Hobbico - BANKRUPT!

[Ace-Garageguy]

23 minutes ago, Richard Bartrop said:

... people moaned that they were making things too easy and creating a culture of instant gratification...

The same attitude was prevalent in the train camp too. I've been reading through my collection of late 1940s through mid 1960s Model Railroader. The introduction of plastic easy-kits and RTR rolling stock, though lauded by some as making the hobby accessible to the skill-free crowd, was roundly condemned by "serious" modelers for the very same reason.

It wasn't until about 1959, when a very highly skilled modeler by the name of Alan Armitage showed what could be done with plastic, that attitudes really began to change.

Still, the toy-train group and the model train group are as far apart today as they were back then.

33 minutes ago, Richard Bartrop said:

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.

Yes, I know. It's sad that the more access people have to information, the less they seem to value knowledge.

[Tom Geiger]

17 hours ago, Ace-Garageguy said:

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

Is there any accounting as to what Hobbico owes to some of our favorite companies?  If that debt goes unpaid or settled for pennies on the dollar, how will that affect the hobby market as a whole?  Considering they were probably net 90 to begin with, and those accounts are probably in arrears...

[niteowl7710]

1 hour ago, Tom Geiger said:

Is there any accounting as to what Hobbico owes to some of our favorite companies?  If that debt goes unpaid or settled for pennies on the dollar, how will that affect the hobby market as a whole?  Considering they were probably net 90 to begin with, and those accounts are probably in arrears...

Be more specific. Not as a knock, but these filings are hundreds of pages long and there are only so many hours in the day when you work 12hr graveyards. What specific company(ies)? Also Hobbico as a whole or just Revell, because those are two different documents. 

[Jim N]

It has been known by the hobbyists that Hobbico has been in trouble for a few years.  The insiders in the business knew before then.  I have been told by people who work in extending credit in the purchase area that as soon as they knew one of their clients was having difficulties, the credit tightened up.  The accounts payables and other short term credit issuers (think modelling companies) may not be in that much trouble.  It's very likely those that issued the long term credit are the ones likely sweating.

The people to feel sorry for are the ones who are supposed to collect their pensions or are collecting a pension.  The ESOP was mentioned as a creditor.  If Hobbico fails and the pension plan is taken over by the Feds through ERISA, the employees who expected a pension may never be able to retire or will retire at a much lower standard of living than they were expecting.  Those collecting a pension will get a haircut they never saw coming and it will be devastating.

[Tom Geiger]

6 hours ago, Tom Geiger said:

Is there any accounting as to what Hobbico owes to some of our favorite companies?  If that debt goes unpaid or settled for pennies on the dollar, how will that affect the hobby market as a whole?  Considering they were probably net 90 to begin with, and those accounts are probably in arrears...

4 hours ago, niteowl7710 said:

Be more specific. Not as a knock, but these filings are hundreds of pages long and there are only so many hours in the day when you work 12hr graveyards. What specific company(ies)? Also Hobbico as a whole or just Revell, because those are two different documents. 

That would be debt that Hobbico as a major distributor would owe say...   Moebius, Round 2,  BMF Co. and (maybe even Revell as an intercompany transfer) others we enjoy and rely on?  And would those unpaid debts be enough to cause serious harm to these companies?

 

[niteowl7710]

11 minutes ago, Tom Geiger said:

That would be debt that Hobbico as a major distributor would owe say...   Moebius, Round 2,  BMF Co. and (maybe even Revell as an intercompany transfer) others we enjoy and rely on?  And would those unpaid debts be enough to cause serious harm to these companies?

 

I can tell you off the top of my head one of the biggest liabilities Revell itself has after the money it owes to China is the over $300k it owes RevellAG. 

[niteowl7710]

Alright Hobbico owes...

Moebius - $63,150.73

Tamiya USA - $662,854.68

Testors - $302,115.91

Paache - $25,929.19

MRC (Model Rectifier) - $11,454.09

Iwata - $13,002.09

Hasegawa - $38,726.24

Bandai Gundam - $39,717.65

Badger - $13,311.91

A number of other smaller claims for less than $10k exist for stuff like Atlas Brushes, Xacto, Excel and stuff like that.

Now there is no specific claim for Round2 being owed money, but Hobbico PAID them $254k and change in the past 90 days.

One thing I found interesting is Hobbico owes $270 to a local donut shop...

Edited March 16, 2018 by niteowl7710

[Joe Handley]

Wow, that's a bunch of donuts

[Dave Van]

18 minutes ago, niteowl7710 said:

Alright Hobbico owes...

Moebius - $63,150.73

Tamiya USA - $662,854.68

Testors - $302,115.91

Paache - $25,929.19

MRC (Model Rectifier) - $11,454.09

Iwata - $13,002.09

Hasegawa - $38,726.24

Bandai Gundam - $39,717.65

Badger - $13,311.91

A number of other smaller claims for less than $10k exist for stuff like Atlas Brushes, Xacto, Excel and stuff like that.

Now there is no specific claim for Round2 being owed money, but Hobbico PAID them $254k and change in the past 90 days.

One thing I found interesting is Hobbico owes $270 to a local donut shop...

Thanks for that.....it's not good for anyone....but that hits Moebius hard.....

