Quick Turnaround by Refinancing, Repositioning and Reinvestment

How Platinum grew a company in trouble by delivering on a new value proposition.

Situation

A family owned business in the specialty printing industry had been unprofitable for two years. The owner was in default with his lending agreements and the banker wanted to foreclose. Platinum was called to step in and lead a turnaround.

Challenges

  • The company’s core business had eroded due to technological advances in the industry.
  • Production equipment was antiquated and running poorly.
  • Top-line revenue was declining and the expense structure was out of line.
  • The owner did not know how to resolve the company’s issues nor have the internal management strength to help chart a new course.

Response

Platinum’s first step was to calm the waters with the bank and secure a new credit facility to increase working capital. The next step was to reposition the company in the marketplace to handle print projects for other printers. The new value proposition was to offer on-demand print work with quick turnaround utilizing specialized capabilities. This required methodically upgrading and replacing equipment, as well as hiring new sales people who were well known in the market. To improve margins, the company purchased core manufacturing materials in bulk directly from the manufacturer.

Results

The company has grown organically by delivering on its new value proposition. By leveraging relationships and providing quick-turn, high-quality products, growth came within the first year from cash flow fueled by improved margins and a low breakeven. Within two years, the company experienced a 25 percent increase in revenue while returning to profitability. Ownership, while enjoying the results of the turnaround, is charting a course to the next level with Platinum’s assistance.

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