Case #773

$140 million insulation manufacturer

This manufacturer of insulation for construction and automotive use was losing nearly $1 million monthly and was running out of cash. Several plants were “bleeding” money profusely, costs were unmanaged, internal controls and financial reporting were poor. On top of that, the holding company was diverting cash for non-company needs. Lender support was evaporating and management was unable to deal with the crisis.

The Morris-Anderson & Associates crew assessed the situation and recommended crisis actions to the Board, which included putting in our team members as interim COO and CFO. We took control of cash, and the diversion of funds was immediately stopped.

A new business plan was quickly assembled. One plant was shut and major reductions of expenses were accomplished—for example, a major project to install a new furnace at one plant was halted due to basic flaws in the design of the furnace. Additionally, prices were selectively increased, management controls were strengthened, new management talent was recruited, and $7 million of new capital came in from the Sub-Debt in support of the turnaround plan. Vendor contracts were renegotiated, which secured over $3 million annually in price rollbacks.

We led efforts as interim managers to improve profitability by over $15 million annually.
When our crew handed the reins to new management, the company was generating over $300,000 monthly of EBITDA and had solid support from its lenders and trade creditors.

The Morris-Anderson & Associates crew saved this company from liquidation.