In the fast-paced and complex world that today’s businesses operate in, utilizing a skilled advisor who understands the market is critical. The experienced professionals at Hemming Morse dependably provide the strategic guidance required to make your company’s long term business and financial goals a reality. Our breadth of expertise includes assisting businesses in improving profitability, increasing financial stability, navigating management disputes and preparing for possible merger and acquisition transactions.
Family Business Turnaround
Hemming Morse team tackles complex business challenges, allowing family-owned manufacturer to turn a new page.
The Hemming Morse team’s client was a family-owned and operated manufacturer and distributor that had grown to significant size. In the last 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; and at each year-end, adjustments applied by financial auditors resulted in reported profit reverting to a sizeable loss. The company’s creditors had grown very uncomfortable and considered forcing dissolution. The Hemming Morse professionals spent significant 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 flawed 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 negotiated with the clients’ creditors, allowing for a settlement of existing debt at 50 percent of outstanding loan balances and securing an asset-based lender to recapitalize the company. 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.