Food Industry Case Study: Poultry Processing
Scope of Engagement:
($80 million annual revenue)
The Company raised and processed humanely raised, antibiotic free chickens, selling processed chickens to food service companies and retailers, including supermarkets. The Company was operating under a forbearance agreement, with the incumbent lender requesting an exit from the relationship. In addition the Company’s accounting system output was unreliable and causing concerns with the collateral supporting the asset based line of credit. Focus Management Group was engaged by the Company as a Consultant.
Prepared the initial cash flow and monitored performance each week, including having working capital management discussions with management and assisting the lender in understanding the data.
Developed a streamlined approach to reporting via weekly QuickBooks and borrowing base downloads.
Reviewed refinancing proposals and explained the impact of various terms to the owner, including analyzing the availability impact, costs, and regular monitoring requirements.
Obtained a backup refinancing proposal.
Managed expectations with the lender on timing of refinancing proposals.
The Company improved its working capital management, and better understood its accounting systems.
The Company was able to manage working capital through the bankruptcy of a key customer and was able to collect its outstanding receivables and receive timely payment going forward.
The incumbent lender’s debt was refinanced in full, and the Company received necessary availability to operate going forward.