David Brown, Certified Turnaround Professional
Red Hawk Associates, Ltd.
30539 Pinetree Road, Suite 228
Pepper Pike, OH 44124
Office 216/464-8714, Mobile 216/374-8714
davidbrown@redhawkassociates.com

EXPERIENCED INVESTMENT BANKER AND TURNAROUND LEADER

Professional Profile

Experienced operator, entrepreneur, dealmaker and investor with more than 2 decades of focus on the middle market;

Actively improved more than 75 businesses in a variety of industries, initiated and closed numerous investment-banking transactions;

Invested in and led own consulting/investment-banking firm since 1998, founded deal sponsor in 2007;

International experience (worked in more than 60 countries) with an international perspective.

Selected Professional Accomplishments

            EBITDA Improvement Experience in Many Industries/Markets

• Manufacturing: rubber products, plastic, metal parts, wood products
• Retail: hard and soft goods, all channels including store, on-line and catalog
• Distribution: business to consumer, b to b
• Other: technology (software development, circuit board mfg.), real estate development, construction (heavy highway, electrical and mechanical, telecom, housing), health care

Turnaround Consulting and Crisis Leadership

• Led bootstrap turnaround of rubber products manufacturer, resulting in improvement of annualized EBITDA from –15% to +10% within 18 months
• Directed balance sheet restructuring of contract manufacturer resulting in full payment of government liabilities and hedge fund lender with new capital provided by a traditional lender
• Achieved full recovery for all creditors of auto/truck parts manufacturer: Prepared and initiated implementation of plan to consolidate plants, reduce costs and manage cash flow.  Resulted in shareholders avoiding bankruptcy

Deal Origination, Financial Restructuring and Capital Raising

• Originated more than 50 new client assignments in past 10 years, many involved capital raising and asset sales as well as EBITDA improvement
• Established deep ties with banking and legal communities in region
• Proven record of marketing and selling to CEOs.  Customers ranged from $5mm of revenues to Orvis, Progressive Insurance and JP Morgan Chase

CURRENT EXPERIENCE

1998-Present   Red Hawk Associates, Ltd.

                                    Founder, Managing Director and owner of consulting firm specializing in helping management solve business problems and build value.  The firm has unique expertise in advising financially troubled debtors and creditors with regard financial restructuring and business reorganization.

Roles and Activities:

LIST OF SELECTED ENGAGEMENTS

Turnaround and Reorganization Experience:

Led turnaround of leading manufacturer of rubber products:  Developed and led plan reversing average annual EBITDA of -15% to +10% per year within 18 months.  Plan focused on improving productivity of assets and labor, improving key customer satisfaction and on time delivery and changing the Client’s operating culture.  Gross margin improved by 1400 basis points in 12 months even while total revenues decreased

Searched for investments for private equity firm, funded by multi-billion $limited partner: Focus on special situation investments including distressed assets. Equity investment ranges from $10 million to $150 million

Assessed situation, developed turnaround and restructuring plan and advised in implementation for a market leading rubber products manufacturer:  This firm markets and sells globally both to OEMs and end users.  The firm was challenged by the global recession, internal management and quality problems and the effects of the Summer Olympics in its largest market, China

Investment-banked exit financing for troubled manufacturer:  Developed memorandum, marketing plan, identified take out lender and accompanying balance sheet restructuring, negotiated with incumbent lender and also with relevant hedge fund to close deal within 6 months from start of effort

Evaluated strategic alternatives for large financially troubled homebuilder:  Analyzed value to shareholders of alternatives including bankruptcy, self-dissolving receivership and bootstrapped turnaround.  Recommended strategy to ownership and management team

Led, as the Court-appointed Receiver, the refinancing of approximately $8 million of senior debt within 8 weeks:  The senior lender increased its recovery by 22% in 8 weeks as the defendant (a large contract excavator) refinanced and the case dismissed

