Transcript SKS Consulting - Company Rescue

SKS Consulting
Interim Executives, Capital Stabilization, and Turnaround Management
SKS Consulting
Services List
•Turnaround Management
•Divestitures
•Interim Executives
•Board of Directors Assignments
•Capital Stabilization Initiatives
•Financial Analysis
•Management Consulting
•Onsite Business Assessment
•Strategic Planning
•Management & Board Review
•FTE & Expense Reduction
•Public Company CFO services
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Our Business Philosophy
• SKS Consulting focuses on aligning our interests with shareholders and the
Board of Directors to maximize value.
• Each client’s circumstances are unique. We ‘custom design’ the most cost
effective utilization of our in house skill sets to deliver optimal results.
• Our compensation structure is designed to:
• Offer a competitive daily fee structure
• Provide long term rewards by equity participation in the success of
the enterprise based upon the work that we perform.
• We do not only “write reports”. We roll up our sleeves and work side by
side with our clients management teams. We prefer to share the risk and
reward.
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SKS Interim Executives
SKS offers our consultants’ expertise for short-term assignments
to help manage organizations on a temporary basis.
Our consultants are qualified to fill all C level and
senior management positions to provide flexibility and custom fit
our clients’ strategic plans.
Typical Assignments:
•Board Director
•CEO
•President
•COO
•CFO
•General Manager
•Chief Restructuring Officer
•Chief Marketing /Sales Officer
•Controller
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SKS’s Business Cycle
SKS’s typical entry points
Growth & Exit
Performing
Relative
Value
Corporate renewal/
Turnaround
Underperformance
Sale & Asset
Recovery
Viability and
investment decision
Relative Time Horizon
Strategic &
Operational Advisory
Services
Provide
performing
companies with
guidance so as to
increase financial
and operational
efficiency
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Business
Assessment
Comprehensive
assessment of a
business to justify
new/further
investments. Focus on
risk/return and exit
strategy (mode &
timing)
Corporate Renewal
Services
Lead the
implementation of
turnaround efforts :
• Crisis & interim
mgmt
• Operational &
financial
restructuring
• Strategic planning &
growth
Exit/Asset Recovery
Services
Facilitate successful
exit as a result of
successful turnaround
or quick sale of assets
if decision not to invest
further
The Turnaround Process
Situation
Assessment
Key Activities:
• Financial Analysis
• Conduct executive
mgmt & board
interviews
• Report findings
Deliverables:
• Complete
Assessment Report
• “This is what I would
do if it was my
company…”
Timeframe:
• 2-4 days
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Re-organization
Key Activities:
• Execute
reorganization
activities focused on
stopping the burn rate
and stabilizing the
company:
FTE and expense
reductions
Deliverables:
• Successful
organizational
restructuring
Timeframe:
• 30 days
Strategic
Planning
Key Activities:
• Develop strategic
plan
• Develop execution
plan
• Structure Latent
Intellectual Capital
Assets
Deliverables:
• MYRNA session
and outputs
Timeframe:
• 2 days Initial
session
• 1 day quarterly
follow-ups
Execute Strategic
Plan
Key Activities:
• Execute focused
initiatives outlined in
strategic plan
(growth/sale/merger
etc.)
Deliverables:
• Acting C Level
• Transactions –
buy/sell
• Capital stabilization
• Hire full-time mgmt
team
• IP Portfolio / Strategy
Timeframe:
• 12-24 months
The Assessment Product
SKS offers a standalone assessment product to provide our clients an accurate
understanding of an organization’s current operational and financial state by
performing a thorough due diligence. Upon completion of our review, we provide
our clients with an extensive analysis outlining the companies strategic position.
Our assessment will provide a bottom line recommendation that helps our clients
make better informed decisions. In all cases, we offer our professional opinion
regarding the viability for future investment, whether or not we can help facilitate a
re-organization, or if we can assist in executing a controlled exit strategy.
