Audio Research Financial Troubles

The company looks relatively stable after being acquired by new owners. https://www.cepro.com/audio-video/audio-research-acquired-by-ar-tube-audio-corporation/

Audio Research’s problems are long over. Nothing to do with the viability of the business, but of a highly leveraged buy out by a great guy with the best intentions and a change in the interest rates. If there is some components available on-line, I would snap them up. Audio Research is going no where and they makes some of the very best components in their price range available. I know, I own quite a few of them.

Great company selling lots of great products for 50 years, so always have been many used ones for sale...

Funny. You beat me to it. I was gonna post the exact same question. Lots of AR units for sale on CAM right now.

If you’re in need of high quality tube components and there is a lot out there then there are probably good deals to be made. I would look at that as an opportunity. 
ARC has had its ups and downs like everyone else but I don’t see them going anywhere. They make great equipment and it will provide years of enjoyment. I’ve been using my last ARC purchased for 6 years now and have not felt the need nor have I considered replacing it with something else. 
I can see that there may be some people looking to move away from tubes as the prices have risen dramatically over the last few years but when you break it down it’s really not that expensive. I typically try to listen to my gear 3-4 hours a night       (sometimes more). If you break down the cost of eight KT-150 tubes over 18 months it’s still less than some people spend per day on coffee at Starbucks.

@tunehead -- Sorry to appear dumb, but what is CAM?

Fellow members, with the apparent glut of used ARC gear for sale, what would you consider to be the best Tube Phono Preamp "bargain" available?  I recently acquired an ARC SP-17 preamp and McIntosh MC-225, and I've been told the phono preamp in the SP-17 is pretty good.  Do you agree with that statement?  If not, back to my original question -- what is a solid older ARC phono preamp and what is the usual price range?

Thanks in advance!

Allen 

allenf1963,

CAM is Canuck Audio Mart.

Brad

The reason there are a lot of ARC products for sale right now:

1) 50+ years of mass production (yes had built but massive production) means LOTS of components worldwide are for sale

2) We are in a global slowdown. Especially Europe where ARC sold many more components than in the USA. High end HiFi is "for sale now" ie: a buyer's market.

3) Tubes are hard to get thanks to the BS in the Ukraine. This substantially raises the cost of owning tube gear. (see #2) 

4) Recently many digital products have gotten as good sounding as tube. Moors Law days digital gear will continue to get better and cheaper. Bonus: no re-tubing. 

5) Old guys who love tubes for nostalgia sake (I'm one of them) are loosing their hearing and dying off. The young bucks think Mac Pro Bluetooth headphones are HiFi. I own a pair- they are really good! It costs tens of thousands of dollars in separates to duplicate their sound. 

6) Tube gear is expensive to own and fix. Like buying a Ferrari. You can get a really good carbureted 8 cylinder under 200k or 12 cylinder for under 400K which is affordable to many. However the engine-out services @ $50K every 20K miles, the $300/hr. mechanic costs, insane cost of OEM parts, unobtanium parts ie: tires like the MXVs used in the 80s all cost insane money to buy.  Likewise ARC charges as much or more than a good 90's vintage pre or power amp is worth to get them "into spec". There was until recently an 8 month wait list to get your gear into ARC for authorized repair and calibration. 

For all these reasons ARC gear is "on sale" now. Ref 250s can be had at 7K, Ref 6s can be had at 6K, DAC9/CD can be had at 5K. Ref 210 mono blocks go for 5K person to person. 5700-6000 through TMR and the like. Prices continue to drop rapidly on the 10+ year old items. Add to that ARC made "entry level" gear as well which sells for very low $. 

ARC is now well capitalized and have retained most of their long term talent. Their Reference lines are better than ever and they are offering upgrades to their Ref 150 line which I'm told sound breathtaking. There is a waiting list. The Ref 320 will cost north of $50,000 each and I'm told by a friend there in MN that there is a long waiting list for them.

Negotiate aggressively. Guys who have to sell will take a hit and you will wind up owing some really fine gear for cheap. . 

@ghdprentice

Audio Research’s problems are long over. Nothing to do with the viability of the business, but of a highly leveraged buy out by a great guy with the best intentions and a change in the interest rates.

Respectfully submitted, while I am hopeful that ARC will flourish under its new owner, I am wondering why you think their problems were due to the original financial leveraging of the company.  I see it as the opposite, as a low amount of debt.  Perhaps a balloon payment falling due that could not be refinanced? 

From reading online, at the time of receivership ARC had secured bank financing of $1.6M.  Even assuming a sky-high interest rate of 20% that is only $320,000 debt service a year.  I realize there was also $1M of unsecured debt, but I would think that was the result of operational problems, not from the original purchase.

All things being equal, I would think this should be easily met for a company whose products sell for between $6,000 to $85,000 per unit.

I'm a long-time happy ARC customer (going back to the D76A era) but I am not at all convinced that ARC's troubles are over. As far as I can tell, it still has an enormous repair backlog. The "store" link on its website has been dead for years and its product line has been steadily shrinking (no Ref DAC, no CD player). Its only "new" product introduction is an amplifier that was to have been available a year ago and it isn't clear that the company has any in-house talent to develop anything else.

