Case Study: Young Electric Sign Company (YESCO)
Huron was hired to serve as the Financial Advisor to Young Electric Sign Company (YESCO), a private company engaged in the manufacture, sales, and service of custom electric signs, resort/casino signage, outdoor media billboards, arena/stadium displays, and LED video displays. Huron’s relationship with YESCO has included multiple assignments, and recently we were asked to review the Company’s annual business plan along with the identification of cost reduction initiatives and other strategies that could improve the Company’s financial performance.
Management agreed with our recommendations and the Huron team assisted the Company in the execution of a Profit Improvement Plan (PIP) for two of the Company’s subsidiaries. Annual savings were more than $10 million. Additionally, we worked with management to develop a “cash culture” resulting in a $17M debt reduction through aggressive working capital strategies. Key methodologies included:
- Weekly cash meetings and updates to the 13-week cash flow forecast
- Intense focus on implementing cost reduction initiatives
- Instituting Key Performance Indicators as a management tool
- Mentoring the accounting team to bring credibility to bank reporting
Contemporaneously, we performed a review of the Company's capital structure in order to extend the liquidity runway. Our recommendation to refinance one of the Company’s divisions was key. Working alongside management we completed this critical step providing needed liquidity to accomplish the turnaround.
Through this work, the Company now has a more appropriate capital structure including a restructured undrawn senior secured revolving credit facility and cash on hand. YESCO realized a 300% YOY EBITDA improvement and earned a seven times return on the investment in the Huron work product in one year. The savings will continue as a result of management’s enthusiasm for the Key Performance Indicators Huron introduced. YESCO recently announced the sale of YESCO Electronics LLC to Samsung Electronics. Read more at: Samsung’s Latest Acquisition: Utah-Based Yesco Electronics