Industry: Patio Furniture Manufacturer
Subject: An established, family-owned patio furniture manufacturer based in Fort Myers, Florida, with a focus on higher-end products for both residential and commercial customers. The manufacturer had done particularly well providing products to the hospitality industry. It maintained a good reputation within the industry and had been in business for more than thirty years.
Circumstance: This company contacted Summit through a financial consultant while the company was in bankruptcy. The company was attempting to work its way through a time when demand for patio furniture was low. However, there were signs that the business was starting to improve, particularly based upon renewed demand from the hospitality industry – a significant sector for the company. The company had implemented cost-cutting measures, but was burdened by excessive debt load it had obtained as it expanded rapidly in the pre-recession environment. The company also lacked working capital, which further hindered sales efforts and performance. To complicate matters, the company required a solution quickly because it was about to enter the spring selling season, the company’s most crucial time of year to book business.
Solution: Summit engaged the manufacturer’s senior lender and was able to purchase the debt at a discount while simultaneously restructuring the company’s balance sheet and enabling it to exit bankruptcy. As part of the restructure, Summit made additional working capital available to the company. Summit’s reputation and experience financing distressed situations were instrumental in negotiating with the bank. Summit was able to close the transaction and support the firm’s exit from bankruptcy with a confirmed plan of reorganization in roughly six weeks, meeting both the bank’s and company’s expectations.
Outcome: The manufacturer, working with Summit, was able to exit bankruptcy and stabilized its financial position. Having cleaned up its balance sheet and with an improved working capital situation, the company had a strong spring sales season and subsequently refinanced the Summit position a year later through a small business administration loan.