Kibel Green Intro2010

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This is an overview of services provided by Kibel Green

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Kibel Green Intro2010

  1. 1. For over 25 years Kibel Green has advised over 1,500 clients in • Unlocking operational potential • Securing new sources of capital • Turning around struggling companies Firm Overview Jonathan J. Wernick| Senior Consultant Kibel Green Inc. | 2001 Wilshire Blvd, Suite 420 | Santa Monica, CA 90403 Direct: 310.829.0255 x205| Mobile: 310.909-6121| Fax: 702-554-2625 jwernick@kginc.com | www.kginc.com
  2. 2. Firm Overview We offer three synergistic capabilities for middle market companies  Over 1,500 clients since 1984  Primary focus on public and  $5B in transactions private middle market companies Turnaround Operations  Lender negotiation  Profitability improvement  Cash flow maximization  Organization simplification  Business plan vetting  Supply chain efficiency  Cost management  Project management  CRO services  A one-stop solution Broad experience Financial  Strong partnership with management  Retail Restructuring  Senior-level professionals  Manufacturing  Debt negotiations  Distribution  New funding sources  Resources and expertise  Service  Bankruptcy plans for urgent situations  Real Estate  Sale of assets  A regional presence in  Technology the Western U.S. 2
  3. 3. Client Profile – Sample of Recent Engagements We have broad industry experience and strong expertise in distressed situations 1 Size $M Description Service Provided 360 Consumer Product Manufacturer Turnaround 190 Residential Real Estate Developer Turnaround, Bankruptcy 1,125 Sporting Equipment Manufacturer Operations 300 Print & On-line Media Publisher Operations 85 Home Furnishings Retailer Turnaround, Bankruptcy 135 Consumer Products Retailer Turnaround, Bankruptcy, Sale 75 Physician Network Turnaround 350 Real Estate Developer Turnaround 100 Res/Comm'l Real Estate Owner Turnaround 300 Automotive & Parts Manufacturer Turnaround, Bankruptcy, Sale n/a County Gov't Health Svcs Provider Operations 10 Oil & Gas Producer Turnaround, Bankruptcy 110 Aftermarket Auto Parts Mfg Turnaround 70 Foreign Auto Parts Distributor Turnaround, Operations 120 Storage & Data Center Mfg Turnaround 100 Staffing Services Fin Restructuring, Capital 350 Specialty Retailer Turnaround, Operations 330 Print & On-line Media Publisher Turnaround, Sale 180 Residential Real Estate Developer Turnaround 130 Automotive & Parts Mfg Turnaround 1 - Annual Revenues except for Real Estate clients which represents the amount of Debt. 3
  4. 4. Service Offerings - Turnaround Our turnaround service offering concentrates on four key activities to address visibility, cost and business model issues Reducing Developing a Projecting and Improving Costs – Plan – Current Managing Management Lowering State vs. Cash Flow Reporting Break Even Future State  Develop a rolling 13-  Renegotiate real estate  Develop a detailed  Create weekly week plan and personal property current state income information package leases statement  Tie projections to  Develop company balance sheet  Evaluate facility  Build a target future dashboard / key driver consolidation state – profitable report  Create goals and business model assign responsibility  Reduce payroll  Improve expense  Identify actions communication among  Identify potential necessary to lenders, equity and sources of cash  Reengineer processes implement plan management 4
  5. 5. Service Offerings - Operations Kibel Green offers a full suite of operations capabilities across our clients’ value chains R&D and Sourcing and Manufacturing Distribution Sales and Customer Product Procurement and Logistics Marketing Support and Development Service  Ideation to  Vendor  Manufacturing  Warehouse  Sales process  Call center prototyping management strategy operations improvement process improvement improvement  Improve speed  Low-cost  Production  Sales to market country outsourcing  3PL vendor compensation  Service parts sourcing selection and cost reduction  Reduce  Lean  Pricing management development  Spend manufacturing effectiveness costs analytics  Inventory  S&OP  Marketing ROI reduction Human  Organization design  Compensation benchmarking Resources Finance/  Driver Analysis  Improve speed of close  Improve reporting Accounting Information  IT strategy  IT vendor selection  IT risk mitigation Technology 5
  6. 6. Service Offerings – Financial Restructuring Helping clients get difficult deals done quickly  Extensive experience assisting Companies with Plans of Reorganization. Design Plans of Reorganization  Deep knowledge of restructuring mechanics.  Has the confidence of the lenders. Credibility  Can vet the Company’s information and projections, thereby lending an independent “stamp of approval.”  Turnaround, financial restructuring and operations groups under one roof. One Firm: Unique Capabilities  Creates options for distressed companies.  Strong relationships with lenders and investors at all levels of the capital structure. Access to Capital/ Creative  KGI has seen hundreds of transactions; seek the best result in each situation. Structuring  Strong relationships with most of the key professionals, enabling more effective negotiations. Negotiation and Structuring  “Parallel Path” leads to streamlined process and optimal solution for client. Expertise
