GOUVERNEUR, N.Y.--(BUSINESS WIRE)----
Seaway Valley Capital Corporation (OTCBB:SWVC) ("Seaway Valley")
chairman and chief executive officer, Thomas W. Scozzafava, issued the
following update to its shareholders today:
Dear Shareholders:
I am pleased to give the following update of the Company. To first
review, Seaway Valley has accomplished the following major milestones:
-- On July 1, 2007, Seaway Capital, Inc. acquired a controlling
stake in the Company, which immediately began managing the
Seaway Valley Fund, LLC. As part of the acquisition of the
Company, Seaway agreed to assume certain legacy debt
obligations of "GS Carbon Corporation," which are now fully
satisfied.
-- In October 2007, Seaway Valley acquired one hundred percent of
WiseBuys Stores, Inc. in a stock merger transaction with a
total enterprise value of approximately $6.5 million. The
WiseBuys acquisition brought into Seaway Valley five retail
locations totaling 230,000 square feet of retail space and key
industry relationships with Payless ShoeSource, RadioShack,
and KB Toys.
-- In November 2007, Seaway Valley acquired one hundred percent
of Patrick Hackett Hardware Company in a transaction valued at
$10.2 million and subsequently merged the WiseBuys operation
into Hackett's, creating a nine store chain with assets of
upwards of $18 million and pro forma revenues of $30-$35
million. Since acquiring Hackett's, Seaway Valley has reduced
Hackett's debt by approximately $3.9 million.
-- In March 2008, Seaway Valley assisted Hackett's in securing a
$5 million inventory based line of credit from Wells Fargo.
-- In April 2008, Seaway merged North Country Hospitality, Inc.
into a wholly owned subsidiary in an all stock transaction
valued at $11.7 million, bringing to Seaway Valley additional
assets of approximately $13 million and pro forma revenues of
approximately $6 million.
Seaway Valley has, in fairly short order, acquired current assets
totaling approximately $30 million and has current projected pro forma
annualized revenues of $36 - $40 million based on North Country
projected revenues and Hackett's annualized revenues once all former
WiseBuys stores are converted and operate for a full year. Below is a
comparison of select reported financial data of the Company as of
December 31, 2007 and June 30, 2007, prior to current management
involvement:
-0-
*T
Reported through: December 31, 2007 June 30, 2007
------------------- -----------------
Revenues & Securities Sales $8,088,303 $18,900
Net Income (loss) $(1,779,921) (1) $(9,442,204)
Assets $18,749,569 $3,077,859
Total Liabilities $15,669,547 $9,861,568
Shares Outstanding 997,941,917 (2) 722,446,617 (3)
(1) Adjusted to exclude discontinued operations and pre-July 1, 2007
stock compensation.
(2) As of March 31, 2008.
(3) As of July 2, 2007.
*T
As management continues the task of integrating its two core
holdings into the Company and, to a certain extent, into each other,
it will also continue to focus on driving the companies' respective
growth.
Hackett's
While Hackett's primary focus is integrating and converting the
WiseBuys stores, management shall aggressively seek select
opportunities for new store development. Hackett's is targeting new
locations with demographics or shopping patterns that are consistent
with Hackett's premium branded products and excellent customer
service. Hackett's flexible store footprints of as small as 15,000
square feet and as much as 55,000 square feet allow the company to
consider a much larger pool of potential new sites than the typical
retailer. Management expects to secure at least one and possibly two
new locations this year. Management will also continue to pursue
acquisitions of select retailers in and around existing Hackett's
stores if management feels the target's operations can be seamlessly
integrated into those of Hackett's. Hackett's recently acquired the
Hamilton, NY RadioShack, is in talks with two other RadioShack owners,
and is in discussions with at least three other various retailers for
possible acquisition or investment. As stated by management
previously, Hackett's initial targeted growth milestone is twenty five
to thirty stores with aggregate revenues of up to $100 million.
North Country Hospitality, Inc.
North Country has a number of fronts on which to drive the
company's revenue growth and profitability. Alteri's Bakery currently
has excess production capacity that would enable it to roughly double
its current sales. Securing new commercial contracts to drive
production while also promoting its higher margin specialty products
will be the focus of management over the coming months. As the owner
of five Jreck Subs franchises, North Country shall seek to develop or
acquire regionally clustered locations of four or five outlets per
group where annual sales potential is between $500,000 and $1,000,000
per store. Management is currently in discussions with various parties
for potential development of its most popular proprietary restaurant
concepts, Goodfello's Brick Oven Pizza and Wine Bar and The 1812
Brewpub. The concepts can be co-located or rolled out separately,
depending on the market of the target area. Finally, marketing the
beer portfolio of the Sackets Harbor Brewing Company represents a
significant growth opportunity. As the products approach their market
potential locally, the company will now begin to aggressively promote
the beer brands beyond the region and in select markets nationally.
