Maximizing Enterprise Value

The Situation:

A $150 million multi-site bi-coastal consumer products manufacturer was operationally dysfunctional, cash flow negative and weeks away from insolvency. The company was restructured via a distressed transaction by 3 hedge funds and recruited Carter Pennington as a turnaround CFO, with full P&L responsibility, to prevent bankruptcy and maximize return on investment.

The Work:

Worked quickly to get the company cash-flow positive.  Within 4 months, generated $3 million cash through aggressive inventory and receivable management – negotiating new terms, processes, and relationships with vendors and customers – taking the company from a cash-burn to cash-positive. Implemented cash culture throughout the organization, spearheaded new protocols to reduce waste, increased productivity and streamlined operations.  Recruited specialized consultants to make improvements in manufacturing processes, IT applications and financial controls.  Developed a new strategy and facilitated the divestiture process of the newly turnaround company.

The Outcome:

Reversed a $6 million loss to a $7 million profit in 15 months, more than doubling the enterprise value.  This included increasing manufacturing thru-put by 50%, reducing shop floor waste by 25% and increase productivity by 17%. Within 30 months the company was sold and generated a 45% ROI to investors.

The Situation:

As a result of management fraud, this leading global designer fashion, marketing, and wholesale company was suddenly discovered to be losing cash at an annualized rate of $55 million.  Carter Pennington was brought in as turnaround CFO/COO, with full P&L responsibility, to stabilize the company and lead an orderly divestiture.

The Work:

Initial managerial responsibility of finance, production, quality, logistics and IT.   Redesigned all operational functions through a new innovated team-based management structure.  Created a cash culture throughout the organization, quickly reduced inventory, reduced expenses and repositioned the product line.  Within a few months, Carter assumed the role of president of the company.  Developed an alternative growth strategy, providing the company’s investors multiple exit plans.

The Outcome:

Increased productivity by 40%, improved product margins 17% and reduced overhead 29%.  This lead to an increase in net income by $35 million, bringing the company to breakeven within 18 months.  The company was stabilized and led through an orderly sale process, maximizing the return to investors.

The Situation:

The subsidiary of a $12 billion conglomerate, was one of the very few companies that manufactured coatings and sealants for the airline industry. After the tragic events of 9/11, the production forecast for the airline industry came to a virtual standstill. This company needed a new strategy to grow and Carter Pennington was retained as a strategy consultant to assist in the development of a new long-term growth plan.

The Work:

Utilizing a proprietary strategic planning process, facilitated strategy sessions with the company’s senior managers. Leading the group to identify the company’s skills and capabilities and the industry’s opportunities, created a comprehensive action plan to move the company in a new direction.

The Outcome:

The company launched a new service division to complement the core manufacturing business. The company was repositioned to a low-cost provider of chemical management services. This new, highly profitable service income stream enabled to company to grow, even in a sharply depressed manufacturing industry segment.

The Situation:

As a result of fraud and highly publicized scandal, the giant telecom was in Chapter 11, the largest in history at that time.  Retained as an advisor to assist with the turnaround of their $3 billion European subsidiary in the UK, which had a $268 million cash burn.

The Work:

Assumed the role of shadow CFO, managing the cash forecasting, planning, and control.  Managed expense reduction initiatives and the capital planning process.  Facilitated the redesign of work processes and coordinated the short term and long term planning.

The Outcome:

Within 10 months, it reduced a $268 cash burn to breakeven and allowed the company to emerge as a strong European telecom with excellent growth potential.  The company later emerged from bankruptcy and is now part of the world’s second-largest telecom company.

The Situation:

Part of a $3 billion cosmetic and personal care company, the $200 million fragrance division was struggling and losing money for several years.  Recruited as the finance director of the division, Carter Pennington soon took the role as the general manager for the division, with full P&L responsibility.

The Work:

Managed a product cost reduction initiative on all 15 brands, increased productivity through work consolidation, reduced excess inventory with new purchasing and pricing policies and redesigned the short and long term business planning processes.  Led the development of a new strategy, which resulted in the consolidation of the mass and department store divisions and launched 4 new product lines.

The Outcome:

The division went from a $5 million loss to a $7 million profit, including a $5 million reduction in overheads, a 30% inventory reduction, and increase product margins by 25%.  Successfully added $70 million of new products, increased product distribution by over 6 thousand doors and contributed to the successful IPO of the company.

The Situation:

The largest commercial printer was looking for new growth strategies as the nation’s printing industry was trending down due to the growth of digital data networks and the explosion of web-based media.   Carter Pennington was retained as a strategy consultant to assist in the development of a new long-term growth plan.

The Work:

Utilizing a proprietary strategic planning process, facilitated strategy sessions with the company’s senior managers.  Leading the group to identify the company’s skills and capabilities and the industry’s opportunities, created a comprehensive action plan to move the company in a new direction.

The Outcome:

The new strategy utilized a core competency of the company, trucking (moving tons of books and magazines across the nation), and created a new business line – a logistics service company.  Third-party transportation was a high-growth industry, with a 40% 5-year projected growth rate.  The company adopted this new strategic direction, creating a new $700 million business line.  Along with other new strategies (digital data management, premedia technology, e-business solutions), the company continues to demonstrate financial strength and growth, even as the print industry continues to erode.