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Dennis Hoyt
(616) 656-7770
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Case Studies
Below are some examples of projects we have successfully completed for clients. Click on the bullet link next to each item or scroll down the page to learn more about the individual project.
New Financing – Growing Organization
Refinancing – Distressed Company
Bank Reporting – Distressed Company
Chapter 11 Reorganization and Reporting
Cash Management Review
Interim Treasurer Role
Foreign Currency Loan Review
SAS 99 Review
Sarbanes-Oxley Projects
Daily Cash Reporting
RFP for Credit and Debit Card Processing
Merger Financing and Integration
Due Diligence and Feasibility Studies
New Financing – Growing Organization
Hoyt was contacted to assist this manufacturer in obtaining new financing. Their current deal was an expensive asset-backed facility with significant reporting and other requirements.
HTS' Role:
Hoyt solicited and met with several banks that could better accommodate this growing company's needs, and requested term sheet proposals from the potential lenders. With this better knowledge of the company's specific borrowing needs, the lenders were able to quickly respond with their proposals.
HTS analyzed and compared the proposals for covenants, reporting requirements, and detail/overall pricing. HTS then made recommendations on how to proceed, and developed the necessary presentation for BoD approval. Hoyt also took part in negotiating the agreement for the Company, by providing valuable insights on pricing issues and other potential operational problems that could arise.
Finally, HTS developed a template for the quarterly covenant reporting requirements and a summary of the agreement, for management and staff reference going forward.
Client Benefits:
By utilizing HTS for this project, the client obtained a well-structured and very competitive financing deal, saving $1 Million over the term of the agreement. In addition, the client was able to utilize the HTS-prepared financing agreement summary to assist them in complying with various reporting and operational requirements. The client further benefited during this time, as management needed only to focus on the high-level decision making requirements for this project.
Refinancing – Distressed Company
Hoyt was asked to assist this company in obtaining replacement financing. The current deal was unsecured, but because of the organization's losses over the last few years, the Company was told by their current lender to seek a new source of financing.
HTS' Role:
Hoyt developed a financing package for the organization that better explained the current situation and detailed the Company's turnaround plans and recent successes. This package was sent to several lender contacts – both local banks and asset-based lenders. Proposals received were analyzed and compared to see which lender could best accommodate this company's needs. The new financing allowed the Company to move forward and continue in its turnaround efforts, with only a slight increase in pricing.
HTS also developed a template for the monthly and quarterly covenant reporting requirements, and a summary of the agreement, for internal reference.
Client Benefits:
By utilizing HTS, the client obtained the necessary financing to allow them the necessary time to focus on making their organization profitable once again.
Bank Reporting – Distressed Company
A manufacturer seeking additional financing was told by its bank that it needed to provide more extensive reporting – weekly forecasts and borrowing base – to support its now-secured loan facility.
HTS' Role:
Working with both the borrower and its bank, HTS reviewed the requirements of the revised credit facility, and developed the necessary 13-week forecast and weekly borrowing base models to accurately provide the required activity and balance reporting for the lender. In addition, procedures were developed to provide the necessary guidance to company employees in their ongoing reporting efforts.
Client Benefits:
This company was now able to comply with all lender requirements for their borrowing facility, allowing them continued access to funds during their industry downturn.
Chapter 11 Reorganization and Reporting
An automotive supplier in Chapter 11 bankruptcy needed assistance in restructuring its Finance department activities and duties due to a significant downsizing. They also needed help in analyzing the impact of recent asset sales. Finally, they were also required to provide weekly and monthly borrowing base reporting on their accounts receivable and inventory balances, in order to support borrowings against their debtor-in-possession credit facility.
HTS' Role:
HTS reviewed overall department activities and personnel, and made recommendations regarding the streamlining of functions and allocation of remaining personnel. HTS also worked with the company’s CFO to analyze and document the effect upon selling certain company assets. In addition, HTS reviewed the requirements of the new DIP credit agreement, and developed the necessary models and procedures for reporting the required weekly and monthly balances to the court and creditors.
Client Benefits:
This company was now able to perform all necessary departmental functions, and prepare the additional court and lender-required reporting in a much more accurate and efficient manner.
