TS3 Technologies, Inc.

Client Profile
Founded in 1984, TS3 Technologies, Inc. (“TS3”) is a tier 3 / tier 4 provider of electronic manufacturing services (“EMS”). The company offers EMS contract manufacturing for wire harnesses, printed circuit boards and box-build assemblies. TS3’s end markets include utilities, energy, industrial, transportation, medical, military and avionics. TS3 focuses on low volume / high mix products, which typically require a higher degree of technical proficiency and a greater service component than high volume contract production. TS3 leases two manufacturing facilities, one near Nashville, TN and another near Houston, TX.
Situation
The cyclical decline in TS3’s primary end-markets and the corresponding impact on the company’s revenue significantly impacted TS3’s ability to support its capital structure. As a result of the cyclical decline and its broad impact on industry participants, the company’s customers began to scrutinize the financial condition and wherewithal of their vendors and operating partners. In response to macroeconomic headwinds, management implemented initiatives to reduce cash consumption and streamline operations. However, given the levels of profitability and cash constraints, the company had an unsustainable debt burden and equity was out of the money.
Solution
To appropriately align the incentives of all stakeholders, and to allow the company to achieve its growth objectives, TS3 determined that a restructuring of its obligations was necessary. The company engaged SSG to advise in negotiations with its stakeholders to facilitate a solution for TS3, the senior lender, the subordinated lenders, management and the equity sponsor. After exploring multiple restructuring alternatives to address the various needs of TS3’s stakeholders, SSG successfully outlined a restructuring plan that provided a proper capital structure for TS3 to enable the company to successfully execute its go-forward plan and provide adequate liquidity.