BREAKING NEWS: Shopsmith, Inc. Has A New Owner

[RFGuy]

@RFGuy: you forgot the stand-alone table saw they had -- the SawSmith 2000, wasn't it? Kind of an under-table radial arm saw and with a tilting arbor. That was innovative but I don't think the market ate it up.

Alan,

Thanks and good point. I appreciate it. Wait, there was a product that Shopsmith made and stopped making and no longer supports? What a novel concept? Forgive my facetiousness, but it seems like those on the Mark V platform in all its forms want/expect the status quo to continue ad infinitum. Yet, they forget all of Shopsmith's product history, including stopping support on many machines (like the SawSmith 2000 and others), SPT's, repair parts, etc. Personally, I would love that Shopsmith continue to support only the Mark V giving me spare parts, accessories or anything else that I want until the end of time, or I am dead, whichever comes first. That may not be the best business strategy for them, which is what some of us were discussing on this thread. I know we all love Shopsmith, otherwise why spend our time on this forum? I have ethused my love for Shopsmith and my connection to them through my Dad (and his 510) many times on this forum. However, I am also brutally honest and will point out when there is a feature or model that doesn't live up to my expectations. Fanboys won't save this company, but a solid business plan, suitable marketing and favorable macroeconomic tailwinds will. JMO.

[RFGuy]

What is the current production quantity? What is "X". Without knowing that how can one challenge the wisdom of 25X??

Shopsmith is a mature manufacturing business with significant competition in the marketplace. It is very easy to challenge the wisdom of 25X based on this because it means they would have to capture market share from the competition which is difficult to do in practice. Unless all of you existing customers are going to go crazy with new orders to push Shopsmith to 25X sales?

Does Shopsmith have plans NOW to withdrawn support for the existing legacy machines? I seriously doubt that.

I didn't say they would, but I suggested they should consider it, if it helps them get to a new and improved platform that significantly increases their market share allowing them to remain a viable company well into the future. Isn't this what we all want, i.e. Shopsmith to continue to survive???

What are Mr. Cupps real objectives for Shopsmith in the long term? I doubt that any one of us has the incite required to answer that question thus most of what is said here is pure supposition.

I have some insight into this having gone through several M&A's in the business world and having to deal with private equity buyouts. Saint Nick clearly stated in the interview that he represents private equity interests that have taken over Shopsmith. Their timeline, profit targets, business plan are all secret, but I hypothesized (made an educated guess) based on my experience. I welcome input from any one else here who has M&A and/or private equity dealings to share their knowledge on the matter, especially how you foresee Shopsmith weathering this latest takeover. Also, I posted about this earlier on the thread and the link to the equity listing is at the link below. Earlier this year Saint Nick opened up an equity round for Shopsmith of up to $1M with a minimum buy-in of $10k required. New company is called Shopsmith L.P. Anyone who feels so strongly about Shopsmith's turnaround potential should contact him and invest; only $10k required to be included as an investor. Caveat Emptor.

https://capedge.com/filing/1980786/0001 ... 3-000001/D

What I do know is that I must re-evaluate my present ability to support my legacy machines. What parts might I be needing in the next couple years? I also know that I do not need and will never own any Shopsmith newer than my 520 and the current gang of SPT (including the 4" jointer). I just have not had the need to joint a beam!!

I guess all of your lumber must be perfectly straight and never bow or twist? You don't have to be working on a beam to need more than a 4" jointer for face jointing. Anyone that only uses a jointer for edge jointing must have some darn near perfect lumber where they live IMHO. Or only work on small woodworking projects that don't need wide and/or long solid stock lumber.

[RFGuy]

@RFGuy: you forgot the stand-alone table saw they had -- the SawSmith 2000, wasn't it? Kind of an under-table radial arm saw and with a tilting arbor. That was innovative but I don't think the market ate it up.

