New Visual Entertainment, Inc.- Letter to the Shareholders
Mr. Timothy M. Kuglin
Ladies and Gentlemen;
Hello, my name is Timothy Michael Kuglin; Tim. For the past twenty years I have owned and operated a television broadcasting company. In 1986, the company was incorporated in California as STAR Satellite Television And Radio, Inc. Over the course of the years, I have produced or co-produced and transmitted more than 5,000 live, televised events. You will find a partial list of clients and projects on the STAR website at www.star-corp.com.
The past couple of months have been a very interesting and enjoyable
period in my life. I have had the pleasure of meeting your President and CEO, Mr. Ray Willenberg, Jr. Our relationship began as a personal
endeavor that immediately evolved into a solid friendship, as we each
shared our personal and professional goals. Through the course of these discussions, we realized that our businesses and our respective
management experience could potentially be of great benefit to one
another.
I am now very pleased to say that we have agreed to merge our two
companies, STAR and NVE, to form a "mini" entertainment conglomerate
production and communications company. The surviving New Visual
Entertainment, Inc., will provide a wide variety of products and
services, as you will soon read in the revised corporate mission
statement.
We all realize that as shareholders, your main concern is our
performance, and how this merger will effect the growth of the company, and consequently, the growth of your investments. For myself and the broadcast services division of the company, these questions can be addressed as much on a personal level as on a fiscal basis.
For the past six and a half years, my time and focus has been more with my family, and less with my company. I have a beautiful son who is the apple of my eye, but unfortunately, is also stricken with type 1 diabetes. It has been my main concern, therefore, to act as a
responsible parent and let the business run its course. In so doing, I
have still managed to maintain a comfortable lifestyle for myself and my son. At this time, however, my son is starting school, first grade, and is now better able to handle some of his own medical needs. This
transition, I am happy to say, now allows me to re-emerge into the
televised entertainment industry with a new vigor.
Results of operations at STAR over the past six years have generated
gross revenues averaging approximately $650,000 per year. Our primary
business model is such that the company provides a service by
out-sourcing many of the tasks and integrating them so as to develop a
complete televised production. Our pre-tax gross margins on these
services average in the 65% of sales range. We will close out 1997 with revenues of $557,000.
I am extremely encouraged, on the other hand, by the fact that my
renewed enthusiasm and excitement of a new career challenge, has
resulted in first month's gross revenues for 1998 of just under the year end total for 1997, while our pre-tax gross margin is averaging roughly 50%. Also, clients I have not spoken with for many years have expressed their sincere delight in my return, and have indicated their support by whatever means possible. On January 22nd, I received a verbal commitment from one client to co-produce an annual show, to begin in February of next year, with an estimated budget of approximately one million dollars.
In terms of how the merger will affect the infrastructure of the
company, Ray Willenberg, Jr. and I have developed a sound management
team for the growth of the company and marketing of its products. Ray
will remain President and CEO and I will step in as Executive Producer. As such, it will be my personal responsibility to manage all production activities for the film and television divisions of the company.
The integration of our two companies' products, services, and
experience, combined with a solid revenue history and restored
commitment within the broadcast services division, we feel will provide a solid, financially stable foundation on which we will build for future growth. This stability will now afford management the time, money, and experience to pursue and market 3D and 2D film productions, as well as, television productions.
I would like to express a sincere thank you for your time in reading
this letter, as well as, your patience and continued support.
ÿ
Sincerely,
Timothy M. Kuglin
President
STAR Satellite Television and Radio |
