$140 Million Candy and Confectionary Manufacturer

Background and Situation:

• The Company is one of the leading manufacturers of seasonal chocolate novelties in the United States and has been in business for more than 60 years.
• Decreased operating efficiency lead to bloated inventories, rising overtime costs, excessive changeover costs and waste, and shrinking gross profit margins.

Results and Accomplishments:

• ESBA’s restructuring recommendations resulted in reversal from heavy operating losses to attractive operating income in one year. Specifically, a 2% increase in gross margin increased cash flow and return on equity and strengthened the capital structure.
• Streamlining of manufacturing operations also improved relations with Fortune 500 customers, reduced manpower costs, reduced and balanced the inventory, enabling the elimination of a warehouse.

WSFS Corp. (Key Customer of this Publically Traded Bank)

Background and Situation:

• Borrower was a $100+ million revenue importer/distributor of baby furniture that was plagued by a combination of disruptive consumer issues and related administrative fees that threatened its viability.
• ESBA was retained by WSFS to develop a business plan to stabilize the Company and enable the Bank to recover its principal loan amount.

Results and Accomplishments:

• As a result of ESBA’s efforts, WSFS’s debt position of almost $20 million was sold for an amount that exceeded the bank’s carrying value of the loan. The magnitude and favorable impact for WSFS from our work was captured in a major newspaper reporting a 4+% increase in WSFS’ stock after reporting this recovery.
• In addition to strengthening WSFS' operating results and stock, ESBA’s work also benefitted the company, which was able to attract alternative debt financing and continue operations more profitably.

$100 Million Women’s Apparel Company

Background and Situation:

• Prior to ESBA’s involvement, this apparel company had been losing at the rate of $12 million per year, creating enough cash tightness to preclude meeting secured and unsecured trade obligations.
• ESBA was retained to evaluate the business and improve its operating results.

Results and Accomplishments:

• Through a number of innovative operations and financial consulting initiatives, ESBA was able to drive a $12 million annualized profit improvement, including $8 million in expense savings.
• ESBA enabled the family to stay in control of the business, which was now building value, operating independently, generating more cash, and strengthening its vendor relations.

Pharmaceutical Formulations, Inc.

Background and Situation:

• This publicly traded manufacturer of generic pharmaceuticals had sustained continuing losses and the loss of its CFO.
• As a result, it was forced to file Chapter 11 bankruptcy (requiring a facility closure) while seeking a strategic buyer.

Results and Accomplishments:

• As interim crisis manager, ESBA immediately got control of the financial function and managed all of the transition activities, involving, union negotiations, the POR, bankruptcy filings, buyer due diligence and working capital financing.
• The result was a successful Section 363 sale to Leiner Corporation, enabling the full payment of all employee compensation, an 80 cent recovery to unsecured creditors, and full repayment of the Bank.

Capital Mercury Apparel

Background and Situation:

• ESBA met this $95 million revenue producer of men’s apparel as the subject of a due diligence review on behalf of a prospective new lender. When the loan was turned down, the company faced some dire some dire restructuring alternatives, including a Chapter 11 filing.
• ESBA assessment suggested a sale of the business, during which time it was necessary to conserve cash and continue operations long enough to permit a sale.

Results and Accomplishments:

• ESBA stabilized the business, reassured the lender for the necessary time period, and facilitated a sale of the business for a price exceeding liquidation value.
• The result was an expedient sale, a full recovery by the lender, some equity value for the shareholders, no exercise of personal guarantees, and the preservation of 280 jobs in a rural area of North Carolina.