| Paper Warehouse, Inc. | |||
| Ticker: | PWHS | 7630 Excelsior Boulevard | |
| Exchange: | NASDAQ-National Market | Minneapolis, MN 55426 | |
| Industry: | Retail (SIC Code 5943) | (612) 936-1000 | |
| # of Employees: | 200 | ||
| Type of Shares: | Common Shares | Filing Date: | 10/1/97 | |
| U.S. Shares: | 1,778,000 | Offer Date: | 11/24/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $8.00 - $10.00 | |
| Primary Shares: | 1,778,000 | Offer Price: | $7.50 | |
| Secondary Shares: | 0 | Gross Spread: | $0.52 | |
| Offering Amount: | $16,002,000 | Selling: | $0.29 | |
| Expenses: | $550,000 | Reallowance: | $0.10 | |
| Shares Out After: | 4,264,275 |
| Manager | Tier | Phone |
| Dain Bosworth Incorporated | Lead Manager | (612) 371-2818 |
| Issuer's Law Firm: | Maslon Edelman Borman & Brand |
| Bank's Law Firm: | Oppenheimer Wolff & Donnelly |
| Auditor: | KPMG Peat Marwick |
| Registrar/Transfer Agent: | Firstar Bank Milwaukee, N.A. |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $43.00 | $24.75 | $19.44 | Assets: | $19.09 |
| Net Income: | $0.81 | $0.29 | $0.13 | Curr Assets: | $12.91 |
| EPS: | $0.32 | $0.12 | $0.05 | Liabilities: | $16.95 |
| Prior EPS: | $0.31 | $0.99 | -$0.22 | Curr Liabilities: | $7.35 |
| Cash Flow/Oper: | $0.09 | -$0.23 | $0.70 | Equity: | $2.14 |
| Cash Flow/Fin: | $0.59 | -$0.76 | -$0.76 | Cash: | $0.36 |
| Cash Flow/Inv: | -$1.20 | -$0.76 | Working Cap: | $5.56 | |
| Business Description |
| The company is a rapidly growing chain of stores specializing in party supplies and paper goods operating under the names Paper Warehouse and Party Universe. The Company is the leading party supplies and paper goods retailer in its four principal markets of Minneapolis/St. Paul, Kansas City, Denver and Oklahoma City. Paper Warehouse stores offer an extensive assortment of special occasion, seasonal and everyday paper products, including party supplies, gift wrap, greeting cards and catering supplies, at everyday low prices. The Company's 124 stores (73 Company-owned and 51 franchise stores) are conveniently located in major retail trade areas to provide customers with easy access to its stores. For the first six months of fiscal 1997, the Company's revenues increased 27.3% to $24.7 million from $19.4 million for the comparable period of fiscal 1996. The Company offers a broad selection of party supplies and paper goods for a wide variety of celebratory occasions and everyday uses, including birthdays, weddings, baby showers, graduations and other family and religious celebrations, as well as seasonal events such as Valentine's Day, Easter, Fourth of July, Halloween, Thanksgiving, Christmas, Hanukkah and New Year's. Through the Company's 8,500 square foot store prototype, the Company offers a comprehensive selection of over 19,000 SKUs, which provides customers the convenience of one-stop shopping for all party supplies and paper goods. The Company's merchandise is organized by party themes, and the prominent signage and wide aisles allow customers to easily access and coordinate the merchandise required for all party occasions. The Company also believes that its extensive selection, combined with high in-stock positions, often stimulate customers to purchase additional products. |
| Competition |
| The party supplies and paper goods retailing business is highly competitive. Paper Warehouse stores compete with a variety of smaller and larger retailers, including specialty party supply retailers (including other superstores), card shops and designated departments in mass merchandisers, discount retailers, toy stores, drug stores, supermarkets and department stores. Many of the Company's competitors have substantially greater financial and personnel resources than the Company. The Company may also encounter additional competition from new entrants in the future in the Company's existing or planned new markets. Increased competition by existing or future competitors may have a material adverse effect on the Company. |
| Business Plan |
| The Company's goal is to be the leading supplier of party supplies and paper goods in each of its existing and prospective markets. The key elements of the Company's strategy are as follows: (I) Convenient Locations, (ii) Extensive Merchandise Selection, (iii) Everyday Low Prices, (iv) Customer Friendly Store Environment and (v) Comprehensive Advertising. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to repay debt outstanding under the company's revolving credit facility, to repay Shareholder Notes, to repay the Subordinated Notes and for new store expansion and working capital and other general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| Yale T. Dolginow | 87.00% | 45.30% |
| Brent D. Schlosser | 13.00% | 6.80% |
| LSG Corporation | 8.40% | 4.70% |
| Officer Name | Title | Age |
| Michael A. Anderson | Controller/Treasurer | 37 |
| Francis E. O'Neil | Director of Franchising | 62 |
| Kristen Lenn | Director of Human Resources | 30 |
| Brent D. Schlosser | Executive Vice President and Director | 44 |
| Yale T. Dolginow | President, Chief Executive Officer and Chairman of the Board | 54 |
| Diane C. Dolginow | Secretary and Director | 53 |
| Cheryl W. Newell | Vice President and Chief Financial Officer | 44 |
| Steven P. Durst | Vice President of Information Systems | 29 |
| Willard V. Lewis | Vice President of Store Development | 61 |
| Carol A. Carroll | Vice President of Stores | 46 |