Achieved full recovery for all creditors of auto/truck parts manufacturer: Prepared and initiated implementation of plan for growing but cash-strapped middle market firm to consolidate plants, reduces costs and manage cash flow resulting in shareholders avoiding bankruptcy and successfully merging with strategic buyer.  Secured debt exceeded $10 million, mostly held by large Ohio-based bank

Evaluated and developed turnaround plan for contract circuit board manufacturer:  Our plan included revenue increases through improved pricing analysis, selective customer acquisition and also cost reductions through facility consolidation, improved manufacturing yields and through implementing a global procurement approach. The plan implemented by our Client would improve cash flow from (3%) to 8% within one year on a same sales basis

Led balance sheet restructuring of a contract manufacturer:  For our insolvent Client, we sourced, negotiated and closed on a debt financing which took out its current lender, paid off its IRS and State tax liabilities and provided the company enough working capital to grow and to subsequently acquire 2 businesses within 6 months

Achieved full recovery for all creditors of large plant nursery: Total secured debt held by Ohio-based bank exceeded $8.5 million.  Our plan reorganized business, reduced assets and consolidated operations while providing for continuance of family ownership

Reduced annualized loss by $500,000 to reach breakeven by assessing business and developing turnaround plan in one week: Contract manufacturer and replacement parts supplier with $5 million revenues.  Management successfully implemented plan

Increased recovery by 50% for senior lender and 100% for unsecured creditors by developing and implementing turnaround plan, and negotiating settlement between lender and guarantor resulting in loan recovery substantially in excess of liquidation: Telecommunications services contractor with $15 million of revenues

Increased loan recovery of senior lender by 40% by quickly determining true status of business, and recommending and managing wind-down and sale of assets for value well above liquidation: Manufacturer of proprietary cryogenic equipment with $8 million in sales

Reduced losses for stakeholders by several million $by quickly and accurately evaluating business status and recommending exit strategy: Review on behalf of lenders of troubled employee services company with $400 million of annual billings

Engineered full recovery by senior lender and unsecured creditors from business assets and doubled likely recovery by equity holder by crisis managing distressed manufacturer: Crisis Leader of $150 million food packager and distributor during labor strike and loss of primary supplier

Created tens of millions $of value by developing and helping to implement turnaround plan and restructuring: (predecessor firm) - Heavy highway and bridge contractor with $100 million of revenues eventually sold to European public company

Developed and monitored plan to wind-down operations and recover loan: (predecessor firm) - Construction Equipment Manufacturer with $10 million of revenues

Increased senior lender recovery by 100% by uncovering bank fraud by ownership and CFO, managing crisis and developing turnaround and restructuring plan for debt and unpaid taxes: Largest Electrical Contractor in Central Ohio, $50 million of revenues

Increased shareholder value by 5 times, obtained full recovery for senior lender and other creditors from business assets by quickly assessing business, developing turnaround and, subsequently, growth plan, and sourcing new debt and equity: Manufacturer of aftermarket truck accessories and also distributor of specialty fasteners, $5 million in revenues

Assessed and improved marketing and sales operations while restructuring debt: (predecessor firm) - Commercial printer with $8 million of sales

Developed turnaround and restructuring plan: (predecessor firm) - Textile manufacturer with $8 million of revenues

Avoided losses of approximately $500,000 to shareholders by quickly determining viability of business to determine value of additional capital infusion: Manufacturer of aluminum permanent mold castings

Assessed business status and assisted in loan recovery: Wood product manufacturer of $7 million of sales

Created more than $10 million of stakeholder value by developing and implementing a turnaround and debt restructuring plan including closing all retail stores, subsequently developed plan for revitalized business to grow: Woodworking equipment manufacturer selling directly to consumers through direct mail, Ecommerce and now Lowe’s stores with $80 million of sales at the time of the restructuring

Guided new management through development and implementation of turnaround plan: Non-profit hospital with $20 million of revenues

