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Cross-Functional Collaboration Divests Company of $1 Billion in Non-Core Assets
Due to the widespread economic downturn, the company had a strategic need to generate cash and preserve capital. After a review of the balance sheet was completed, certain assets were determined to be non-strategic, and the most valuable method of monetization was to remove them from the portfolio.
Worked with a large, multi-functional team on the completion of a bulk asset sale to an investment company. Generated cash inflows, including a large IRS refund based upon a quick claim NOL carryback. Coordinated and assembled volumes of due diligence materials, in conjunction with legal and operational departments from multiple geographies. Provided consistent follow-up throughout the transaction and negotiated post-closing true up of contingent proceeds.
As a result, more than $1 billion in book value and assets were sold and disposed of, protecting the company from substantial loss.
Maximizing Current Loss Utilization Enables $1 Million Tax Savings
The company needed to be better utilizing NOLs, as well as provide for tax planning strategies. The consolidated group had more than 200 entities, some operating at a profit and some generating losses.
Devised a strategy to best structure the entities to maximize current and future loss utilization, taking into account IRS loss carryover limitation regulations. Performed an analysis of the positions of several entities. Reorganized the entities to effectively utilize NOLs and credit carry-forwards, while simultaneously simplifying the organizational structure.
As a result, the company experienced $1 million in immediate tax savings, and avoided $100,000 in annual compliance costs.
Identifying and Securing Venture Partner Generates $163 Million
The organization needed a vehicle to provide immediate growth of the division to capitalize on market conditions. A unique opportunity was presented to purchase the assets of a competitor, via a bidding process. However, there was a limited amount of time to complete due diligence and prepare a bid package.
Identified and secured a venture partner due to the size, risk profile, and complexity of the package. Led a team to assemble an offering package on behalf of the venture, once a Memorandum of Understanding was completed. Created a joint venture entity, operating agreement, bank accounts, insurance placement and debt to finance assets. Determined and executed the best course of action in order to maximize profits for all assets.
The bid was awarded and ultimately generated $163 million in additional revenue for the organization, $27 million in profits, and margins of up to 40%.
Purchasing Multiple Entities Increases Market Share by 8%
In order to leverage overhead and significant capital expenditures on infrastructure, the organization developed a strategic focus on gaining market share in the fragmented industry. The company developed a strategy to expand markets, but locating proper acquisition targets was difficult.
Purchased multiple entities, or assets of entities, over the course of a five-year period. The size of deals ranged from $5 million to as much as $125 million. Performed due diligence on many fronts, including terms negotiating, deal closing, purchase accounting and systems integration.
The series of successful acquisitions improved the company's market share by 8%, and enhanced profitability by $25 million.
Complete Reporting Suite Delivers 15% YOY Growth
The company's operations were not accurately tracking capacity utilization, which did not allow for a review of which services generated the greatest margins. Additionally, no systems, tools or processes were in place to accomplish the goal, and IT applications did not easily accommodate the required data.
Worked directly with the Controller and IT Manager to complete a review of operational practices and capabilities of the enterprise system. Initiated and completed the creation of a timely, complete reporting suite in order to allow for increased visibility of the highest revenue-generating services. Built the suite to review reporting timeframes, as well as return on assets for capital expenditures.
As a result, the company achieved an initial 15% growth on YOY margins, followed by a 12% growth in following year.
National Shared Services Team Enables 65% Headcount Reduction
The company wanted to create a more scalable organization, which would enable additional consistency and control over workflows, thereby reducing staffing needs. However, this would require the relocation of operations into a single geography, from more than 40 sites, as well as adjustment of business processes.
Created a regional, followed by a national, shared services team to provide all transactional accounting services. Gathered focus group input and designed and validated a national shared services department to complete transactional functions. Transferred more than 40 divisions within 12 months of commencement.
The relocation was a tremendous success, reducing divisional headcount by as much as 65%.
Comprehensive Model Provides Performance Insight
Portfolio and investment decisions varied by locations, producing a lack of clarity and consistency in how resources were being allocated. No tools or processes were in place to ensure that resources were being utilized to maximize overall operating results.
Directed Financial Analysts and designed a comprehensive model, incorporating data from existing applications, as well as user input to allow for focused quarterly reviews of all projects, which provided greater transparency into operations. Enhanced and improved the tool over successive quarters to become the standard for how existing projects were evaluated.
The tool was a huge success, giving operations and senior management better insight into short-and long-term project performance and enabling company to meet incremental operating cash goal of $1 billion.
Effective Recruiting and Mentoring Achieves Staffing Objectives
The company relocated to a new state, decided not to offer relocation packages to prior staff, and needed to staff the external reporting and tax departments from scratch. However, there was an unknown talent pool in local markets, as well as time constraints due to the entity being publicly traded.
Recruited and staffed departments comprised of six to eight individuals. Established policies and procedures, resulting in very effective and efficient departments as was demonstrated by completion of all SEC reporting on a timely basis and having no delinquent IRS filings despite the organization having over 200 entities requiring compliance in various jurisdictions.
As a result of effective staffing, training, and mentoring one of the employees later went on to be a department head and another succeeded to my position upon my exit.
Global Conferences Helps Complete All SEC Filings
The majority of the company's stock became U.S. owned, and GAAP was converted from U.K. to U.S. in order to comply with SEC requirements. New U.S. Pronouncements that required researching and communication to operating companies included FAS109, accounting for income taxes, FAS112, accounting for post-employment benefits, and FAS123, accounting for stock-based compensation.
Completed research on the impact of each pronouncement and communicated the results to business unit CFOs and Controllers. Conducted in-person and telephone conferences globally. Trained and advised each business unit in order to ensure the coordinated implementation.
All standards were implemented, and all proper SEC filings were completed in a timely manner.
Task Force Increases Productivity 40%
Historically, the flow of information was not well-coordinated due to regulatory requirements. A new tool was required, which could service multiple departments; however, economic conditions did not allow for much IT involvement or provision of new solutions.
Created a task force to gain input from Finance, Sales, Operations and IT to complete the design and creation of a secure sharepoint site. Enabled multiple entities and multiple departments to securely post and share documents via a web-based application on a real-time basis. Centralized escrow department functions and created additional uses for purchasing and operations.
As a result, the company achieved enhanced communication and reduced staffing needs, which allowed for a 40% productivity increase.
Cross-Departmental Efforts Lead to $1.05 Billion in Negotiated Financings
Due to the size, complexity, and required returns of certain projects, it was necessary to obtain external financing to enable viability. The company had to source funds and provide efficient information flow to the source, along with the completion of negotiations to achieve beneficial results.
Tailored to projects requiring placement or joint venture debt, as well as projects that required the creation of community financing district bond issuance. Led the financial negotiations and sources of the placements. Worked with Legal and Treasury departments to determine the most viable vehicles.
In total, $1.05 billion in financings utilizing various forms of entities were negotiated or renegotiated.
Comprehensive Reporting Suite Saves $800,000 Annually
In order to align with goals among operations, management and the Board, the organization needed to implement standardized weekly, monthly and quarterly operational reporting. However, with over 40 divisions using different formats and having different cultures, the change was sure to be difficult.
Created a suite of reports and dashboards to be used across the company. Included profitability balance sheet, sale flash, divisional dashboards, backlog, estimated completion, and inventory reporting. Benchmarked reports against forecasts, both current and annual. Centralized reports and sent to operators on a defined time schedule.
The report suite enhanced the visibility of operations, and saved the company approximately $800,000 annually.