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Case Study

CRO, COO, CFO, and Turnaround Advisory

Industry
Team Size
2 Senior Managing Directors, 1 Associate
Project Duration
10 months

The Situation & Approach

In the face of declining sales, a global manufacturing company that supplies cash processing equipment to the finance industry, primarily to bank and credit union retail branches, with global headquarters in Mebane, North Carolina and manufacturing, R&D, and engineering operations located in Ivrea, Italy, failed new product offerings, and an inflexible fixed operating structure, the Company had arrived at a juncture where they would be unable to meet their debt service obligations.

Engaged initially as CRO, Mackinac led a rigorous evaluation of the profitability and viability of the companies’ product offerings and R&D initiatives, the results of which demonstrated the need to abandon unprofitable and unproven lines of business as well as focus on core selling markets.

Expanding our role as interim COO, we helped right-size the Company’s operations, which included a significant reduction of fixed costs supporting R&D/engineering initiatives. We worked with management and foreign counsel to successfully navigate negotiations with the various Italian unions and arrive at a resolution that was agreeable to all parties involved.

We also designed and successfully negotiated a creative labor solution which protected the Company’s key engineering and R&D talent but at the same time resulted in the labor cost reductions required to make the business viable. Mackinac also worked with ownership and the CEO to successfully recruit new senior management including Chief Commercial Officer, Chief Financial Officer, EVP Global Manufacturing and Supply Chain and Chief Technology Officer.

The renewed focus on core selling markets and key management changes initiated by Mackinac led to a rebound in sales, with the first seven months outpacing YOY results by +35%, reversing a 3-year downtrend in revenues. Combined with the reorganized cost structure, the Company experienced significant EBITDA margin improvements and was able to generate the cash flow necessary to meet principal and interest obligations without the need of additional permanent capital.

Services

CRO, COO, & CFO

Turnaround Management

Performance Improvement

The Results

Facing declining sales, failed new product offerings, an inflexible fixed operating structure and debt servicing issues, our team successfully implemented a global turnaround plan to significantly improve results/EBITDA and position the Company to meet its existing obligations without the need of additional permanent capital.