Steel Manufacturer and Turnaround Strategy

“Can Elliott Davis help us: restore sales, improve profitability of operations, restructure the organization, improve the culture, and secure the line of credit?”

Context

Third generation steel manufacturer was facing financial difficulties

• Sales had been deteriorating over past years
• Margins were decreasing to negative
• Bank was threatening to pull line of credit

CEO/Owner had tried several times to turn things around and restore profitability, but had been unsuccessful.

Our Approach

Immediately focused efforts and aligned organization:

(1) Better understanding of financials

• Developed rolling 13-week cash flow to prioritize decisions

(2) Expense reduction

• Detailed look at P&L for quick wins to increase cash, particularly SG&A

(3) Operational improvements

• Setting and managing to proper KPIs
• Improving profitability of throughput
• Better scheduling of projects

(4) Revenue growth

• Setting targets for sales team
• Focusing on highest-margin opportunities

(5) Securing line of credit

• Providing turnaround story to banks

Customer Results

Drove improvements throughout the company across major categories:

• Increased sales by 23%
• Increased production throughput from 150 tons of steel to handling up to 500 tons
• Reduced SG&A expenses by $500k

Improvements drove an increase in EBITDA from average of -3.5% for the 2 years prior to Elliott Davis’s involvement to 4.7% for the most recent 6 month period at the conclusion of Elliott Davis’s effort.

We Can Help

For more information on this and other topics, contact a member of our team.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.