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The primary problem was a significant drop off in production releases without meaningful replacement production. Variable costs were not adquately adjusted for the change in volume and hence losses began to mount. The company began to run out of cash in approximately 3 months. The company retained ABC and immediately began to see the benefits of an external pair of eyes. Variable cost were trimmed, negotiations for extended pay terms were put in place with trade credit, and accelerated payment terms were put in place with customers.