Reduced losses by 20% through unique analysis of business by location and product, using GMROI approach, resulting in re-merchandising and also closing some locations: Truck parts distributor with $11 million of sales

Led profit improvement of almost 400 basis points of EBITDA by improving productivity of machinery and material yield, as well as improving budgeting and controls: Specialized plastic injection molder with $8 million of revenues

Guided recovery and growth after purchase out of Chapter 11: Chain of health clubs with $15 million of revenues

Assessed business then helped with wind-down and loan recovery: Minority owned manufacturer of after market auto parts with $7 million of sales

Assessed business and recommended strategy to owners and lender: High technology consulting firm with $12 million of sales

Preserved $3 million of equity by leading the development and helping to implement a turnaround and restructuring plan: Manufacturer of after market auto parts and OEM marine parts with $9 million of sales

Avoided losses of $10,000 per month by developing liquidation and wind-down plan: Electrical contractor with revenues of $4 million

Reduced losses by estimated $1 million per year through creation and implementation of turnaround plan including a sale of a subsidiary: (predecessor firm) - Multi-business, family-owned corporation, manufacturer of pipe, proprietary hauling attachments and specialty fasteners

Created $6 million annually of value by guiding board and management in the creation and implementation of turnaround plan for forging division: Multi-business $90 million public company focusing on manufacturing for and servicing aerospace industry

Developed assessment and cash flow projection: (predecessor firm) - Involved at lender’s request to assess status of very troubled city bus manufacturer

Value Building Experience:

Led successful search on behalf online marketing firm

Advisory Partner with hedge fund-backed Castle Island Partners and advisor to Chicago-based private equity fund: Evaluated numerous investment opportunities for these two value-based investment groups

Conducted North American search for unique business targets: Conducted search for large family owned truck parts distributor and repair business

Developed growth strategy and sourced new debt and equity resulting in improvement of more than $1 million in EBITDA: Specialized metal fabricator with $17 million of sales

Reviewed business strategy and developed and helped implement profit improvement program resulting in immediate annual improvement of approximately $500,000: Multi channel consumer products company (mail order, e-commerce, retail) with $200 million of sales

Evaluated call center and back office operations and developed program to reduce costs by up to 50% while improving service: Global financial services firms retail and credit card divisions with $8 billion in revenues

Reviewed and recommended improvements and growth strategy for new customer concierge initiative, now a key driver of the Company’s growth: Top five-property and casualty insurer with $16 billion of revenues

Valued investment and coordinated sale to management team: For Private Equity Fund, assisted regarding valuation and subsequent divestiture of portfolio investment

Assisted in creating an estimated $2 million of equity by helping to obtain growth financing to support new product line: Consumer heater manufacturer selling to mass merchandisers with $15 million of revenues

Helped create more than $20 million of shareholder value by conducting operational and financial assessment leading to improved profit as part of refinancing: Multichannel (retail, catalog, Ecommerce, distributor) baked goods and gift company with $25 million of revenues.  The firm serves the personal gift, entertaining and food at home markets and recently sold for much more value than before this assessment

Designed and implemented, including training, new inventory and lot control system: Tier One auto stampings manufacturer with 200 employees

Conducted operational and strategic review as part of strategy development effort: A leading Brazilian general merchandise retailer

Designed and helped implement a new merchandising system: Canadian soft goods apparel retail chain with $60 million of sales

Developed and implemented a new merchandising system: Do it yourself hardware retail chain with $50 million of sales

Chapter 11 Debtors in Possession include:

Custom Coach Corporation - $12 million motor coach modification manufacturer, service and leasing company with 4 senior lenders and hundreds of unsecured creditors

REMACOR - $25 million manufacturer of chemicals for steel makers’ hot blast furnace operations

HUPP Industries (predecessor firm) - $20 million manufacturer of specialized products for the defense and HVAC markets

Tenn-Ohio - $20 million trucking company

Film Transit - $5 million film delivery and supply company for retailers

Chapter 11 Committee of Unsecured Creditors include:

