Diedrich Coffee, Inc.
Ticker: DDRX 2144 Michelson Drive
Exchange: NASDAQ-National Market Irvine, California 92612
Industry: Retail (714) 260-1600

Type of Shares:Common Shares Filing Date:7/23/96
U.S. Shares:2,200,000 Offer Date:9/11/96
Non-U.S. Shares:0 Filing Range:$10.50 - $11.50
Primary Shares:1,600,000 Offer Price:$9.50
Secondary Shares:600,000 Gross Spread:$0.57
Offering Amount: $24,200,000 Selling:$0.33
Expenses:$1,400,000 Reallowance:$0.10
Shares Out After:5,391,650

ManagerTierPhone
Boston GroupLead Manager (800) 382-3220

Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
1/31/96 5/1/96 4/25/95 5/1/96
Revenue:$10.24$4.28$2.06Assets:$8.91
Net Income:$0.19$0.11$0.06Liabilities:$5.50
EPS:$0.06$0.03Equity:$3.41

Note: Dollar amounts are in U.S. millions; Audited figures expressed as full year,
unaudited figures are partial year

Business Description
Diedrich Coffee is one of the leading specialty coffee roster/retailers in the United States and currently operates thirty-six coffeehouses located in Southern California, Colorado and Texas. At each of the Diedrich Coffee offers a broad range of Italian-style beverages such as espresso, cappuccino, caffe latte, caffe mocha and expresso machiato. To complement beverage sales, the company sells light food items and whole bean coffee through its coffeehouses. The first retail store under the name Diedrich Coffee commenced operations in Orange County, California in 1972. The company grew from three coffeehouses in fiscal 1992 to thirty-six coffeehouses as of July 19, 1996 through the construction of new coffeehouses and recent acquisitions. In addition the company has entered into leases that will permit the opening of six additional coffeehouses in the next four months. The company's expansion strategy is to own and operate newly-developed coffeehouses and to acquire and convert existing specialty coffee retailers in geographic regions where it believes it can operate profitably.

Use of Proceeds
The proceeds from the proposed offering will be used for repayment of the amounts outstanding under the company's short term revolving credit facility and a revolving promissory note and funding for the opening of additional coffeehouses (through new store construction and acquisitions). infrastructure enhancements, repayment of certain other indebtedness, working capital and other general corporate purposes.

Last updated: 10/28/96

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