I wish ARC the best. I'm a nut-job, so I'm actually considering buying a new Ref 6SE, in part because I believe it will be serviceable regardless of ARC's future. I think ARC is doing its best to overcome its issues and that only time will tell whether it succeeds.

Wondering??

It's not only ARC, but everything pretty much going South FAST except I guess war machines, weapons and ammo. 

@czarivey You nailed it.  Luxury items are a leading indicator.  I wonder how many people cut back on their Star Bucks purchases or is it what the hell do I care this is my treat to myself.

@cleeds You nailed it as well with "so I'm actually considering buying a new Ref 6SE, in part because I believe it will be serviceable regardless of ARC's future".

And yes I have a bunch of ARC gear, the latest of which is a REF6 earlier this year bought used. 

Regards,

barts

One thing that struck me while reading the receivership documents was how little ARC really is.  I seriously doubt it ever really made net income after salaries. Bill Johnson didn’t get rich and the last 3 owners didn’t either. 
 

I’m reminded of the old axiom: “ Sell To the classes eat with the masses, sell

to the masses eat with the classes”

I think owning ARC is a trophy hunt- or a labor of love.  If you want to make real money get elected to congress. 

@yesiam_a_pirate , man 

Sometimes people are so POOR -- all they have is just dollars!

Bob Marley

This discussion is about 6 months late; ARC’s issues have been resolved with what must be very close to the best possible outcome. If ARC was swept up by another huge corporate conglomerate, OR passed to another small owner in over his head, there would be cause for continued concern. But going to Val Cora seems about the perfect fit here.

If you’re still concerned about ARC, don’t look too close at all the other companies in this industry. ARC’s current status seems more solid than average - and crucially, they’re not a "one-man show" where that one guy is nearing or past retirement age.

mulveling

... ARC’s issues have been resolved ...

Customers who are waiting months before even being allowed to return their products for service would not likely agree that the issues "have been resolved." The company seems to have acquired the capitalization it needed to continue operations, but it looks to me like it has a long road ahead.

Hey, I understand where you are coming from. I own a Ref 5 SE. let me know when I can stop by and grab your Ref 6,3,or 2,SE on the cheap so you do not have to worry anymore. 😁

@hsounds 

let me know when I can stop by and grab your Ref 6,3,or 2,SE on the cheap

If you are really in the market, have you looked on Audiogon or USAudiomart recently?  There is plenty to chose from at attractive prices.  

hsounds

I own a Ref 5 SE. let me know when I can stop by and grab your Ref 6,3,or 2,SE on the cheap so you do not have to worry anymore.

Huh? I already said I’m contemplating trading my 5SE for a 6SE. (I plan to keep my Ref Phono 2SE.) I don’t have any stock in ARC, so I have nothing to worry about.

If you are really in the market, have you looked on Audiogon or USAudiomart recently? There is plenty to chose from at attractive prices.

Is it true? Go to hifishark and filter by "North America". Then I see none of the Reference 3 phono preamp - don’t confuse those numerous & ancient Ref 3 line stages with the Ref 3 phono stage he (presumably) wants. There are a couple Ref 3SE phonos - 1 priced way above market, the other replicated on a few sites (TMR) and still a bit above market. There’s 1 Ref 2SE phono in Canada. And there’s 1 Ref 6 line stage (which actually used to be mine - nice unit). Definitely no glut of cut-rate units in those three recent-ish models. If you go back to the much older models (like Ref 3 line stage), yeah you could consider that a glut, but it's more understandable. 

There has been no actually new product from ARC since Ward Fiebiger passed away in 2017. He, essentially alone, designed all the ARC audio  circuits since 2005. Trent Suggs purchased a company that was already compromised from a design talent standpoint. How difficult would it be to use the Reff 6SE as the basis for a Ref 10 (based on Ref 5SE) replacement?  Why has the 320M gestation been so difficult? Financial capital is essential to business, but it is meaningless without human capital to put it to use. ARC has another 6-8 months to develop momentum on all relevant fronts before the new owners come to an unpleasant crossroads, 

@jetter 

 It’s all about cash flow. Ongoing operations have mismatches between purchases and the delay of revenue from sales as well as ongoing cash obligations to pay staff. It is a multi national company so it also has fluctuations in currencies… etc. etc. etc.  This is not in any way intended to be an exhaustive list. I have communicated with Trent (the former owner), and learned much more through my friend dealer who spoke to him often.  In addition there were tube cost increases. Anyway, it is a shame what happened, because he was doing great things for the company. The new owner is very committed and has deep pockets.

Nobody really knows what will happen with them or any business. It depends on the decisions leadership makes, how well the company is positioned, and how well it delivers a compelling promise to the market in a way to support continued profitability. 

People much smarter than me have ruined businesses. I hope they continue to do well, but in the end they are subject to the laws of the free market.  

