| Color Spot Nurseries, Inc. | |||
| Proposed Ticker: | CSNI | 3478 Buskirk Avenue | |
| Exchange: | NASDAQ-National Market | Pleasant Hills, CA 94523 | |
| Industry: | Wholesale (SIC Code 5193) | (510) 934-4443 | |
| # of Employees: | 2540 | ||
| Type of Shares: | Common Shares | Filing Date: | 10/7/97 | |
| U.S. Shares Filed: | 3,850,000 | Filing Range: | $12.00 - $14.00 | |
| Non-U.S. Shares Filed: | 0 | Offering Amount: | $50,050,000 | |
| Primary Shares: | 3,850,000 | Expenses: | - | |
| Secondary Shares: | 0 | Shares Out After: | 10,766,858 |
| Manager | Tier | Phone |
| BT Alex Brown | Lead Manager | (410) 727-1700 |
| Donaldson, Lufkin & Jenrette Securities Corp. | Co-manager | (212) 371-0641 |
| Issuer's Law Firm: | Brobeck, Phleger & Harrison |
| Bank's Law Firm: | Latham & Watkins |
| Auditor: | Arthur Andersen |
Dollar amounts in U.S. millions except for per share data | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 6/30/97 | 6/30/97 | ||||
| Revenue: | $113.40 | Assets: | $133.42 | ||
| Net Income: | $2.84 | Curr Assets: | $56.94 | ||
| EPS: | $0.43 | Liabilities: | $129.14 | ||
| Prior EPS: | Curr Liabilities: | $43.67 | |||
| Cash Flow/Oper: | -$4.09 | Equity: | $4.28 | ||
| Cash Flow/Fin: | $64.39 | Cash: | $2.76 | ||
| Cash Flow/Inv: | -$58.23 | Working Cap: | $13.27 | ||
| Business Description |
| The company is the largest wholesale nursery in the U.S. The company provides a wide assortment of high quality plants as well as extensive merchandising services primarily to leading home centers and mass merchants. The Company distributes products to over 850 retail and commercial customers, representing over 8,000 locations, primarily in the western and southwestern regions of the United States. Since June 30, 1996, the Company has completed 13 acquisitions, making it a leading consolidator in the wholesale nursery industry. On a pro forma basis, the Company generated approximately $182.8 million in net sales and $15.3 million in operating income in fiscal 1997. The Company believes it is one of the few wholesale nurseries that has the scale and distribution capabilities necessary to provide large volumes of high quality product to its retail customers on a multi-regional basis. The Company produces over 2,000 varieties of live plants, including bedding plants, shrubs, potted flowering plants, ground cover and fresh cut Christmas trees. Through its 200 person salesforce, the company also provides its retail customers with a broad array of value-added services, such as in-store merchandising, product display and maintenance, promotional planning and product reordering. The Company believes that providing these services differentiates it from its competitors and helps to establish the company as a preferred supplier in the industry. |
| Competition |
| The wholesale nursery industry is highly competitive. Competition is based principally on product quality, breadth of product offerings, customer service and price. The Company believes it has differentiated itself from its competitors through the breadth of its product offerings, multi-regional capabilities and the value-added services it provides to retail customers. The wholesale nursery industry is highly fragmented with over 10,000 small and regional nurseries nationwide. In 1996, the ten largest and 100 largest wholesale nurseries in the United States accounted for approximately 8% and 22%, respectively, of total wholesale production. The Company currently competes directly with a large number of western and southwestern producers. On a multi-regional basis, the Company also competes with both Hines Nurseries primarily in bedding plants and shrubs and Monrovia Nursery Company primarily in shrubs. The fresh cut Christmas tree market is also highly fragmented and, on a regional basis, the Company competes in this market with Holiday Tree Farms and The Kirk Company. |
| Business Plan |
| The Company's goal is to enhance its leadership position in the wholesale nursery industry. Color Spot's growth strategy is to continue to enter new geographic markets through acquisitions and to expand its presence in its existing markets. An important aspect of the Company's growth strategy is to increase its penetration in targeted markets thereby enabling the Company to better serve its retail customers, enhancing its brand name recognition and increasing operating efficiencies. The key elements of the Company's growth strategy include: (I) Existing and New Customer Growth, (ii) Acquisitions and (iii) Product Line Expansion. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for repayment of debt and general corporate purposes. |
| Name of Shareholder | % Owned Before | % Owned After |
| KCSN Acquisition Company, L.P. | 69.20% | 44.70% |
| Michael F. Vukelich | 18.40% | 12.20% |
| Heller Equity Capital Corporation | 7.50% | 4.90% |
| Jerry L. Halamuda | 5.80% | 3.80% |
| Officer Name | Title | Age |
| Michael F. Vukelich | Chairman of the Board and Chief Executive Officer | 47 |
| Paul D. Yeager | Executive Vice President and Chief Financial Officer | 59 |
| Robert F. Strange | Executive Vice President and Chief Operating Officer | 43 |
| Karla D. Vukelich | Executive Vice President of Administration and Secretary | 35 |
| Jerry L. Halamuda | President and Director | 47 |