Protein Business

Protein Business

Roles
Financial Advisor
  • Increased EBITDA
  • Lender agreed to forbearance agreement
  • Restructured existing debt and stabilized balance sheet
  • CR3’s action plan was adopted to support the company’s restructured operations

The $160MM meat processor had a history of profitability, but faced operational challenges which led to a significant reduction in revenue and EBITDA. CR3 professionals worked with management to implement financial controls and develop strategic options, driving the company towards being demand-driven rather than production-driven. Efforts increased EBITDA nearly 2x and the lender agreed to a long-term forbearance. Under CR3’s action plan, the company restructured existing debt and stabilized their balance sheet.

The Situation

  • Meat processor with two U.S. facilities, annual revenue of $160MM, a diverse customer base and multiple branded product
  • Company had history of profitability but faced significant challenges due to under-utilization of its slaughter operation, turnover in its executive team, staffing constraints, and sub-optimal supply and pricing
  • Operational issues resulted in significant reduction in revenue and EBITDA

The Work

  • Worked with management to create operational-restructuring plan with new operating and financial metrics and a special emphasis on shrink and margin spread
  • Implemented cash and working-capital management controls to provide time for analysis of strategic options
  • Company switched strategic focus to becoming a demand-driven, rather than production-driven company
  • Refocused management on performing against new metrics
  • Improved slaughter operations by increasing volumes with third-party processors where the company charges a custom-kill fee, but does not take ownership of the animal

The Results

  • EBITDA increased from $3MM to a projected $5-7MM
  • Lender agreed to long-term forbearance agreement
  • Company restructured existing debt and stabilized balance sheet
  • CR3’s action plan was adopted to support the company’s restructured operations

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