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Case Study:
Aerospace and Defense Supplier Realizes Significant Performance Improvement |
Overview of Project
A contract foundry had significant operational and market challenges and an unhappy lender. Manchester was engaged to assess the business, negotiate with the lender, and develop a plan to improve operations and financial results.
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The Challenge
The company is a premium quality aluminum and magnesium castings foundry that supplies the aerospace and defense industries. It is a privately held company with revenues up to $105 million and a history of multiple generations of owners. At the time Manchester was engaged, the company had significant operational issues with scrap, work-in-progress, and capital expenditures. It was having difficulties responding to changes in its market and its selling, general, and administrative (SG&A) expenses exceeded industry norms. Due to its poor performance, our client’s lender was fatigued and management had lost credibility with them.
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The Engagement
Manchester was referred to the company’s owner by the senior lender and engaged by the owner to conduct a multi-disciplinary assessment, create a turnaround plan, and improve performance.
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The Solution
Manchester conducted a multi-disciplinary assessment of the company to identify issues and prioritize and assess associated operational and capital needs. Subsequently, we created and implemented a turnaround plan to reduce SG&A expenses by $4.0 million and $10 million of operational improvement programs. We also worked with management to assess the team’s strengths and weaknesses, resulting in changes in the management team and providing interim management as needed. Manchester’s professionals then worked with the new management team to develop a highly sophisticated and integrated operational and financial plan that better suits the client’s current market.
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The Impact
As a result of Manchester’s engagement, the company is implementing our recommended operational improvements and has received a waiver from its lender, which agreed to continue its relationship with the client.
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Working with Manchester
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