A winning rebound for a leading fitness company
How 乐鱼（Leyu）体育官网 helped a fitness leader regain its financial strength
Client
A major manufacturer and marketer of fitness recovery equipment
Sector
Consumer packaged goods; athletic products and technology
Primary goal
Restore solvency; return company to growth
The client was a leader in fitness recovery equipment. Founded in 2011, the company built a financially strong business with $50 million in earnings before interest, taxes, depreciation and amortization (EBITDA) and approximately $250 million in revenue. But then COVID-19 froze its supply chains, drying up revenue and rendering previous growth estimates obsolete. When the company found itself in default, its leading lender recommended engaging 乐鱼（Leyu）体育官网 as a financial adviser. 乐鱼（Leyu）体育官网 helped the company improve its financial performance, obtain new debt and equity financing, repay all lenders, and return to health. The engagement exemplifies the depth of experience within鈥攁nd the wide-ranging services provided by鈥攖he many resources of 乐鱼（Leyu）体育官网.
KEY OUTCOMES
Making a measurable difference
- $30 million in cost reductions
- $75 million in inventory monetization
- New equity and debt financing provides stability
- New processes and controls for moving forward
Client transformation journey
Click on each part of the journey to learn more about our client鈥檚 transformation.
This is not our first time seeing a very good start-up with a very good product hit a roadblock. They needed a more mature organizational structure. Our goal is to bring in as much experience as needed, and that鈥檚 the real strength of 乐鱼（Leyu）体育官网鈥攚e have much better depth in terms of skill sets than many companies do. Here, we were able to bring in three different elements of 乐鱼（Leyu）体育官网 to help this company.
Pete Smidt
Managing Director, Deal Advisory & Strategy
How 乐鱼（Leyu）体育官网 refinanced, recapitalized, and restructured a company in just five steps聽
乐鱼（Leyu）体育官网 took a proactive approach, working closely with the board and company management to address the client鈥檚 full range of issues. The strategy engaged multiple 乐鱼（Leyu）体育官网 capabilities: wide-ranging financial and operations services, project management to coordinate the process, and advanced data and analytics. In a stepped methodology, the engagement unfolded in five distinct phases: understanding the key areas for exploration, assembling and parsing the data, planning the individual rebuilding steps, putting those plans into action, and monitoring results to assess progress toward intended goals.聽
1.聽Preliminary phase
Initial assessment
With advanced data and analytics, 乐鱼（Leyu）体育官网 quickly aggregated extensive financial and operational information into a single source of truth for the client. Workshops with senior leaders and business stakeholders pinpointed trouble spots and enabled the setting of goals.聽
2.聽Diagnostic phase
Deep drilling
Armed with salient information, 乐鱼（Leyu）体育官网 performed a rapid assessment to determine the most significant challenges facing the client. In only four weeks, 乐鱼（Leyu）体育官网 had analyzed every facet of the client鈥檚 operations and financial controls. This included a review of the company鈥檚 credit agreements, vendor relationships, and account relationships throughout the commercial, manufacturing, operational, and administrative sides of the business. Diving deeper, 乐鱼（Leyu）体育官网 evaluated the company鈥檚 performance against its stated goals over time. The analysis provided the company鈥檚 board and management with the framework to understand company performance and identify areas for improvement. This helped build stakeholder confidence in the company鈥檚 recovery opportunities.聽
3.聽Planning phase聽
Build the road
With a baseline level of performance established, 乐鱼（Leyu）体育官网 worked with the board and management to help determine the most impactful value and cost levers and develop initiatives to realize them.
Scoping the resources and governance needed to accomplish the turnaround, it was clear that recovery would require strong synergy between three separate disciplines within 乐鱼（Leyu）体育官网 Advisory: Restructuring, Working Capital, and Corporate Finance. Working together, they developed a clear plan to address the most urgent issue: providing sustainable cash flow.聽聽
4.聽Activation phase
Leveraging knowledge
乐鱼（Leyu）体育官网 built a 13-week cash flow model, a very tight forecast of cash in and cash out. By showing weekly variances, the model made all functions within the company accountable for performance. This provided clear internal benchmarks across business units, enabling the client to identify and quickly address issues.聽
While one team focused on the commercial sale side, from China to shelf, the finance team concentrated on liquidity and back-office processes. A third team benchmarked the company against others and put together an inventory monetization plan. Through the benchmarking process, 乐鱼（Leyu）体育官网 was able to define both the current and desired future states. With the destination established, a path could be found.
乐鱼（Leyu）体育官网 Working Capital began monetizing inventory while Corporate Finance found new debt and equity options. Meanwhile, 乐鱼（Leyu）体育官网 Corporate Restructuring built modern governance systems to help organize and transform the company鈥檚 management capabilities.聽
These efforts quickly led to strategic insights. In one instance, 乐鱼（Leyu）体育官网 market analysis identified a gap in the company鈥檚 product line鈥攊t needed a less-expensive gun massager to compete with new imports. By ordering at the start of the year, the product was on US store shelves by September and accounted for a large percentage of holiday shopping sales, bolstering the client鈥檚 financial position.聽
5.聽Completion phase聽
Bringing it all together
Working with the company鈥檚 board, management team, and business leaders, 乐鱼（Leyu）体育官网 helped implement value and cost levers that had a decisive impact on company performance. These efforts cut expenses by $430 million, monetized $75 million worth of inventory to raise capital, and streamlined operations. 乐鱼（Leyu）体育官网 helped keep stakeholders, including creditors, up to speed and informed throughout the process. With support from 乐鱼（Leyu）体育官网, the company was able to move faster, act with greater precision, and achieve more impactful results.聽
乐鱼（Leyu）体育官网 Advisory
Our Advisory specialists can help you improve your forecasting, your efficiency, your marketing, and your sales. Combining business experience with functional acumen, we provide you with deep economic analysis, robust customer insights and market intelligence, and strategic business direction to help you build revenue and profitability. 聽
Meet the team that made the difference for a major manufacturer
Let鈥檚 talk about the ways data and analytics can transform your effectiveness.
乐鱼（Leyu）体育官网. Make the Difference.
Pete Smidt
Managing Director, Deal Advisory and Strategy, 乐鱼（Leyu）体育官网 US
James Grace
Director Advisory, Strategy - PDT, 乐鱼（Leyu）体育官网 US
Pete Smidt
Managing Director, Deal Advisory and Strategy, 乐鱼（Leyu）体育官网 US
James Grace
Director Advisory, Strategy - PDT, 乐鱼（Leyu）体育官网 US