The Organization
A gravure printing company was started by three employees of another printing firm to capitalize on a new technique for making textile prints. It grew rapidly.

The Situation
The Company quickly went from profits in its initial years to substantial losses in its 3rd and 4th years. The losses, together with fighting among management members, lead to loss of confidence at the bank which had substantial loans outstanding. Pace was hired by the company to evaluate its future and viability, manage it, and restore it to a profitable condition.

The Approach
A complete company-wide evaluation was performed, indicating that...

• Severe cuts in overhead and some other costs were needed
  
• There was no real knowledge of the market they were selling to, or how to get a larger share of a shrinking market
  
• Strict fiscal controls were badly needed
  
• Management was thoroughly demoralized and without leadership

The evaluation also indicated that the company could be kept alive with the proper effort. Accordingly, a multi-pronged attack was made to...

• Cut overheads to levels supportable with current sales volume
  
• Restructure management and provide explicit assignments and directions
  
• Place a Pace Principal on site on a full time basis
  
• Sell under-utilized assets
  
• Engage a qualified textile sales rep and base him in NYC where day-to-day contacts could be made with the company's markets
  
• Make arrangements for extended pay down with key suppliers

Results
Cash flow reached balanced condition in 7 months, customers realized major gains in production quality and timeliness, which in turn resulted in steady sales increases. Operations became profitable on a monthly basis in month 14 and pay down of secured and unsecured creditors was initiated. Company was eventually liquidated, meeting all obligations 100%.

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