[Joe Handley]

3 hours ago, Dave Van said:

Thanks for that.....it's not good for anyone....but that hits Moebius hard.....

Those still aren't too bad, thought I heard elsewhere that they were on the hook to Futaba for a couple million!

[niteowl7710]

46 minutes ago, Joe Handley said:

Those still aren't too bad, thought I heard elsewhere that they were on the hook to Futaba for a couple million!

The owe Futaba - $2,310,765.19

[Dave Van]

9 hours ago, Joe Handley said:

Those still aren't too bad, thought I heard elsewhere that they were on the hook to Futaba for a couple million!

Because I have worked for Moebius it kinda hits home some......I know how much that is for them.

[slusher]

Guys do you think in your opinion that we might lose Revell?

 

[Luc Janssens]

Don't see that happening, Revell is a too strong brand name, known worldwide.

 

Edited March 16, 2018 by Luc Janssens

[Jim N]

1 hour ago, slusher said:

Guys do you think in your opinion that we might lose Revell?

 

I do not see this happening.  Revell is one of the crown jewels of Hobbico, and the crown jewels always go for a premium in bankruptcy proceedings.  The worst that could possibly happen is that another model company buys Revell with the sole intention of acquiring the molds and producing the old "Revell" models under their own name.

[slusher]

2 hours ago, Luc Janssens said:

Don't see that happening, Revell is a too strong brand name, known worldwide.

 

 

1 hour ago, Jim N said:

I do not see this happening.  Revell is one of the crown jewels of Hobbico, and the crown jewels always go for a premium in bankruptcy proceedings.  The worst that could possibly happen is that another model company buys Revell with the sole intention of acquiring the molds and producing the old "Revell" models under their own name.

Thanks, I have been wondering what would happen to Revelll...

[Tom Geiger]

1 hour ago, Jim N said:

I do not see this happening.  Revell is one of the crown jewels of Hobbico, and the crown jewels always go for a premium in bankruptcy proceedings.  The worst that could possibly happen is that another model company buys Revell with the sole intention of acquiring the molds and producing the old "Revell" models under their own name.

Hmmm, and somebody has been collecting old model companies

[Luc Janssens]

Just now, Tom Geiger said:

Hmmm, and somebody has been collecting old model companies

Oh, NOOOOOOOOOO

Then it's re-issues, of re-issues of re-issues....

 

[niteowl7710]

We won't lose Revell they've had gross revenues of close to $40 million over the past two years  ('16 & '17). I'm far too lazy (and/or busy) to crunch the numbers to try to extrapolate how much would be net profit, but even a casual once over shows they're eeking one out even under the duress of the 1Q of 2018.

Edited March 17, 2018 by niteowl7710

[martinfan5]

2 minutes ago, niteowl7710 said:

We won't lose Revell they've had gross revenues of close to $40 million over the past two years  ('16 & '17). I'm far too lazy (and/or busy) to crunch the numbers to try to extrapolate how much would be net profit, but even a casual once over shows they're eeking one out even under the duress of the 1Q of 2018.

That seems like decent enough revenues for a couple of years, better that I thought.

[Ace-Garageguy]

11 minutes ago, martinfan5 said:

That seems like decent enough revenues for a couple of years, better that I thought.

Gross revenue means very little, really.

If you have gross revenue of 40 million but expenditures of 41 million, you're going down the toilet.

Edited March 17, 2018 by Ace-Garageguy

[martinfan5]

9 minutes ago, Ace-Garageguy said:

Gross revenue means very little, really.

If you have gross revenue of 40 million but expenditures of 41 million, you're going down the toilet.

Yeah

[niteowl7710]

1 hour ago, Ace-Garageguy said:

Gross revenue means very little, really.

If you have gross revenue of 40 million but expenditures of 41 million, you're going down the toilet.

...and like I said they're eeking our a profit under bankruptcy duress and a lack of real saleable product line with the retool '69 Stang and fixed '29 Model A lingering out into 2Q. Fortunately the Honcho and 2nd Bronco kits blew out the door for them.

Might they have taken in water both those prior 2 yrs, possibly. But I'd be willing to bet they chug out a few million in profit every year. Nothing that's going to set the world of fire, but enough to be self-sustaining.

Hobbico hemorrhaged cash because it bought it's way to expansion, tried to be all hobbies to all people, took a bath in R/C drones. Plus got sued by Traxxas and botched the daylights out of their ESOP.

Edited March 17, 2018 by niteowl7710

[mikemodeler]

On 3/15/2018 at 9:22 PM, Joe Handley said:

Wow, that's a bunch of donuts

I dunno Joe, have you priced a dozen doughnuts at Dunkin lately? $270 is about 25 dozen, even less if they bought a couple of boxes of coffee!

[Oldcarfan27]

On 1/10/2018 at 2:00 PM, niteowl7710 said:

Other than a random ownership group, the only person I can think of that has enough cash to scoop them up is...Mr. Lowe. Round2 suddenly RULES THE WORLD! Maybe the prior RevellAG ownership will buy them back. Revell had owned and sold the German arm before.

How cool would that be?

Round 2 as caretaker of ALL vintage model kit tooling. Now if they could only find all the Johan molds!....