Appalachian Forest Products

Situation

Appalachian Forest Products, Inc. is a leading global provider of high-quality hardwood forest products. The Company was performing unprofitably due to over-leveraging itself during expansion. Its bank moved the credit into Special Assets and required the Company to find a new lender.

Amherst was retained by Appalachian Forest Products to assist it in the negotiations with its bank after the bank had become concerned due to liquidity problems experienced by the company.

Solution

Amherst devised improvements in the company’s working capital management and cost structure, solving the underlying causes of the banking difficulties.

Amherst was hired to develop an operating budget and corresponding operating metrics, generate 13-week cash flow statements, and implement cost-reduction measures

Results

Amherst attracted an alternative banking proposal and the company was able to use this along with its financial improvements to negotiate a favorable resolution with its bank.

Within 12 months, the Company was returned to profitability, enabling it to stay with its existing lender and be moved from Special Assets back to Commercial Lending.