  7. 7. Service Offerings When to contact us  The earlier Kibel Green is brought in, the wider the range of restructuring options.  As operations and enterprise value deteriorate, the probability of a successful turnaround or restructuring declines dramatically. Potential Distress Signals Checklist  Breaches of key performance covenants (i.e.,  Late filing of financial statements/other minimum EBITDA, maximum leverage or information interest coverage, minimum FCCR)  Tightening of availability/taking more reserves  Failure to meet business plan  Vendors tightening terms  Significant declines in cash flow  Significant litigation  Increases in days payables  Capital infusion by owner  Piecemeal asset sales  Large write-downs  Loss of key customer or vendor  Transfer to special assets division  Layoffs  Sales of debt obligations to other parties  High turnover at officer level  Death/incapacity of owner 7
  8. 8. Kibel Green’s Approach Our standard approach translates objective, fact-based analyses into tangible client benefits Objectivity and Experience A 3rd party that is the Honest Broker and can achieve results with key constituents Critical, Thorough Analyses Detailed cash flow, financial forecasts and valuations, and analysis of stakeholder interests Development of Strategies and Plans Vetting and/or development of business plans that are believable to all key constituents Practical Solutions and Action Steps Converting the Plan into action and guiding the client through the process Positive Results for Clients Achieving the client’s objectives 8
  9. 9. A Selection of Professionals Our team can flex up & down – here are a few of our professionals Steve Green Steve Green Bruce Conklin Bruce Conklin Jonathan J. Wernick Jonathan J. Wernick President President Senior Managing Director Senior Managing Director Senior Consultant Senior Consultant Expertise: Expertise: Expertise: Expertise: Expertise: Expertise:  Co-founder of Kibel Green  Co-founder of Kibel Green  Principal of Kibel Green  18+ years of financial, business  Principal of Kibel Green  18+ years of financial, business  30+ years of capital markets  30+ years of capital markets  30+ years or experience in the development and management development and management  30+ years or experience in the and turnaround experience and turnaround experience business management,  Served in senior management business management,  Served in senior management  Personally managed over one  Personally managed over one operations and turnarounds operations and turnarounds roles for public and private roles for public and private hundred financial and hundred financial and  Interim CEO and CRO for companies in retail, companies in retail,  Interim CEO and CRO for operational restructuring operational restructuring numerous companies manufacturing, technology, manufacturing, technology, numerous companies assignments, capital raising, assignments, capital raising, construction, heath care and construction, heath care and  Extensive experience with  Extensive experience with sale/ acquisition transactions sale/ acquisition transactions real estate real estate creditor negotiations creditor negotiations  Frequent speaker at USC  Frequent speaker at USC  Experienced in creditor  Experienced in creditor  Raised and managed several  Raised and managed several Marshall School of Business and Marshall School of Business and negotiations negotiations regional legal and business billion dollars in equity and both billion dollars in equity and both regional legal and business  Financial analysis, budgeting,  Financial analysis, budgeting, conferences secured and unsecured secured and unsecured conferences cash flow projections, cash flow projections, financing financing forecasting, valuations forecasting, valuations Education: Education: Education: Education: Education: Education:  MBA, University of Southern  MBA, University of Southern  BS, Lehigh University  BS, Lehigh University  MBA, University of Southern  MBA, University of Southern California California California California  CPA  CPA  BS, Northeastern University  BS, Northeastern University  CPA. KPMG  CPA. KPMG  BA, Yeshiva University  BA, Yeshiva University 9
  10. 10. A Selection of Professionals Our team can flex up & down – here are a few of our professionals Tim Vadney Tim Vadney Matt Covington Matt Covington Jay Maddox Jay Maddox Managing Director Managing Director Managing Director Managing Director Managing Director – Real Estate Managing Director – Real Estate Expertise: Expertise: Expertise: Expertise: Expertise: Expertise:  Real Estate financial advisory  Real Estate financial advisory  Sales and operations planning  Sales and operations planning  Over a decade of experience in and Capital Markets  Over a decade of experience in and Capital Markets  Demand planning and  Demand planning and financial restructuring and M&A financial restructuring and M&A  15+ years commercial real  15+ years commercial real forecasting forecasting transactions. transactions. estate finance and workouts estate finance and workouts  Direct and indirect materials  Direct and indirect materials  Deep understanding of financial  Deep understanding of financial  Completed over $1B of  Completed over $1B of sourcing and procurement sourcing and procurement restructuring mechanics and restructuring mechanics and transactions and restructurings transactions and restructurings  Manufacturing strategy negotiation dynamics. negotiation dynamics.  