Financial discipline for an industry where equipment, workforce, and customers represent irreplaceable value.
Manufacturing businesses in distress face a race against time. Lighthouse has served as receiver, interim president, and turnaround advisor to manufacturers across metal fabrication, boat building, and industrial equipment, managing shareholder disputes, lender negotiations, and operational transformations.
In manufacturing, the value walks out the door every day — in the form of skilled labor, customer relationships, and equipment that depreciates faster when idle. We move with the urgency the situation demands, stabilizing operations while building a viable path forward.
Lighthouse served as advisor to a manufacturer experiencing mounting operational losses and strained liquidity.
Challenge: Operating losses were mounting and liquidity was strained as the subsidiary was a construction firm which billed on a percentage of completion method. Sales had increased significantly, but their percentage of completion progress billings were not allowed in the borrowing base. The senior lender provided limited borrowing against the receivables, but not enough to provide sufficient working capital. Financial information was not readily available for management to make decisions in real time. Further, since cash was combined amongst operating entities, significant time was required to manage cash and payments to vendors between the subsidiaries.
One of the company’s largest customers had projected significant purchases related to a major remodeling effort across its franchisees. However, due to prevailing headwinds, it delayed its orders.A newly constructed hotel near the University of Bemidji had experienced cost overruns and limited customer traffic. The borrower defaulted on a syndicated loan and ownership disengaged from operations.
The Solve: After meeting with management and working through the issues, a restructuring plan was developed with the new senior management team and the board. The outline of the plan was as follows:
1. Appoint permanent CEO
2. Sell non-core businesses
3. Wind down unprofitable operations
4. Implement a RIF which eliminated $1.4 million of payroll expenses
5. Exit an underutilized facility6. Execute a forbearance agreement to allow time to implement the plan
7. Find a new lender to take out the current bankA newly constructed hotel near the University of Bemidji had experienced cost overruns and limited customer traffic. The borrower defaulted on a syndicated loan and ownership disengaged from operations.
The Outcome: Lighthouse was able to implement the plan resulting in first half net income increasing to $703k from <$1.4M> the year prior.
How we approach manufacturing engagements.
1. Operational & Financial Assessment: We evaluate production capacity, equipment condition, workforce capabilities, customer concentration, and backlog to understand both the financial distress and the underlying enterprise value.
2. Cash Flow Stabilization: We implement immediate measures, renegotiating supplier terms, optimizing production schedules, reducing overhead, and improving working capital management to extend the runway for strategic decisions.
3. Market Repositioning: We evaluate whether the business model is viable and, where necessary, help management transition from technology-driven to market-driven operations that align production with actual demand.
4. Resolution & Value Maximization: We execute the right outcome — whether that's a successful turnaround, a sale to a strategic buyer who values the workforce and customer base, or an orderly wind-down that maximizes recovery.
The best outcomes start with early action.
The sooner we're at the table, the more options remain available. Reach out for a confidential conversation with our team