NATURE OF ASSIGNMENT:
Primary: Lender Services / Cash Flow Performance
Primary Industry: Dairy Operations
Focus Scope: Focus Management Group was hired by the Lender of a milk product manufacturing production facility i) review current performance and balance sheet structure, ii) develop alternative capital structures and (iii) create financial forecasts for future performance. Focus Professionals assumed the following the tasks:
Tasks Performed:
- Conducted an analysis of the Company’s working capital components, product pricing, production assumptions and product marketing strategies
- Analyzed current markets for milk and milk products, coupled with historic trends for inputs and outputs
- Developed alternative balance sheet structures to include an asset based line of credit, mezzanine debt and long term debt restructure, to include the working capital account forecasts for trade payables and producer payables
- Prepared a comprehensive pricing analysis of inputs and outputs to show relationships, or lack thereof, between these commodities
- Worked with the lender to develop questions and strategies for interviews and due diligence work
Results:
- Focus discovered weaknesses in reporting working capital and worked with the Company to improve practices, which in turn improved reporting to the Lenders.
- Focus worked with the Lender to review impacts of various lending structure strategies and assisted in development of loan covenants.