• Validated the business case for acquisition and privatization of 2 publicly held distributor / manufacturers.
• Completed diligence on both the acquisition and the acquiring portfolio.
• Identified non-recurring EBITDA adjustments totaling $2.9 million and EBITDA synergy savings from consolidation of $3.3 million.
• Determined acquisition integration timing of EBITDA savings.
• Identified asset-based lending constraints associated with the Company’s foreign inventory purchases.

• Identified understatement in accounts receivable of $400,000.
• Researched and documented company’s contractual ability to pass-through raw material price increases.
• Identified differences in GAAP reporting procedures between company and foreign parent.
• Evaluated standard costing systems and valuation differences between foreign and domestic entities.
• Commented on due diligence report generated by “Big 4” accounting firm and identified material discrepancies in EBITDA roll-forward computation.
• Analyzed the impact of the Puerto Rico tax rate on the overall effective U.S. tax rate for “Newco.”

• Determined internal controls to be inadequate, resulting in inaccurate interim financial statements.
• Discovered an existing senior lien relating to a significant segment of the business and secured by a performance bond. A unique loan structure was required to carve out collateral behind performance bond; otherwise, the existing lien could trump the new senior loan.
• Generated 3 years of combined income statements for 3 related companies previously not combined.
• Created a combined, trailing 12 months income statement and EBITDA schedule.
• Identified inefficient sales bidding process.
• Determined current controller incapable of assuming role of CFO.
• Discovered potential risks related to accounting software.

• Conducted pre- acquisition due diligence on behalf of equity investor.
• Identified non-recurring EBITDA adjustments totaling $2.3 million.
• Identified inadequacy of controls over master franchise fee reporting; suggested cost-effective procedures to minimize exposure of underreported franchise income.
• Identified improper deferred revenue reporting and adjusted earnings in accordance with GAAP.
• Evaluated proprietary software management system and identified insufficient controls; assessed timing of rollout of future accounting modules.
• Evaluated the impact of a qualified stock purchase and possible §338 election.

• Consolidated 3 separately reported companies for current year and 2 previous years. Identified and eliminated intercompany transactions.
• Re-calculated EBITDA on a consolidated basis.
• Scheduled the trailing twelve months P&L for 3 companies, created pro-forma adjustments, determined normalizing entries and re-calculated profit sharing contribution.
• Identified internal control issues related to material amounts of sales and cost of sales allocated to improper periods.
• Identified other accounting and internal control issues that rendered the interim financial statements unreliable.

• Saved company approximately $1,000,000 in tax liability by evaluating the capitalization policy of manufacturing overhead.
• Identified benefits of integrating inventory and general ledger software packages.
• Created inventory turnover report to manage purchasing efforts and isolate slow moving products.
• Assisted management in their search for new outside accountants.

• Determined accounts receivable reserve understatement of $2,300,000.
• Surfaced concerns regarding the lack of knowledge and understanding of the company’s business by the financial personnel.
• Uncovered material internal control weaknesses relating to revenue recognition.
• Initiated the creation of software programs to capture revenue transactions on a timely and accurate basis.
• Developed historical accounts receivable write-offs.
• Identified various service provider partners and locations within the US that had higher than normal rate of accounts receivable write-offs.
• Created method of estimating bad debt reserve and identifying potential uncollectible accounts receivables.
• Implemented procedures and timing guidelines to perform monthly “close” and instituted procedures to analyze each balance sheet account.

• Conducted financial due diligence to assist with stock acquisition.
• Ascertained inadequacies of EBITDA “add backs” totaling $600,000.
• Identified $265,000 of downward adjustments to EBITDA, which resulted in a 38% decrease in the target’s purchase price.
• Discovered material overstatement in reported inventory balance as much as $38,000.
• Prepared pro-forma financial statements.
• Identified purchase price adjustments that would impact cash balance and require reimbursement by the seller.
• Prepared adjustment schedules to reflect the fair market value of the current lease payments.
• Assessed competency of the accounting department.

PORTFOLIO COMPANY REVIEWS

• Uncovered “pre-billings” of $1,400,000.
• Identified $3,300,000 of ineligible inventory on the borrowing base certificate.
• Detailed a $1,900,000 understatement in accounts receivable reserve.
• Determined incorrect recording, resulting in cash shortfall of over $1,000,000.

• Evaluated borrowing base reports, monitored over-advance use, and identified ineligibles in borrowing base certificates totaling $1,800,000.
• Implemented a 13-week cash flow forecasting system maintained by management and monitored by B&A.
• Analyzed and recommended various methods to improve the Company’s cash flow.
• Assisted management in establishing appropriate internal controls for billing, production and shipping activities.
• Stabilized information flow and established integrity of data going to the Lender.
• Reinforced and monitored implementation.

• Discovered and identified management personnel responsible for fraudulent reporting in the borrowing base certificate.
• Created and implemented daily cash management reporting system.
• Prepared and integrated (i.e., balance sheet, cash flow and P&L) monthly budgeting system and procedures.
• Established 13-week cash forecasting system and methodology to compare with budgeting system.

• Created 13-week cash forecasting system to be used and maintained by management.
• Assisted management with evaluating viability and ability to service debt.
• Evaluated benefits of integrating the Company’s three divisions into one computer system.
• Analyzed the commission policy and structure, and recommended improvements for the Company’s independent sales brokers.
• Reviewed accounts receivable and accounts payable for trends, potential cash sources, and savings.
• Identified various methods to improve cash flow.