Outdoor Advertising
Roles
Financial Advisor
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James Katchadurian
Partner, Partners
James Katchadurian has significant experience in several highly visible insolvency matters.
Barak Tulin
Partner, Partners
Barak Tulin is a creative, analytical, and effective executive with over 20 years of experience in performance improvement, restructuring and turnaround, financial planning and analysis, transaction services and general management.
- Identified performance improvement insights
- Created KPI dashboard for lender
The company creates and executes advertising campaigns in multiple outdoor venues such as gas stations, buses, trucks, restaurants, bars and ski resorts. After multiple operational issues, reduced duration of its campaigns, the unsuccessful integration of an add-on business and the loss of a large customer contract, the company’s financial performance deteriorated, and it violated its lender covenants. CR3 partners served as Financial Advisor to the secured lender and performed and delivered an assessment to the lender and company on its 2019 business plan, identified risks and opportunities to the P&L and balance sheet that the borrower had not previously contemplated, and provided the lender a scenario model in which it could determine how those risks and opportunities impacted financial and loan-covenant performance.
The Situation
- Outdoor-advertising agency violated lender covenants prior to 2019 after multiple operational issues and the unsuccessful integration of add-on business
- Reduced lead times led to increased cost to service customers, reduced duration of advertising campaigns, reduced profit in several growing business lines, and loss of a large customer contract due to execution issues
- The company enacted price increases to maintain gross margin from prior years, and the lender was concerned the price increases and increased operational complexity would place achievement of the business plan at risk
The Work
- Reviewed and provided insights regarding company's operations
- Assessed strategic and financial condition of company's business lines
- Reviewed overhead and costs structure
- Assessed the company's sales and marketing process
- Reviewed P&L projection in the context of the capital structure to determine if the borrower’s debt load was sustainable
- Worked with the borrower to generate risks and opportunities to the P&L and balance sheet in order to determine their impact on financial and loan-covenant performance
- Provided ongoing advisory services to the lender in conjunction with resolution of the credit
The Results
- Delivered assessment to the lender
- Provided key components of the deliverable to the borrower
- Shared insights with both parties that would help improve the company's performance and enable the lender to monitor the company's performance in the future
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