Audiovox to purchase the Klipsch group

[mike stehr]

Lavelle (Audiovox CEO) called Klispch Group "the preeminent audio brand for residential, professional and personal listening use." He said the company has "a strong and stable base of retail, e-commerce, commercial distribution, and professional installation business partners in North America, Europe and around the world."

From what I read here, I get the impression the guy doesn't want to gut the company to just a brand name. He seems to respect the fact of what Klipsch is doing, and has done.

I dunno about others, but when I think of Klipsch I think of the Klipschorn, and the tall gangly dude with a moustache that invented them. It's like the main icon of the Klipsch legend. I'd say the flagship of the heritage series, because I think the Palidium (sp?) is the modern day Klipsch flagship model.

I couldn't see why Audiovox would want to shut down the Hope plant if they still sell Klipschorns, even if it is more or less a specialty item. And as far the plant shutting down and moving to China? Why? Everything is already in Hope, tweaked-in and ready to build speakers. Why would one want to fix something that isn't broke? Is it that expensive in Arkansas?

When will have to burn Klipschorns to stay warm?

[Trey Cannon]

we were told today that nothing is changing...in fact we are looking to move more product to be built in Hope.

[Rick]

we were told today that nothing is changing...in fact we are looking to move more product to be built in Hope.

That is encouraging news! I felt optimistic myself after reading that link before I posted it here...[]

[spurdarren]

we were told today that nothing is changing...in fact we are looking to move more product to be built in Hope.

YEAH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[AVSOLUTIONS]

I read pages 1-12 of this thread, in addition to the last two pages. I also had my reservations about the future of Klipsch with their new business partner.

But, I spoke with my Klipsch rep today and needless to say I am just as equally excited about this as he is. This venture will allow Klipsch to expand into divisions currently not available to them. The same Klipsch attitude, and product quality will remain the same if not better. The same key people who have made Klipsch who they are today will still be there tomorrow. Products will continue to improve, and more product variations will be available. To me this will make Klipsch a stronger company, with a quality product to bring into the ever-changing marketplace.

I am embracing the change, and I look forward to selling & representing Klipsch as a dealer throughout this process.

David Williams

AudioVideo Solutions

[onlyme]

[Y]

-Kelly

[PrestonTom]

"....

The same Klipsch attitude, and product quality will remain the same if not better. The same key people who have made Klipsch who they are today will still be there tomorrow. Products will continue to improve, and more product variations will be available. To me this will make Klipsch a stronger company, with a quality product to bring into the ever-changing marketplace.

...." David Williams Audio•Video Solutions

Well, David I am glad that you are enthusiastic about all the promised improvements. Certainly a number of positive statements were made.

BTW, what is the track record for Audiovox and their improved products?

[SilverSport]

I hope everybody keeps their jobs and Mr. William's predictions for the future are true...

Bill

[Mike Dubay]

Why did Klipsch sell for show a low amount? Normally for a company that is healthy, with no need of significant amount of capital "fix" problems you sell for between 5 and 10 time EBIT, (earning minus taxes, interest, and amortization). The company appears to be making about 150 to 175 million a year in earning (sales), and year to year increases in sales.

Now appears that company sold for around 1x yearly income? Why? Was Klipsch as a company disfunctional? I see no exterior indications of that.

Sorry, by I have a saying in life, "things are as they appear". What this rings of is a sell out. Yes I understand how hard it is running a family business, it takes over your life. But family run business's are run by passionate people. I don't know Fred or Judy K. personally, but they personally stand to make enough to be able to kick back and relax for the rest of their lives. But cashing in on the work of mostly people who have come previously. Now a family run business is now just another arm of a large comgolermate. They my say now, keep things as is, but as board members come and go, they will look at the bottom line, quarterly or monthly cash flow, as large companies do. That will direct the business in the future.

While this change only gives the employee's of the company an uncertain future at best.

What bothers me is that I like small family owned business, my local used record store, my favorite resturants, my favorite beer/wine store, my local fav tavern. What they all have in common is local family control, people who are dedicated to what they do. Now Klipsch now answers to a corporate board of directors. Sad state of affairs.

[orrb_05]

hmmmm? I'll believe it when I see it - time will tell.

On the same note... AR and Advent were both very respectable at one time, and I've no idea if they were ever seperate of Audiovox; regardless both have definately fallen from grace - hope Klipsch is not in for the same fate

[SSnyder]

Why did Klipsch sell for show a low amount?

may be cause Klipsch addvertized it in GARRAGE SALE forum

[ZAKO]

Audiovox will eventually flip the Klipsch Company from 166 million to double that,,,,,,, The Tushinsky brothers bought Marantz for 17 million and flipped it to Phillips for alot more,,, The brand name is of greater value.

[BLSamuel]

AR and Advent were both very respectable at one time, and I've no idea if they were ever seperate of Audiovox; regardless both have definately fallen from grace - hope Klipsch is not in for the same fate

Yes. They were both separate. We're all blaming Audiovox for running all their brands into the ground which maybe they did with some? But it's possible that there was nothing left but the brand when Audiovox bought some of these brands.

Acoustic Research was founded by Edgar Vilchur and Henry Kloss in 1952 and incorporated in 1954 and after many innovations and great products. According to Wikipedia AR went into liquidation in 2004 and the name was bought by Audiovox.

Advent's history from Wikipedia is heavily intertwined with Henry Kloss.

Henry Kloss went on to found KLH in 1957 with Malcolm Low and J Anton Hofman (son of pianist Jozef Hofman). KLH was sold to Singer in 1964 which was later sold to Kyocera. In 1962 Henry collaborated with Ray Dolby to develop the Dolby B consumer version of the Dolby noise reduction system. (So that's how Kyoto Ceramics got into audio).