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•
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Two week process (4 days on site)
Interview of board members, senior management, & operational management
Thorough review of financial statements, operational processes, sales strategy,
business plan assessment, and capital spending review
Examination of business practices and cultural conditions
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Assessment – Key Work Flows
Executive Interviews
Objective: obtain key
executives’ thoughts on
“what immediate changes
they would make if it were
their company”
• Private, individual
interviews with
leadership team and
board members and
other key executives
• ABC analysis – best and
worst performers; are
individuals in the right
positions?
• Organizational structure
analysis - gaps and
redundancies
• Performance and
compensation structure
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Financial
Statement Analysis
Objective: Understand
current financial situation
and identify opportunities for
immediate improvements
• Operating structure – burn
rate
• Key financial metrics
• Capital structure
• Balance sheet analysis
Business Plan
Assessment
Objective: Review viability of
business plans in the context
of the market and
competitive landscape.
Develop valuation estimates
of the investment
opportunity
• Sizing the market and
competitive landscape
• Key revenue and cost
assumptions
• SG&A assumptions
• R&D assumptions
• Business development
initiatives
• Valuation assumptions –
comparable deals, DCF
analysis
Develop
Recommendations
Objective: Develop robust
recommendations on areas
for improvement and provide
assessment and our
recommendations
• SWOT analysis to include:
• Organizational restructuring
• Recommended operational
and financial restructuring
initiatives
• Sales & marketing
recommendations
• Valuation Scenarios based on
comparables and DCF analysis
• Investment recommendation
MYRNA - Strategic Planning
•
SKS Consulting facilitates on site strategic planning seminars for its clients through the
efforts of MYRNA Associates, Inc.
•
We enlist the expertise of John Myrna and his team of professional strategic planning
experts to develop the overall planning process to drive all functions in the client
company towards a cohesive, measurable, and accountable action plan.
•
Success flows from the executive team's consensus and commitment to achieving a
small number of goals through specific action plans. Myrna Associates' Total Quality
Planning (TQP) process facilitates this happening. Myrna Associates can take total
responsibility for pre-planning, meeting facilitation and the transcribing and printing of
a company's plan. After completion of the intensive two-day meeting, managers will
receive a final comprehensive plan for moving forward.
•
The deliverable from this session is a clear understanding of what each team member
must accomplish in the next 30-60-90 days and how performance will be measured.
Quarterly one day update meetings ensure we stay on target and allow for adjustments
required by internal or external variants.
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Board of Director Assignments
•
•
SKS Consulting seeks to assist PIPE companies and Private
Equity firms in managing their investments in an arms length
fashion by assigning our consultants to the Board of Directors.
Our consultants assist in managing firms from the Board of
Directors level, while managing the interests of the investor so
they can remain within SEC rules and regulations.
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SKS’s Clients Include:
•
NeoGenomics – Bio Medical
• Cellution – Telecom
•
Icoa - Telecom
• Isonics – Semiconductor & Security
•
NeoMedia - Software
• TelePlus World, Corp. - Telecom
•
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Southern Metal Products – Metal Fab • Mobil Pro Corp. – Telecom
• PBMAI – Advertising Agency
NS8 - Software
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SmarTire - Automotive
•
Coroware – Robotics
•
FutureMedia – E-Learning and
Exhibitions & Events
•
Falcon Natural Gas - Energy
•
ATSI - Telecom
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• Naples Women’s Center – Physician
Practice
• BridgeLabs / eTeleNext – Medical
Software
• Ultra Life – Vitamin Manufacturer
and Distributor
The NeoGenomics Case Study
Action Steps & Results
Action Steps:
Critical Issues
•
Approximately 500k in revenue
•
Poor leadership at the top
•
Management had unacceptable
background for the genetics industry
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1.5 million LOC due in 6 months
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Stock trading at $.10 per share
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Results:
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Only 500 shares were trading a day
Eliminated 8 out of 10 initial personnel
Hired new President & management team
Took interim positions as COO & CFO
Restructured Board of Directors
Raised $5 million through SEDA with investor
Refinanced debt to eliminate call on LOC
Started quarterly shareholder meetings
Restructured balance sheet
Bought out old investors at healthy profit
Took seat on Board of Directors
7.
