Overview
The client, a private equity-owned consumer electronics company, faced declining performance due to poor product launches and reduced consumer demand, resulting in excess and obsolete inventory as well as mid-term liquidity concerns. Anticipated debt default and weak accounting controls led to a Board investigation and the need for audit restatements, further complicating the financial situation.
AlixPartners was brought in to assist with lender negotiations, liquidity management, and long-term planning, while also assuming interim CEO and CFO roles. The team worked closely with company accountants and external auditors to restate two years of financials, implement improved accounting controls and processes, and develop a long-term business plan. Additional actions included strategic inventory liquidation, cost structure review, pricing discipline, and the acquisition of a premier reseller to capture product margin.
As a result, the client successfully restated its financials and completed the audit, enabling a recapitalization with $30 million in new equity and debt-to-equity conversion. Over $20 million in liquidity was generated through working capital optimization and vendor negotiations, providing a bridge to an out-of-court solution. The company transitioned to new leadership and was positioned for long-term success through enhanced financial planning and analysis (FP&A), liquidity management, and controls, ultimately achieving a public listing.