Assignment - Winder Case 1 - Exec Summ

Assignment - Winder Case 1 - Exec Summ - Executive Summary...

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Executive Summary – Winder Dairy Winder Dairy, Inc. is a milk production and distribution business that began operations in April 1880. The Company distributes over 100 products to 15,000+ Utah households twice each week and services 300 wholesale accounts. Revenues were $13.8 million two years ago and $14.7 million last year. The company is headquartered in West Valley City, Utah and employs approximately 200 people. The Company is currently family-owned and operated by the Winder and Liddle families. Three years ago, management discovered material irregularities in their financial reports spanning the previous 36 months. These irregularities were the result of a complicated scheme orchestrated by the Company’s former treasurer, aimed at covering up the Company’s true financial position. The subsequent restatement resulted in an adverse swing in profitability of approximately $4 million (cumulatively over the 3 years), and exposed substantial liabilities to vendors, lenders, and the taxing authorities, and put the company in violation of its bank covenants. The existing senior lender, with total exposure of $4.3 million, has initiated foreclosure proceedings. Winder needs new investment capital to refinance several existing lenders, to clean up the payables, and to provide adequate working capital for its growth. The Business Winder Dairy has been in the milk home delivery business since its inception in April 1880. Today, Winder delivers all kinds of milk products including all natural milk, cream, cheese, etc. Milk products account for approximately 85% of revenues. The Winder Bakery began operations in 1958, focusing on all natural, preservative-free products that could be delivered along with customer milk orders. This accounts for approximately 7% of revenues. Outside products account for approximately 8% of revenues. In 1985, Winder purchased the home delivery business of Crème of Weber, which more than doubled the number of customers served. Over the last decade, revenue growth has come primarily from regional expansion and the creation of a wholesale division. Today, home delivery accounts for approximately $11.2 million in revenue (73%) and wholesale accounts for approximately $4 million in revenue (26%). Convenience and a great-tasting product are the primary selling points for the Winder home delivery service. Winder’s focus on hormone-free, preservative-free products (known as “all natural”) also appeals to customers. By providing essential foodstuffs, Winder also sells the fact that customers need to visit grocery stores less frequently. Some customers claim this alone saves them more than 30% on their grocery bill. Customers are typically upper middle income, two wage-earner families with children. In addition to its home delivery business, Winder has developed a robust wholesale and private label
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This note was uploaded on 03/06/2012 for the course BUS M 475 taught by Professor Gregpeterson during the Fall '11 term at BYU.

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Assignment - Winder Case 1 - Exec Summ - Executive Summary...

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