BeechTalk - BT - Vans RV aircraft temporarily suspending operations

Username Protected · **Posted:** 27 Jan 2024, 17:04

So if you don't accept, you lose your deposit????

Username Protected · **Posted:** 27 Jan 2024, 17:23

Did Lycoming or the other accessory vendors raise their prices?

I can see the increase for Vans produced products. But did they previously offer pricing from Lycoming that was 6K below list price?

Username Protected · **Posted:** 27 Jan 2024, 18:41

Username Protected wrote:

Did Lycoming or the other accessory vendors raise their prices?

I can see the increase for Vans produced products. But did they previously offer pricing from Lycoming that was 6K below list price?

Van's is bankrupt. They have to make more money. Of course they increased prices on pass through items like prop's, engines, hats, t-shirts, and everything else.

On engines, their prices were ~50% (?) of what you'd have paid for the same engine through normal channels. Now they are ~60% of the regular retail price. Stinks that they are going up, but beats having to go to someone who charges full retail.

Example... From Van's an O-320-D2G is $41K today. From Air Power it is $71K.

Username Protected · **Posted:** 27 Jan 2024, 22:30

Username Protected wrote:

So if you don't accept, you lose your deposit????

My understanding is that if you do not accept, you become a creditor in the bankruptcy procedure and receive a refund of somewhere between 0 and 100%.

I could be wrong.

Username Protected · **Posted:** 27 Jan 2024, 22:34

Username Protected wrote:

Did Lycoming or the other accessory vendors raise their prices?

I can see the increase for Vans produced products. But did they previously offer pricing from Lycoming that was 6K below list price?

Van's is bankrupt. They have to make more money. Of course they increased prices on pass through items like prop's, engines, hats, t-shirts, and everything else.

On engines, their prices were ~50% (?) of what you'd have paid for the same engine through normal channels. Now they are ~60% of the regular retail price. Stinks that they are going up, but beats having to go to someone who charges full retail.

Example... From Van's an O-320-D2G is $41K today. From Air Power it is $71K.

Username Protected · **Posted:** 27 Jan 2024, 22:45

Username Protected wrote:

Giving those types of discounts on engines is one of many reasons why they are in trouble. There can't be hardly any margin at those prices. You would probably spend that or be close to it buying a core and having it overhauled at a shop.

I think their pricing was fine at the moment they sold things. The backlog caused by COVID/logistics/demand meant that by the time they made and shipped those items, the pricing *wasn't* adequate. And then they created the laser cut parts issue...

Until those two things, the business was pretty profitable, witness Dick VanGrunsven being able to loan the company >$10M to help with cashflow.

Username Protected · **Posted:** 28 Jan 2024, 11:49

Username Protected wrote:

Did Lycoming or the other accessory vendors raise their prices?

I can see the increase for Vans produced products. But did they previously offer pricing from Lycoming that was 6K below list price?

Van's is bankrupt. They have to make more money. Of course they increased prices on pass through items like prop's, engines, hats, t-shirts, and everything else.

On engines, their prices were ~50% (?) of what you'd have paid for the same engine through normal channels. Now they are ~60% of the regular retail price. Stinks that they are going up, but beats having to go to someone who charges full retail.

Example... From Van's an O-320-D2G is $41K today. From Air Power it is $71K.

Username Protected · **Posted:** 28 Jan 2024, 12:16

Username Protected wrote:

Did Lycoming or the other accessory vendors raise their prices?

I can see the increase for Vans produced products. But did they previously offer pricing from Lycoming that was 6K below list price?

Van's is bankrupt. They have to make more money. Of course they increased prices on pass through items like prop's, engines, hats, t-shirts, and everything else.

On engines, their prices were ~50% (?) of what you'd have paid for the same engine through normal channels. Now they are ~60% of the regular retail price. Stinks that they are going up, but beats having to go to someone who charges full retail.

Example... From Van's an O-320-D2G is $41K today. From Air Power it is $71K.

Username Protected · **Posted:** 28 Jan 2024, 12:59

Username Protected wrote:

Not entirely accurate…..Vans was selling experimental engines, AirPower does not. If you wanted a new experimental IO-390 or any other experimental engine you had to order through Van’s which was taking deposits that Lycoming never required. Van’s was then turning around and using the deposits as operating capital when the funds should have been escrowed. In fact Van’s was actively encouraging customers to make engine deposits before “the next price increase” right up until the bankruptcy announcement. The fact that they are now asking for those same individuals to pay more for a product that Vans is effectively drop shipping doesn’t sit well with me.

Van's ain't selling to the certified market. Same item, less paperwork. For a Van's customer, the price is 60% of the price of other options.

Username Protected · **Posted:** 28 Jan 2024, 18:51

Username Protected wrote:

Not entirely accurate…..Vans was selling experimental engines, AirPower does not. If you wanted a new experimental IO-390 or any other experimental engine you had to order through Van’s which was taking deposits that Lycoming never required. Van’s was then turning around and using the deposits as operating capital when the funds should have been escrowed. In fact Van’s was actively encouraging customers to make engine deposits before “the next price increase” right up until the bankruptcy announcement. The fact that they are now asking for those same individuals to pay more for a product that Vans is effectively drop shipping doesn’t sit well with me.

