Electrical Sign Manufacturer Requiring Increased Net Profits

Although revenue experienced double-digit growth for five consecutive years, in 2007 profits had eroded significantly while sales continued to increase. The owner of this company approached Rento Associates to identify and resolve the cause of the decreasing company profits.

Early conversations with management revealed the company provided three different services that could be offered separately or in combination. These services were separated into different divisions for cost and profit measurement purposes. This process clearly identified one of the divisions was being under quoted.

After identifying and implementing a more detailed quoting procedures, Rento Associates instituted improved purchasing procedures to lower COGS and inventories; held a weekly production meeting that quickly identified manufacturing problems that affected deliveries; developed production schedules that now formulate jobs in dollars to be invoiced for better cash flow predictions; and implemented production reports that identified backlogs in dollars for improved utilization of outsourcing and human resources. In addition, AR procedures were instituted to accurately identify cash flow and team manufacturing procedures were started that placed manufacturing responsibilities in the shop floor's hands

These improvements helped develop a company with visibility and reactivity. With mall development decreases of 75% in the tri-state area in 2009, the company's management team was able to clearly identify and implement necessary adjustments to enable profitability going forward.

This year a national advertising and marketing firm approached the company with interest in acquiring one of its divisions. The division is an intricate part of the company as a whole and was determined inseparable. Talks continue.