from their website:
chronicleinc.com
EXPANSION PLANS
The Company plans to add press capacity to both plants, restructure
the entire debt of the combined companies and aggressively market
it's web services. Chronicle's revenue growth of 310% for the year
ended September 30, 1998, will be the minimum standard set for
1999. Currently the Company plans for a 335% increase in revenue
for the year ended September 30, 1999, or total revenues of
$6,014,682.
The Company plans to introduce eighteen additional Georgia
Chronicle editions in selected counties across Georgia which
management has determined have sufficient commercial and
economic bases to support several print media products. Each
county in the Company's expansion plan has an aggressive Industrial
Development Authority which has an history of successful
recruitment of new business and industry. Management believes the
Company can quietly expand into a new market while introducing
commercial advertisers and readers to the concept of high quality,
low priced print advertising. The Company's goal is to open three
new markets per month, subject to available future cash flows and
equity or debt financing, if any. Each edition of the Company's
Georgia Chronicle will carry the appropriate geographic designation,
such as South Georgia Chronicle. The Company is committed to an
expansion program, subject to available funding. Management
believes the Company must expand its products into new markets,
with initial starts and consolidation within its industry by acquisition of
existing shopper and news specialty products, as well as small
weekly and daily newspapers. A recent edition of the Bithlo-Cribb
report recommends that daily newspaper companies broaden their
base with the addition of weekly publications, suggesting that weekly
newspapers are a bargain at seven to nine times cash flow compared
to the limited number of daily newspapers available for acquisition
which command ten to sixteen times cash flow. The report states:
"the geographic hub and spoke or cluster approach has consistently
proven a winner." The report goes on to reflect that large media
groups are beginning to recognize the shopper publication industry as
solid and profitable, with founders of older shopper publications
bringing in younger management or selling out. Management believes
the Company is positioned to benefit from these trends. Beginning at
the Company's founding, management has developed the Company's
infrastructure for the hub and spoke structure, with a view to
expansion and acquisitions. Subject to available funding,
management intends to pursue an aggressive expansion and
acquisition program. There is no assurance that any or adequate
funding will be available, and if available, that the terms will be
acceptable to the Company. The Company plans to expand its
Internet site to provide advertisers with added value through a
statewide classified advertising data base, with emphasis on
employment advertising. The Internet site will include links to
Chambers of Commerce and corporate relocation departments
across the United States. The Company is actively evaluating the
purchase of existing publishers of specialty newspaper which the
Company believes are priced below market value and have
synergism with the Company's product mix. The Company's
objective is to expand into markets which are not saturated by
numerous print media companies. The Company's acquisition focus
is on niche products with a delineated readership.
MANAGEMENT
John V. Whitman, Jr., the Company's founder, Chairman and CEO,
has over 15 years experience in the publishing industry. Prior to
founding the Company, Mr. Whitman was president of Gray
Communications Systems Inc., (NYSE--GCS) Georgia shopper
subsidiary after its acquisition of Phillips Publishing, Inc. in
Tallahassee for $1.45 million, a company which Mr. Whitman built
from negative cash flow to positive cash flow in 28 months. Mr.
Whitman was also president of a Gray subsidiary, The Rockdale
Citizen Publishing Company, which published two daily newspapers.
Mr. Whitman, turned a million dollar loss per year at the Citizen to
positive cash in just 63-days. Ronald L. Mallett, a director, is a vice
president of a regional heating and air condition contractor and a 23
year U.S. Marine Corps veteran, retiring with the rank of Captain.
Jackson L. Morris, a director, is an attorney specializing in securities,
general corporate and financial transactions law.
PRODUCTION
The Company has centralized all composition and production
functions, other than printing at the present time, at its
headquarters/production facility in Cairo, Georgia. Centralization of
these functions results in production economies, including more
intensive use of equipment and personnel. Modern computer and
communications technology enables information, including local news
and interest, school sports and advertising copy, gathered at the
Company's district office to be transmitted to the centralized
production department for page layout and ad building in both
current editions and planned future editions of the Georgia Chronicle.
By composing all editions in a central production department, the
Company is able also to realize quality assurance. The Company has
made a major commitment to state-of-the-art computer hardware
and publishing software. The Company owns a sixteen work station
computer network and a central file server expandable to fifty user
work stations with a 10-T based ether talk INA system. Installed
technology allows full pagination of all products with simplified
transport by "zip disk" to the printer. Color proofing and scanning
equipment has been installed which eliminates most darkroom
procedures. The Company has installed a computer hard drive array
which has the capacity for storing of years' worth of customer
advertising materials for future use. The Company expects to require
a new file server in the reasonably near future. The Company's
products are currently printed at the plant of United Printing in
Tampa, Florida.
RECOMMENDATION B |
