Aerospace Manufacturing Company
Industry:Manufacturing & Processing
Company:Aerospace Manufacturing Company
The Company was in severe financial trouble. With over advances on their bank line by $2.5MM and current liabilities rising to almost $7MM, the Company was losing approximately $600,000 per month. In addition to this, the Company was cut off by almost all of its raw material suppliers. Its largest equipment lessor had also begun legal proceedings to repossess most of its equipment.
At the request of the Lender, a team of Focus Professionals reviewed the Company’s financial situation, implemented operational improvements and returned the Company back to profitability. Focus Management Group took immediate control of its cash and re-negotiated customer pricing to require up-front payment of material costs. They then used this cash to open up relationships with the material suppliers which brought material flowing back into the plant.
- Focus Professionals stopped all equipment lease payments, using the cash only to pay for materials and operating expenses that generated cash.
- Some long term contracts were re-negotiated to require up-front payments. The up-front payments for materials and contract re-negotiation amounted to more than $5MM.
- Settlements agreements with creditors saved over $100,000 in cash through discounts. Payment plans negotiated within these agreements will brought the general creditors to fully current in less than six months.
- Focus entered into a sale and lease back agreement for the manufacturing facility generating over $5MM.
- Finally, Focus Management Group negotiated settlement agreements with many of the general creditors and with eight different equipment lessors, in some cases extending the term of their financing.
- Under the guidance of Focus Management Group, the Company was able to fully repay the secured lender within 120 days from the start of the assignment.
- The Company has generated a positive cash flow each month going forward.
- The Company now uses a pricing model that requires up-front payments to fund material purchases and tooling. This model is currently very well-received by its customers.