TRANSCRIPT OF CONFERENCE CALL:
Chronicle Communications, Inc.
Conference Call Notes
CONFERENCE CALL April 5, 1999 Today is Chronicle's third Anniversary. On April 5, 1996 Chronicle
incorporated in the state of Georgia. Operations actually began in February of that year with the opening of
the Crisp Area Penny Saver on February 15, 1996. Our first fiscal year ended September 30, 1996 with
revenues of $337,384. Our second year ended September 30, 1997 revenues of $645,051. Revenues for
the period ended September 30, 1998 were $1,767,985. Each of these years ended with a net loss.
However Chronicle for the first time ended its first fiscal quarter with a net profit. The period ended
December 31, 1998 Chronicle realized a profit of $8,633 on revenues of $454,020.00. Un-audited revenues
for the 2nd quarter or the period ended March 31, 1999 were $572,262.00 or a gain of $118,242 -- 26%
over Chronicle's 1st quarter 1999 results. The quarter ended March 31, 1999, represents Chronicle's
commercial web offset business, it's Bartow Communications subsidiary in Maryland and it's RKN
subsidiary in Boca Raton. Both Bartow and RKN were acquisitions that Chronicle closed on January 4,
1999. The purpose of this call is to update each of you on operating results and to discuss where each
proposed acquisition stands. Other topics such as funding, audits will be address as well. As of March 31,
1999, Chronicle had a total of 6,560,952 total issued and outstanding with 3,899,904 registered for sale into
the public market and 3,122,477 currently deposited with brokers and DTC eligible. At March 30, 1999 for
the preceding 90-trading days Chronicle's average daily trading volume was 73,124 shares with an average
closing price of $ .657 each.
Pending Acquisitions
Florida Machine and Welding and Chronicle signed a definitive agreement on March 24, 1999. Florida
Machine will add an additional $450,000.00 in revenue in Chronicle's third quarter. This revenue projection
is without any capital infusion on Chronicle's behalf. The acquisition will be 100% complete upon the owners
of Chronicle and the old owners of Florida Machine swapping stock. We are going to that on Friday April
16th. Chronicle is currently operating the company and will get to book all current revenues and profits. With
modest capital infusion from Chronicle Florida Machine and Welding will hit it's projected 12-month
revenues of $5,000,000.00. Chronicle is expected to fund Florida Machine and Welding 500,000.00 by the
end of April 1999. There seems to be talk on the internet concerning a sister company owned by the same
people that sold us Florida Machine & Welding, I want to clear up this issue. It is true that another company
called Florida Equipment and Service is owned by the person who sold us Florida Machine & Welding. It is
also very possible that Chronicle will become the owner of this company as well. Florida Equipment is
currently in chapter 11 reorganization. Chronicle's management is currently in talks with Sr. Creditors to
acquire their positions in an effort to become the senior creditor. If successful, Chronicle will realize an
additional $4,000,000 in net assets and revenue of $5,000,000 per year with out having any additional stock
outlay and the amount of cash needed to secure all debt and get Florida Equipment out of reorganization is
under $3.5 million. Chronicle believes this will be accomplished by the end of April. If successful in acquiring
Florida Equipment and Service Chronicle will have a dynamic company that is drastically undervalued and
will represent huge profit potential over the next 12-months.
Frontline Consulting Services and Chronicle are expected to sign a definitive agreement by Friday of this
week. This acquisition represents months worth of work on behalf of the management of Frontline and
Chronicle and is a combination of two companies merging into one and then being acquired by Chronicle.
Once signed, Frontline, will operate as a wholly owned subsidiary of Chronicle. Some of the people I have
talked with have side stepped this acquisition or not given it the attention it deserves. This is without
question Chronicle's most exciting acquisition to date and represents millions of dollars in net profit over the
next two years. Frontline is an "IBM Partner" and shortly after being acquired by Chronicle will announce a
huge contract with a foreign government to head up their Y2K compliance issues as well as ongoing
computer software consulting services.
Seminole Scrap Corporation is still pending Chronicle's due diligence. On March 19, 1999, I actually
withdrew the letter of intent to acquire 100% of the stock in Seminole Scrap Corp. Don't read more into this
than what I have said. I only withdrew the letter of intent to acquire the stock not the assets of the business. In
the early review of the Corporation "Seminole Scrap" it was determined that certain transactions by the
corporation were questioned by Chronicle and were not answered to Chronicle's satisfaction. It was
determined by Chronicle that potential liability could be passed to Chronicle if we actually acquired this
corporation. Therefore, Chronicle is currently attacking this via a straight asset purchase. Since we were not
acquiring Seminole Scrap under "GAAP" pooling rules, we do not believe the numbers will change that we
released in our 8K. Chronicle is expected to form a newco that will house the assets of Seminole Scrap
Corporation.
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Company Owned Products
Market Maker Plus is moving forward. We have delayed the start of this magazine so that an all inclusive,
complimentary web site can be created. This internet web site will feature listing information on every
company planning to go public plus other firms searching for money. Profiles of some of the firms will include
audio text and information will be updated daily. This site will contain more data on companies searching for
investors than any other web-sites. The magazine will reach every stock brokerage office with news and
features on publicly traded emerging growth companies.
Financing
Chronicle has been in talks with several qualified lenders and is about to announce a closing of a debt deal
with two of them. CHRONICLE IS NOT PLANNING TO ENTER INTO A EQUITY DEAL WITH ANY LENDER.
Each of our acquisitions need funding and we are confident about our ability of securing that funding. One
three million dollar deal has been approved and another five million dollar deal is in the final stages. When
you consider that Post acquisition activity, Chronicle's total capital needs will be under five million, we are
going to be very well capitalized.
Audits
A complete update of Chronicle's records has been started by it's audit firm of Pender Newkirk CPA's of
Tampa Florida. Chronicle expects to update the SEC within the next 45-days on forms 10K, 10Q and all
necessary 8K's of recent activity.
Corporation Video
Chronicle has engaged a company to produce and shoot a video that will be made available to everyone
who requests it. The video will also be available on Chronicle's web-site to download at your convenience.
We will put out a press release once the video is complete. |