Manufacturing strategy  10 years financial and  10 years financial and  Returns management  Has advised companies,  Has advised companies, operations management  Returns management operations management creditors and financial sponsors creditors and financial sponsors experience with small  Customer and channel  Customer and channel experience with small in both in-and-out-of-court in both in-and-out-of-court technology companies segmentation segmentation technology companies restructuring transactions restructuring transactions  Sales force effectiveness  Sales force effectiveness across a variety of industries. across a variety of industries.  IT strategy and effectiveness  IT strategy and effectiveness Education: Education: Education: Education: Education: Education:  MA, American University  MA, American University  JD/MBA, University of Chicago  JD/MBA, University of Chicago  MBA, UCLA Anderson School  MBA, UCLA Anderson School  MA, Ritsumeikan University  MA, Ritsumeikan University  BA, University of California at  BA, University of California at  BA, Claremont McKenna College  BA, Claremont McKenna College Berkeley Berkeley  BA, Emory University  BA, Emory University 10
  11. 11. Contact Information – Los Angeles Office 2001 Wilshire Boulevard  Suite 420  Santa Monica, CA 90403 866.875.0255 Tel  310.453.6324 Fax  www.kginc.com Steven J. Green, Co-Founder & President 310.829.0255 x220 sgreen@kginc.com Jonathan J. Wernick, Senior Consultant 310.829.0255 x205 Office jwernick@kginc.com 11
  12. 12. SUPPLEMENTAL INFORMATION 12
  13. 13. Introductions An investment with Kibel Green creates immediate and lasting value Benefits of an Introductory Meeting with Kibel Green  Client will receive valuable insights and ideas  We provide an initial assessment of the business model and identify options and strategies  The initial consultation is at no charge Fee Structure  Affordable – fees are based upon hourly rates  Engagements are at-will  Transactions – based primarily on contingency fees Kibel Green wrote the book on crisis San Francisco and turnaround We primarily serve clients in management and the 11 Western States but do Los Angeles Orange County understands how to perform engagements across navigate the the U.S. and internationally in economic downturn. support of key relationships. 13
  14. 14. Kibel Green’s Team We have substantial professional resources available that can be quickly mobilized to tackle either short-term or large and complex projects  We are a boutique firm offering Partners Directors custom, highly specialized services throughout the Western U.S. Manage engagements and lender  We staff based on the size and negotiations complexity of the engagement.  We have 7 people at the Managing Director level or higher and have a staff of about 30 people. Managing Consultants  We actively recruit and maintain a highly-qualified reserve of 50+ senior Prepare detailed business plans, financial executives to provide additional forecasts and presentation outputs functional or industry-specific expertise as needed. Sr. Consultants Consultants Conduct ground level due diligence, analysis and research 14
  15. 15. A Selection of Professionals Our team can flex up & down – here are a few of our professionals Guy Schneggenburger Guy Schneggenburger Matthew Getty Matthew Getty Jonathan J Wernick Jonathan J Wernick Director Director Managing Consultant Managing Consultant Senior Consultant Senior Consultant Expertise: Expertise: Expertise: Expertise: Expertise: Expertise:  25+ years of industry and  25+ years of industry and  17 years of financial, marketing  17 years of financial, marketing  18+ years of financial, business  18+ years of financial, business consulting experience consulting experience and operations management and operations management development and management development and management  Warehouse operations  Warehouse operations  Managed a business unit of a  Managed a business unit of a  Financial analysis, budgeting,  Financial analysis, budgeting,  Distribution network planning public company and ran a public company and ran a cash flow projections, cash flow projections,  Distribution network planning division of a $1B private division of a $1B private forecasting, valuations forecasting, valuations  Transportation management  Transportation management company company  Structured and sourced $1B+  Structured and sourced $1B+  Demand planning and  Demand planning and  Business planning, new product  Business planning, new product of corporate debt of corporate debt forecasting forecasting development and introduction development and introduction  Due diligence  Due diligence  Production capacity planning  Production capacity planning  Sales operations and demand  Sales operations and demand  Business process reengineering  Business process reengineering  Lean manufacturing  Lean manufacturing planning planning  Turnaround and restructuring  Turnaround and restructuring  Inventory management  Inventory management  Turnaround expertise  Turnaround expertise  Project management  Project management Education: Education: Education: Education: Education: Education:  MBA, University of Southern  MBA, University of Southern  MA, Cal State Fullerton  MA, Cal State Fullerton  MBA, UCLA California California  MBA, UCLA  BS, UC Irvine  CPA, Deloitte & Touche  CPA, KPMG  CPA, KPMG  BS, UC Irvine  CPA, Deloitte & Touche  BS, University of San Francisco  BS, Yeshiva University  BS, Yeshiva University  BS, University of San Francisco 15
