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Aerospace & Defense

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The aerospace and defense industry has been facing major challenges for many years. Those hardships were exacerbated by the recent economic downturn, and furthered by cuts in government spending.

The aviation industry’s challenges include declines in passenger travel, shrinking profits, fuel price volatility, environmental concerns and lack of capital investment. The commercial aviation supply chain is under pressure from vigorous airline cost-cutting and low traffic demand. Aggressive outsourcing bids have reduced maintenance repair & overhaul (“MRO”) margins. Many fixed base operators (“FBOs”) have responded to the recession by consolidating operations. Even defense contractors are now very uncertain about the future. Budget deficits and sequestration have negatively impacted many defense contractors.

Conway MacKenzie has served the aerospace and defense industries since its formation with a focus on providing restructuring services to clients. Our focus in these situations is to perform critical analysis of the company, its business model and its current circumstances, develop plans to improve the financial and operational performance of the company, and implement those plans through working with relevant stakeholders.

Conway MacKenzie’s aerospace and aviation team brings the resources to help clients to navigate these difficult times. Our supply chain experience in automotive, aerospace, aviation, defense and other manufacturing industries is second to none, and our thorough understanding of the dynamics between suppliers and OEMs makes us the most effective service provider to aircraft and defense suppliers in the country.

Our team is experienced in restructuring companies through both operational and financial restructurings, executing in and out-of-court restructuring transactions (representing debtors, creditors and other key stakeholders), developing and implementing performance improvements, and assisting corporate and private equity in all of their transaction needs, including financial and operational due diligence on buy and sell-side M&A transactions.

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Costs Driven Down, Profit Rising Up

The Engagement

Specializing in the manufacturing of Fiber Reinforced Structures, the company is a supplier to both the U.S. Government and major aerospace companies.

Our Role

Conway MacKenzie was retained to assess and control its circumstances, including analysis of the plans to keep its senior lender revolving the credit, actions to improve operating performance, and, ultimately, a case that would support assistance from the customers.

The Result

Conway MacKenzie, along with company management, executed a comprehensive plan to turn around operations that included reduction of operational costs and garnering enough cash to support near term operating needs. Conway MacKenzie’s actions resulted in securing one-time cost reimbursements and ongoing increased part pricing. The result was extremely successful: $2.5 million annual increase or over a 20% improvement and the company’s enterprise value increased over $40 million.

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