Hobbico - BANKRUPT!

[martinfan5]

8 minutes ago, Erik Smith said:

Yup, we’d probably last all of two weeks!

And the truth be spoken

[Casey]

16 minutes ago, Erik Smith said:

Yup, we’d probably last all of two minutes, tops!

FTFY. 

[SfanGoch]

41 minutes ago, Erik Smith said:

Yup, we’d probably last all of two weeks!

You're being overly optimistic. 

[Dave Van]

I kinda figured it was as likely to happen as it was of being successful.....just stirring the pot!!!

[niteowl7710]

Managed to get my hands on the bankruptcy filing paperwork. Hobbico has $65,087,445.76 in assets - including buildings, inventory, AR, vehicles, etc. and $137,465,183.74 in liabilities. About 117 mil of which has banks looming over it and the rest is unsecured stuff like employee wages and the ESOP program.

Edited March 14, 2018 by niteowl7710

[niteowl7710]

Minimum Bid: A Bid must have a purchase price that includes a combination of cash and the assumption of postpetition liabilities and cure costs associated with the relevant Lot, and subject to any adjustments typical of similar transactions, that, in the Sellers’ reasonable business judgment (after consultation with the Consultation Parties), has a value equal to or greater than the following, subject to the terms of these Bidding Procedures: 
(a) For substantially all of the Acquired Assets: $38 million; 
(b) For the U.S. Assets Lot: $32 million; 
(c) For the Hobby Business Lot: $22 million; 
(d) For the Global Mass Market Lot: $16 million 
(e) For the Global Revell Lot: $10 million 
(f) For the Revell Germany Lot: $8 million 
(g) For the Estes-Cox Lot: $6 million

Edited March 14, 2018 by niteowl7710

[martinfan5]

So lets get the collection plate passed around

[mikemodeler]

8 hours ago, martinfan5 said:

So lets get the collection plate passed around

Working on my taxes, let's see how well I do before I commit huge sums of money to saving the hobby.

[martinfan5]

10 hours ago, mikemodeler said:

Working on my taxes, let's see how well I do before I commit huge sums of money to saving the hobby.

[Dave Van]

In today's climate $10M is pretty high for Revell.....kinda depends on the debt included. Even if debt load is very small it would take a while to start making a good profit on the investment..........speaking as a retired Sr Analyst. We'll see....it may go w/o a bid .....

[Ace-Garageguy]

20 hours ago, niteowl7710 said:

Managed to get my hands on the bankruptcy filing paperwork. Hobbico has $65,087,445.76 in assets - including buildings, inventory, AR, vehicles, etc. and $137,465,183.74 in liabilities. About 117 mil of which has banks looming over it and the rest is unsecured stuff like employee wages and the ESOP program.

"Unsecured" debt would also include outstanding bills owed to suppliers and contractors.

For instance: if the "replacement" tooling for our much longed-for '29 and '31 Ford kits is finished and ready to go into production, but the tab for doing it hasn't been paid.

A situation like that could well delay our seeing any '29 or '31 kits on the shelves for many months...until somebody coughs up the jack to pay for the tooling, and demonstrates they have the funds available to pay for a production run.

I'm not saying this is the situation (because I just don't know), but it's entirely possible. And it COULD well have been strangled cash-flow that caused the stoppage of these kits anyway. The "lost" or "damaged" molds thing may be entirely speculation or smokescreens.

As a supplier of short-run aftermarket real-car tooling from time to time (air dams, spoilers, scoops, fiberglass seats, aero-kits, etc.) I've been left holding-the-bag full of nothing but promises (more than once) when my clients were unable to pay me.

Edited March 14, 2018 by Ace-Garageguy

[niteowl7710]

1 hour ago, Dave Van said:

In today's climate $10M is pretty high for Revell.....kinda depends on the debt included. Even if debt load is very small it would take a while to start making a good profit on the investment..........speaking as a retired Sr Analyst. We'll see....it may go w/o a bid .....

