DCK DCK Cons Constructi truction on Case Case Study Study #1 #1 - - PowerPoint PPT Presentation

DCK DCK Cons Constructi truction

• n Case

Case Study Study #1 #1

Background:

• Formed in 2008, DCK is the largest construction/ general contractor company in the

Pittsburgh, PA region

• Industries served by DCK include hospitality, timeshare, multifamily/senior living,

energy, sports, and retail

• Company has consistently ranked among the Top 100 Contractors in the United

States

Company Challenges:

• Highly cash flow constrained
• Company struggled with stretched payables demand, less profitable terms, which

constricted margins, operating leverage, and the company’s ability to generate new and profitable business

Capstone | 2017 | 19

• FACTORING. FUNDING. FINANCING.

Cons Constructi truction

• n Firm

Firm Case Case Study Study #1 #1

Capstone’s Solution:

• Provided a Master Invoice Factoring Facility to inject the working capital required for

supporting a larger volume of contracts

• Provided PO Financing Facility

Progress and Future Outlook:

• Constraints drastically eased on cash flow
• Timely payments are being made to vendors
• Firm can now focus on the rapid growth of their company‐ revenues have doubled on a

monthly basis

• Capstone is funding four projects:

‐ Four Seasons Resort in Bermuda‐ $175,000,000 ‐ Atlantis Hotel in the Bahamas‐ $19,000,000 ‐ Half Moon Bay Hotel in Jamaica‐ $50,000,000 ‐ Ritz‐Carlton Napa Valley in Calistoga, CA‐ $113,000,000

Capstone | 2017 | 20

• FACTORING. FUNDING. FINANCING.

Fo Four Seasons Seasons Re Resort, Bermuda Bermuda

• FACTORING. FUNDING. FINANCING.

Capstone | 2017 | 21

Engineering Engineering St Staf affing fing Compan Company Case Case Study Study #2 #2

Background:

• In November 2015, Capstone met with a Temporary Staffing Company that places

engineers in Fortune 500 service contracts

• Engineers are placed at Qualcomm telecommunications centers and laboratories
• Engineers complete time sheets and turn them into a third party monitor who submits

the time sheets to Qualcomm

• Qualcomm changed their payment cycle from weekly to monthly

Company Challenges:

• Company lacked sufficient working capital to make four successive payrolls without

payment from Qualcomm

• If a working capital solution was not achieved the Company would have to exit the

contract

• Needed working capital

Capstone | 2017 | 22

• FACTORING. FUNDING. FINANCING.

Engineering Engineering St Staf affing fing Compan Company Case Case Study Study #2 #2

Capstone’s Solution:

• Entered into a Master Factoring Agreement to provide working capital for payroll
• Purchased weekly invoicing from the Company and used advance proceeds to

fund payroll.

Progress and Future Outlook:

• Number of engineers employed under the Qualcomm contract is increasing.
• Company is bidding on other technical staffing contracts with Fortune 500

customers

• The company is confident it can bid on larger jobs even those it does not have

capital for

• Capstone looks forward to providing additional capital as additional contracts are

won

Capstone | 2017 | 23

• FACTORING. FUNDING. FINANCING.

Pr Private ate Label Label Out Outerwear ear Com Compan any Case Case Study Study #3 #3

Background:

• New York City based outerwear company receives a $28,000,000 order from Costco

Warehouse Club

• Order received in November of 2016, goods deliver from March of 2017 through

February of 2018

Company Challenges:

• No banking relationship to open letters of credit
• Lacks working capital to post cash collateral to open letters of credit
• Need a letter of credit facility to support manufacturing of the goods in Vietnam
• Logistics support for international and domestic shipment to all US, Canadian, and

Mexican Costco distribution centers

• Back office to collect accounts receivable from domestic and international shipments of

goods to Costco

Capstone | 2017 | 24

• FACTORING. FUNDING. FINANCING.

Pr Private ate Label Label Out Outerwear ear Com Compan any Case Case Study Study #3 #3

Capstone’s Solution:

• Provided Trade Financing and a Factoring Facility
• Set up an worldwide logistics platform to ship to each Costco market
• Became the vendor of record to Costco
• Issued $22,000,000 letters of credit to two Vietnamese manufacturers
• Established an inspection regime to ensure only first quality goods were shipped to

Costco

• Streamlined order processing, billing, and payment through the purchase of subscription

to an online database with Costco

• E

Progress and Future Outlook:

• Costco indicating that additional $10,000,000 of orders for ladies wear be placed

between September 2017 and November 2017 for fall and late winter delivery

• Client has been given several additional styles from Costco to bid on for 2018 sales cycle

Capstone | 2017 | 25

• FACTORING. FUNDING. FINANCING.