Whither Audio Research

[dminches]

Warnings have been issued.

 

[2fastdriving]

I am very puzzled by the animosity of picears and of Gregadd to ARC being purchased by an audiophile who can afford to purchase it. I don't understand the snarky comments about someone who could afford to buy ARC probably would have an "ego" problem who would treat ARC like a "plaything." How many private equity transactions are in your database of personal experience where you are in a position to evaluate accurately the psychology of the purchasers and arrive at the correlations you assert?

I think it would be great if ARC were in the hands of a passionate audiophile rather than a consumer electronics conglomerate. ARC would be safe, for now, as a going concern, the value of ARC components in the field would be saved, and current owners would be able to continue to have their components repaired by ARC. I think that would be a great outcome.

Great post. I was biting my tongue, wanting to say the same thing!

 

[Gregadd]

I am very puzzled by the animosity of picears and of Gregadd to ARC being purchased by an audiophile who can afford to purchase it. I don't understand the snarky comments about someone who could afford to buy ARC probably would have an "ego" problem who would treat ARC like a "plaything." How many private equity transactions are in your database of personal experience where you are in a position to evaluate accurately the psychology of the purchasers and arrive at the correlations you assert?

I think it would be great if ARC were in the hands of a passionate audiophile rather than a consumer electronics conglomerate. ARC would be safe, for now, as a going concern, the value of ARC components in the field would be saved, and current owners would be able to continue to have their components repaired by ARC. I think that would be a great outcome.

I think I have had my say, I'll watch from the sidelines. I continue to promote the highend in whatever course it takes.

 

[Big Dog RJ]

That's what I initially thought that Trent S is actually a good chap. I'm sure he meant well and tried his best, as someone who had a passion for the company and the brand. He must have seen it coming and tried to take a gamble. Thinking that the debt won't accumulate, interest rates will not go up too much... take a few risks and try to jump over the hurdles... rather it didn't happen the way he thought. It hit the fan! I'm also wondering whether along the way towards accumulated debt, the signs were there... or not? Surely he must have seen something coming in the form of a negative... I'm sure at that point he was probably in a dilemma, and thought about it some other way, thinking it would fix itself in the long run but it didn't.

This would have been a typical Case Study during my MBA program, which I did in 2007. Although it's fairly outdated, one lesson remains the same, "never borrow more than you can afford to lose." And when you can't pay it back in a reasonable time frame, you will be labelled as "default!" In Trent's case he had defaulted several times! Oh dear... what a shame indeed.

Nonetheless, we all do silly mistakes. Financial ones are the hardest to get out of, let alone relationship mistakes. Those spiral out of control! I can very clearly remember the time wifey and I were at the bank signing up our new home loan. The bank manager said to the both of us that our credit history is pristine and therefore we should take a loan of upto a million. I said no thanks and only took 200grand. The rest was paid in full! I learned my financial lessons the hard way, especially during my senseless times of owning Wilson speakers and Quad ESL's, one made me nearly homeless, and the other was an absolute disaster! My old pops and the wifey had to bail me out, what a loser... I was! That's why I refer to her as the "good wife!" Bless her soul.

Now, I'm not comparing oranges to oranges here am I... the point I'm trying to make is if something negative hits you financially, then why even go down that path again? By all means just avoid it and learn from your mistakes and do the right thing, even if it involves a few sacrifices. Just do it! Do the hard yards in the short term, set things right and seek the best advise, don't be afraid to ask. In the long term, things will work out as long as you've shaped it in such a way that it will. Not putting yourself and others at risk! That's a textbook rule!

It would take someone or a company with a big heart and true passion to sort out ARC. Seriously jokes aside, I would've put my hand up. The only thing is, I'm based in OZ and ARC is in the US. I won't leave my family to bail out a high-end audio company, I won't do that. The other thing is, I do have a big heart and very very passionate about tube gear but I'm not persistently attached to any particular brand, although my system comprises of a full array of CJ tube gear!

If there's a will then there's a way. I sincerely believe that there's a way to get ARC back on track but like I said it will involve quite a number of sacrifices... I truly hope they make it. I wish ARC and it's new ownership all the very best, and may those wonderful tubes keep glowing.

