Priority 1 Holdings

P1

Summary

Lender Advisor

Lexington Park, MD

Priority 1 is a diversified international aerospace and defense company with over three decades of experience to provide Intelligence, surveillance and reconnaissance technical operations.

Priority 1 faced a crossroads as it attempted to rebound from the termination of the AFRICOM program and recover from adversely affected financial performance in a time when the Company’s revolving credit facility was frozen.  The Company lacked sufficient liquidity to continue quarterly debt service and provide a working capital cushion to operate on a normalized basis..

Key Challenges
Liquidity Constraints
Covenant Default
Tight Working Capital Position
Leveraged Capital Structure

Engagement Highlights

  • Reviewed historical and projected financials to identify performance trends.
  • Assessed management’s prior cost-cutting initiatives and their progress.
  • Reviewed and discussed the business development process, including Priority 1’s backlog and pipeline, to project any necessary liquidity needs.
  • Visited the Company for detailed discussions with management and tours of Priority 1’s facilities.
  • Developed high-level financial sensitivity models to extrapolate the Company’s base forecast into 2022 and to forecast results based on various win-loss assumptions, higher-lower revenue levels, and potential new programs.

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