Spa Faucet presentation will spotlight 100% revenues, 9x earnings growth at 2nd Tuesday IRI/NYSSA Forum Jan. 14

Business Wire, Jan 8, 1997

NEW YORK and CHATSWORTH, Calif.--(BUSINESS WIRE)--Jan. 8, 1996--

23-Year-Old Company, Public Only Since March 1996, Applies for AMEX

A quiet family company specializing in decorative faucet supplies for 23 years but which, only after less than a year as a public company is already posting numbers equal to the high-flying high-techs, will be thrust into the Wall Street spotlight Tuesday, January 14.

Spa Faucet (DRIP) will be the sole corporate presenter at the `2nd Tuesday' Small Cap Forum co-sponsored by the Investors Research Institute (IRI) and the New York Society of Security Analysts (NYSSA) at the World Trade Center. It will be telecast live at 12:15 p.m. on NBC PFN throughout the financial community.

The speaker will be Leonardo Sudman, president and CEO, the former vice president - sales and marketing, who engineered a management buyout of the company in 1994 and turned it into a public company in March, 1996.

Until 1994 the company primarily manufactured and regionally-distributed inexpensive bath and kitchen faucets used mostly as `loss-leaders' by hardware and plumbing supply retailers. Under Sudman's direction, however, the company's revenues have soared each year, from $2.8m in 1993 to $6.3m in 1995 and $10.5m in 1996. Spa Faucet expects to generate up to $30m in sales for its fiscal year ending May 31, 1997, and believes its track record deserves further recognition.

Its year-over-year earnings have experienced similar growth, from a loss of 4cps in 1995 to a gain of 2cps in 1996, and has already earned 4cps in 1997, and anticipates earnings of 18cps in 1997, 42cps in 1998 and 52cps in 1999.

The key to this transformation has been a shift in business strategy, focusing on higher quality, higher profit-margin `niche items', according to Sudman, and initiating an aggressive campaign to expand sales and distribution to nationwide hardware retailers and developing new markets such as commercial builders and supply wholesalers. The company now, for instance, manufactures and distributes 126 different kitchen and bath items, and at prices from $29.95 to $69.95, a price range that accounts for 30% of all purchases in the multi-billion dollar market, it has become `very competitive.' It believes it has plenty of room to grow, as it so far has achieved its growth while penetrating the shelves of only half, albeit the top half, of the six national hardware retailers. Current customers include Home Depot, Lowes, Payless Cashways and Home Base.

Although it enjoys an $8m purchase order financing agreement, a $2m inventory and accounts receivable credit line and a $1.5m letter of credit facility, it has utilized only the letter of credit facility, having had sufficient cash flow to finance its current capital requirements. Its shareholders' equity has increased to $1.5m as of Aug. 31, 1996, up from $926,735 on May 31, 1996.

The company has recently announced its own stock buy back of up to one million shares of its common stock, approximately 10% of its outstanding shares, and has submitted an application for a listing on the American Stock Exchange.

The Forum is designed as a networking luncheon for analysts, private investors, brokers, traders, corporate executives and investor relations executives.

The IRI/NYSSA forums, which have become the premier platform for the introduction of elite small cap companies to Wall Street, are held at 11:45 a.m. on the second Tuesday of each month as a luncheon program at NYSSA headquarters on the 44th floor. For reservations, call 212-912-9249. IRI and NYSSA are located on the World Wide Web at http://www.netcapital.com and http://www.nyssa.com .

Information about Spa Faucet (DRIP) can be found on the World Wide Web at http://www.spafaucet.com .

CONTACT: Gary Cella, 203/869-7571 (cdpgc@aol.com)

or

Leonardo Sudman, 800/232-7363 (faucetspa@aol.com)