Henry Kloss founded Advent in 1967 with the goal to produce projection television but created the The Advent Loudspeaker, a wildy popular 10" 2 way which cost half as much as the 12" 3 way AR 3a available from AR at the time. The Advent Video Beam 1000, the 1st home projection TV was released in 1972 which led to the founding of Kloss Video Corporation in 1977 where he invented the Novatron tube increasing the efficiency of projection TVs.

Long after his departure from Advent, they never emerged with bankruptcy declared in March 1981. Kloss Video passed on reaquiring the brand which was later merged into International Jensen (which is how Audiovox came to acquire the Advent brand

Henry of course later went on to found Cambridge Soundworks in 1988, leaving in 1996. Cambridge Soundworks is now a subsidieary of Creative Labs and soon cofounded Tivoli Audio with Cambridge Soundworks co founder Tom DeVesto..

So it kind of appears that just maybe Acoustic Research and Advent were pretty much just brands when acquired by Audivox. Of course the above sources are from Wikipedia. If Klipsch did sell too low as some as posted, maybe it makes it more difficult for Audiovox to gut Klispch and ensures some level of autonomy... but I too fear the large corporate bean counters. Of course Audiovox is buying Klipsch to improve their bottom line but just maybe one would hope that they've acquired some of these brands to restore them to some higher level of respectability if not their former glory. Remember that Klipsch has managed to stay afloat and grow in the current economy so just maybe Audiovox' long term goals aren't as evil as the conclusions we are all jumping to.

And Trey did say there's plans to build more speakers in Hope.

Here's hoping for business as usual and even better and Pilgrimage 2011 planning to begin in earnest.

(whew this optimism thing is hard work.... and I work for a much larger multi billion company that swallowed up the still quite large multi billino company and it's not at all been rosy.... )

[Rich_Guy]

Why did Klipsch sell for show a low amount?

may be cause Klipsch addvertized it in GARRAGE SALE forum

No it was on ebay, that damn Audiovox outbid me at the last second. []

Seriously the whole thing scares me a bit. It's good to hear that Audiovox isn't planning to make any major changes yet, but I am a little more worried about what they will do in the long run. Hopefully all will work out well, I'd hate to see the Klipsch product or its employees hurt by this.

[Amy]

What this rings of is a sell out.

On a personal note...

To me, this rings of a "sale." I can't speak about the price tag and I know little about the transaction in general, but I do know that Mr Klipsch purchased the company over 20 years ago when he was almost 50 years old. He's not going to run it forever, and it appears no one in the family wishes to either. That is their personal choice. Would you rather the company simply fade away as the owners approach retirement? A plan needed to be implemented which allows us to continue as we are (or better). Time will tell, but I believe they have achieved that.

[SilverSport]

thanks Amy...the voice of reason...perhaps we just needed to be held (watch out for Coytee)...good thoughts and wishes for everyone at Klipsch who cares to stay at Klipsch...

Bill

[Thaddeus Smith]

but how many of us have actually been going out there and supporting their bottom line?

Me For one.

Lets see, I've bought 12 new Reference speakers, a set of headphones, 1 subwoofer and a H3 kit, all new from Klipsch. I have purchased 4 used speakers however. I'm sure that there are those on this forum that could make my purchases look paltry by comparison.

EDIT: I think you're forgetting how important people like you are to Klipsch staying in business however. If no one had ever bought my sperkers from me that I had purchased new, I wouldn't have been able to purchase more new product from Klipsch.

hehe, thanks carl. just stirring the pot, i guess..

[Jeff Matthews]

Why did Klipsch sell for show a low amount? Normally for a company that is healthy, with no need of significant amount of capital "fix" problems you sell for between 5 and 10 time EBIT, (earning minus taxes, interest, and amortization). The company appears to be making about 150 to 175 million a year in earning (sales), and year to year increases in sales.

Now appears that company sold for around 1x yearly income? Why? Was Klipsch as a company disfunctional? I see no exterior indications of that.

The "Earnings" in EBIT refers to net earnings. The "B" stands for "before."

It is correctly, net earnings, adding back interest expense and income tax. More often, you will see EBITDA. This would be net income without deducting for interest expense, income tax expense, depreciation expense, and amortization expense.

[gnatnoop]

Why did Klipsch sell for show a low amount? Normally for a company that is healthy, with no need of significant amount of capital "fix" problems you sell for between 5 and 10 time EBIT, (earning minus taxes, interest, and amortization). The company appears to be making about 150 to 175 million a year in earning (sales), and year to year increases in sales.

Now appears that company sold for around 1x yearly income? Why? Was Klipsch as a company disfunctional? I see no exterior indications of that.

The "Earnings" in EBIT refers to net earnings. The "B" stands for "before."

It is correctly, net earnings, adding back interest expense and income tax. More often, you will see EBITDA. This would be net income without deducting for interest expense, income tax expense, depreciation expense, and amortization expense.

you're confusing sales numbers with your EBIT number. 5 to 10 times EBIT is not out of the ordinary. however, 1 times sales would be a very big price.

[Boxx]

What this rings of is a sell out.

On a personal note...

To me, this rings of a "sale." I can't speak about the price tag and I know little about the transaction in general, but I do know that Mr Klipsch purchased the company over 20 years ago when he was almost 50 years old. He's not going to run it forever, and it appears no one in the family wishes to either. That is their personal choice. Would you rather the company simply fade away as the owners approach retirement? A plan needed to be implemented which allows us to continue as we are (or better). Time will tell, but I believe they have achieved that.

You've got to appreciate the reasoning skills of a teacher (former teacher). Way to go Amy... you help to keep us all grounded by putting things in the proper perspective....