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Sr. Mgmt. & Board chasing NASDAQ Listing
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Former CEO hired 5 finance directors in 18 months
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Company overpaid for bad acquisitions
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Revenues decreased 19% from prior year
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Acquired company shut down after 6 months
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Parent company treating newly acquired company poorly, creating un-repairable damage with clients and vendors
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Clients, vendors, employees, & Investors expecting bankruptcy
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Management used method of robbing one company to fund the other, weakening both
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Management increased corporate over-head at a time when they were losing business
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Management hired unqualified people externally, ignoring in-house talent that was more appropriate
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Company had unclear & unbelievable strategy
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Action Steps:
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Immediately eliminated CEO, and made 26 employees redundant to decrease burn rate
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Took interim positions as President, CEO & Board Member
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Initiated immediate 2 day strategic planning session
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Separated business into two divisions, requiring them to stand on their own merits
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Made two more rounds of redundancies to right size both divisions
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Moved office locations& negotiated early termination of both leases
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Focused sales efforts on “hero clients”
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Company headcount reduced from 115 on 5/31/07 to 60 within 1 year right sizing the business
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Eliminated old BOD and replaced with 3 new members
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Moved from NASDAQ to OTCBB with seamless integration
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Hired FD, Sales Managers & Strategic Development head
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Sold underperforming division to focus on company’s core business and path to profitability
Results:
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Within three quarters achieved first EBITDA and cash flow positive quarter in over 5 years
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EBITDA improvement of $10 million in 18 months
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Reduced corporate overhead by $2.5 million
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Move of offices created $500k per year in savings
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Obtained shareholder approval for reverse split
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Increased number of authorized shares to ensure company corrected default on covenants with institutional investors
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After meeting milestones, secured $10 million in capital
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Avoided bankruptcy, and finally stabilized stock price |
