Alvarez & Marsal

After years of growth, Leiner Health Products, Inc., America’s largest private label
manufacturer of vitamins, faced mounting liquidity problems and the prospect of
defaulting on debt obligations. At the urging of its private equity investor, Leiner hired
Alvarez & Marsal to work with management to execute a turnaround and restore critical
confidence among customers, suppliers and stakeholders. Assuming the role of interim
Chief Financial Officer, Alvarez & Marsal performed profitability analyses, increased
liquidity through better inventory and receivables management, improved financial
disciplines and reduced costs through plant consolidations. The team then negotiated a deal
with bondholders in advance of a pre-packaged, 45-day Chapter 11 filing, allowing Leiner
to quickly emerge positioned for future growth. The turnaround resulted in more than $30
million in working capital improvements and EBITDA growth from negative $2 million to
positive $40 million during the year of the turnaround, and $55 million the year after. The
investors have since sold approximately half of their position and the senior bank debt has
been refinanced yielding above par to the original lenders.