Revell's independent filing states assets of about 9.5 million with 2.2 mil in A/R incoming. 

[mikemodeler]

1 hour ago, niteowl7710 said:

Revell's independent filing states assets of about 9.5 million with 2.2 mil in A/R incoming. 

I'm no business analyst but I can do math, so if there is 23% of A/R to Assets, that could be a good buy for the right company. Of course if that A/R is more than 60-90 days, that would indicate a collection problem unless they have a policy for certain customers to extend payment, which sometimes happens with large accounts (HL, AC Moore, Michael's). 

It will be interesting to watch this unfold and see where Revell lands, just might fall into the hands of a foreign company. Maybe Marcus Lemonis from The Profit will step in and buy Revell, he lives in the Chicago suburbs not too far from Revell offices!

[niteowl7710]

The A/Rs in the filing were less than 90 days. Actually the whole of Hobbico only has like $2,800 in over 90 day A/R. My guess is, particularly with the facing of a bankruptcy, Hobbico got pretty strict with lagging behind on invoices. 

[Dave Van]

2 hours ago, niteowl7710 said:

Revell's independent filing states assets of about 9.5 million with 2.2 mil in A/R incoming. 

If I was asked to perform due diligence on Revell, like I did 50+ times when I was working for a top 5 bank, It'd be a hard call. 

I love Revell Monogram, have folks there I call friends....just being real. 

IMHO only......thx

[niteowl7710]

30 minutes ago, Dave Van said:

If I was asked to perform due diligence on Revell, like I did 50+ times when I was working for a top 5 bank, It'd be a hard call. 

I love Revell Monogram, have folks there I call friends....just being real. 

IMHO only......thx

I agree they're a bit of a mess themselves, but nothing like the debacle of the home office. One of the expenses I'd love to see a specific return value return is the nearly quarter of a million they owe Disney for the Star Wars licensing. When the strict non-importation rule got dropped and you could acquire Bandai kits again I can't believe that whole deal can be turning a profit making made-up scale kid's toys. That licensing is ridiculously overpriced when you consider the payment to GM for everything is a little over $20,000.

[Richard Bartrop]

Hard to say. Star Trek kits were basically a license to print money for AMT for the longest time, and Lucas made more money off the Star Wars toy licenses than he did the actual movies.  

And let's not forget the millions Bandai rakes in from its Gundam robots.    Considering the demand for GM related merchandise,  the licensing makes perfect sense.

Edited March 15, 2018 by Richard Bartrop

[niteowl7710]

1 hour ago, Richard Bartrop said:

Hard to say. Star Trek kits were basically a license to print money for AMT for the longest time, and Lucas made more money off the Star Wars toy licenses than he did the actual movies.  

And let's not forget the millions Bandai rakes in from its Gundam robots.    Considering the demand for GM related merchandise,  the licensing makes perfect sense.

All of those things are also either real models or at least accurately scaled replicas (in the case of some Gundam that don't require paint or glue to assemble).

The Star Wars kits that Revell has tooled up have all been kid's toys (a lot with lights & sounds)that are made-up scales - ya know cause 1/227 is so popular - to make things fit in a specific sized box. The models they released that were actually model kits are re-boxed Fine Molds kits which have the double whammy of being licensed TWICE.

Edited March 15, 2018 by niteowl7710

[Richard Bartrop]

8 minutes ago, niteowl7710 said:

All of those things are also either real models or at least accurately scaled replicas (in the case of some Gundam that don't require paint or glue to assemble).

The Star Wars kits that Revell has tooled up have all been kid's toys (a lot with lights & sounds)that are made-up scales - ya know cause 1/227 is so popular - to make things fit in a specific sized box. The models they released that were actually model kits are re-boxed Fine Molds kits which have the double whammy of being licensed TWICE.

Have you ever put together the AMT Enterprise?  Calling it an accurately scaled replica is stretching things juuust a bit.  In any case,  Revell's shoddy execution has absolutely nothing to do with the value of that license.

