NATURE OF ASSIGNMENT:
Primary: Lender - Creditor Services / Debtor Oversight
Primary Industry: Healthcare
Company: Regional chain of MRI centers
Situation: A Company operating multiple diagnostic scanning centers utilizing state of the art X-Ray, PET, CT and MRI Scanning equipment was running at below breakeven levels. The lender providing equipment finance had not received principal or interest payments since inception of leases (approximately 18 months) and was threatening to replevin the equipment.
Focus Scope: At the request of the senior lender, FOCUS worked with management to determine the underlying profitability of its business and to recommend operational and financial performance improvements.
Tasks Performed: Focus undertook a comprehensive review of the Company’s market, operations, systems and finances. Operating cost eliminations relating to equipment and staffing levels were implemented, and a realistic rolling cash flow forecast was prepared to identify debt service capacity.
Results: Focus recommended that management restructure the Company’s accounting system to aid collection practices and unit cost visibility, and to scale back leased equipment levels. We then worked with management and the lender to restructure the terms of the debt facility to better match debt service to the attainable cash flow capabilities of the business.