GOUVERNEUR, N.Y., Nov 19, 2007 (BUSINESS WIRE) -- Seaway Valley Capital Corporation (SWVC:seaway vy cap corp com
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12:44pm 11/20/2007
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SWVC 0.01, 0.00, -12.0%) ("Seaway Valley" or the "Company") chairman and chief executive officer, Thomas W. Scozzafava, issued the following update to its shareholders today:
Dear Shareholders:
Since July of 2007, Seaway Valley management has been focused on delivering, as promised, the acquisitions of WiseBuys Stores, Inc. ("WiseBuys") and then Patrick Hackett Hardware Company ("Hacketts"). Now that this has been accomplished, Hacketts management will begin the task of converting WiseBuys stores to Hacketts stores, which should take a number of months. When done, there will be nine Hacketts stores in total with projected combined annual sales of over $30 million and earnings of around $1.5 million to $2.0 million. These nine stores will serve as a platform to rapidly expand the Hacketts brand further. And although Hacketts is considering additional locations in upstate New York, it will be particularly interested in new locations in Vermont, Pennsylvania, Massachusetts, and Connecticut. Hacketts' Phase I goal is to prudently but rapidly expand its presence to 25 to 30 stores with revenues approaching $100 million.
As part of the WiseBuys transaction, the Company also now controls the Seaway Valley Fund, LLC (the "Fund"), which generated net earnings of approximately $2.0 million and $1.2 million in 2006 and 2007, respectively. The Fund, which was formed in July 2003, buys and sells securities of primarily publicly traded companies. We expect to continue the activities of the Fund and may seek to raise additional capital into the Fund through an offering of limited partnership interests in 2008.
Seaway Valley is also currently seeking additional acquisitions and investments whereby it could increase shareholder value as well as diversify its holdings. These acquisitions may be either minority or majority stakes in companies seeking growth capital and that are well positioned for appreciation. Of particular interest to Seaway Valley are software and technology companies, restaurant and hotel groups, and energy companies. We are in initial discussions with several potential acquisition candidates, and we hope to consummate at least one additional investment in the coming months.
Finally, after management builds the underlying intrinsic value of Seaway Valley through its portfolio of cash flowing assets, the Company will aggressively explore value enhancing strategies such as parent debt reduction, share buybacks, and/or dividends. These strategies shall take additional time and will ultimately depend on the success of the underlying portfolio companies.
Thank you for your continued participation, and we look forward to additional activity in the coming months.
About Patrick Hackett Hardware Company
Hacketts, 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. Hacketts, now with nine locations, features brand name clothing for men, women, and children, and a large selection of athletic, casual, and work footwear. Hacketts also carries domestics, home decor, gifts, seasonal merchandise and sporting goods. Hacketts full service hardware department features traditional hardware, tool, plumbing, paint and electrical departments.
About Seaway Valley Capital Corporation
Seaway Valley Capital Corporation makes 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 will consider investment opportunities in a number of different industries, including retail, restaurants, media, business services, and manufacturing, and Seaway will also consider select technology investments.
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