DSI Toys, Inc.
Ticker:DSIT 1100 West Sam Houston Parkway (North), Suite A
Exchange:NASDAQ-National Market Houston, TX 77043
Industry:Wholesale (SIC Code 5092) (713) 365-9900

Offering Information
Type of Shares:Common Shares Filing Date:3/26/97
U.S. Shares:3,000,000 Offer Date:5/29/97
Non-U.S. Shares:0 Filing Range:$9.00 - $11.00
Primary Shares:2,700,000 Offer Price:$8.00
Secondary Shares:300,000 Gross Spread:$0.60
Offering Amount: $30,000,000 Selling:$0.32
Expenses:$600,000 Reallowance:$0.10
Shares Out After:6,000,000

Primary Underwriting Group
ManagerTierPhone
Tucker Anthony IncorporatedLead Manager (800) 453-8205
Sutro & Company Inc.Co-manager (415) 445-8323

Legal Counsel, Auditor and Registrar
Issuer's Law Firm: Thompson & Knight
Bank's Law Firm: Stroock & Stroock & Lavan
Auditor: Price Waterhouse
Registrar/Transfer Agent: American Stock Transfer & Trust Co

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
12/31/96 12/31/96
Revenue:$63.22Assets:$16.30
Net Income:$2.15Curr Assets:
EPS:$0.58Liabilities:$25.73
Prior EPS:$0.66Curr Liabilities:
Cash Flow/Oper:$4.36Equity:-$9.42
Cash Flow/Fin:Cash:
Cash Flow/Inv:

Business Description
The company designs, develops, markets and distributes high quality, value-priced toys and children's consumer electronics. The company's core product categories are 1) juvenile audio products, including wallkie-talkie, preschool audio products, pre-teen audio products and musical toys; 2) girls' toys, including dolls, play sets and accessories; and 3) boys' toys, including radio control vehicles, action figures and western and military action toys. Founded in 1970, the company was principally a supplier of non-proprietary toys to deep discount stores and regional drug store chains. With the addition of new senior management personnel in 1990, the company began to market its expanding product line to major toy retailers by emphasizing innovative packaging and developing in0house brands. Further, in fiscal 1993, the company began to emphasize the development and marketing of proprietary products, consisting of toys developed by the company incorporating concepts licensed from outside inventors, products designed in0house, products for which the company owns the molds and products incorporating well-known trademarks licensed to the company.

Use of Proceeds
The proceeds from the proposed offering will be used for repayment of debt of the company, consisting of senior term loans and subordinated term loans outstanding under a revolving line of credit and indebtedness to the Estate of Mr. Moss and for working capital and general corporate purposes.

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