Audio Research Financial Troubles

@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.

@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.  

@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.