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Case History: Strategic Financial Advisory

Manufacturing & Distribution:
Fintronx Lighting Equipment

Raleigh, NC

A comprehensive business and viability analysis will pinpoint where losses are being incurred and where opportunities exist to ensure management is making strategic decisions based on accurate data.

Situation

Located in Raleigh, North Carolina is a multi-national manufacturer of LED lighting and lighting control systems for new construction and retrofit projects that supplies a range of companies from start-ups to Fortune 100. After the company was acquired, ownership decided to aggressively address sluggish sales, the lack of a standard operating platform, cultural alignment, and standard minimums for profitability to ensure investor repayment.

Objective

Fortis Business Advisors was engaged to develop strategies to generate revenue with efficient scalability, and analyze all organizational, operational, financial, asset, and sales and marketing functions. The top-down analysis began with comprehensive interviews of management and staff to dissect organizational challenges. Bottlenecks in the sales cycle and opportunities for sales channel development were identified. Utilizing Fortis ForeSight™, the financial and operational analysis included comparative balance sheet and income statement trends, uncontrolled versus optimal cost distribution, break-even efficiency, ratio health, employee productivity and turnover, inventory and A/R efficiency, and engineered profitability projections. Inbound/Outbound inventory handling and warehouse organization was assessed to identify productivity bottlenecks, and office procedures were reviewed to outline information flow.

Results​​​

Presented a comprehensive strategic plan that would significantly improve sales, operations, profitability, and the cultural gap that divided the company

Initially engaged for revenue-generating strategies, discovered that cutting costs by 16% would have an equal impact as generating $3m in additional revenue

Uncovered that since the acquisition days required to break-even had increased by 221 days revealing cash flow and working capital strains

Because of no pre-developed profit planning, identified that profit was being treated as a residual with accumulated losses of over $1.6m

Faced the hard task of recommending that management pare back their own top-heavy salaries that were placing a heavy burden on the company

Identified that $12m in potential sales could be generated by moving into a distribution model with improved channel alignment and optimized pricing

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