Action Auto Rental (predecessor firm) – Replacement auto rental company with $50 million in revenues

Sales managed under Section 363 of Chapter 11 Code, Chapter 7, or as Secured Party Sale include:

Digital Printing Company: out of court settlement resulting in Article 9 sale in Ohio

Grabill Corporation (predecessor firm) - $200 million manufacturer – Sec. 363

REMACOR – Section 363

Hough Bakeries (predecessor firm) – $25 million bakery and retailer - Chapter 7

Custom Coach Corporation – Section 363

Mariclare Inc. - $15 million revenues auto part distributor

Lenders worked with include:

Huntington National Bank

National City Bank/PNC

Foothill Capital

Key Bank

First Merit

Firstar

Comerica

Provident

Fifth Third

OTHER EXPERIENCE

1990-1998                   The Parkland Group

                                    Principal in firm specializing in consulting to companies and creditors with regard to financially troubled situations.  Resigned to found own firm, Red Hawk Associates

1990                            McDonald & Company (now Key Capital Markets)

                                    Vice President of Corporate Finance for Cleveland-based investment bank

1985-1989                   Touche Ross & Company (now Deloitte Consulting)

                                    Lead consultant in general management and restructuring consulting practice

1980-1983                   Associates for International Research, Inc. (now AIRINC)

                                    Lead consultant for this leading global mobility workforce consulting firm, worked in more than 60 countries

EDUCATION/CERTIFICATIONS

1985         Carnegie-Mellon University, Tepper School of Business: Masters of Business Administration

1979     Georgetown University, School of Foreign Service: Bachelors of Science in International Economics

1996     Certified Turnaround Professional (CTP): Achieved designation in 1996, maintained certification since with 25 hours per year of education. One of fewer than 500 certificate holders worldwide

AWARDS/SPEECHES/PRESENTATIONS

Winner of Crain’s Cleveland 40 Under 40 Award

“Small and Midsize Turnarounds”, Harvard Business School Turnaround Symposium, 2005

“Building a High Performance Organization”, Non Ferrous Founders Society Annual Meeting, 1997

“Finance for Growth”, Enterprise Development Inc. (affiliated with Case Western Weatherhead School) Spring Seminar, 1999

“Using the Internet in Turnarounds”, Turnaround Management Association Annual Workshop, 1999 and 2000

SELECTED ARTICLES

“We are in a Fight – How to Fight Back”, unpublished, 2004

“Advice for Leaders and Managers in Challenging Situations”, commissioned by the Greater Cleveland Growth Association

“Using the Internet in Turnarounds”, Journal of Corporate Renewal, 2000

“There’s a better way than Chapter 11”, Metal Center News, 1992

“Good management is the key to surviving hard times”, Metal Center News, 1991

“Can Lenders Afford Not to Lend to Construction Companies?”, The Secured Lender, 1994

BOOKS

The Turbocharged Company, David Brown and Larry Goddard, York Publishing, 1995:  This book guides business leaders through the process of improving their company’s performance.  In contrast to many “fad” business books, the authors focus on all areas of an organization from sales and customers to organizational development and productivity.  It is the combination of what the authors call the Four Foundations of business excellence and the Process to build them that ignites outstanding performance.  The authors’ own hands-on experience, coupled with extensive research, make convincing arguments to cause managers to carefully examine their own businesses from a different perspective.

“(the process) is logical, well thought-out and proven in organizations across America” Bernard Marcus – CEO, The Home Depot

“Using real-life examples, (the authors) illustrate how companies large and small can actually thrive, and not merely survive, in today’s take no prisoners environment”

Robert J. Eaton – CEO, Chrysler Corporation

BOARD SERVICE AND LEADERSHIP

President and Board Member, Turnaround Management Association, Ohio Chapter

Greater Cleveland Boy Scout Association

Ohio Venture Association

Mayfield Sand Ridge Club