JC Jones & Associates winS NATIONAL TURNAROUND AWARD
Firm honored with industry’s “Oscar” for second time since 2005
ROCHESTER — For the second time in four years, JC Jones & Associates has been nationally recognized by the Turnaround Management Association (TMA) for leading a successful corporate turnaround.
The Pittsford firm is the 2008 recipient of the Small Company Turnaround of the Year Award, widely recognized as the “Oscar” of the turnaround industry, for its work at Michelman-Cancelliere Iron Works, Inc., a steel fabrication, construction and engineering firm in Bath, Penn.
JC Jones also won a TMA award in 2005 for its restructuring of Knowlton Specialty Papers Inc. in Watertown, N.Y.
This year’s winners will be honored at an Oct. 28 luncheon at the TMA’s 20th Annual Convention in New Orleans.
“We’re extremely honored to be recognized again by the Turnaround Management Association,” said Jeffrey C. Jones, president and CEO, JC Jones & Associates. “It’s especially gratifying because in addition to this turnaround helping MC Iron Works become profitable again, it saved hundreds of important jobs in a rural Pennsylvania community – and that’s so important in today’s struggling economy.”
Steel company buckles after successful start
Bethlehem Contracting Corporation, owned by the Cancelliere family since the 1970s, began working in 1992 with the Michelman family, owners of the Michelman Iron Works since 1946. Strategically positioned at a major business hub on the Eastern seaboard, Bethlehem Contracting had a hand in building a wide array of structures ─ from schools and bridges to high-rise apartments. Michelman Iron Works in Brooklyn also was firmly entrenched in the bridge rehabilitation business with the New York City Transit Authority.
In 2002, the companies merged to form Michelman-Cancelliere Iron Works (MCIW), based in Bath, Penn. MCIW became the steel provider for many high-profile New York structural projects, employing 110 people in 2002 with nearly $24 million in sales and a net income of nearly $2.1 million.
When JC Jones arrived at MCIW in late summer 2006, however, the team led by John J. Bellardini discovered a dysfunctional company that finished 2006 with nearly $4.7 million in losses. MCIW’s struggles included longstanding issues with management, teamwork and communications.
The turnaround team at JC Jones identified a number of significant factors that had to be fixed to save the company, including inconsistent and fragmented communications, elimination of the largest contract in process, no cash or profit forecasts or performance metrics, and declining employee morale with strong labor-union concerns.
Despite these serious issues, MCIW had earned an excellent reputation for both the company’s products and people. JC Jones went to work to make sure the company’s history of success would continue by making a number of significant operational changes, including implementing a 13-week cash flow forecast, containing costs by aligning workforce resources with contract requirements, eliminating overtime, adjusting management compensation and selling non-performing assets.
After initial resistance from some members of the ownership team and employees, all parties eventually agreed to make major changes for the survival of the business. An industrial psychologist helped management resolve the potentially business-ending problems between the two families; the backup bankruptcy plan was never implemented; the performance issue with MCIW’s largest customer contract was settled out of court; and medical benefits for union members are now supported by the union.
After three consecutive years of losses in 2004-06, the steel fabricator made nearly $2 million in net income in 2007.
“MC Iron Works today is well positioned for growth in a market segment that supports U.S. commerce in critical transportation and related infrastructure,” Bellardini said.
This year’s TMA award marks the latest honor for JC Jones. The M&A Advisor, a leading conference producer and newsletter publisher serving the finance industry, honored the firm earlier this year for “Turnaround Deal of the Year” in the manufacturing and distribution category for the successful restructuring of Harman Stove Company, one of the world’s leading manufacturers of wood pellet, wood and coal stoves, based in Halifax, Pa.
In addition to its turnaround awards, the firm also was recognized in 2007 with the Rochester Business Ethics Award after being named a finalist in 2006.
About JC Jones & Associates
JC Jones & Associates (www.jcjones.com) is a professional services firm assisting companies in profit improvement and turnaround, business restructuring, mergers and acquisitions, and strategic audit services, including Sarbanes Oxley compliance. The firm is headquartered in Rochester with offices in Buffalo, Detroit and Syracuse.
About Turnaround Management Association
With international headquarters in Chicago, TMA’s 8,300 members in 43 regional chapters comprise a professional community of turnaround practitioners, attorneys, investors, lenders, venture capitalists, investment bankers, accountants, appraisers, liquidators, executive recruiters and consultants. Members adhere to a Code of Ethics specifying high standards of professionalism, integrity and competence. Its Certified Turnaround Professional (CTP) program recognizes professional excellence related to workouts, restructurings and corporate renewal.
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