The BlackEagle System

We view our operational, hands-on approach as a value-added advantage.  We often work with management teams to implement the BlackEagle System which has three key elements:

• Lean Thinking, a business philosophy that seeks to simplify processes in order to and achieve the highest quality at the lowest cost
• Key performance indicators to identify areas for improvement and to highlight issues before they are revealed in financial results
• Active corporate governance to align the interests of stakeholders

The BlackEagle System is a systematic and repeatable approach to investing in and fixing distressed companies.  Our focus in implementing a turnaround plan is to rapidly reduce costs, eliminate excess capital requirements, strengthen the management team and introduce a Lean focused business strategy.  Within the BlackEagle System the economic interests of all company stakeholders—investors, board members and employees—are aligned to execute a successful turnaround.  BlackEagle’s goal is to identify the largest and quickest improvement opportunities and systematically implement a successful turnaround.

Lean
Lean forms the core of our operationally focused turnaround strategy.  It is an operating philosophy that builds self-managed systems and seeks to reduce the seven major types of waste: over-production, waiting time, transportation, over-processing, excessive inventory, unnecessary motion and scrap.  Lean helps facilitate the identification of the largest and quickest improvement opportunities and provides the management processes to align the activities of everyone in the organization, from executives to hourly workers.  It not only allows the acquired business to achieve dramatic initial improvements, but it also ingrains a continuous improvement culture in the management team that can drive significant long-term improvements, thus reducing volatility and creating significant return on invested capital.

Key Performance Indicators
KPIs help drive accountability at every step in the improvement process.  BlackEagle and management will develop a detailed plan containing goals for these metrics and timeframes for achieving them along with assigned responsibilities.  These metrics measure both financial and non-financial results related to throughput, yield, safety, quality, delivery and cost.  The use of KPIs enables us to address any operating issues long before they become evident in the financial results.

Active Corporate Governance
BlackEagle’s corporate governance philosophy is based on transparency, a highly structured budgeting process where the board of directors and management work together as a team to develop aggressive yet achievable goals and monthly operating reviews at the portfolio company.  When corporate governance is effectively applied in a portfolio company, the management team operates in an environment where expectations are clear and accountability is tied to the aspects of performance under their control.  We believe that our system of corporate governance based on clearly defined objectives will enable us to recruit and retain top tier management personnel.