Case Study #7

Company Profile

• Company manufactures corrugated and packaging materials.

Financial Situation

• Company’s sales were decreasing, with yearly revenues equal to $30 million.
• Company had experienced operating losses for the past two years.
• Significant capital expenditures would be necessary in order to upgrade product lines.
• The industry was consolidating, with a significant emphasis on stealing market share through price.
• The current lender wanted to terminate its relationship with the Company.

Sherwood Mandate

• Assist in the development of a revised business plan, with the goal of submitting the plan to prospective lenders.
• Identify prospective lenders and assist in negotiations.

Results

• Sherwood negotiated a $6.5 million “working capital” credit line, which was more flexible and responsive in allowing the
• Company to address market challenges. Sherwood accommodated the facility within 60 days of its engagement.
• Sherwood consolidated the Company’s equipment debt into a term loan, lowering the effective interest rate and reducing monthly payments.