Medicalodges, Inc

Client

Bridge was hired as Financial Advisor and reorganizing consultants to Medicalodges, a $100 million operator of twenty-nine skilled nursing facilities, twelve assisted living facilities, and six home based community service facilities in multiple states.

Challenge

The Company faces a wide range of issues, including defaults under loan agreements, an increasing cost structure, ineffective cash management process, and a failed attempt at diversification with assisted living facilities. The Company also faces a severe liquidity crunch during a time when facilities are experiencing a deterioration of patient census as well as needs of capital expenditure investments The Company seeks replacement financing in a tightened credit market that requires lower leverage ratios than currently exists. As Financial Advisor, Bridge advises and works with management to address all aspects of their business challenges.

Solution

Upon being retained, Bridge worked quickly to implement a new cash management process, prepare a reliable short-term cash flow forecast, and developed divestiture strategy to eliminate non-core assets. Created task force team to focus on improving collection efforts that result in additional cash generation by reducing accounts receivable balances. As Financial Advisors, Bridge is assisting management with assessing employee job functionalities and implementing operational improvements that further improve shareholder value and enhance the Company’s ability to obtain replacement financing. Bridge functions as an intermediary between the Company and Senior Secured Lenders.

Results

Successfully improved overall cash position by implementing new cash management process and reducing “Day Sales Outstanding” with a refocused collection effort. Divestiture strategy resulted in the sale of 4 facilities thus far and 7 assisted living facilities are in final stages of due diligence. Additional non-core assets are entering initial due diligence phase. Non-essential job tasks are being eliminated resulting in reduction in operating costs.