[niteowl7710]

2 hours ago, Richard Bartrop said:

Have you ever put together the AMT Enterprise?  Calling it an accurately scaled replica is stretching things juuust a bit.  In any case,  Revell's shoddy execution has absolutely nothing to do with the value of that license.

No I said it was a real model in the sense it's not a SnapTite kit with flashy noises for children. I said the Gundam were accurately scaled replicas.

I also wasn't questioning the value of the license (which IMHO is too high, but what do I know), but more to Revell's ability to gain any value FROM it. Paying out a boat load to Disney and then a small gondola to Fine Molds is a waste of money if they aren't turning a profit.

[SfanGoch]

3 hours ago, niteowl7710 said:

No I said it was a real model in the sense it's not a SnapTite kit with flashy noises for children.

As a seven year old, I thought that the  AMT Enterprise was really neat. The original 1967 kit included grain of wheat light bulbs to illuminate the clear green bridge and main sensor domes. No flashy noises unless you provided them yourself. PHHT! BLAM! BZZZZ! Did you know that Aurora Plastics Corp produced the AMT kit for the UK and Canadian markets under their own label on the box?

[niteowl7710]

I dunno I was 15 when the Revell Caprice came out with that goofy "Electronic Lights & Sirens" thing and I was annoyed they wasted money on that and didn't put a real light bar in the kit - as opposed to the 2/3rds of a Federal Signal Streethawk that came as the static option.

[Richard Bartrop]

6 hours ago, niteowl7710 said:

No I said it was a real model in the sense it's not a SnapTite kit with flashy noises for children. I said the Gundam were accurately scaled replicas.

I also wasn't questioning the value of the license (which IMHO is too high, but what do I know), but more to Revell's ability to gain any value FROM it. Paying out a boat load to Disney and then a small gondola to Fine Molds is a waste of money if they aren't turning a profit.

Guess what, this stuff was originally intended for children, and you may have noticed stuff for children is still a big part of what they do.  If they stuck to "real modelers" they'd be in even worse shape.

And you do know Gundams are snap kits, right?

Edited March 15, 2018 by Richard Bartrop

[Ace-Garageguy]

55 minutes ago, Richard Bartrop said:

Guess what, this stuff was originally intended for children, and you may have noticed stuff for children is still a big part of what they do.  If they stuck to "real modelers" they'd be in even worse shape.

A thorough perusal of old hot-rod and custom car mags will show that model cars were aimed in large part at the older-teen, young-adult, REAL car guys...from the introduction of Revell's 1/32 scale car kits.

These kits were advertised in the real-car mags, and feature articles reminding real-car guys that models could be used to work out customizing ideas in scale abounded.

I don't think anyone could really believe that most "kids" (which I assume to mean pre-teens) had the manual skills to put together one of the multi-piece bodies that even adult modelers cry about today. I sure as hell couldn't make anything decent from one of them back then.

Just as the toy-train / model train camps are (and were even in the 1950s) as different as night and day, I believe that car kits were initially made more for "modelers" than "kids".

I also remember from my youth that, to get any kind of decent selection of models, I had to go to a hobby shop. Toy stores typically didn't have much, if anything, in models. That implies the target market was at least older kids, and adults.

                                             

Edited March 15, 2018 by Ace-Garageguy

[Richard Bartrop]

And they also advertised in comics.   Revell's first car kit was a children's pull toy sold in disassembled form.  Not only were they intended for kids, people moaned that they were making things too easy and creating a culture of instant gratification.  If there's a decent library, go look up the December 1958 issue of Industrial Design magazine, where they do just that in their review of new toys, which includes plastic model kits.

People expected more out of kids back then, and as crude as those kits were, they were still a step up from the wooden kits, or building from scratch.   Check out "The Boy Electrician" and "The Boy Mechanic", both of which are available in electronic form online, to see 1913's idea of what's appropriate for children.