North Country originally targeted revenue growth to $30 million on an
asset base of $40 million by 2010.
Additional Acquisitions
Seaway Valley will also continue to evaluate other acquisitions
and investments in industries outside the retail, hospitality, and
consumer products industry.
Shareholder Value
Management is concerned with and focused on increasing shareholder
value. The first and requisite step to achieve increased shareholder
value at Seaway Valley is to first acquire or internally develop
assets that have or that can create value faster than and beyond the
costs associated with their acquisition, development, and growth.
Management believes Seaway Valley's first two platform acquisitions
have provided just that. As the holdings generate a history of
performance, Seaway Valley can utilize lower cost sources of capital
versus those used by Seaway Valley (and its predecessors) to date. The
successful closing of the Wells Fargo line of credit is one example of
that. And as these core holdings mature and the capital generated is
in excess of what is needed to sustain growth, that excess capital can
be used for such activities as convertible debenture repayments,
preferred stock repayments, and/or common stock re-purchases. Once the
underlying business conditions permit that, management is committed to
such a plan.
About Seaway Valley Capital Corporation
Seaway Valley Capital Corporation (www.seawaycapital.com) was
formed in 2002 to make equity, equity-related, and debt investments in
companies that require expansion capital and in companies pursuing
acquisition strategies. Seaway also seeks investments in leveraged
buyouts and restructurings. Seaway Valley will consider investment
opportunities in a number of different industries including retail,
restaurants, media, business services, and manufacturing. Seaway
Valley will also consider select technology investments.
About Patrick Hackett Hardware Company
Hackett's (www.hackettsonline.com), one of the nation's oldest
retailers with roots dating back to 1830, is a full line department
store specializing in name brand merchandise and full service
hardware. Hackett's, now with nine locations, features brand name
clothing for men, women, and children, and a large selection of brand
name athletic, casual, and work footwear. Hackett's also carries
domestics, home decor, gifts, seasonal merchandise and sporting goods.
Hackett's full service True Value hardware department features
traditional hardware, tool, plumbing, paint and electrical
departments. Hackett's also owns and operates RadioShack stores at
numerous locations and at certain stores leases space to Payless
ShoeSource.
About North Country Hospitality, Inc.
North Country (www.northcountryhospitality.com) was formed to
develop and operate lodging, restaurant, and recreational venues in
and around northern New York. In addition, the company seeks to
acquire or develop strategic consumer products that complement its
core hospitality businesses and that can be positioned for growth
outside the region. The company's current holdings include: Sackets
Harbor Brewing Company, which produces the award winning "1812 Amber
Ale" and "Railroad Red Ale"; the Sackets Harbor Brew Pub, which is an
operating "Brew Pub" that produces its own line specialty beers on
site while also offering fine dining; Goodfello's Brick Oven Pizza and
Wine Bar, which specializes in excellent-yet-affordable Italian food;
the Sackets Cantina Sackets, which offers a traditional Mexican menu;
(v) five Jreck Subs Franchises (www.jrecksubs.com); and (vi) Alteri's
Bakery (www.alteribakery.com), which has served the north country
region with the finest Italian breads and specialty pastry items, such
as cakes, cookies, muffins, bagels, and specialty gift baskets that
can be found at restaurants, grocery stores, schools, and its own
store.
Safe Harbor Statement
This press release contains statements that may constitute
"forward-looking statements" within the meaning of the Securities Act
of 1933 and the Securities Exchange Act of 1934, as amended by the
Private Securities Litigation Reform Act of 1995. Those statements
include statements regarding the intent, belief or current
expectations of the Company, and members of their management as well
as the assumptions on which such statements are based. Prospective
investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from
those contemplated by such forward-looking statements. Important
factors currently known to management that could cause actual results
to differ materially from those in forward-statements include
fluctuation of operating results, the ability to compete successfully
and the ability to complete before-mentioned transactions. The company
undertakes no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of
unanticipated events or changes to future operating results.
Investor Relations
CEOcast, Inc.
Gary Nash, 212-732-4300
or
Seaway Valley Capital Corporation
Email: contact@seawaycapital.com
Web: www.seawaycapital.com
Keyword: United States North America Massachusetts New York
Industry Keyword: Travel Lodging Other Travel Product/Service Retail Specialty O
her Retail
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