Case Study
EBITDA Scrub + Addback Restatement
- Matthew Edwards
Manufacturing
INDUSTRY
4,500
EMPLOYEES
$750M
ANNUAL REVENUE
Background
Our client experienced an extraordinary disruption to the business stemming from an ERP implementation across the organization. Following a period of cleaning up and restating 9 months of activity, it became clear that the impacts to the business far exceeded forecasts.
S+H was asked to conduct a scrub of financial performance to identify non-recurring impacts and report these as addbacks for an adjusted EBITDA. This “EBITDA Scrub” included an evaluation of the circumstances that impaired decisions during the period of system instability.
Objective
Conduct detail analysis to identify monthly performance deficiencies.
Evaluate business impacts for recurring and non-recurring nature, including the sources of the impacts.
Prepare pro-forma normalized performance after carving out non-recurring activities.
Prepare report of normalized financial performance.
Solution
Prepared analysis of contribution margins, labor efficiency, and contract pricing efficiency, isolating $40M of losses for non-recurring evaluation.
Deep dive analysis on the cause of losses incurred by the business.
Prepared carve out financials for an additional $36M of addbacks.
Worked with functional leaders to inform operational changes to address deficiencies.
Delivered report on normalized financial performance for distribution to investors.
Identified additional $36M of addbacks including pricing forecast gaps that utilized inaccurate data, discontinued ops for a distressed business unit, and vendor contract pricing deficiencies.
Knowledge Hub
Valuation for Internal Equity Transfer
Interim Controller
Construction Operations Management
System Transformation
Company Valuation to Prepare for Transaction