  16. 16. Retail Case Study – Turnaround An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $350M regional retailer with ten  Prepared an objective independent locations with 90% of sales on bank report that provided clarity credit to immigrant community and assurance on the Company’s with no previous credit history turnaround efforts  $150M term debt  Built a cash flow modeling tool to  Downturn in economy resulted in navigate tighter loan availability higher defaults and slower  Created a dashboard of key payments performance drivers (KPI’s) to  Financial and purchasing practices assess and improve financial and did not keep pace with rapid operational results expansion over the last 3 years  Identified operational opportunities  Running out of ABL loan availability to improve cash flow, profitability  In forbearance with lender group and utilization of working capital in and credibility deteriorating excess of $10 million 16
  17. 17. Distribution Case Study – Operations An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $1B sporting goods manufacturer  $4.0M EBITDA improvement in 3 was staffed for day-to-day months operations and needed immediate  Lead the Asian-market supply chain expertise for strategic project selection and implementation implementation activities  Executives observed that cost  Completed supply chain partner reductions should be available from selection and implementation in improvements to distribution three countries operations and improved  Established knowledge base for outsourcing relationships activities in five additional countries  Market pressure to show results on  Cross-functional project a quarterly basis increased urgency management between executive of capturing identified opportunities leadership, internal departments,  Underperforming Asian (China, and external vendors Korea, Japan) distribution partners 17
  18. 18. Distribution Case Study – Turnaround, Operations, Financial Restructuring An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $70M regional automotive and  Stabilized the bank relationship marine parts distributor  Approved a $2.0M over-advance experiencing a cash shortage  Downsized the footprint to liquidate  $18M asset-based loan inventory and increase near-term  Lenders were not cooperating by cash flow by $3.1M providing an overadvance  Used increased funds to improve  Strained supplier relationships were stocking levels constraining inventory levels  Created time to run a sale process  Fill rates declined from 90% to  Effectuated a sale transaction 72% resulting in a noticeable within 4-months that paid the impact to sales secured lender 100% 18
  19. 19. Distribution Case Study – Operations An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $2B telecommunications products  $18M EBITDA improvement in 6 distributor had a new management months team leading a leveraged buyout -  100% improvement in distribution needed to reduce costs quickly center productivity from process  Network of over 70 regional engineering distribution centers with varying  Reduced average order processing policies and performance results time to two hours  Flagship distribution center  Facilitated installation of WMS averaged two days to process an across the distribution network order  Led and provided project  Operations management team had management for four facility difficulty translating financial goals consolidation and relocations set by the Board into action  Created departmental KPI program to translate financial goals into work standards 19
  20. 20. Manufacturing Case Study – Turnaround, Operations An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $225M medical products  $2M EBITDA increase in 4 months by manufacturer had a 5-year history removing the barriers of an of losses or breakeven organization built on functional silos performance  $4.5M EBITDA gain with design and  Private equity investor and senior debt holders wanted an exit implementation of new transportation program  Senior management recently completed a restructuring project,  Reduced the number of SKUs from but did not achieve breakthrough 350 to 75 resulting in simplified results manufacturing processes and  More than 85 cost reduction increased purchasing leverage projects were in motion without  Increased product availability and coordination decreased finished goods inventory  Company had difficulty expressing through a significant reduction in its value proposition for the market changeover times place 20
  21. 21. Manufacturing Case Study – Turnaround, Operations An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $125M high-performance appliance  $12M EBITDA improvement in 6 manufacturer was undervalued months versus investor expectations in a  Increased capacity 30% in existing sales process facilities  A history of late delivery to its  Reduced lead time from 153 to 6 distribution channels days for product delivery to the  WIP inventory required a separate customer material handling staff to track and  Established Office of Continuous move it Improvement to sustain changes  Company was contemplating the  Reduced WIP investment by 80% by purchase of additional machine incorporating parts tooling into tools to solve parts shortage assembly lines problems  Led sales process that resulted in achievement of the investors’ financial goals 21
