In the fast-paced and complex world that in which today’s businesses operate, utilizing a skilled advisor who understands the market and organizational issues is critical. Experienced professionals at Hemming Morse dependably provide the strategic guidance required to assist in making a company’s long-term business and financial goals a reality. Our breadth of expertise includes helping businesses in improving profitability, increasing financial stability, navigating management disputes and preparing for possible merger and acquisition transactions.
Family Business Turnaround
The Hemming Morse team’s client was a family-owned-and-operated manufacturer and distributor that had grown significantly. In the previous three years, the company had experienced a financial downturn due to economic conditions and other internal factors. Each year, the company reported profitable operations to its lender, which had extended more than $10 million in credit. But at each year-end, adjustments applied by financial auditors resulted in the reported profit becoming to a sizeable loss on the company’s financial statements. The company’s creditors had grown uncomfortable and considered forcing dissolution. The Hemming Morse team spent substantial time on site, working with the family to conduct a broad-based assessment of the business, uncover an inventory costing system in need of significant maintenance, and identify a combination of hourly and piece-rate costing through the manufacturing process that had resulted in inaccurate financial statements. In the course of two months, we corrected the company’s inventory system and developed a financial dashboard that allowed the management team to assess key metrics for determining which product lines were profitable and which should be discarded or re-priced. Finally, we provided information to support negotiations with the clients’ creditors. The end result was effectively a new beginning for the family owners, who now possessed the tools and infrastructure to effectively manage and grow their business.