Fender Musical Instruments Corp. is going public. What that means is that its stock will be traded on the Nasdaq under the symbol FNDR and that we, the public, can choose to invest.
What it also means is that Fender will be required to tell us about its finances and business practices in detail every quarter. What they have disclosed is of interest to people who buy their products.
Here are some highlights from the initial filing:
-Fender doesn't make most of what it sells. 52 percent of its finished products come from independent OEMs in China, India, Indonesia, Japan, South Korea, Taiwan, Thailand and Vietnam.
-Fender demands sweetheart pricing deals for the factories that work for it. Fender does NOT require all of the factories that build its products to prove, or even pledge, that they follow the labor and environmental laws of their home nation:
"With many of our OEMs we do business on a purchase order basis rather than pursuant to formal written contracts. ... Most of these contracts require our OEMs to provide us with a favored nations pricing policy whereby we get the benefit of any more favorable prices offered to other customers of our OEMs. In addition, our OEMs that use subcontractors cannot subcontract the manufacturing of our products unless we provide advance written consent and certain other criteria are met. Although some of our OEM contracts prevent the OEM from making or dealing in competitors products, others do not. In most of our OEM contracts, our OEMs represent to us that they are in compliance with local labor, environmental and safety laws. Although our supply chain employees occasionally visit our OEMs facilities, we do not require our OEMs to abide by any formal code of conduct as a condition of doing business with us."
-Fender paid a $79,000 fine in 2009 to the EPA for improper waste storage and employee training at its California plant.
-Fender made $700 million in sales last year and $19 million in profits last year.
-Guitar Center makes up roughly 16 percent of Fender's sales. Fender CEO Larry Thomas is a Guitar Center veteran.
-Surprisingly, 59 percent of Fender's sales still come from the 13,000 independent music stores that carry its products.
-A private equity group invested $60 million in Fender in 2002 and owns 43 percent of the company. That implies that Fender is/was worth $1.3-4 billion.
Here's a link to the filing. I'll dig in further when I have more time.
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What it also means is that Fender will be required to tell us about its finances and business practices in detail every quarter. What they have disclosed is of interest to people who buy their products.
Here are some highlights from the initial filing:
-Fender doesn't make most of what it sells. 52 percent of its finished products come from independent OEMs in China, India, Indonesia, Japan, South Korea, Taiwan, Thailand and Vietnam.
-Fender demands sweetheart pricing deals for the factories that work for it. Fender does NOT require all of the factories that build its products to prove, or even pledge, that they follow the labor and environmental laws of their home nation:
"With many of our OEMs we do business on a purchase order basis rather than pursuant to formal written contracts. ... Most of these contracts require our OEMs to provide us with a favored nations pricing policy whereby we get the benefit of any more favorable prices offered to other customers of our OEMs. In addition, our OEMs that use subcontractors cannot subcontract the manufacturing of our products unless we provide advance written consent and certain other criteria are met. Although some of our OEM contracts prevent the OEM from making or dealing in competitors products, others do not. In most of our OEM contracts, our OEMs represent to us that they are in compliance with local labor, environmental and safety laws. Although our supply chain employees occasionally visit our OEMs facilities, we do not require our OEMs to abide by any formal code of conduct as a condition of doing business with us."
-Fender paid a $79,000 fine in 2009 to the EPA for improper waste storage and employee training at its California plant.
-Fender made $700 million in sales last year and $19 million in profits last year.
-Guitar Center makes up roughly 16 percent of Fender's sales. Fender CEO Larry Thomas is a Guitar Center veteran.
-Surprisingly, 59 percent of Fender's sales still come from the 13,000 independent music stores that carry its products.
-A private equity group invested $60 million in Fender in 2002 and owns 43 percent of the company. That implies that Fender is/was worth $1.3-4 billion.
Here's a link to the filing. I'll dig in further when I have more time.
Invalid Link Removed