1st year growth – $500k to $2.5 million in rev.
Total tenured growth – $500k to $20 million
Stock price rose from $.10 to $2.10 per share
Stock price currently $.75 per share
Trading volume went from 500 to 125,000 per
day
Trading volume currently 25,000 shares per
day
Company is poised for strategic merger
The Futuremedia Case Study
Action Steps & Results
Action Steps:
Critical Issues Prior to SKS
1.
2.
Sr. Mgmt. & Board chasing NASDAQ Listing
Former CEO hired 5 finance directors in 18
months
3. Company overpaid for bad acquisitions
4. Revenues decreased 19% from prior year
5. Acquired company shut down after 6 months
6. Parent company treating newly acquired
company poorly, creating un-repairable
damage with clients and vendors
7. Clients, vendors, employees, & Investors
expecting bankruptcy
8. Management used method of robbing one
company to fund the other, weakening both
9. Management increased corporate over-head
at a time when they were losing business
10. Management hired unqualified people
externally, ignoring in-house talent that was
more appropriate
11. Company had unclear & unbelievable strategy
1. Immediately eliminated CEO, and made 26 employees
redundant to decrease burn rate
2. Took interim positions as President, CEO & Board Member
3. Initiated immediate 2 day strategic planning session
4. Separated business into two divisions, requiring them to
stand on their own merits
5. Made two more rounds of redundancies to right size both
divisions
6. Moved office locations& negotiated early termination of
both leases
7. Focused sales efforts on “hero clients”
8. Company headcount reduced from 115 on 5/31/07 to 60
within 1 year right sizing the business
9. Eliminated old BOD and replaced with 3 new members
10. Moved from NASDAQ to OTCBB with seamless integration
11. Hired FD, Sales Managers & Strategic Development head
12. Sold underperforming division to focus on company’s core
business and path to profitability
Results:
1. Within three quarters achieved first EBITDA and cash flow
positive quarter in over 5 years
2. EBITDA improvement of $10 million in 18 months
3. Reduced corporate overhead by $2.5 million
4. Move of offices created $500k per year in savings
5. Obtained shareholder approval for reverse split
6. Increased number of authorized shares to ensure company
corrected default on covenants with institutional investors
7. After meeting milestones, secured $10 million in capital
8. Avoided bankruptcy, and finally stabilized stock price
The NeoMedia Case Study
Action Steps & Results
Action Steps:
Critical Issues Prior to SKS
1.
Inability to commercialize patented
technology
2.
Flawed business plan, with no chance of
success
3.
Approximate burn rate of $800,000 per month
4.
Sellers were promised cash top off if stock
dropped below $.40 per share
5.
Stock dropped to $.04 per share
6.
Management had zero ability to execute or
provide leadership or vision for the company
1. In first week, CEO, COO & Top Finance Consultant
positions were eliminated
2. Immediately reduced corporate overhead by 50%
3. Terminated EVP of sales when it was determined he was
working for another company concurrently
4. Negotiated that sellers take stock instead of cash top off
and paid off remaining obligations
5. Focused strategic direction on core business
6. Divested three non-core business units
7. Focused on properly integrating IP technology
8. Started quarterly shareholder conference calls
9. Took COO, acting CEO, SVP of Sales and Board of Director
seat s for first six months
10. After six months hired industry leader as CEO and
replaced him within 12 months with more entrepreneurial
CEO from a competitor in the business.
Results:
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5.
Reduced burn rate from 800k to 400k per month
Secured funding for new burn rate
Augmented capital structure for optimal performance
Raised $10 million for operations and seller obligations
Divested business units and restructured debt for ROE of
$8 million
6. Reduced full time employees from 92 to 40
7. Focused enterprise on core business and created U.S.
Market
8. Completed new software product NEOREADER, and is
currently being implemented in U.S. & Europe
SKS Consulting
Interim Executives, Capital Stabilization, and Turnaround Management