Profile:

SkinMedica, Inc. – $90 million fast-growing, Carlsbad, CA-based skincare products company founded in 2000. Acquired late 2012 by Allergan, a strategic investor.

Objective:

SkinMedica’s finance team wanted to find ways they could directly contribute to earnings to support team objectives. They embraced Accretive’s cost savings assessment process to help supplement internal efforts as well as to satisfy the various Private Equity investors who of course want to increase earnings and the valuation of their investment.

Annual Savings results:

Accretive assessed the following areas but determined that CCHS was doing a very good job in these areas or the estimated savings were not material enough to pursue or implement. This is also considered a positive outcome since it validated the team’s efforts to contain cost and improve efficiency:

• Small Parcel Costs – Accretive brought in one of its buy-side experts in this area, resulting in $100,000-$130,000 per year without sacrificing quality or timeliness of service.
• Legal Services – Accretive introduced the Company to a firm that provides part-time, in-house general counsel services, to economically internalize routine legal activities, minimizing the use of more costly outside counsel. Net savings are estimated to be $75,000 – $125,000 per year.
• Travel costs – Accretive performed a no-cost review of our travel policies, processes & procedures for major sales conferences & events as well as international travel using a corporate travel group. The savings are hard to pin down but the program was designed primarily to improve efficiency of internal staff who are able to focus on event content vs. event logistics.
• Trade Show Binders – Accretive brought in a Marketing Asset Management firm to handle all our trade show binders using “on demand” web-based tools, resulting in significant recapture of valuable staff time during critical periods leading up to our many trade shows during the year.

Areas validated (immaterial or no savings):

Accretive assessed the following areas but determined that the Company was doing a good job in these areas or the estimated savings were not material enough to pursue. This is also considered a positive outcome since it validated the team’s efforts to contain cost and improve efficiency.

• Telecom cost
• IT maintenance and related contracts

Impact for SkinMedica:

Company achieved its EBITDA targets and strengthened several business processes during a period of rapid growth with nominal time and no fixed cost investment.

“Accretive’s team performed as they said they would. We achieved several of the identified goals and we learned about a number of services & resources with which we were not familiar. Accretive’s Project Manager was very sensitive to minimizing our internal time investment while maximizing results”

Steve Loomis, CFO