Sherwood Lumber

Summary

Financial Advisor

Melville, NY

Sherwood Lumber is a family-owned commodity lumber distributor operating throughout the United States and based in Melville, New York.

CMA was initially retained to conduct an assessment at the request of the secured lenders. Liquidity was tight and lenders were concerned about cash management as well as the financial planning abilities of the management team.

CMA was subsequently engaged to implement several identified opportunities and ultimately to refinance the ABL.

Key Challenges

Tight liquidity

Strained lender relationship

Lack of forecasting process

Unprofitable business units

Lack of inventory controls

Volatile commodity exposure

Engagement Highlights

CMA implemented the following after conducting an initial assessment of the business:
- Implemented and managed a 13-week cash flow forecasting process.
- Created a dynamic three-statement financial model for the next three years.
- Advised on the simplification of the business including an elimination of a business segment and implemented inventory planning measures.
The Company’s existing lenders acknowledged the positive actions taken but chose not to extend their loan; CMA then ran a full refinancing process.
CMA successfully secured a new lender at more favorable terms than the prior facility.
- CMA contacted 22 potential lenders regarding the ABL refinancing.
- 8 parties submitted term sheets; CMA led diligence and negotiations of terms.
- Despite negative LTM EBITDA at the time of refinancing, the new facility was at a lower interest rate and had higher inventory advances than the prior facility.
The positive actions taken over the ~9 months of CMA’s involvement were key to the successful refinancing.

Sherwood Lumber

Summary

Financial Advisor

Key Challenges

Engagement Highlights

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