Return to Profitability

The Turning Point CFO advisory arm not only returned this company to profitability but set them on the path to their subsequent 28% growth.

“Armed with timely, accurate financial reporting, the CEO was able to make real-time decisions and better predict both oncoming challenges and making the most of opportunities.”

Overview:

A leading manufacturing and installer in the commercial construction industry, in a soft commercial construction market and saddled with an acquisition that failed to meet exceptions, experienced significant losses for 18 months. A year-end physical inventory revealed significant discrepancies and forced the company to adjust inventory downward by a significant amount. The company’s lender had already begun pulling back on the availability of funds and this reduction in inventory, and resulting additional loss caused the lender to risk rate the client to put the in Special Assets. The lender, having lost confidence in the company’s management, referred the company to Turning Point.

Actions:

Turning Point’s CFO Advisory team quickly assessed the situation, then developed a turnaround plan and a financial management plan. These plans included a complete re-designing of the client’s ERP and Financial Accounting systems, notably the inventory control systems. Turning Point then worked with the lender, securing a 6-month forbearance, so that finding new and more expensive financing was not required. Turning Point was able to work with the lender to provide full access to available funds, making available enough capital to fund operations.

Results:

Once the company was stabilized, Turning Point created a financial reporting package that delivered timely, accurate, actionable information to the management team.

Key Takeaway:

The company returned to profitability within six months of retaining Turning Point. The following year, the company grew 28% and produced 11% EBITDA.