NXT in trouble...

Ian,

The boards and sub-assemblies are made for Cyrus by external companies and assembly is done in house, I highly doubt that any UK hi-fi manufacturer except perhaps Linn produce their own boards.

http://www.rdh.34sp.com/cyrusunofficial/index.php?infoid=2&x=41&y=34

 

* Disposals of remaining Manufacturing Operations - the Company is
currently in advanced negotiations for the disposal of the Cyrus Electronics
hi-fi manufacturing and distribution business. In the 2002/3 financial year,
Cyrus contributed £87,000 in operating profit, but has now reached a point where
it will require further working capital to develop new products. If the sale is
completed it is expected to realise a net asset value of approximately £600,000.
In addition, the Company has sold its remaining shares in Symphonix Ltd., which trades as Mission. These transactions will complete the strategic withdrawal of NXT from manufacturing to focus on technology licensing.

NXT PLC.
mil GBP 6/2000 6/2001 6/2002 6/2003
Turnover 3.61 4.19 5.01 7.99
Cost of sales 1.70 1.69 1.96 2.05
Sell, gen & adm exp 13.05 17.28 17.39 16.65
Operating profit (loss) -11.14 -14.78 -14.34 -10.71
Net profit (loss) -19.78 -13.85 -10.84 -9.33

source Bloomberg

company press release:
http://www.nxtsound.com/industries/popUpNews.php?f_id=614

 

sorry about the format of the figures. i couldn't get it to format properly...

 

In that case sales must be alarmingly low. Considering that Cyrus appeared on the surface to be one of the more successful brands, makes you wonder about the profitability of some of the other famous names.

-- Ian

 

You could buy the company for the price of 600 cd8 units... how many units do they make/sell in a year?

 

Any idea how much pick and place surface mount equipment costs to setup for each board type, board production then ATE testing, it's a very costly for small runs, BTW I talking about 1000 - 2000 as a small run.

AFAIK there are only about 30 people at Cyrus.

http://www.smtinfocus.com/processguide_placement.html

 

take £100 VAT off. Then dealer price is about £600 at most. Build and packaging per unit will be about £200. Then you've got design cost, setup and tooling, etc. That leaves about £150 per unit at most. That has to pay employees, rent, etc. Profit is difficult.

 

Having run my own company for 15 years I'm well aware that profit is difficult. My point was not a criticism of Cyrus, merely that the low profit is indicative of the collapse of hifi sales, something we're all aware of in theory, but that this story shows up very clearly in practice.

-- Ian

 

Ian I didn't take it as criticism of Cyrus, it was the cost of SMT PCB's that I was trying to get across.

 

Exactly. Either Cyrus have not been as successful as their brand prominence implied, or they are as comparitively successful as we percieve, which suggests the market is considerably depressed and other less prominent brands in the same sector might be actually losing money. Certainly an indicator of something.

 

they will probably get about 0.8 - 1.1x sales or an EBITDA (Operating Profit (sort of) stands for Earning Before Interest, Tax, Depreciation and Amortization) multiple of 6-8x.
GBP600,000 with EBITDA of GBP87,000 equals 14.5% EBITDA margin (assuming 1x sales multiple)... a bit low...but with in the high yield (junk bond) class of company.
GBP600,000 also equates to a 6.9x EBITDA multiple, also within the range.

BP, for what it's worth is valued at 6.7x EBITDA at present. suggests to me that, that's a fairly full price for cyrus.....

 

Blake, what do you do? You sound scarily like the Equity Research analysts I have to deal with every day . I'm up to my eyes in EBITDA, NOPAT and their respective margins especially when the analysis software isn't behaving properly

Michael.

 

high yield bond trader..... what do you do? from what i've been able to glean, you seem to spend a lot of time on the beach....

 

Size doesn't matter

 

'In a similar vein, and I'd like to whisper this, vibrating speaker/equipment supports may inadvertently improve the overall ambient sound of the system.'
Is that how Quadraspire works then?

Bob

 

Bob, I don't know.

I was introduced to a system of combining NXT panels with moving coil speakers - Layered Sound. The method seems to me to be worth further exploration as it may have the potential to provide a more realistic ambient component to the sound.

What I'm suggesting is that if a speaker cabinet (particularly the front baffle) vibrates through the mechanical coupling with the driver, it acts to a degree like an NXT panel and may therefore, give some of the effects of the Layered Sound combo.

The same can be said of a vibrating speaker stand.

But this is only some of my current thinking and I haven't yet had the time to test the theories out so I really don't know.

File under 'Hmmm that's interesting, I'll bear it in mind'.

 

I hope Bub didnt hear your whisper, I dread another Mana brainwashing session.

 

I heard it, and thought it was interesting.

Uninterested in your brain, greg.

 

As I said, it's only a tentative theory, Bub. That's the reason I suggested you do the 'blanket' test, although I'm sure you've figured that out by now.

 

I never carried out the blanket test because it will stop the stands from working properly. There's a lot of energy going into those stands, and the last thing I want to do is try to damp it.