Cheers, actually that deserves a mighty WOOF!!!
RJ

 

[Bill Hart]

Remind me- the Asian guy (I think S. Korea?) who used to bring the vintage WE stuff to Munich is/was a big industrialist but also an audiophile and I think had some connection to Silbatone. I also thought KL was owned through Koolance by a big industrialist. And for some reason, I may be wrong, I thought one or both were connected to the family that owned Hyundai. For that level, they hire top designers. (Not sure about GIP backing, the outfit that does the repro WE)
No question the wealthy investor would want to see a business plan and good management. I've sat in on such meetings. It is open the books time plus direction from the money but it can be done. And I don't think we have to look overseas. No politics intended or implied.
PS: from other things I read, ARC doesn't have as much going on in the Far East-- a market some of you know far better than me. Perhaps that's part of bringing it back stronger- bigger markets.

 

[picears]

I am very puzzled by the animosity of picears and of Gregadd to ARC being purchased by an audiophile who can afford to purchase it.

I did not say I am against someone, who can afford it, buying ARC. I said it would be a tragedy if such a thing occurred because the buyer wanted a toy to play with.

I am presuming, though, that we are hoping the company becoming a viable business again.

If you want ARC to be a hobby/toy/pastime of someone with really deep pockets, then fine. Who am I to stand between someone and their avocation?

 

[davidavdavid]

I started this thread "Whither Audio Research" and now i have to ask Whither Audio Research?

Has the company run its course? Why has the bank? The assigned financial management company (which specializes in turnarounds) and venture capital firms approached not deemed ARC a worthy/viable candidate for resurrection?

Is the demographic for ARC going to be there in 5 years, 10 years? Has the company been innovative these past few years? Are folks thinking with their hearts (waxing nostalgic) and not their heads? I'm the last one to dispute ARC's history, but I question it's present and remain leery/skeptical of its long-term future.

Perhaps I'd feel differently had ARC not been previously acquired and its ownership changed hands a number of times. And what about past dealers, who opted out and pursued other amplifier brands in place of ARC as a result. Can they be won back?

I understand that there are customers around the world who want the continued support of the company, and that there are folks whose livelihoods are tied to the company, but, is that enough to warrant its acquisition. This is rather interesting.

Which leads me to something I remind tech/Internet startups all the time: ROI = Return on Investment not Return on Interesting

This should liven things up a bit.

 

[Bill Hart]

I started this thread "Whither Audio Research" and now i have to ask Whither Audio Research?

Has the company run its course? Why has the bank? The assigned financial management company (which specializes in turnarounds) and venture capital firms approached not deemed ARC a worthy/viable candidate for resurrection?

Is the demographic for ARC going to be there in 5 years, 10 years? Has the company been innovative these past few years? Are folks thinking with their hearts (waxing nostalgic) and not their heads? I'm the last one to dispute ARC's history, but I question it's present and remain leery/skeptical of its long-term future.

Perhaps I'd feel differently had ARC not been previously acquired and its ownership changed hands a number of times. And what about past dealers, who opted out and pursued other amplifier brands in place of ARC as a result. Can they be won back?

I understand that there are customers around the world who want the continued support of the company, and that there are folks whose livelihoods are tied to the company, but, is that enough to warrant its acquisition. This is rather interesting.

Which leads me to something I remind tech/Internet startups all the time: ROI = Return on Investment not Return on Interesting

This should liven things up a bit.

I asked this question differently in a thread entitled something like "Are We the Last Generation" . The responses I got were mixed- from "we were always niche" to "there are younger generations who are into it but haven't reached their earning power yet."
I'm not sure there is an answer-
The brand has credibility and perhaps not as well known as McI to the uninitiated, the marque (or trademark) alone has value. I know some people are very taken with the current line of products-- I'm not plugged into that scene anymore, having gone in a different direction (I owned ARC stuff back in the mid-70's through the '90s and sold off my SP-10mk ii when I got back into hi-fi in the early oughts simply b/c it was too noisy for horns).
Yeah, the business has to make sense to an investor- that was one of the reasons I raised the question whether they could expand their market to the Far East, where I gather they don't have much presence.

 

[Ron Resnick]

From the bits of information I received about the outstanding liabilities of ARC I think a rescue is unlikely. From what I have been told the balance sheet has much bigger fish to fry than contemplating a speculative expansion to Far East Asia.

