PLASTIC INJECTION MOLDING
INDUSTRY – Manufacturing
COMPANY – A leading injection molder and coater of plastic engineered parts for the automotive, office furniture and commercial lighting industries. Tier one, and tier two supplier to automotive that require high quality components and modular assemblies.
PROBLEM – After 15 years of operations, this company had suffered substantial losses totaling over $11 million. The company would spend large amounts of cash in set-up and fixture costs for new projects without arranging for these costs to be paid for by the customer. Management failed to properly develop an overall practical business profitability strategy, financial projections, cash flow assessments, budgets and implement overall management discipline. The company also had a number of unprofitable customers and projects.
RESOLUTION – We acquired the operations and assets in a UCC Article 9 sale from the first secured lender resulting in a decrease in the overall debt from $21 million down to $6 million without the use of bankruptcy.
We improved operating income from a loss of $1.4 million to a profit of $1.5 million. First full year operating performance – EDITBA of $2.5 million. We evaluated customer profitability, reduced production costs and increased customer prices. We eliminated and reduced several expense areas without an effect on productivity. Reduced industry concentration from 95% automotive to 60% by adding new nonautomotive customers.