Food Processing Case Study:

Protein Further Processing Company

Business Growth and Value Creating Activities:

Refocused Growth Strategy: Going head-to-head against its significantly larger, fully-integrated competitors, management and the board refocused the company’s growth strategy away from local retail and foodservice accounts toward national restaurant chain accounts.

Emphasized Core Competencies: Pursuing a business growth strategy based on national accounts played right to the company’s strengths as a further processor. Matching a customer’s product spec with a specifically procured and sized meat block, the company was able to provide better product spec conformity and customer service than could its larger, fully-integrated competitors. Furthermore, management entered into forward contracts with suppliers to fix or collar the pricing and volume of our meat block purchases on an annual basis, facilitating a stable and predictable earnings stream.

Strengthened Management Infrastructure: To execute a national accounts growth strategy, management and the board recruited and hired experienced national accounts salesmen who were already well established in the industry. In addition, management developed an in-house research and development capability to increase the company’s responsiveness in turning product samples for customers.

Pursued Capital Projects to Improve Cost Structure: In support of our growth strategy, management and the board pursued capital projects to make the company more cost competitive in its pursuit of national accounts. Desiring to focus management on the most earnings accretive capital projects, Jay Binkley developed a formal analytical process for capital appropriations and approval whereby management would evaluate and defend the payback period for each proposed investment. Significant capital projects approved included an automated packing line and an ammonia freezing system, both of which significantly improved the company’s cost structure.

Implemented Stronger Reporting Tools: Working closely with the company’s Chief Financial Officer, Mr. Binkley was a strong advocate for improving the company’s financial reporting capabilities. Through his urging, management implemented an ERP accounting system with a cost accounting module, providing visibility for the first time into profitability by customer by item.

Implemented Management Incentive System: Wanting to incentivize management to use the cost accounting system to drive profitability in the business, Mr. Binkley designed, negotiated and implemented a bonus system for top executives that tied overall business growth to account-level profitability.

Financial Results:

As a result of outstanding management execution, EBITDA increased from $5.5 Million to $13.0 Million in three years, all through organic growth.



Industrial Manufacturing Case Study:

Branded Engineered Products Company

Turn-Around Initiatives and Value Creating Activities:

Recruited New Management to Rebuild Struggling Manufacturer: Jay Binkley recruited his long-time friend and current business partner Dick Brereton as President to turn around a once-proud manufacturing company.

Identified and Promoted Star Performers: Through his years of executive leadership, Mr. Brereton was able to quickly identify talented supervisors and/or managers and promote them to positions of increased responsibility.

Streamlined Material Flow: Realizing that shortages of certain commodity materials were stopping work flow, causing labor variances and materials expediting charges, Mr. Brereton implemented kanban systems and vendor managed inventory to ensure the continuous availability of these materials.

Improved Job Scheduling: Understanding that a non-standard product mix was creating rolling bottlenecks in different production workstations, Mr. Brereton began scheduling jobs based on workstation availability rather than ship date, dramatically improving labor utilization.

Proactively Managed Warranty Claims: Through his years of design and manufacturing engineering, Mr. Brereton identified problems with a legacy product design and worked proactively with customers to rework products in the field before they produced more serious and expensive warranty claims.

Overhauled Design of Troubled Product Line: Having discontinued the production of a legacy product because of outsize warranty claims, Mr. Brereton and his engineering team rebuilt the product line from scratch, including designing and building customized manufacturing equipment and production processes that incorporated robotic tube insertion. With these new methodologies, the redesigned product required less material and labor costs, while also providing improved product quality and durability. After significant in-house quality tests, Mr. Brereton and his team provided the newly redesigned product to key customers for further field testing before implementing a full product re-launch.

Financial Results:

Upon joining the company, Mr. Brereton improved the company’s EBITDA margin from (6.5%) in the prior one and a half years to 13.7% in the first full year under his leadership. Mr. Brereton and his team eventually improved the company’s EBITDA margin even further to 16.7% for the trailing-twelve-month period prior to exit.