Industrial Distributor

The Situation

  • Private equity-owned industrial distributor that provides surface-preparation media and equipment, safety items, PP&E products and equipment rentals
  • Company operates 12 locations and completed two major acquisitions that were poorly integrated; company was negatively affected by an incomplete ERP implementation and a poorly-executed warehouse consolidation
  • Drop in oil prices led to 13% decrease in sales and 40% reduction in TTM EBITDA; management team’s efforts were not enough to forestall a financial-covenant default

Role(s)

  • Interim COO

The Work

  • Engaged to perform four-week operational assessment, which led to being hired as interim COO to implement extensive recommendations
  • Created and tracked monthly operational KPIs; led effort to reduce past-due accounts receivable to generate cash; instituted improved inventory-management practices; and put in place the previously incomplete ERP system changes place
  • Supported new CFO in managing cash and creating lender
  • deliverables, evaluating M&A opportunities, standardizing customer contracts and establishing a new supply chain for its principal product
  • Assisted private-equity owners with sourcing, evaluating and onboarding new CEO
  • Following implementation of initial assessment recommendations, conducted four-week sales-function assessment to address top-line weaknesses in the business, providing roadmap for new leadership and a smooth transition

The Results

  • On-site presence during the engagement helped stabilize operations and provided the owners and lenders sufficient confidence to execute a financing amendment and relax financial covenants for an 18-month period
  • Order-fulfillment results improved with conservative final results at 98% shipped complete, over 99% shipped damage-free and over 96% invoicing accuracy
  • Reduced aged receivables to 16% from 36% provided over $3MM in working capital

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Overview

  • Distribution
  • Interim Management

Engagement Team