At a Glance
Client: Family of Companies: RRP Enterprises, Masterform Tool Company, Cylinder Components
Industry: High precision machining for global industries since 1903
Location: Franklin Park, IL
Owner: Richard Perales, President
Services: Client Accounting and Advisory Services, including financial analysis, annual compiled financial statements, tax planning and individual owner tax planning
ROI: Helped the owner move the company out of factoring (the last step before bankruptcy) to steady financial footing with a trusted banking referral, saving its legacy in Illinois and the owner’s dream. The company was in the black in less than a year. With support from KRD’s knowledgeable quarterly accounting and tax guidance, this turnaround has led to 30 local employees and growth to $10M in revenue.
In high school, Richard Perales started working on the factory floor of Masterform Tool Company.
Over more than 50 years, he learned every detail of the business, from production to customer service, sales to operations. He also became a member of the owner’s family through marriage.
As the company was transitioning to its second generation of ownership, it was losing ground financially. Perales, now in management, formed a second company to protect some assets from the struggling factory operations. Perales also got divorced and thought he might lose his livelihood, too.
“After the father passed away, ownership moved to the son,” Perales said. “Things were not being run the way I would run it. The overhead was too high. And eventually we were in factoring.”
A Renewed Partnership
KRD Partner Gene Barinholtz had been a longtime advisor for Masterform Tool Company, but the son chose a different accounting firm. When Perales offered to take over operations, he brought Gene back in to consult with them.
“We were on the slippery slope before bankruptcy. To go from factoring, where you are getting just 80% on every dollar of revenue, to being back in the black…it took less than a year,” Perales said. “Gene came over and looked under every rock to see what we were doing wrong and right and gave us guidance on how to fix the problem.”
Gene also referred Perales to a banker who trusted his experience and commitment. It was a huge turning point. “This is the only thing I know, and I was going to work night and day to fix this,” Perales said of those early talks with KRD and his banker. “It was not going to fail on my watch. That trust with me and Gene was instrumental to get the financing.”
Perales was able to maintain operations and buy out his brother-in-law. The valuable customer base stuck with him, too. By 2020, the company had diversified and grown to $4.8 million. Perales needed to maintain business momentum.
“Gene helped us with the PPP loan through the pandemic so I could keep my employees,” Perales said. “He has also advised me on things like purchasing new equipment and tax management that I wouldn’t otherwise understand. I also work with Bridget [Bryan Toth] at KRD. She does a lot of financial analysis and gives Gene the information he needs for our quarterly meetings.”
As Perales looks to the future, he wants to leave the company in good hands. It has survived many ups and downs, just like Perales. Gene and Bridget and the team at KRD are helping him plan for what’s next. “They help me with personal tax planning and all that. They have helped me grow the company as much as I have, and I’ve been happy ever since.”