Yikes. Lycoming didn't even require deposits and yet they were required by Van's? Is/was that common knowledge in the experimental/Van's world (that no deposits were required at all)? Presumably if the price actually did go up, which is the protection the deposit seems to be offering, Van's was making up the difference (from the next depositor's deposit) until they couldn't any longer?

Username Protected · **Posted:** 29 Jan 2024, 09:37

Username Protected wrote:

Van's was making up the difference (from the next depositor's deposit) until they couldn't any longer?

It's a common practice among shady home builders. They use the next guy's money to finish the current house under construction, and so on until there's a problem and then the house of cards collapses and the last one under construction is left high and dry.

Username Protected · **Posted:** 30 Jan 2024, 16:27

Received the below via email from Dynon. I'm sure some will view this cynically, but it's pretty thoughtful and generous from my perspective.

Username Protected wrote:

To: RV Builders

The world of experimental aircraft builders is a small one. I’ve met many of you at Oshkosh and other shows over the years, and I know the commitment it takes to build and maintain your own airplane. When some of us have misfortune, it is felt by all of us. We’re in this together.

The difficulties that Vans has experienced over the last six months is known to us. We have seen the effects through decreased sales to RV builders, and know the pain firsthand from our own employees who are in the process of building RVs.

My message today is simple: We want to help.

Therefore, we are offering a special discount to those builders who are directly affected by the change in pricing on aircraft kits they had previously put deposits on.

If you are one of these customers and purchase certain Dynon and Advanced Flight Systems products between today, January 30, 2024, and the end of Sun ‘n Fun (April 15, 2024), we will rebate you 5% to help out. Because we know that some kit lead times may be longer than usual, we will also warrant these products for an additional year (4 years, instead of the usual 3).

We will need documentation from you showing proof that you are an affected customer.

I am sure there are ways to game this, but we are asking you not to do so, and work with us to fairly share the cost with those who are directly affected.

We are experimental builders and owners here at Dynon, and our goal has always been to help make it affordable for anyone and everyone who wants to fly. That is our mission, and has been for 24 years.

For full details about this program, please visit this page.

Robert Hamilton
President, Dynon

Username Protected · **Posted:** 30 Jan 2024, 16:51

Username Protected wrote:

To: RV Builders

The world of experimental aircraft builders is a small one. I’ve met many of you at Oshkosh and other shows over the years, and I know the commitment it takes to build and maintain your own airplane. When some of us have misfortune, it is felt by all of us. We’re in this together.

The difficulties that Vans has experienced over the last six months is known to us. We have seen the effects through decreased sales to RV builders, and know the pain firsthand from our own employees who are in the process of building RVs.

My message today is simple: We want to help.

Therefore, we are offering a special discount to those builders who are directly affected by the change in pricing on aircraft kits they had previously put deposits on.

If you are one of these customers and purchase certain Dynon and Advanced Flight Systems products between today, January 30, 2024, and the end of Sun ‘n Fun (April 15, 2024), we will rebate you 5% to help out. Because we know that some kit lead times may be longer than usual, we will also warrant these products for an additional year (4 years, instead of the usual 3).

We will need documentation from you showing proof that you are an affected customer.

I am sure there are ways to game this, but we are asking you not to do so, and work with us to fairly share the cost with those who are directly affected.

We are experimental builders and owners here at Dynon, and our goal has always been to help make it affordable for anyone and everyone who wants to fly. That is our mission, and has been for 24 years.

For full details about this program, please visit this page.

Robert Hamilton
President, Dynon

Username Protected · **Posted:** 30 Jan 2024, 19:12

My RV-7 is nowhere near ready for avionics- Still sheet metal stage.
I decided long ago when the time comes, I will purchase Dynon.
This reinforces my decision.

Username Protected · **Posted:** 08 Feb 2024, 16:19

Vans December and full year 2023 Financials were posted publicly.

December came in worse than their bankruptcy advisors projected.

They projected $185K positive net cash flow
Actual was negative - $(256K) net cash flow

They are projecting continued negative cash flow in January -$(355K) net cash flow

EBITDA for the entire 2023 year was negative - $(638K). That is before any amortized non-cash expenses and before paying any Interest on debt. That is also before the $4 million inventory write off and the $5 million reserve for the "Laser Cut Parts Replacement Expenses".

Net Loss for 2023 was $(9.4) million

Net Cashflow was Negative for entire 2023 - $(3.6) million and that is after another infusion of $3.25 million in cash from the VanGrunsven family during 2023 (in the form of debt). Without the latest loan Vans would have lost $(6.9) million in net cash for 2023.

On the Balance Sheet they have:

Liabilities
$25.6 million in customer deposits
$10.2 million in loans from the VanGrunsven family
$0.75 million in loans from the ESOP
$4.2 million in Current Liabilities that they most likely have to pay in order to function
$5.0 million Reserve for Laser Cut Parts replacement which may or may not be adequate

Equity is negative - $(10) million

Assets offsetting these Liabilites
$3.5 million in Cash and Restricted Cash Customer Deposits
$22.0 million in Inventory
$9.0 million "claimed" value in a building
$1.7 million in all machinery, furniture, fixtures, improvements, vehicles, etc net of Depreciation.

See detail here - Full statements and detail on all cash disbursements and settlements. Mike Via is on the payroll. I don't see the payments to their "advisors".

https://www.courtlistener.com/docket/68061212/83/vans-aircraft-inc/