From Accumulated Losses to a Sustainable Future: A Metal Stamping Turnaround
OVERVIEW
- Revenue: $24,500,000
- General Description: Metal stamping and value-added assembly manufacturer
- Geographic Location: Midwest
- Markets Served: Automotive
THE SITUATION
JACO Advisory Group served as turnaround leader for a $24.5 million, second-generation metal stamping company in the Midwest that had experienced years of accumulated losses following the passing of its first-generation founder. Since the transition, the business had been poorly managed operationally, commercially, and financially.
The company was locked into long-term customer contracts with unfavorable terms and below-market economics. It had defaulted on its obligations with its senior secured lender, and while the family cured the default through a related-party takeout loan, the underlying structural and operational issues remained unresolved. The family further required the company to service the related-party debt immediately, without providing access to a working capital facility.
Liquidity constraints intensified as the company fell significantly past due with vendors. Years of deferred maintenance led to chronic equipment failures, resulting in late customer shipments, elevated overtime labor costs, and significant premium freight expense—further eroding profitability and customer confidence.
THE SOLUTION
Working closely with the company’s newly hired outside President, Jeff developed and executed a comprehensive restructuring and turnaround plan focused on operational stabilization, liquidity management, and restoring commercial viability.
The plan included establishing structured vendor payment plans, negotiating price increases with customers, and exiting business that was no longer commercially viable due to changes in battery electric vehicle (BEV) platforms at certain automotive OEMs. JACO addressed foundational financial issues by correcting inaccurate financial statements, implementing a 13-week cash flow forecast, and updating standard cost systems that had not been refreshed in more than five years.
JACO also negotiated a new credit facility with a private credit lender that supported the turnaround strategy. In parallel, Jeff worked with company leadership to prioritize and fund critical equipment repairs and maintenance, restart the company’s sales and marketing efforts, and right-size the labor force to align with stabilized production volumes.
THE OUTCOME
With operations stabilized and improved financial discipline in place, Jeff worked with the company’s President to recruit a new Chief Financial Officer to lead the financial function and support the next phase of the company’s recovery. The strengthened leadership team, improved liquidity profile, and restored operational performance positioned the company for improved profitability and long-term sustainability.
Is Your Manufacturing Business in Financial Distress? There’s a Path Forward
Is your manufacturing business facing financial distress or operational instability? JACO Advisory Group has the experience to stabilize your business and chart a path forward. Contact us for a confidential consultation.
