The Company

A privately held consumer packaged goods (CPG) company, ambitious to quadruple its size in five years, selling products to major retailers such as Costco, Loblaws, and Pattison Food Group.

Role

Chief Financial Officer (CFO)

The Situation

The company was experiencing significant growth but faced several challenges:

Lack of Sales Demand Visibility: The company struggled to predict sales demand accurately, leading to excessive inventory buildup.
High Inventory Levels: Excessive inventory tied up significant amounts of working capital, limiting the funds available for other growth initiatives.

Seasonal Business Nature: The business had high working capital needs, especially during peak seasons, necessitating additional funding for growth.
Inadequate Sales Channel Reporting: There was no regular reporting system to track chargebacks, promotional spending, and returns, making it difficult to manage profitability.

The How

Collaborated closely with sales channels to enhance the accuracy of sales demand forecasts. This data was used to drive inventory projections and purchasing decisions.

Raised additional equity and secured a long-term revolving debt facility from a Tier 1 bank to meet working capital needs, especially during seasonal peaks.

Established regular profitability reporting for each sales channel. This enabled management to adjust pricing and promotional strategies to ensure profitability.

Developed detailed forecasts outlining the personnel and resource requirements needed to achieve the goal of quadrupling the company’s size.

Sales Growth: The company’s sales surged from $4 million to $28 million while we were engaged as CFO.
Improved Inventory Turnover: Significant improvements in the inventory turnover ratio reduced the strain on cash flows.
Strong Banking Partnership: The bank remained a long-term partner, providing continued support for seasonal financial needs.
Increased Gross Margins: Gross margins improved by five percentage points, contributing to overall profitability and financial health.

Through strategic financial management, accurate forecasting, and effective partnership building, the company not only overcame its initial challenges but also achieved substantial growth and profitability. Catapult’s role as CFO was pivotal in steering the company towards its ambitious goal of quadrupling in size, demonstrating the impact of sound financial practices on business success.

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