Focus Management Group

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Large Multi-Location Dairy Operation

Company:

A large multi-location dairy operation

Situation:

The dairy had been consistently experiencing financial difficulties and was currently in default with its lender.

Focus Scope:

Focus was hired by the Lender of a multi-location dairy operation to review the Company’s financial and cash flow forecasts and to suggest possible restructuring alternatives and forbearance strategies.

Tasks Performed:

  • Reviewed Company’s financial forecast and cash flows
  • Conducted an analysis of historic financial information by dairy operation
  • Developed a comprehensive list of forbearance terms, conditions and covenants to be considered by the lender in developing a forbearance strategy
  • Developed suggestions for hedging opportunities related to feed and milk
  • Reviewed over advance requests to facilitate reduced over advance requirements
  • Identified opportunities to reduce cash flow needs during the next year
  • Developed weekly and monthly monitoring practices for the benefit of the Lender
  • Implemented a weekly reporting mechanism that included borrowing base forecasting, working capital forecasting and other additional important items.

Results:

Focus Professionals successfully applied the Focus Dairy the Operating Success Matrix©, an FMG proprietary matrix that shows a Lender the combinations of variables which would result in success for a specific borrower, to determine the combination of feed costs, milk prices, and milk production which provided the borrower with opportunities to reduce debt.

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