KingThomason Group, Inc. to Acquire Majority Interest in High Quality Vinyl Record Producer and Distributor

KingThomason Group, Inc. to Acquire Majority Interest in High Quality Vinyl Record Producer and Distributor

REDONDO BEACH, Calif., July 28 /PRNewswire-FirstCall/ -- KingThomason Group, Inc. (BULLETIN BOARD: KGTH) today reported that it has signed a Letter of Intent to acquire 51% of privately held Cisco Music, Inc., an established producer and international distributor of high quality vinyl records and CDs, at a to be determined final purchase price, with iCapital Finance as the investment Banker, according to an announcement by Thomas E. "Tim" King, President and Chief Executive Officer.

Commenting on the proposed Cisco Music acquisition, King said, "Cisco Music, with its unique manufacturing technology and highly experienced executive staff and marketing organization, is ideally positioned to capitalize on the burgeoning U.S. demand for high end vinyl records. There has been a huge increase in domestic vinyl records sales in the last few years that has been fueled not only by the increased number of audiophiles that demand the superior sound quality of vinyl records not found on CDs but also rapidly growing teenage and early 20's audiences that are buying vinyl records at the fastest rate in a decade."

King noted that KingThomason will issue a Promissory Note to Cisco Music in an amount representing 51% of the mutually agreed upon valuation of the Company at closing.

Cisco Music, headquartered in Chatsworth, California, was founded by David Fonn in 1985. Historically, Cisco Music has concentrated its marketing efforts on the export market, principally Japan, producing net sales for the fiscal year ended June 30, 2005 of approximately $6,600,000.

In early 2005 Cisco Music completed an exhaustive market research project and concluded that the exploding domestic demand for high quality vinyl records represented a unique and potentially highly lucrative opportunity for the Company. Industry wide sales for the 12 months ended March 31, 2005 were up 64% from the preceding 12 month period and 87% for the three months ended June 30, 2005. As a result, during Fiscal 2006 the Company is placing increasing marketing emphasis on domestic vinyl record sales and believes that they will exceed $7,000,000 for the year to end June 30, 2006. Combined export and domestic sales are anticipated to exceed $15,000,000 for fiscal 2006 with a combined pre-tax profit margin of approximately 30 percent, according to the Company.

Cisco Music will function under an Operating Agreement that will allow them to continue managing the Company and retain creative control. KingThomason will lend its expertise in guiding the Company through its expansion and growth.

Statements in this press release that are not strictly historical are "forward-looking" statements within the meaning of the Safe Harbor provisions of the federal securities laws. Forward-looking statements involve risks and uncertainties, including, but not limited to, continued acceptance of the Company's products and services in the marketplace, regulatory and competitive factors, new products and technological changes, the Company's dependence upon third-party suppliers, and other risks detailed from time to time in the Company's Form 10-K and other regularly filed reports.

Source: KingThomason Group, Inc.

CONTACT: Thomas E. "Tim" King of KingThomason Group, Inc., +1-877-540-5484

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