Case Studies

Manage Cash and Working Capital

Problem Statement: A regional specialty food manufacturer was dealing with issues of deteriorating profitability and the owner was faced with an ongoing need to contribute additional capital to maintain operations.

Riverbend was Engaged to: Improve the overall financial performance of the company with a major focus on cash management.

Riverbend's Results: Within two weeks, Riverbend created a detailed 13-Week cash flow management model that incorporated A/R terms, receipt forecasting, A/P terms and prioritized payments and payroll.  The model was integrated into the heart of the client’s financial planning and cash management processes. Within six weeks, net cash flow was at break even, no additional cash influx was required by the owner, and raw material availability improved.

Solve Billing Issues and Reduce Accounts Receivable Balance

Problem Statement: An Oil & Gas chemical and services company was experiencing revenue and profitability decline including poorly performing A/R with a large past due (90 day+) backlog and a high write off percentage.

Riverbend was Engaged to: Determine the root causes of the poor A/R performance and quickly implement solutions to improve A/R performance.

Riverbend's Results: Riverbend quickly determined that most of the client’s A/R issues stemmed from a poor billing (and feeder) process that either failed to send or sent inaccurate invoices as well as from an inadequate collections process. Riverbend modified the billing process as well as the key operational processes that fed billing and created a robust collections process that closely tracked billing status and significantly engaged with customers for resolving issues, developing payment plans, and collecting cash. Due to the severity of the problem, Riverbend provided day-to-day management of collections. Within 2 months, all A/R was returned to “current”, all existing customer issues resolved, A/R backlog was reduced by over $1M, and write-offs brought to 2 percent.

Improve Cash Flow and Supplier Relationships

Problem Statement: A plastic injection molding company was experiencing financial issues including Accounts Payable (A/P) problems (large backlog, late payments) with key suppliers that threatened the ability of the company to function.

Riverbend was Engaged to: Improve overall financial performance with a major focus on fixing A/P and improving relationships with vendors.

Riverbend's Results: Riverbend quickly assessed A/P issues were rooted in a poor purchasing planning process and inadequate vendor relationship management focus. Riverbend implemented tools and a process to provide visibility of key material requirements and implemented a Just-in-Time purchasing process to better utilize limited cash to purchase required materials while reducing the A/P backlog. Riverbend also appointed a vendor relationship management person and assisted in preparing vendor management strategies, communicating with key vendors, and developing payment plans. Within two months, all vendors had lifted the “on-hold” status, the A/P backlog was significantly reduced without hurting the cash position, and raw material availability was improved.

Restructure Income Statement for Strategic Decision Making

Problem Statement: A manufacturer of health education products with three divisions was considering divesting or closing one of divisions that ownership/senior leadership felt was unprofitable.

Riverbend was Engaged to: Analyze performance of the organization and its divisions to determine the correctness of the divestiture decision.

Riverbend's Results: Riverbend immediately saw that the P&L existed only at the company level and not at the division level.  In the next two weeks, Riverbend restructured the P&L to include divisions and to reveal the Contribution Margin and Gross Margin at the divisional level.  Based on the new P&L, the division that was slated to be divested was in fact the most profitable division that carried the other two. Based on the new insight, ownership did not divest the most profitable division and thus did not significantly endanger the functioning of the business. Going forward, management was able to make better decisions leading to a healthier financial performance.

Develop and Implement Short Term Strategy

Problem Statement: A food industry organization with manufacturing and distribution divisions was unsure of its strategic direction given its poor financial performance and some of the changes happening to its industry and customer base.

Riverbend was Engaged to: Develop various strategic alternatives and to assess the most appropriate direction for the company including determining the company divisional configuration, product mix, and customer sector focus.

Riverbend's Results: Riverbend quickly built financial and operational models for six strategic scenarios that incorporated possible divisional structures, product mix, and customer focus. The models included all key strategic planning parameters required to determine the profitability of each scenario. Once the best scenario was chosen, Riverbend assisted the client in executing the new direction and a path to profitability. The implementation of the new direction resulted in a return to profitability and overall improvement of financial parameters.

Develop Operating Plan

Problem Statement: A health care services company focused on autism treatment and support services was not meeting its overall revenue profitability targets.

Riverbend was Engaged to: Assess the current financial situation and develop a detailed plan that will return the company to hitting its overall performance targets.

Riverbend's Results: Riverbend quickly determined that organizational goals and metrics were only at the overall company (HQ) level and did not deploy adequately throughout the organization to the division/regional office level. Specifically, key drivers of financial performance and profitability were not sufficiently tracked and integrated at key field operations sites.  Based on the company’s key drivers and strategic direction, including organic and acquired growth, Riverbend built a detailed operating plan that rolled up from the regional office/division level to overall company level, and which contained granular financial and operational metrics with targets. Within six months, the organization had a detailed plan that can be implemented and managed and that allowed the company to reach its overall performance targets.

