| CD Warehouse, Inc. | |||
| Ticker: | CDWI | 722 N. Broadway | |
| Exchange: | NASDAQ-Small Cap Market | Oklahoma City, OK 73102 | |
| Industry: | Retail (SIC Code 5735) | (405) 232-2797 | |
| Type of Shares: | Common Shares | Filing Date: | 10/30/96 | |
| U.S. Shares: | 1,000,000 | Offer Date: | 1/22/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $5.00 - $6.50 | |
| Primary Shares: | 1,000,000 | Offer Price: | $5.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.50 | |
| Offering Amount: | $5,750,000 | Selling: | ||
| Expenses: | $325,000 | Reallowance: | ||
| Shares Out After: | 1,780,000 |
| Manager | Tier | Phone |
| Capital West Securities, Inc. | Lead Manager | (405) 235-5720 |
| Berthel Fisher & Company Financial Services, Inc. | Co-manager | |
| Westport Resources Investment Services, Inc. | Co-manager | (800) 935-0222 |
| Issuer's Law Firm: | Day Edwards Federman Propester & Christensen, P.C. |
| Bank's Law Firm: | Phillips McFall McCaffrey McVay & Murrah, P.C. |
| Auditor: | Ernst & Young |
| Registrar/Transfer Agent: | Liberty Bank and Trust Co of OK |
Dollar amounts in U.S. millions except for per share data | |||||
| 9 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/95 | 9/30/96 | 9/30/95 | 10/15/96 | ||
| Revenue: | $4.15 | $3.54 | $2.77 | Assets: | $0.46 |
| Net Income: | $0.28 | $0.14 | $0.10 | Curr Assets: | |
| EPS: | $0.08 | $0.06 | Liabilities: | $0.11 | |
| Prior EPS: | Curr Liabilities: | ||||
| Cash Flow/Oper: | $0.32 | Equity: | $0.35 | ||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | |||||
| Business Description |
| The company was formed in September 1996 to acquire the assets of Compact Discs, International, Ltd., a Texas limited partnership with franchises and operates stores throughout the United States and England under the name "CD Warehouse." The company stores sell, trade and buy new and preowned compact discs and related products. According to the January 1996 issue of Entrepreneur Magazine, CDIL was ranked among the tope 30 new franchises in the United States. At September 30, 1996, there were 109 franchised company stores in 26 states and England. The company's stores sell CD's, take customers' CD's in trade or buy customers' CD's for cash. The company concept capitalizes on the emergence of CD's as the prevailing form of prerecorded music. Because the CD is encased in plastic and read by a laser, the playing of CD's and even the occasional careless handling of CD's, rarely cause damage that will impair performance or result in any degradation of sound quality. |
| Competition |
| The company competes in the retail music industry, which is highly competitive in price, selection, service and location is often affected by changes in consumer trends, economic conditions, demographics, traffic patterns and technological innovation. The following profile provides an overview and comparison of how the retail "new release" CD industry and the emerging retail "remarketing" or "buy-sell-trade" CD industry are currently structured and segmented. |
| Business Plan |
| The company believes that a growing consumer willingness to purchase preowned CD's, provides an expanding market niche in the retail music industry for CD remarketers. The company's business strategy is to establish itself as the recognized industry leader in the domestic buy-sell-trade retail CD marketplace by pursuing a three-fold approach: 1) offering quality, prenowned CD's at exceptional value; 2) selling new releases at competitive prices; and 3) offering to accept as a trade, or buy for cash, selected CD's from customers. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to purchase the CDIL assets, open new company stores and remodel existing stores in which the company owns an interest and manages and for working capital and for general corporate purposes. |