Managing Liquidity, Restructuring Costs, & Supporting Lender Negotiation
The Situation
A $150mm graphics and services company with operations across the United States and Canada was facing rapidly declining sales as a result of the COVID-19 pandemic. The Company needed support in revising sales projections and developing a plan to restructure costs in order to manage liquidity under a highly accelerated timeline. Accordion was called on to develop an integrated13-week cash flow projection model, which illuminated short and medium-term liquidity levels under the revised business outlook. As part of the engagement, our team also supported the preparation of an integrated restructured business plan for stakeholder use.
Services
13-Week Cash Flow Forecasting
Active Liquidity Management
Business Plan Reforecasting
The Execution
- Worked with the CEO, CFO and other key members of management to establish current business trends and assess the impact of COVID-19 on the forward sales and collections of the business.
- Worked with key company stakeholders to develop a consolidated cash flow forecast with the flexibility to prepare multiple scenarios as cost reduction assumptions were finalized.
- Prepared a revised integrated “going-forward” business plan to reflect the new economic realities alongside Management and the Sponsor.
- Led a detailed review of accounts receivable to determine potential risk issues with collectability.
- Analyzed the overhead cost structure on a fixed vs. variable basis to determine the go-forward supportable base of the business operating at lower sales levels.
- Worked with the Sponsor and key department leads to analyze detailed operating costs to identify sustainable staffing levels to support go-forward operations.
- Reviewed and modeled debt covenant requirements to assess and test implications on revised plan.
- Bolstered conversations between the Sponsor and Lender.
The Results
Accordion led the urgent development of a viable, comprehensive “go-forward” business plan that reflected significant modifications to the planned revenues and costs integrated with a detailed liquidity forecast. Our team supported Management and the Sponsor during a uniquely difficult business situation. Accordion established a comprehensive cash forecasting process, helped evaluate various liquidity options, developed scenarios to analyze potential outcome, and supported the Sponsor during lender discussions.