Increase Plant Throughput

Problem Statement: A plastic injection molding company was experiencing high revenue growth. However, it was simultaneously experiencing a rapid decline of profit which had led to 2 consecutive years of negative EBITDA.

Riverbend was Engaged to: Determine the root causes of the accelerating EBITDA decline and create a plan to return to profitability.

Riverbend's Results: Riverbend quickly determined that most of the client’s revenue came from products in price sensitive sectors and concluded that operational efficiencies would be required to reduce costs and improve margins. Riverbend conducted an extensive root cause analysis and implemented operational process improvements to increase throughput. Within four months, throughput increased from 46% to 56% and the organization was on track to improve contribution margin from 33% to 36% and achieve positive EBITDA.

Accelerate Revenue Growth

Problem Statement: A national professional services company was experiencing rapid market share deterioration in an industry sector experiencing rapid growth.

Riverbend was Engaged to: Determine why revenue was declining and identify and implement process improvements to stem market share losses. 

Riverbend's Results: In less than 30 days, Riverbend identified and implemented process improvements including definition of a prospect target list, implementation of a sales management process and training / reassignment of business development team members to leverage their skills and strengths. Four months following implementation of the process improvements, new business had been contracted equivalent to the prior 12 months.

Improve Profitability and Enterprise Value

Problem Statement: A regional specialty food manufacturer was dealing with issues of deteriorating profitability and the owner was faced with an ongoing need to contribute additional capital to maintain operations.

Riverbend was Engaged to: Define the underlying profitability of the company's distribution and manufacturing divisions and associated customers and products, and develop a cash flow forecast to understand weekly capital requirements. 

Riverbend's Results: Riverbend determined that 25% of 1,500 SKUs were unprofitable, prompting rationalization based on importance to key relationships, pricing actions, cost reductions or discontinuance. The rationalization process resulted in immediate, six figure profit improvement.

Achieve Strategic Growth

Problem Statement: An oil and gas services company was growing rapidly and needed to raise capital, but lacked clear strategic direction and an understanding of the timing and amount of capital necessary to finance its growth.

Riverbend was Engaged to: Determine the short term and long-term objectives of the organization and develop a detailed strategic plan including pro forma financials and capital requirements. 

Riverbend's Results: Riverbend worked closely with the key stakeholders of the organization to create a detailed Strategic Business Plan which included an industry analysis, value proposition statement, go to market strategy and legal entity structure. It also outlined the organization’s strategic objectives and annual goals with forecasted financials and capital requirements over a five-year period. Using the Strategic Business Plan and the capital requirements tied to the plan, the organization was able to raise the necessary capital to finance its growth.

Improve Operational Performance

Problem Statement: A manufacturing company in the health education sector was experiencing increasing customer and employee dissatisfaction and sales challenges.

Riverbend was Engaged to: Determine the root cause of the dissatisfaction and sales issues and implement the required changes to fix the issues.

Riverbend's Results: Riverbend quickly determined that the dissatisfaction could be directly attributed to long and unpredictable product delivery times.  The business’s first pass fulfillment rate was 42% and it was taking two weeks to deliver orders. Riverbend put the necessary changes in place to segment the inventory and implement changes in production. Within six months, the fulfillment rate had increased to 95% and orders were being delivered in less than 3 days resulting in increased sales while reducing finished goods inventory by 33%.

Establish Strategic Direction

Problem Statement: Over the past several decades, a small, regional non-profit had evolved into a prominent international organization with significant industry influence. However, the mission, vision and purpose of the non-profit had not changed from its inception.

Riverbend was Engaged to: Review and revise the mission and vision statements, develop a three-year strategic business plan, design a business model to facilitate achievement of the strategic business plan, and develop an implementation plan with clear operational and financial goals to measure progress.

Riverbend's Results: Riverbend’s collaborative planning process built consensus of the non-profit’s new mission, vision and strategic objectives among the diverse, 26-member Board of Directors. This allowed the new direction to be rapidly implemented and provided a compelling plan that significantly accelerated fund raising.

How We Engage

Riverbend has a unique engagement process that includes a free, no obligation assessment. Our process provides the opportunity to get to know one another and the challenges you’re facing. This enables us to identify and prioritize areas for improvement and results.

We believe that we should never be a net expense to our clients. We consistently deliver operating income improvement amounting to a multiple of our fees in the first twelve months after implementation.