This company specializes in retailing new and used CDs with a franchise store model. They currently have over 150 stores (most
are franchises, the company has some company-owned stores). The unit economics are quite compelling.
The revenues grew at 83%, same-store sales increased 14% during
'97. The past results are below:
1996: $4.9M in revenues, .10 in earnings
1997: $9.0M in revenues, .23 in earnings EPS up 130%!!!!!
Management has given guidance that they are on track to do
.50 in earnings for '98 with revenues over $12M in top line growth. The company is poised for even more growth in '99.
The management team is quite impressive. The CEO has a franchise background and was CFO of Sonic Corp (SONC) and helped to bring
them public in '91. He knows the ins and outs of franchising and has built several businesses. The CFO of CDWI is equally as impressive and has over 12 years of experience with a big six firm. In addition,
senior management owns half of the company. It seems that their interests are aligned with the shareholders. Does anyone have any comments about this stock?
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