Retail Marketing Company
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Financial Advisor
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Eileen Frino
Director, Other Professionals
Eileen Frino is a seasoned finance professional with over ten years of experience spanning investment banking and credit advisory to operational and regulatory consulting.
Sugi Hadiwijaya
Partner, Partners
Sugi Hadiwijaya has more than 15 years of combined experience in financial services and turnaround management, assisting companies with tasks such as cash management, securing of financing, business plan assessment, M&A activities, and financial modeling in multiple industries.
Mike Juniper
Partner, Partners
Mike Juniper has 20 years of experience in financial and operational analysis and improvement, turnaround and restructuring consulting, and interim management. He has served as an advisor to numerous companies through Chapter 11 proceedings.
William Snyder
Partner, Partners
With executive and entrepreneurial experience spanning close to 40 years, William Snyder has restructured, managed, and guided a multitude of companies in a wide variety of industries.
- Developed high/low cash flow model
- Cash flow model indicated reset of covenants with lender
The company was a large consumer products marketing company that had experienced a decline in liquidity, was anticipating continued near-term declines, and had concerns about missing covenants due to an expected 50%+ decline in EBITDA. This decline was driven by the company’s customers halting most marketing spending in the wake of COVID-19. CR3 Partners was engaged as financial advisor to build a 13-week cash flow forecast to assess near term liquidity and working capital needs and to identify cost reduction initiatives with company. CR3 accomplished the scope of work while working remotely during COVID-19 and determined the company expected performance had a high likelihood of covenant defaults, with the revised liquidity forecast forming the basis of a covenant reset with its lender.
The Situation
- Consumer products marketing company that represented manufacturers at national retailers
- Company faced 40% revenue decline in Q2 and uncertainty about Q3 due to COVID-19 pandemic
- Despite being on a budget during Q1, reforecast for the remainder of year indicated 53% decline in EBITDA versus budget
- Board had limited visibility into liquidity and had concerns about missing covenants and running out of liquidity
The Work
- Engaged as financial advisor
- Built 13-week cash flow forecast to assess near-term liquidity and to understand working capital needs under a variety of “restart” scenarios
- Identified and validated near-term cost reduction initiatives to reduce losses
- Negotiated with vendors, including landlords, to identify options to reduce cost and increase near-term cash flow
The Results
- Developed high- and low-case cash flow model, reflecting potential sales levels and cost reduction initiatives
- Cash flow model indicated little risk of running out of liquidity, but high likelihood of covenant breaches, which would form basis of a reset of covenants with lender
- Accomplished scope of work with executive leadership and accounting and treasury personnel while working remotely during COVID-19
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