Jeff,
>>>Where will the cash come from to sustain operations?<<<
That's the big question and the one thing that also bothers me about TSIG, I think that is also the reason we are trading at .40 and not 4.00. That being said Mr. Gordon has put up $5,000,000 of his own money, that's a start.
Not only does TSIG have outstanding obligations to the IRS, but there are several breach of contract suits. Now granted these are still pending but this was the past, what I'm banking on is the future! The future is CCI.
This is an interview with Darrel Piercy CEO of Compact Connection, if what he say's is true than I think we all know where the CASH is going to come from.
(OTCBB:TSIG)
On March 12th TeleServices International Group announced that it had acquired Compact Connection, Inc., a leading wholesaler of compact discs and cassette tapes, subject to an audit of financial statements and due diligence review. Compact Connection has reported that its 1997 revenues were approximately $14 million with $1.4 million in net profit and the Company projects $35 million in revenues this year. The following interview is with Darrell Piercy, chief executive officer of Compact Connections, who explains exactly how his Company plans to attain its goals.
Please note that TeleServices has been selected as a "featured company" for the nationally broadcast television program entitled "Emerging Public Companies - The Story Behind the Symbol", which will be carried to 65 percent of the top 215 Designated Market Areas in the United States. It is scheduled to air during the second quarter of this year.
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O&A by Andrew Schamisso, Vice President, VistaOuest, Inc.
VistaQuest Please tell us about your company.
Darrell Piercy We started selling musical compact discs and cassette tapes at wholesale prices in 1993. Today, we have over 200,000 titles, which covers every category of music including new releases. The niche market that we have carved our for ourselves revolves around the Compact Connection Music Card, which is what we sell to consumers enabling them to purchase CDs at wholesale prices.
VistaQuest What does the card entitle customers to?
Darrell Piercy The card typically sells for $10 and entitles consumers to buy up to 50 CDs at $9.99 per CD, about a $5 savings, for a total savings of $250. Currently, they are being marketed to over 200 dedicated distributors that we have across the country. The distributors then sell the card direct primarily through fundraisers, which raised millions of dollars last year for various school groups, colleges, etc.
VistaQuest To what do you attribute your impressive growth in revenues?
Darrell Piercy Well, first off, we don't lose customers. The same customers I had in 1993, I have today because they are drawn to the card.
VistaQuest What is your retention rate?
Darrell Piercy It's very close to 90%.
VistaQuest How many cardholders do you currently have?
Darrell Piercy We currently have 1.5 million and get 2000-3000 new customers every day.
VistaQuest Do you have any inventory?
Darrell Piercy Only a small amount. The majority of our shipping is done through our suppliers and they get the shipping and handling money for a little profit and handle all fulfillment.
VistaQuest You've already had impressive growth and you intend to more than double from here in one year? How?
Darrell Piercy Our new parent, TeleServices, would allow us to market directly because we can now handle the call volume. So, very soon, you are going to see national television and print campaigns offering our cards with TeleServices 800 telephone number and, if you're a music lover, I am confident that you'll love the value.
VistaQuest In what markets will you roll out the TV advertising?
Darrell Piercy Our commercials will roll on MTV, VH1 and various cable outlets.
VistaQuest What is your 1998 and 1999 advertising budget?
Darrell Piercy Our budget is for $2 million in 1998 and $5 million in 1999.
VistaQuest Are there any unique challenges facing TeleServices' call center with regard to this new market?
Darrell Piercy There are only exciting ones. Figuring out how best to handle 10,000 calls per hour would be a good problem to have.
VistaQuest In the acquisition release, there was mention of a dedicated website. Please describe.
Darrell Piercy We are currently under construction and should be up and running to coincide with our advertising blitz.
It is going to be a phenomenal site where consumers will be allowed to buy their first CD for $9.99 which is about $4 less than I've seen on the net and, if they want to continue to get CD's at that price, they must purchase the card directly from the internet site as well.
VistaQuest In this crowded, tight-margined internet-music market, how are you going to maintain savings to the consumer without affecting your bottom line?
Darrell Piercy Everything revolves around the card. We have a $10 item from which were generating revenues that costs us little and saves consumers close to $300. Bottom line is our price will be $3 to $4 cheaper than the competition. Plus, I'm not going to be selling CD's direct unless they purchase the card. Therefore, the margins that other companies work off are affected by the fact that they do their own shipping and storage. Other companies have overhead that we don't have.
VistaQuest What is the average dollar sale per customer?
Darrell Piercy $20 per customer. However, if you include the average of all 50 cd purchases, it's over $500.
VistaQuest Will you maintain your 10% bottom line?
Darrell Piercy It will probably be a little higher this year. Through our distributors, we only receive about $2 per card. By selling direct, we're getting $10. Obviously, there are some new things we have to pay out of that, but the net profit on the cards will probably be $6-$7.
VistaQuest One million new buyers equals $20 million in revenues, $7 million to the bottom line. And you believe you can sign up 5 million new customers and generate $100 million in revenues per year - is this correct?
Darrell Piercy Yes, We plan to be generating revenues at the rate of $100 million per year within 18 months.
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For more information on TeleServices International Group Inc., please contact:
Andrew Schamisso,
Vice President,
VistaQuest Financial Public Relations,
at 212.551.7874 or
fax 212.551.7837.
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