They went Waay down hill in quality over the past15 years,

CJ same thing ,,McIntosh too has slipped ,nice outside inside quality average at best . Living off their old reputation. I sold Audio for years  and even my technicians said many companies skimp on the internal parts quality.

which sadly is true .

These threads are really just lightning rods to bring out the "I don't like Audio Research" guys 😅

We'll see another one, same purported topic, in a few months at most. 

Audioman58,

If CJ quality has declined, should anyone consider having CJ update older equipment? I own a MV60se and have considered CJ giving it the once over. They will replace and upgrade caps etc. It works flawlessly right now but a complete cleaning and update may last another 10-15+ years. 

There is a Glut of "audiophile" equipment (New and used ) on the market today...sales everywhere....Bargain with the seller because you can.

@mulveling

These threads are really just lightning rods to bring out the "I don’t like Audio Research" guys 😅

Possibly, but at least some of us are business people with a lifetime of experience analyzing business financial situations including receiverships, so it's second nature.  No trust fund babies here.

Nothing unusual appears to be going on at ARC from what I/we can tell looking at things from the outside. There are always ARC products being listed, sold, unsold on Agon and USAudiomart. The good news is that they were acquired by an experienced and successful audio equipment manufacturer, presumably saving the brand. ARC enjoys such a revered and special lineage that it's not a stretch to imagine that its customers would, if need be, help financially to ensure its future. Just my opinion as an ARC loyalist, current owner and a former dealer from 40 years ago.  

Conrad-Johnson quality has declined?  That's an absurd statement made by someone who has no knowledge of C-J and probably has never owned their equipment.  Their quality has never been better.  I own their latest ART amplifier and have owned their best amplifiers and preamplifiers for 30 years.  The quality of their latest offerings is exceptional.  My friend owns the best of Macintosh with the same experience.  Don't listen to those losers who can't afford better products so feel a need to cause trouble.

Just had ARC repair my new 150SE under warranty... and... the service was excellent and very responsive! 

Although, it was a very minor repair (which I likely could have completed myself) - tightening a speaker terminal on the back - they completed it within a couple of days of receiving it, and returned it.

With the quality of the ARC products and their responsive service - I would think their products should be in great demand.  You would be very fortunate if you find one for a good price.  

Coppy777, I agree. CJ makes high end equipment that is truly exceptional. The MV60se I own is no exception. This was the first post I’ve ever read regarding declining quality. 

Possibly, but at least some of us are business people with a lifetime of experience analyzing business financial situations including receiverships, so it's second nature.  No trust fund babies here.

@jetter  The financial geniuses in these forums already had their fun back in the May / June timeframe. Besides reporting some rote facts of the receivership, which did indeed look very bad, the speculation was generally inaccurate and none predicted the actual (happy) outcome. All it did was rile up needless panic. And now here we are again for some reason. 

Just had ARC repair my new 150SE under warranty... and... the service was excellent and very responsive! 

@bassdude  That's fantastic! I've heard out-of-warranty repairs currently have a long queue (~ 6 months). But in-warranty repairs are another ball of wax. Upgrades (e.g. 6 to 6SE) are also processing very efficiently, much more so than before. It's absolutely sensible for the business to prioritize these over out-of-warranty service, while not cutting off the latter. Their product history goes back decades! And many other high-end boutique outfits will also make you wait months for repair, in warranty or not - they just don't have it listed as explicitly.

mulveling

I've heard out-of-warranty repairs currently have a long queue (~ 6 months). But in-warranty repairs are another ball of wax. Upgrades (e.g. 6 to 6SE) are also processing very efficiently, much more so than before. It's absolutely sensible for the business to prioritize these over out-of-warranty service, while not cutting off the latter. Their product history goes back decades!

I agree that makes perfect sense. Consider also that ARC will not only service but can often upgrade most every product it has ever made. That's quite a feat.

Servicing a tube amplifier is a nightmare. Just try to get a repair done in Manhattan. Of all places where you should be able to do anything. One tube repair center may be going out of business soon. Not because of business issues but because no one wants to do the work on tubes anymore and therefore no one is capable of doing the work. The experienced people are drifting away. Manufacturers are delegating all this to the warranty repair centers which is really stupid.

So you'd best choose tube equipment from a company that stands behind their products.  Conrad-Johnson and VAC here in Sarasota come to mind.

I think the arc financial problems have hurt the brand, wrongly so, but in any case most used stuff is from their ‘golden age’, and the quality is and was superb. Lots used because lots sold. Take the opportunity to get a better deal, I have. Just toured their factory—still pursuing the best sound from the pinnacle of design and build quality. Great people who care about their customers, and I wish them the best. William Zane Johnson did get rich, btw.

Most recent post on FB was quite positive and encouraging. The introduction of the 320M seems near completion while acknowledging long development beyond norm. In the wake of reorganization with new owners new equipment goes a long way toward establishing confidence in the company’s momentum going forward. I believe the 320M will be very good for the entire ARC product line sales.