- Industrial Products Manufacturer
- Vibratory Equipment Manufacturer
- Metal Stamping Business
- Refractory Manufacturing and Installation
Industrial Products Manufacturer
This client manufactures a variety of products primarily used in the utility, mining, aggregate and minerals industries. In its third generation of family ownership, the company had failed to respond appropriately to changes in the world marketplace and had built up a large overhead burden that was stifling management and innovation. After suffering a consistent slide in profitability and a massive increase in bank debt, the company was facing a bleak future. With the help of Promontory Point Partners, the company was able to streamline its operations, reduce overhead, improve teamwork, upgrade personnel talent and implement a strategy that produced a dramatic increase in profitability. From a best case scenario of break-even in 2002, the company went on to produce operating income of 20% in 2003. This was no one-hit wonder. The company grew its top line in excess of 20% in both 2004 and 2005 while still achieving a 20%+ operating income. Fantastic growth and world-class earnings quality, now there is a turnaround success!
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Vibratory Equipment Manufacturer
In its second generation as a family business, this company manufactures equipment which is used in heavy industrial applications such as foundries to move large parts along the production line using vibratory technology. Historically dependent upon the rise and fall of the foundry industry, foreign competition and pressure from domestic auto manufacturers was crushing their customer base. Due to decades of strong profitability and little or no debt, the company had built up a large overhead and was somewhat complacent about reacting to changes in the marketplace. The company lost over $3MM in both 2001 and 2002. With the help of Promontory Point Partners, the management team was able to reduce costs, eliminate all debt and build up a large cash reserve. Through better sales management and diversification strategies, the company has reduced its reliance on the domestic foundry industry and produced operating income of 10% in 2003 and over 12% in 2004. For 2005, the company enjoyed revenue growth of 15% and achieved operating income in excess of 16%. No debt and double digit operating income percentages as an industrial machinery OEM, now that is performance you can take to the bank!
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Metal Stamping Business
This family business, now in its second generation, had historically enjoyed solid profitability and low financial leverage. Recognizing the pressures facing the stamping industry and the risks of an 80% sales concentration to one customer in the appliance business, the President made a number of bold acquisitions in order to diversify. Unfortunately, a family crisis took the President away from the day to day management of the business and his management team proved to be incapable of integrating the acquisitions or managing the business without him. Within one week of returning to the business full time, the President recognized the situation was dire and hired Promontory Point Partners. Within our first week, we terminated the COO, CFO and approximately one-third of the remaining workforce. While dramatic, these steps were critical to avoid a disastrous cash shortage and looming liquidation. Mike Barto stepped in as interim COO to run the company and we quickly began work on a plan to increase the company’s viability. Within four months we had closed down or sold off the acquisitions, retired 60% of the company’s debt, recruited a permanent COO and returned the company to profitability. Today, the company is consistently profitable, better diversified and has a strong balance sheet. Timely and difficult decisions were key on this engagement and the company is now poised for long-term success!
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Refractory Manufacturing and Installation
This client, in business for over 90 years, recently emerged from a four year bankruptcy process which allowed resolution of hundreds of millions of dollars of asbestos personal injury claims. Historically undermanaged and unprofitable operationally, the company was sliding towards bankruptcy regardless of the asbestos litigation. After floundering in bankruptcy for over two years with no end in sight, Promontory Point Partners was hired in March of 2004. Mike Barto took on the role of interim CEO and led the company through a dramatic turnaround in operating results producing back to back years of record profitability. The company successfully exited bankruptcy in March of 2006 and is currently well positioned to capture market share and continue to increase profitability. Not only did the creditors achieve their objectives but the company was saved along with approximately 800 jobs.
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