Cash Management Review
For this direct marketer based in the Northwest, HTS conducted a review of many of its treasury activities. Although cash management was not known to be a problem, management asked HTS for their assistance due to the many changes occurring in the Finance area over the last few years.
HTS' Role:
HTS reviewed all receipt and disbursement activities and procedures of the Company, its bank structure, pricing, fees, and other related practices. With HTS' knowledge of best practices and internal controls, a detailed report of findings was prepared for the Company. This noted numerous cash control weaknesses and inefficiencies, and included a plan for making several needed improvements. In addition, HTS' review found unnecessary vendor fees, and an overcharge in excess of $40,000.
Client Benefits:
In addition to the recovery of vendor overcharges, the client received a concise report which detailed the findings, quantified the opportunity costs, and provided a list of action steps for the Company to use in making improvements to their cash management procedures. Savings of $200,000 were generated within the first year alone.
Interim Treasurer Role
This company’s Treasurer had moved to another company; due to circumstances they were unable to find a replacement for several months. HTS was contacted to assist.
HTS' Role:
Over several months Hoyt served as the company’s Treasurer, overseeing all activities while also performing reviews of many of the functions within the department. As a result of Hoyt’s work, the Company was able to successfully negotiate a new financing, save several hundred thousand dollars by unwinding an unnecessary hedging obligation, reallocate department resources for better efficiency, identify and prioritize other departmental projects to be performed, and significantly improve loan documentation and certain internal controls.
Client Benefits:
In addition to adding strong daily oversight of activities, making several improvements, and generating significant savings, the client benefitted by having a “roadmap” for additional improvements to be made to the department’s overall structure and activities.
Foreign Currency Loan Review
Hoyt was contacted to assist this Tier One automotive supplier with its loan portfolio for its world-wide operations, and to make recommendations for improving its loan transaction controls and reporting. The Company's 300+ loans were both intercompany and third party, and in USD, foreign currency, and cross-currency denominations.
HTS' Role:
Hoyt performed a comprehensive review of the company's inter-company and third party loans. The resulting report provided numerous recommendations in areas including the communications and approvals needed for loan initiation, the proper accounting treatment for interest accruals, the reporting of FX gains/losses, and the Balance Sheet classification of the loans.
As a follow-on undertaking, Hoyt performed a loan clean-up project to implement the recommendations made. In doing so, HTS reviewed and analyzed all outstanding loan agreements, identified loans to be written-off, adjusted, or reclassified, identified interest accruals to be made, and developed procedures for the proper initiation and control of all company loans going forward.
Client Benefits:
As a result of HTS' efforts, the client was now able to accurately record and classify all of its loans (both principal and interest), and - for its foreign currency loans - properly account for their FX gains and losses in accordance with FASB standards. The company also was able to write-off many incorrect intracompany loan balances. In addition, they now had the procedures in place to control and classify the balances and activity for all new loans that would be put in place between their many operating entities.
Further, the client was now able to more accurately and efficiently determine what foreign currency amounts could be repatriated, and what remaining currency amounts needed to be hedged.
SAS 99 Review
A large public accounting firm needed assistance related to the SAS 99 requirements for their upcoming audit of a non-profit client. Specifically, they need expertise related to potential cash management control weaknesses.
HTS' Role:
HTS assisted the audit firm by reviewing their client's processes and controls related to their cash receipts and disbursements. HTS then provided a report to the auditors, which documented numerous cash control weaknesses, and allowed the firm to recommend to their client several improvements over their reporting and controls of cash activities.
Client Benefits:
As a result of HTS' efforts, the audit firm was made aware of many control weaknesses in their client's cash management processing and reporting. This allowed the auditors to tailor their audit plan to include additionally required steps, and ensure that any control weaknesses affecting the F/S would be addressed. Their client also benefited from this information - allowing them to make needed corrections, improve their cash-flow, and avoid future cash management problems.
Sarbanes-Oxley Projects
On occasion, companies will need additional experienced resources for their Sarbanes-Oxley section 404 projects.
