Is Gibson in real problems?

[macmax77]

http://www.tennessean.com/story/mon...otPostID=['b2cd8d92e1991f9216be07d31616457e']

http://www.tennessean.com/story/mon...gibson-puts-gulch-properties-market/82120490/

Is this old news?

 

[Turi]

Yeah, old news.

 

[SPROING!]

They got 99 problems. That ain't the worst.

 

[cutaway]

this is the business equivalent of a headstock ding. i mean, yeah you can see it, and it might affect resale, but it still works fine

 

[Pedal Dan]

Used Gibson Guitars are their biggest competition.

 

[Bluesful]

Nope.

 

[peskypesky]

the terrible 2015 product line was bound to cause them some pain

 

[JPIndustrie]

From what I understand from the residents' sarcastic and salty comments that area of Nashville is 'up and coming' so to say. Probably made a lot more sense to capitalize on that property value jump.

Because really, its the whole guitar industry in trouble...

 

[bismark]

Nah....fanbois, MIA loyalists, old farts and the general nostalgia will keep the company afloat.

 

[Jonny G]

Ummmm. 8.5x debt is a problem. Very understandable why they may be selling that property since they have significant debt repayments due - far in excess of their cash generation on current form. 2015 guitars clearly got hammered which must have hurt margins and put them into serious junk territory (Caa1 is frankly just one step up from "expected to default"). If the 2016 line does better, (which seems to be the case), if they sell the property for a good price and if they can make the electronics acquisitions work (that one is a really big "if" - I was surprised to see that guitars are now only a small part of their turnover and theyve gone so big into consumer electronics - a pretty unattractive sector to be in) then they may dodge the bullet, but it'll be close.

Watch this space.

p.s. I am a finance guy and so, contrary to standard TGP operating procedure, do actually know what im talking about on this one.

 

[eSS eSS]

Not with this they don't

 

[Suhrlicious]

Gibson is always "in real problems."

 

[Jonny G]

this is the business equivalent of a headstock ding.

This is the business equivalent of taking a dive off stage into the mosh pit and the punters start moving aside. Not pretty

 

[FPS1453]

They should have hired a CQO instead of a new CFO!

 

[Average Joe]

I hope not, but that is some serious debt

 

[axe4me]

Q/C not important to Henry.
P/L is paramount to Henry.
Old news.

 

[JohnK24]

music lifestyles company ?

Thank god Paul Reed Smith just continues to make outstanding, well crafted instruments

 

[stratplexi]

Yes, this is a real problem. The cost of capital just went up for Gibson. It sounds like they are over leveraged as a result of acquisitions and 2015 really hurt them.

 

[carlosmucho]

Thanks for linking those articles, they were eye-opening to me. I found it interesting that Gibson's annual revenues are 1.7 Billion now, compared to just 300 million in 2010, thanks to acquisitions of electronics companies. Wow.

 

[peskypesky]

Thanks for linking those articles, they were eye-opening to me. I found it interesting that Gibson's annual revenues are 1.7 Billion now, compared to just 300 million in 2010, thanks to acquisitions of electronics companies. Wow.

That's revenue. But what was the net income, if any?