 

[microstrip]

From the bits of information I received about the outstanding liabilities of ARC I think a rescue is unlikely. From what I have been told the balance sheet has much bigger fish to fry than contemplating a speculative expansion to Far East Asia.

This weekend rumors say they will get a new owner soon.

 

[Ron Resnick]

This weekend rumors say they will get a new owner soon.

I hope so!

 

[Nathanu]

I have no inside information and do not have knowledge of any rumors about Audio Research. Based solely on the court filings to date, I expect that Trent Suggs has been walking a fine line of trying to find a buyer to maximize the return to the secured lender (the bank) in order to avoid paying on his personal guaranty while at the same time dangling the hope of a future sale in front of unsecured creditors to avoid an involuntary bankruptcy. The bank, however, has the company on a very short leash. Under the March 14 forbearance agreement, the company was given until April 3 to raise $750,000 of equity capital. The bank agreed to forbear from exercising its remedies until that date. I suspect that Mr. Suggs had hoped to bring in an equity partner while retaining control. But, April 3 came and went and apparently the capital was not raised. It would seem that the company’s filing on April 4 of the assignment of assets was a calculated strategy to seek to convince the bank (and a great many unsecured creditors) that the company is working with a professional receiver who will be better able to accomplish what Trent Suggs failed to do — that is, raising capital to be used to pay creditors. The April 4 filing triggered a default under the forbearance agreement and the loan agreement, but the failure to raise capital also triggered a default. Therefore, the company probably figured that it had nothing to lose. The bank gave its 10 day notice of default and then asked the court to enter the confession of judgment and order of replevin which were signed pursuant to the forbearance agreement. If approved by the court, which is likely, the bank will be in control of a liquidation or orderly sale. At that point, it is possible that the receiver may seek to file a voluntary Chapter 11 in order the trigger an automatic stay in bankruptcy court, if the receiver believes that a deal is forthcoming and the bank will not allow the time needed. In the meantime, no doubt the receiver is still working to find a buyer. As long as the bank has confidence in the receiver it could allow it to continue its work even after the confession of judgment and order of replevin are confirmed. I expect that there is a lot going on behind the scenes and it is too early to predict either the demise or turnaround of Audio Research. The bank’s liquidation analysis and Mr. Suggs’ collectibility on his guaranty are also important factors, which are not part of the public record. Once again, this is all speculation and I would not rely on anything that I am or anyone else is posting about Audio Research as being accurate or predictive.

 

[godofwealth]

The best time to get an ARC product you always wanted is now! Just got the ARC Ref 6SE preamp to replace my old Ref 3. NIB at a great discount. Wow! It’s hard to understand what ARC is all about unless you see in your hands a beautifully designed product like the 6SE preamp. It oozes quality. The build is just breathtaking. I’ve owned many preamps over 30+ years, but this is just so elegantly made. Still breaking in, but the sound is leagues above the Ref 3.

I will be doing a shootout of the Mola Mola Makua and the ARC Ref 6SE in a while, once these get settled. Old school vs. new snd snazzy. Tube regulated power supply vs. switching. App friendly Makua vs. a pure analog class A tube pre. Stay tuned…

 

[godofwealth]

The best time to get an ARC product you always wanted is now! Just got the ARC Ref 6SE preamp to replace my old Ref 3. NIB at a great discount. Wow! It’s hard to understand what ARC is all about unless you see in your hands a beautifully designed product like the 6SE preamp. It oozes quality. The build is just breathtaking. I’ve owned many preamps over 30+ years, but this is just so elegantly made. Still breaking in, but the sound is leagues above the Ref 3.

I will be doing a shootout of the Mola Mola Makua and the ARC Ref 6SE in a while, once these get settled. Old school vs. new snd snazzy. Tube regulated power supply vs. switching. App friendly Makua vs. a pure analog class A tube pre. Stay tuned…

View attachment 109096 View attachment 109097

Listening now to a pure DSD Telarc jazz album through the Lampi Pacific into the ARC Ref 6SE. The Ref 6SE has opened up my eyes as to how great a DAC the Pacific is. The sheer three dimensional sound that the 6SE projects with the help of the Pacific is awe inspiring. Folks, now’s your chance to indulge in your ARC cravings before it’s too late! Want to taste what preamp heaven sounds like? Get a 6SE!

