| An SI Board Since February 1997 |
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| Emcee:
roland
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We initially became interested in Harmony Holdings in the summer of 1995 when it was reported that Jaguar Holdings, a private investment partnership run by one of Wall Streets most successful investors (Julian Robertson) had acquired a 7% stake in the company. A spokesman from Jaguar reported that the stake was acquired for investment purposes because of its belief in the company, its business plan and the attractive level of the stock price. In early January of 1996, the Hollywood Stock Review recommended the shares of Harmony because of its belief in the company, its business plan and the attractive level of the stock price.
Harmony Holdings is the only "pure play" publicly traded television commercial producer in the United States. The industry totaled $2.2 billion (domestically) in 1996. Since 1992 sales have risen at an average annual rate of in excess of 30% rising from $18 million to over $60 million last year. After undergoing a restructuring in 1996, the company has returned to profitability as witnessed by the first six months results which were reported on 1/28/96. Earnings were $0.10 per share vs. a loss of $0.30. Sales for the last three quarters were $10,000,000, $13,000,000 and $15,000,000.
If a company can be judged by its' clients, we are in good shape indeed. While Harmony may not be a household name, if you watch any television at all, you have seen their work. Here is a partial client list: McDonalds, Diet Coke, Target, Michelob, Little Ceasars, Mazda, Sears, Pepsi, Pizza Hut, American Express, Budweiser, Huggies, Blockbuster, Nintendo, AT&T, Listerine, Reebok and Taco Bell. Does anyone think these companies may stop advertising anytime soon ?
On a valuation basis, Harmony has a market capitalization of a mere $11,000,000 and has no long term debt. This contrasts with $60 million in sales and $0.10 in earnings for the first six months alone. Harmony is a long term holding that we believe will be in our recommended portfolio for years to come. Our short term target (one year) is $3.00 or 50% higher than current levels. We should be coming out with a full report highlighting all the various operating segments in the near future. Hollywood Stock Review 310-285-1778 Harmony Holdings (Terri ManInnis 213-960-1400 for packet)
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