Newspaper article THE JOURNAL RECORD

Sound Warehouse Makes Offering to Expand, Settle Debt

Newspaper article THE JOURNAL RECORD

Sound Warehouse Makes Offering to Expand, Settle Debt

Article excerpt

Sound Warehouse Inc. of Dallas, an outgrowth of a firm started in Oklahoma City back in 1972 with a $40, 000 loan and developed into a regional chain of 69 stores, announced an initial public offering of 1.45 million common shares Tuesday at $19 a share.

The stock was issued through underwriters led by Goldman Sachs & Co. of New York. All stock was spoken for prior to trading, said Dawn Brulet, syndicate coordinator for E.F. Hutton in Oklahoma City.

The firm is headed by Terry N. Worrell, president and chief executive officer, and co-founder Kay Y. Moran as chairman of the board.

The proceeds of more than $20 million will be used to finance a new store expansion program, to repurchase 2,224,914 shares from a principal stockholder for about $9.1 million to pay off certain bank debt and for general corporate purposes, according to the prospectus.

The company expects to open 12 new stores during fiscal 1986, and at least a comparable number during fiscal 1987, according to the prospectus, at a cost of about $6.5 million each year.

The firm sells prerecorded music, prerecorded video casettes and other home entertainment software products. The company also rents video casettes.

Sound Warehouse Inc. and its subsidiaries list $33 million in assets as of May 31, 1985 in the prospectus. In the fiscal year ended May 31, 1985, the firm had a net income of $6.05 million on revenues of $109.6 million, the prospectus said.

Sound Warehouse Inc. operates seven stores in Oklahoma City, plus one store each in Tulsa and Norman. The firm also owns 60 additional stores in Colorado, Kansas, Louisiana, Missouri, New Mexico, Tennessee, Texas and Utah.

Of the shares, 1.35 million are being sold by the company and 100,000 by a selling stockholder, the prospectus said.

Sound Warehouse Inc. was formed in May to consolidate Bromo Distributors Inc. of Oklahoma City and Bromo Distributors of Dallas Inc.

Bromo Distributors Inc. was incorporated in 1972 by James D. and Kay Y. Moran in Oklahoma City. They borrowed $40,000 shortly after graduating from college and set up a wholesale and retail store at NW 23rd St. and Western Ave., where the "Someplace Else" restaurant is now located.

The Morans, along with Terry and Sharon Worrell, established Bromo Distributors of Dallas Inc. in 1974 for the purpose of expanding Bromo's business into the Dallas market.

By 1982, the chain of Sound Warehouse stores had gross revenues of $58 million and a net income of $1.9 million through 55 stores in nine states plus a new Buttons home video store at 2924 NW 63rd St. …

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