Just to make sure I am 100% clear here. Alan raised a good point about innovation. Ed and I were just bouncing ideas around on this thread about how a reimagined new headstock or Mark product might look (actually free brainstorm ideas for the new Shopsmith company). The most innovative or highest performance product doesn't always win in the marketplace (many examples of this, but the classic example is VHS vs. Betamax). There is great risk in bringing innovative products to market. Shopsmith's best business plan and direction forward may be to continue as it is and support as many of the original Shopsmith products as they can with relatively nothing new. Be nice if they supported Magna products too. Shopsmith already has their X-6000 prototype that didn't see the light of day, other than some features getting incorporated into the 510 and 520 series of the Mark V. Still the innovations of the height adjustment on the X-6000 are lost to history unfortunately...unless Shopsmith L.P. does something with them. We will have to wait and see. Until then, those with interest can engage in flights of fancy with us on what a new and improved Shopsmith product might look like, if you dare.

[edma194]

@RFGuy: you forgot the stand-alone table saw they had -- the SawSmith 2000, wasn't it? Kind of an under-table radial arm saw and with a tilting arbor. That was innovative but I don't think the market ate it up.

I have a Sawsmith 2000. Two of them that combined make my Super Sawsmith 4000. I hope Shopsmith can achieve great new sales and bring back this machine. It didn't take off for several reasons largely about the market that also resulted in dropping sales of Model 5XX sales. It's innovative under-table sliding saw feature was an expensive feature, nice to have but it would have been an excellent table saw without it. And offering it as an upgrade to a lower priced starter model might have looked better in the competitive table saw market. I have the version using the Excalibur fence and rails, expensive and no longer made, but it probably influenced the 520 rail system. A new version that has a PowerPro motor in it would be attractive to some maybe, or not, that's what marketing has to figure out. Anything Shopsmith makes has to suit the market or it's pointless to make it.

If Nick is successful at growing the Shopsmith community and increasing demand for the product the company will have to provide new products for the growing customer base. The products can be incremental versions of the existing product the way that new versions of table systems and motors were introduced, but also new or improved versions of SPTs need to be there for the next generation of Shopsmithers to use, and new ideas may take hold as well. We've seen plenty of product line changes, 3rd party products added to the line, products that were dropped and sometimes revived. I hope that process continues for a long time and produces more winners than losers.

[RFGuy]

Anything Shopsmith makes has to suit the market or it's pointless to make it.

+∞

[bainin]

It will be interesting to watch which way this thing breaks.

From an M+A viewpoint , I'm hard pressed to imagine what assets are sellable aside from inventory. I'd guess the IP is all past 17 yrs now.

Does the factory physically make stuff like way tubes, mechanical support structures or is it more "assembly + alignment" ?

I don't get the sense that there is a deep engineering team inside Shopsmith developing new products, it seems more like a support engineering team to me. Coming up with completely new products would be outside a support engineering teams scope.

I think Dusty is right though..if there are some replacement parts you imagine needing in the next few years , it may be a good time to stock up.


b

[RFGuy]

It will be interesting to watch which way this thing breaks.

From an M+A viewpoint , I'm hard pressed to imagine what assets are sellable aside from inventory. I'd guess the IP is all past 17 yrs now.

Does the factory physically make stuff like way tubes, mechanical support structures or is it more "assembly + alignment" ?

I don't get the sense that there is a deep engineering team inside Shopsmith developing new products, it seems more like a support engineering team to me. Coming up with completely new products would be outside a support engineering teams scope.

I think Dusty is right though..if there are some replacement parts you imagine needing in the next few years , it may be a good time to stock up.


b

Agree completely, which is why I am surprised that private equity investors took on Shopsmith. Not complaining in that I want the company to continue, but I also don't understand their path to 25X sales. Most private equity ventures have an exit timeline, i.e. secure X% profit by a specific date. Whether they have an exit planned or not, they definitely expect a certain % return by a specific date. IF/WHEN they don't meet those targets, then an exit for a loss for taxes is likely the solution. Let's hope it doesn't come to that. There are not significant assets available to divest, if needed, but there could be IP and/or product lines they potentially want a bigger woodworking company to takeover via acquistion. Private equity does sometimes takeover with this intent to pretty up the company to lure someone else in. The Made in America has more cache now particularly that political winds shifted against China in recent years, so being USA based is a definite plus for a manufacturing acquisition here.

[edma194]

Does the factory physically make stuff like way tubes, mechanical support structures or is it more "assembly + alignment" ?