  22. 22. Manufacturing Case Study – Turnaround, Operations An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $150M manufacturer and supplier  Stabilized the bank relationship of furniture  Negotiated over-advance and long-  A cash shortage and operating term forbearance agreement losses  Downsized headcount and  $14M asset-based loan increased production flexibility by  Borrower moved into special assets changing to a cell manufacturing  Facing decreased demand for methodology domestically made furniture and  Created time to continue to pricing competition from overseas operate  Currently operating under extended forbearance agreement with same lender 22
  23. 23. Consumer Goods Case Study – Financial Restructuring An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $100M designer and direct-  Created an offering memorandum marketer of educational products  Ran a successful sale process  $90M syndicated debt targeting 16 strategic buyers and  Rapid dissipation of customer base 18 financial buyers worldwide due to construction industry  Achieved a consensual agreement implosion and heightened scrutiny avoiding bankruptcy of immigration issues  Structured and negotiated key  Y-O-Y Revenues down 19% and elements of the transaction forecasted to drop another 10%  Provided critical input to stabilizing  Dramatic reversal in EBITDA within and improving cash flow a short timeframe  Syndicated loan with a difficult and fragmented lender group 23
  24. 24. Real Estate Case Study – Turnaround, Financial Restructuring An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  $60M Los Angeles urban in-fill  Stabilized the lender situation and homebuilder restored management’s credibility  $28M of construction loans and  Developed the Company’s financial unsecured debt in default, all restructuring plan personally guaranteed by principals  Created robust financial models for  Home values substantially lower lender presentations than secured debt, resulting in  Negotiated a repayment of debt potentially massive personal obligations at a 44% discount with recourse exposure full release of personal guarantees  In forbearance with lender group, and dismissal of legal proceedings with one lawsuit filed and  Facilitated new $10.8M capital credibility deteriorating infusion  Company retained equity in projects 24
  25. 25. Real Estate Case Study – Turnaround, Financial Restructuring An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  Major California homebuilder  Stabilized the lender conflict  $70M of senior secured and $62M situation subordinated parent company debt  Prepared detailed project budgets in addition to $100M of project and cash flow analysis and roll up construction loans with 12 different financial projections for corporate banks and co-lenders in California guarantor entities, stratified by and Texas lender  Project debt guaranteed by  Created bankruptcy analysis at corporate entities, creating heavy corporate and project levels to liquidity pressures due to loan re- support lender negotiations margining demands from banks  Advised in lender negotiations and  In conflict with lender group, with helped avoid a run-on-the-bank existing and pending loan covenant that would have crippled the defaults company 25
  26. 26. Real Estate Case Study – Turnaround, Financial Restructuring An investment with Kibel Green creates immediate and lasting value Business Challenges Results Delivered  Family controlled commercial  Prepared detailed business plan developer/owner based in Southern and financial forecasts including California liquidation analysis to support  Multiple commercial and land lender negotiations development projects that  Educated client on available encountered difficulty in the recent defenses in response to aggressive economic downturn tactics by lead bank  $40M of bank debt subject to re-  Assisted in successful effort to margining demands and/or obtain long term extensions of maturing with no viable repayment bank debt thereby providing for source, posing a significant threat long term financial stability to liquidity and long term viability of the portfolio 26
  27. 27. Service Offerings – Financial Restructuring Maximizing client value in various types of Financial Restructurings Restructuring Balance Sheets Renegotiating Debt Covenants/Terms  $645M meat processor and sandwich maker  $140M mobile phone distributor  $250M contract manufacturer of field rations for  $200M chain of regional casinos the military  $96M global provider of telecommunications  $366M natural gas plants in the Northeast services  $150M chain of furniture stores  $350M chain of electronics and furniture stores Raising Capital Selling Distressed Assets/Companies  $350M manufacturer and distributor of medical  $100M Group of wineries in Northern California consumables for the elderly  $114M Jeweler targeting low-middle income  $126M manufacturer and distributor of dairy Hispanic market products  $200M retailer of denim and casual clothing for  $75M chain of Mexican restaurants teens  $100M integrated media publishing company  $125M manufacturer of consumer and (trade magazines, journals, conferences) commercial cooking equipment 27

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