Traditional Industries to Sell Securities to Raise Cash
Traditional Industries, a marketer of photographic services, said it plans to raise $30 million to $40 million by packaging its receivables into securities that will be sold to investors.
Traditional, based in Agoura Hills, sells various photo/video products and services to consumers, who often agree to buy the merchandise with revolving credit provided by the company. Traditional said the service is a “profitable but cash-intensive activity.”
But by packaging its receivables--money owed to Traditional by its customers--into securities, Traditional will be able to raise additional funds for growth “without dilution of shareholders’ equity or an extensive reliance on debt financing,” Traditional Chairman Arland D. Dunn said in a statement.
Traditional, whose executives could not be reached for additional comment, said it hired Bear Stearns & Co. to place the securities with investors.
In its fiscal year that ended June 30, Traditional’s profit more than doubled from the previous year, to $3.1 million, on a 70% increase in sales to $35.8 million.