Nick is trying to reduce the amount of fabrication done at the factory and have it become much more of an assembly shop. He says many parts finished at the factory can be purchased in their final form instead of requiring time and maintenance of costly machinery.

I don't get the sense that there is a deep engineering team inside Shopsmith developing new products, it seems more like a support engineering team to me. Coming up with completely new products would be outside a support engineering teams scope.

This remains to be seen. They certainly need a larger and more experienced support engineering team instead of relying on a dwindling number of people who have around long enough to develop an ingrained knowledge of the product. Support now is the result of the low volume sales picture for the company. Its one of the things that has to be addressed to achieve growth. Counting on modern social media for marketing has it's dark side, word of bad support gets around quickly and can stop sales growth in its tracks. The solution is not difficult, but it will be costly if it's not implemented in coordination with a comprehensive growth plan.

As for engineering new products, they don't have to reinvent the Space Shuttle. The engineering to make new tools based on existing ones is not that great and can be outsourced as was done to develop the PowerPro. They do need engineering that can build and test prototypes on the R&D side, and quality control engineering on the back end to maintain the reputation of the product and reduce the support and service costs.

I hope someone will read the following: I will pay for a service contract on my PowerPro components. A machine dependent on two parts that cost $800 and $600 to replace is a risky investment. I'd pay for that as a personal user, and if it was available as part of a general service contract for the entire machine the price of a Shopsmith Mark 7 would be quite reasonable for a commercial operation.

[edma194]

Most private equity ventures have an exit timeline, i.e. secure X% profit by a specific date. Whether they have an exit planned or not, they definitely expect a certain % return by a specific date. IF/WHEN they don't meet those targets, then an exit for a loss for taxes is likely the solution.

Nick sounds like he's a little more in it than that. He sounds like he's getting hooked on the Shopsmith concept, something we all understand. He doesn't sound like he's in for just three years and out. We have been lucky that Shopsmith has so far escaped the cruel unseen hand of the free marketplace, no one knows what would lie ahead if Nick hadn't taken it on, so I can be happy that we have a few more years of life ahead now.

[RFGuy]

Nick is trying to reduce the amount of fabrication done at the factory and have it become much more of an assembly shop. He says many parts finished at the factory can be purchased in their final form instead of requiring time and maintenance of costly machinery.
...
As for engineering new products, they don't have to reinvent the Space Shuttle. The engineering to make new tools based on existing ones is not that great and can be outsourced as was done to develop the PowerPro. They do need engineering that can build and test prototypes on the R&D side, and quality control engineering on the back end to maintain the reputation of the product and reduce the support and service costs.

I hope someone will read the following: I will pay for a service contract on my PowerPro components. A machine dependent on two parts that cost $800 and $600 to replace is a risky investment. I'd pay for that as a personal user, and if it was available as part of a general service contract for the entire machine the price of a Shopsmith Mark 7 would be quite reasonable for a commercial operation.

Ed,

I agree that Shopsmith doesn't have to do everything internal...many companies don't these days. However, that just increases the final product cost significantly as you have to pay margin on top of unit cost for everything you outsource. Realize he may want to reduce costs by eliminating costly machinery, but then as you do so you have to start asking what actually is it that Shopsmith produces anymore?

Are you sure about that last point? Really, you want to pay a service contract every year as an insurance policy on a product with a track record of poor reliability and longevity? Service contracts are like printing money for businesses as they often recoup far more than they spend to maintain them. They also love have guaranteed revenue they can count on every year. I would prefer that weak components be re-engineered and/or costs brought down more in line with what other manufacturers are paying StriaTech for similar components on that DVR motor.

Nick sounds like he's a little more in it than that. He sounds like he's getting hooked on the Shopsmith concept, something we all understand. He doesn't sound like he's in for just three years and out. We have been lucky that Shopsmith has so far escaped the cruel unseen hand of the free marketplace, no one knows what would lie ahead if Nick hadn't taken it on, so I can be happy that we have a few more years of life ahead now.

I only have that interview on YT to go by and I got a totally different read on him, but maybe I am reading between the lines too much. We will see.