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Mike Caruso
Senior Director, Other Professionals
With financial and operating experience spanning over 30 years, Mike Caruso is a proven problem-solver with the ability to quickly adapt to different environments and produce quantifiable bottom-line results.
- Company earned support from lender
- CR3 launched extensive business improvement plan
The company is a $80MM branded consumer products company primarily focused on selling women’s haircare products. Due to poor management decisions during a sales process that resulted in declining financial performance, buyers lost interest in closing a transaction. CR3 Partners was initially engaged by a creditor but transitioned to debtor-side to improve cash flow, rebuild profitability, and better position the company for a sale. CR3 developed 13-week cash flow projections, accelerated operational changes, and developed financial projections, which earned support from lender who provided a ~$2MM extension of credit. The company regained profitability, relaunched a sales process, and was successfully sold to a private equity firm.
The Situation
- Privately-owned $80MM branded consumer goods company focused on women’s haircare products sold primarily thru direct-to-consumer channel
- Balance sheet was highly leveraged and EBITDA had declined to negative ~$2MM
- Sales channels include direct-to-consumer, retailers, and Amazon; business model relies on consumer subscriptions acquired in the direct-to-consumer channel
- Company pursued sale of company to re-pay debt
- Company launched discount program that negatively affected its consumers’ subscriptions and profitability during sales process
- Cash flow and financial performance declined rapidly, and buyers lost interest in closing transaction
The Work
- CR3 Partners were initially engaged by creditor to review cash flow projections, identify capital needs, and assess sales process status
- Transitioned to debtor side to improve cash flow, rebuild profitability, and accelerate operational changes
- Developed 13-week cash flow projections, accelerated operational changes, and developed financial projections
- Relaunched sales process by repositioning company and hiring new investment banker
The Results
- Company earned support from lender who provided ~$2MM extension of credit to support restructuring initiatives and return to profitability
- CR3 launched extensive business improvement plan which increased EBITDA from negative $2MM to positive $10MM
- With financial performance improvement and investment banker hire, company relaunched sales process and was successfully sold
- CR3 transitioned to interim management role post-close and provided interim CFO services
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