Brought order out of chaos
PML Microbiologicals, Inc. was the sole subsidiary of PML, Inc., a publicly traded, FDA-regulated medical device manufacturer. PML, the third largest supplier of culture media in North America, reached a crisis point in 1995. The company had lost money or operated at break-even every year since 1991. In 1994, financially and operationally troubled PML acquired a financially and operationally troubled competitor, Adams Scientific. That acquisition precipitated a crisis.
In 1995, PML’s operations were out-of-control. Financial records were inaccurate and out-of-date; the company had no business plan; there were frequent overdrafts at the bank; the company was on COD or credit hold with many vendors; systems were woefully inadequate; there were frequent stock-outs of raw materials and finished goods as well as numerous shipping errors; inventories were inaccurate; there was a growing chorus of customer complaints.
The Special Assets Department of PML’s bank recommended that PML engage Renee Fellman. PML agreed.
Renee had full operating authority at PML from January 9, 1995 until mid-April 1996. Working as Interim CEO, Renee
- Gained control of cash and purchasing
- Restored credibility with stakeholders
- Prepared the company’s first-ever operating plan
- Reduced personnel costs through operational improvements
- Designed and implemented a management accountability system
- Instituted cycle counting of inventory
- Tightened production control
- Solicited bids on all materials and services
- Eliminated positions or replaced 75% of managers
- Avoided Chapter 11 by negotiating a creditors’ extension
- PML returned to profitability during Renee’s tenure.
- Performance in every financial and operational category improved dramatically; e.g.,
- EBITDA improved 200%.
- Material costs as a percent of revenues declined from 42.5% to 33.2%.
- Freight costs declined from 6.1% to 1.6%.
- PML repaid its creditors in full and enjoyed record earnings until 2006, when the company was sold and shareholders realized a handsome profit.
- Renee won the Turnaround of the Year Award from the international Turnaround Management Association for her leadership at PML.