HTS' Role:
HTS has worked with both internal and external professionals on numerous SOX projects, and in many roles. Work includes reviewing and documenting (via narratives, flowcharts, risk and control matrices) all significant processes and accounts, and their related controls and weaknesses. Other areas include the design and execution of tests of controls, remediation of control weaknesses, and development and documentation of policies and procedures.
Client Benefits:
Clients have benefited from HTS' experience as they are able to complete their SOX projects on time and/or at a lower cost, than if they had performed the project internally or used a more expensive outsource alternative.
Daily Cash Reporting
With little advance notice, a Midwest manufacturer was sold by its overseas parent to another entity. As a result, the manufacturer needed to quickly set-up its own banking arrangements and monitor its cash activity and balances each day. HTS was called in to assist the company in setting-up the required bank facilities and reporting systems.
HTS' Role:
HTS assisted in the planning and implementation of the new bank accounts, and monitored the status of the remaining work to be performed by the Company. For the daily cash reporting, HTS developed an Excel-based model that provided, on a daily basis, the needed detail and summary information of all bank activity.
Client Benefits:
The client now is able to quickly determine and accurately report their daily cash activity and balances for their numerous bank accounts. In addition, their new reporting allows them to reconcile to their bank balances both daily and monthly, automatically generate monthly journal entries, and provide an audit trail for those JEs. It also allows for the monitoring of their debt, investment, and letter of credit activity and positions.
RFP for Credit and Debit Card Processing
HTS was brought in by this Midwest retailer to help them obtain lower pricing on their credit & debit card acceptance. Although the Company already accepted these cards, their current contract was expiring soon, and they had no way of knowing what pricing was available in the market -- given their specific authorization and settlement methods, and certain other related problems.
HTS' Role:
With HTS' experience and knowledge of the credit card industry (pricing, trends, problems, and the processors), HTS developed a customized Request for Proposal ("RFP") for credit/debit card processing for the Company. This RFP documented the Company's specific methods of card authorization and settlement, the problems it faced (interchange downgrades, charge-backs, additional fees, etc.), its future direction and volumes, and other pertinent information. The RFP was then sent to several processors which HTS had identified as being able to provide the necessary services to the client. Proposals were analyzed and compared -- both on a quantitative and qualitative basis, and the top candidates were interviewed by the Company. The processor selected was projected to save the Company more than 20% over the current contract.
Client Benefits:
Not only did the client save over $100,000 per year in card processing, but they now had additional pricing information -- guaranteed in writing -- on how they could generate additional savings should their growth exceed current projections, or if they choose to make certain system improvements.
Merger Financing and Integration
HTS was engaged by this West Coast distributor to assist in a refinancing and in the planning and integration of the treasury operations for their acquisition of an East Coast competitor.
HTS' Role:
HTS did all of the necessary work to assist the Company in obtaining the bank financing (and later, a private placement of debt) to support the combined entity's borrowing needs.
In addition, HTS led the planning and execution for the consolidation of the combined treasury functions of the two companies.
Client Benefits:
The benefit to the client was in having the financial expertise on hand to successfully carry-out the integration activities for this significant transaction ($600 Million in combined sales). With this expertise available, the Company's CFO was able to focus on overseeing the financial aspects of the transaction, and the Company saved money by not adding any employees to cover what were only short-term project needs.
Due Diligence and Feasibility Studies
HTS has conducted several feasibility studies for its clients. These studies are usually related to either beginning or broadening a (credit/debit/gift) card acceptance program, or the need for implementing certain cash management software.
HTS' Role:
On one card acceptance study, HTS was asked to determine if credit card acceptance and processing was a revenue-generating area of opportunity for this online reservation company. HTS met with company personnel to discuss their ideas and specific computer system requirements, prepared a survey for its customers to determine the likelihood of their acceptance of the idea, met with several industry vendors, and prepared a report of findings which documented the work performed, discussed the costs and benefits of the venture, and presented alternatives and recommendations for proceeding with the project.
Client Benefits:
In this case, HTS recommended that the project should not go forward, due to the upfront costs involved and the lack of guaranteed ongoing revenues. The Company benefited by engaging an independent third party with industry contacts to perform this project, which allowed them to "cut their losses" on the venture. As a result, no additional and unnecessary funds were spent by the Company in what would have been an unsuccessful venture.
