EBITDA Scrub & Addback Restatement
VIP SOLUTIONS CASE STUDY
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.
VIP 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.
OBJECTIVES
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
SOLUTIONS
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 forecasting gaps that utilized inaccurate data, discontinued ops for a distressed business unit, and vendor contract pricing deficiencies.
STATUS DOCUMENTATION
