• Built weekly cash flow forecasting model
  • Implemented cost reduction projects

The client is a $300MM heavy industrial construction company that experienced a decline in liquidity due to some significant chargebacks from customers related to disputed change orders, which pushed it into technical default with its secured lender. In addition, forecasted EBITDA was insufficient to cover fixed charges, support working capital and rebuild liquidity. CR3 was engaged to assess the 13-week cash flow, business plan and operations in support of a longer-term restructuring plan for the business; later retained as CRO. CR3 assisted the company in implementing a new weekly cash forecasting and management process, identifying EBITDA improvement opportunities, and identifying opportunities to raise cash.

The Situation

  • $300MM heavy industrial construction company that provides engineering, construction, and fabrication services to various industries worldwide
  • Company experienced a decline in liquidity due to some significant chargebacks from customers related to disputed change orders
  • Company was now in technical default with its secured lender
  • Forecasted EBITDA was insufficient to cover fixed charges, support working capital, and rebuild liquidity

 The Work

  • Engaged to assess 13-week cash flow, business plan, and operations in support of a longer-term restructuring plan for the business; later retained as CRO
  • Developed a more detailed weekly cash flow forecasting and management process
  • Identified EBITDA improvement opportunities
  • Identified opportunities to raise cash, including settling outstanding receivables, selling assets, and raising equity

 The Results

  • Implemented new weekly cash flow forecasting with input from entire company
  • Assisted with revised revenue forecasting using historical win conversion rates against current quoting volume and needed level of quoting activity to hit goals
  • Implemented cost reduction projects to improve EBITDA

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