Providing Interim Management & Undergoing Transformation
A national consumer leisure company faced liquidity issues due to challenges in forecasting cash flow and reporting. While it outperformed its peer group, it made less than optimal decisions on managing capex and operating expenses. Accordion’s Performance Improvement & Restructuring Solutions team was brought in to help the Board understand why liquidity was rapidly declining, identify value creation/performance improvement opportunities, and improve financial reporting/forecasting.
Interim & Crisis Management
13-Week Cash Flow Forecasting
- Developed and maintained a detailed cash forecasting model to identify the magnitude and timing of liquidity needs so problems could be proactively handled.
- Worked with function and location heads to better understand what drives customer decision making (e.g., price, quality, availability), and from that, selectively raised prices, modified operating hours, reduced opex and re-prioritized capex spend – which resulted in a bottoms-up, zero-based budgeting process with better functional visibility and accountability.
- Identified the metrics that provide the greatest insight into the Company’s performance, then put real-time tracking in place against target.
- Supported negotiation between the Lender and the Equity Sponsors to obtain a $10 million over-advance and one-year covenant waiver in exchange for a modification of the distribution waterfall.
- Worked with landlords and insurance providers to gain the return of significant cash deposits.
- Developed structured payment plans with key vendors to slow the rate of disbursements.
- Reviewed go-to-market strategies, geographic coverage and four-wall cash flow performance and then sold or closed all non-core or underperforming locations, using net proceeds to reduce debt.
- Sold on non-recourse basis a $10 million judgement against prior key-man life insurance provider.
Accordion brought experienced senior leadership, improved visibility, and restructuring expertise to quickly address the Company’s liquidity challenge and develop a viable plan to exit. Our team was subsequently appointed to interim CFO and oversaw active day-to-day management of liquidity and disbursement decisions, while improving business performance based on a data driven approach. With Accordion’s support, the Company materially improved business performance, sold or closed non-core or underperforming locations, and sold a material judgment, using net proceeds to reduce debt.