Furniture Manufacturer

Client Overview: A leading upholstered furniture manufacturer. The Company was sold to key distributors, primarily in the midwest and eastern United States.

Opportunities:

  • Family owned business sold to an equity sponsor in 2002
  • Continued degradation of revenues and EBITDA over a four-year period. EBITDA worsened by $10M over a 30 month period
  • New management team brought in in 2005 contributed to a worsening financial and profitability situation

Solutions:

  • Qorval was initially engaged to address improvement areas and process issues. Within one month, the Board appointed Qorval as President and acting CEO
  • Close underperforming factory and make critical cost cuts quickly
  • Address quality problems and implement a quality focus within the factories
  • Work with Sales to open new accounts and strengthen existing accounts
  • Secure new financing (sponsors were not willing to provide a 45-day bridge loan to close)

Results:

  • First quarter EBITDA of $1M after many straight quarters of continued losses
  • Focus on quality began to change customer perceptions as “problem quality company”
  • Secured new financing if ownership had chosen to continue the company in business
  • Engaged and led an orderly liquidation outside of bankruptcy resulting in bank repayment at approximately 85% of debt
Beretta

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