11 Success Stories Bob NaglickPresentation Transcript
Robert Naglick, CFO
B&P - Background• Located in Saginaw Michigan• Manufactures mixing, separating and compounding equipment for the plastics, chemical and pharmaceutical industries.• Equipment orders range in price from $125,000 to $2.5 million.• Production cycles range from six to fourteen months.• B&P also sells replacement parts. Parts orders average $50,000.• Annual Revenues total $30 million.• Approximately 50% of equipment and parts sales are exported to Asia, Europe and Latin America.
Key Issues• Need for additional working capital funding availability.• Repayment risk associated with export sales and receivables.• Export-related Work in Process inventory financing over six to fourteen month production cycle.• Requirement to issue performance related standby letters of credit and bid bonds.• A single export order can be significant to the balance sheet.
Solution• $5 million Export Line of Credit Agreement with JP Morgan Chase, guaranteed by Export-Import Bank of the U.S.• B&P also has a separate $5 million domestic line of credit with JP Morgan Chase.• B&P’s cost of Working Capital Guarantee Program – Annual fee is assessed on the Export Line Facility.Borrowing Base Collateral Domestic Line Advance Rate Export Line Advance Rate Accounts Receivable 80% 90% Inventory – Raw material and WIP 50% 75% Reserve for Standby L/C’s (100%) (25%)Result• B&P has been able to achieve steady export growth.