ORLANDO, Fla., May 12, 2004 (PRIMEZONE) -- TS&B Holdings, Inc. ("Company" or "TS&B") (OTCBB:TSBB), CEO James Jenkins has provided the following open letter to all shareholders and the investment community.
I wish to thank all our shareholders and investors who have stuck with TS&B through this turbulent time, both in the U.S., and all over the world, that are and have supported our efforts. I feel it is essential that the current shareholders and prospective investors are aware that TS&B is executing its strategic business plan to improve shareholder value. TS&B is not just "another" OTCBB company.
The stock market has not been responsive to TSBB. It is the Company's position that due to the trading volume that TSBB has experienced over the past few months the Company has been targeted by "SHORTERS", and that our stock is severely undervalued at current levels. The Company and the management are not selling stock. 1E shares are one method BDCs use to raise investment cash. The Company cannot stop investors of 1E stock from selling when they choose. The Company believes the per-share price should be in the $.03 to $.05 range, the share price was recently at $.05. The Company knows the only way to rid TSBB of the "SHORTERS" is to acquire assets, revenue and show earnings. The Company is taking the steps necessary to fulfill those requirements. The Company also needs to have sustained retail buying. It is our sincere hope that our current shareholders as well as potential investors will see the intrinsic value of TSBB and "BUY" at the current levels, which are severely depressed.
Management forecasts that quarterly operating results will increase significantly due to many factors, including the generation of revenue from the Company's recent acquisitions, investments and consulting fees. The Company has also added significant assets to the Company's balance sheet. The Company has hired an independent appraisal firm, Valuation Strategies, Inc., to value the Company's most recent acquisitions and those appraisals will be incorporated into the third quarter financial statements.
Company Election to a Business Development Company (BDC)
The Company elected to become a Business Development Company under the 1940 Act in January 2004. BDCs were created to provide investment capital for undercapitalized developing companies. The Company's election as a BDC allows it to raise money in the public sector and reinvest it in the private sector. By investing in a BDC shareholders enjoy diversity of markets and the liquidity of a publicly traded stock while participating in the private equity industry. TS&B has targeted the following growing markets; Manufacturing and Distribution; Product Marketing and Sales; Financial Services; Sports & Entertainment and Gaming; and Construction and Management Services.
The business model for TS&B as an investment company (BDC) requires TS&B to lend its management expertise to the existing management of companies acquired or invested in by TSBB to further develop and expand their businesses. The Company makes investments through cash, debt, equity, warrants and hybrid instruments. The Company can raise up to $5M annually through the 1E registrations. Recently the company raised $850K.
TS&B's management has substantial experience in all aspects of investment and business including commercial real estate, finance, sales & marketing, construction, golf course development, gaming and hospitality. TS&B has conducted substantial research and due diligence on a variety of investment opportunities and TS&B believes this initial range of products and investments benefit TS&B shareholders. In addition, there is an opportunity to cross-sell between TS&B portfolio companies and subsidiaries.
The following is a list of our recent accomplishments . . .
In February, the Company closed on the investment in Gulf Coast Records. The business plan has been executed and is moving along extremely well. The recording of the first album started on April 26th and is anticipated to be released in June 2004. We are extremely happy with the success we are having with the team that has been assembled to promote Glenn Cummings in Nashville.
In March, the Company closed on Buehler Earth and Waterworks LLC (BEW). The Company owns a 51% equity interest in the business and will provide management services. BEW is in the site preparation, underground utility and land clearing business in Florida. Mr. Buehler has extensive experience in site preparation, underground utility and land clearing. There is a large market both here in Florida and around the country for this business. Revenues for this year are projected to be approximately $2 million dollars with net income projected to be approximately $400,000. BEW currently has signed contracts of $75,000 and over $1,400,000 pending bids to date. BEW's operation will grow internally as well as externally. BEW recently completed a project at Camellia Point in East Orlando and started the Orlando Flight Training Facility in Kissimmee.
In March, the Company announced the formation of TS&B Gaming & Entertainment Corp., a wholly owned subsidiary created solely for the purpose of positioning the Company in the $600 billion dollar Gaming Industry. In the year 2000, 35.1 Million people played online games. That number is expected to rise to 104.9 million by the year 2005. Online games are growing at a rate of 25% annually. To date the Company has signed a Letter of Intent with a Florida Corporation to jointly develop a world class thoroughbred race track and para-mutual gaming facility in Central Florida. The Company is acting as the investment advisor to raise the necessary funding for the project through the Company's commercial financing contacts and will receive equity. The Company is also in discussions with several on-line gaming companies to secure a license agreement and intends to develop an Online Casino and Website that will include blackjack, roulette, craps, pai gow, poker and slots.
In March, the Company formed TS&B Ventures, Inc., a Florida corporation, to develop a series of investment partnerships that will be instrumental in financing associated transactions for TS&B. The Company is currently exploring the acquisition of a site prep company in Central Florida with revenues of $18M and is in negotiations with a custom millwork & casework manufacturing company in the southeast with revenues of $7M, and combined net income of approximately $2.5M. Management anticipates raising up to $5,000,000 in fresh capital through sub-debt and hybrid securities to fund transactions of this nature. TS&B Ventures is currently in contact with several large hedge funds and is working to structure one of several offerings for acquisitions.
In May, the Company is closing on Cummings Financial. The Company will own a 51% equity interest in the business and will provide management services. Cummings Financial Services is a residential mortgage company started in 1998. The company employs 20 people. In 2003 they processed $26.5M in loans with gross revenues from fees in excess of $850K. CFS has financing relationships with over 450 financial institutions allowing them the ability to guarantee their clients the lowest possible rate. They have a secondary revenue source through their relationship with a Title Company. The Company intends to integrate its commercial mortgage business into Cummings Financial.
Revenue Streams
The Company's first priority is to grow revenue through portfolio investments and to expand the base of such investments. As previously released the company projects approximately $2M in revenue from Buehler Earth and Waterworks and in excess of $1M from Cummings Financial Services. Additional revenue will come from Sports Nation, Gulf Coast Records and TS&B Gaming as well as management fees charged to the portfolio companies.
The Company anticipates meeting its cash needs through revenue from its portfolio acquisitions, financial consulting services, commercial real estate transactions and leveraging its relationships with other companies within its other revenue divisions.
In closing I would again like to thank our stockholders for their continued patience as we navigate the OTCBB landscape. When we began the journey to develop this business plan, our sources of revenue were very limited. We adopted a plan which was very expensive for our stockholders from a viewpoint of dilution but one which included our then present stockholders rather than excluding them. The Company has sold 50,000,000 shares of stock to raise the money for investment in the companies mentioned and to finance the continuation of the business plan as we have presented it. We will continue to raise funds by the best means possible to finance acquisitions and investments that we believe will provide stockholder value. We value your support and will be making a better effort to communicate to stockholders as we make advances in executing our plan.
SAFE HARBOR
The statements made in this release constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, changing economic conditions, interest rates trends, continued acceptance of the Company's products in the marketplace, competitive factors and other risks detailed in the Company's periodic report Filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.