Designer & Manufacturer of Mobile Accessories: Liquidity Management, Lender Relations & Refinancing

Situation Overview:

• Migration of end-user demand to new channels required a strategic shift and investment in new channel partners and new products.
• Client anticipated a covenant breach and possible liquidity tightness during a critical point in the selling season and product development cycle.

Armory Solution:

• Armory helped the CFO develop a 13-week cash flow and collateral forecast, and confirmed liquidity would be tight but manageable.
• Conceived a proactive communication plan to initiate dialogue with lender and prepare for waiver/amendment negotiations.
• Worked with management to finalize its new business plan and craft a narrative regarding its new business strategy.
• Supported management’s operational restructuring initiatives.
• Advised CFO through discussions with lender regarding waiver/amendment need.
• As lender signaled desire to be taken out, initiated contact with ABL lenders.

Results:

• Successfully managed timely refinancing of revolver to not only meet seasonal working capital needs, but also support cash outlays for new products and inventory investments in new channels.
• Company continues to rely upon weekly liquidity forecasting and management tools as it implements its new business strategy.