 

[2fastdriving]

Listening now to a pure DSD Telarc jazz album through the Lampi Pacific into the ARC Ref 6SE. The Ref 6SE has opened up my eyes as to how great a DAC the Pacific is. The sheer three dimensional sound that the 6SE projects with the help of the Pacific is awe inspiring. Folks, now’s your chance to indulge in your ARC cravings before it’s too late! Want to taste what preamp heaven sounds like? Get a 6SE!

View attachment 109098

I enjoy mine every day!

 

[Elliot G.]

Listening now to a pure DSD Telarc jazz album through the Lampi Pacific into the ARC Ref 6SE. The Ref 6SE has opened up my eyes as to how great a DAC the Pacific is. The sheer three dimensional sound that the 6SE projects with the help of the Pacific is awe inspiring. Folks, now’s your chance to indulge in your ARC cravings before it’s too late! Want to taste what preamp heaven sounds like? Get a 6SE!

View attachment 109098

I have a Ref 6SE and 4 Ref 160 M mono’s all used only for 3 days at Axpona
if someone wants they are available at a deal

 

[Kozak170]

I hope that this innocent child will not be orphaned at only ten years old and that his wishes will remain alive..

 

[Lee]

I started this thread "Whither Audio Research" and now i have to ask Whither Audio Research?

Has the company run its course? Why has the bank? The assigned financial management company (which specializes in turnarounds) and venture capital firms approached not deemed ARC a worthy/viable candidate for resurrection?

Is the demographic for ARC going to be there in 5 years, 10 years? Has the company been innovative these past few years? Are folks thinking with their hearts (waxing nostalgic) and not their heads? I'm the last one to dispute ARC's history, but I question it's present and remain leery/skeptical of its long-term future.

Perhaps I'd feel differently had ARC not been previously acquired and its ownership changed hands a number of times. And what about past dealers, who opted out and pursued other amplifier brands in place of ARC as a result. Can they be won back?

I understand that there are customers around the world who want the continued support of the company, and that there are folks whose livelihoods are tied to the company, but, is that enough to warrant its acquisition. This is rather interesting.

Which leads me to something I remind tech/Internet startups all the time: ROI = Return on Investment not Return on Interesting

This should liven things up a bit.

David,

I think you have to be patient just a bit longer. I understand there are multiple bidders for the company and an announcement is expected this week.

Ideally they will attract someone who has capital for investment and is a steady hand.

I do believe the company has been innovative in terms of refining the circuit design and improving parts. My belief stems from owning a series of their products since 1994 and hearing better and better sound. The current Reference gear in my main system is superb sonically. For instance, I have owned the Ref 3, Ref 5SE, and now the Ref 6SE. The latest offers a huge improvement over the 5SE. I have also had very little reliability issues with the gear, really only one instance where I blew a resistor on my VT-100 and the protection circuit kicked in and worked there.

 

[Skanda]

I hope that this innocent child will not be orphaned at only ten years old and that his wishes will remain alive..

hahaha what the hell. top tier sht post meme

 

[davidavdavid]

David,

I think you have to be patient just a bit longer. I understand there are multiple bidders for the company and an announcement is expected this week.

Ideally they will attract someone who has capital for investment and is a steady hand.

I do believe the company has been innovative in terms of refining the circuit design and improving parts. My belief stems from owning a series of their products since 1994 and hearing better and better sound. The current Reference gear in my main system is superb sonically. For instance, I have owned the Ref 3, Ref 5SE, and now the Ref 6SE. The latest offers a huge improvement over the 5SE. I have also had very little reliability issues with the gear, really only one instance where I blew a resistor on my VT-100 and the protection circuit kicked in and worked there.

Lee, it's not about being patient and/or impatient. I put my questions out there because to some extent, with each passing day, I reckon ARC's ship might have sailed. As I stated in the post you quote, I am respectful of ARC's history, and admire its accomplishments, however it is the company's present and future which give myself and others reason to pause.

Any entity bidding and/or seriously looking to buy will have to assume considerable debt. And it is not just a matter of having enough capital to make the investment, it is about having more than enough money to right and re-position the ship.