Putting Good People in Good Cars

Dear Reader,

The first essential element in any successful public company performance is innovation or, metaphorically speaking, the construction of the better mousetrap. And while the proverbial mousetrap conjures an image of a tangible product improvement, in many instances it also can be the synthesis of innovation, creativity, and management that better defines the prevailing new invention or concept.

Today's featured company, Manchester Inc. (OTCBB: MNCS) employs the better mousetrap concept of  "Buy-Here/Pay-Here" to sell and finance used vehicles to credit impaired borrowers with a one-stop-shop approach.  Other successful companies that have employed similar concepts include America's Car-Mart Inc. (NASDAQ: CRMT), Autonation Inc. (NYSE:AN), and Carmax Inc. (NYSE:KMX).  Please take a few moments to read about this exciting company.  
 

Manchester Inc. (OTCBB: MNCS)

Manchester, Inc. (OTCBB: MNCS), headquartered in Dallas, Texas, seeks to create the preeminent company in the "Buy-Here/Pay Here" auto business; selling and financing used vehicles to credit impaired borrowers. The Company intends to sell acquired and newly generated receivable portfolios through a securitization process and deploy the proceeds to payoff loans utilized to acquire such receivables. On October 4, 2006, Manchester acquired Nice Cars, Inc. and Nice Cars Acceptance Corp.  Nice Cars, Inc., headquartered in Chattanooga, Tennessee, operates six automotive sales lots that focus exclusively on the Buy-Here/Pay-Here segment of the used car market. 

"Buy-Here/Pay Here"dealerships sell and finance used cars to individuals with limited credit histories or past credit problems. Nice Cars Acceptance is a financial services affiliate of Nice Cars, Inc. that purchases the retail sales contracts of Nice Cars, Inc. and assumes all rights and responsibilities with respect to sales contracts with varying terms, generally ranging from 36- 60 months.
 

Under the banner of, "We Help. We Listen. We Understand. We Care" MNCS knows that people have difficulties or problems at various stages in their lives and often these difficulties can create financial problems.  MNCS helps individuals with troubled credit or no established credit to finance a quality car and simultaneously re-establish credit.
 

Industry

The “Buy-Here Pay-Here” auto business is a $50 billion Industry that sells pre-owned cars to sub-prime buyers at high margins and high rates These dealers typically utilize banks, insurance companies, credit unions, or other regulated lenders to provide revolving credit.  Most of the time the lenders are regulated and local in nature with a focus on net worth often outside of the portfolio. After satisfying the lenders, the dealers may often experience financing restraints emanating from the regulators. Consequently, many dealers spend more time holding financing together than on building and managing the operating business. Those that are able to obtain expansion funding may do so at their peril, with lenders imposing stricter criteria that undermines liquidity and uses existing portfolio equity to subsidize additional growth. The Manchester model addresses these issues, welcomes expansion, eliminates personal guarantees, provides liquidity, and moves financing from Main Street to Wall Street.

The current disparity between the availability, magnitude, and terms of financing to some “Buy-Here Pay-Here” auto dealers versus others presents Manchester with a familiar opportunity – an opportunity to become a dominant player in a market due to a particular expertise and access to funding that competitors do not have. Such opportunity existed in the past with the real estate market during the S&L crisis when cash purchases were required in asset sales through the Resolution Trust. Local businessmen were mainly brokers for deals they identified because conventional regulated funding was not available. Similar dynamics and opportunity are now present in this segment of the pre-owned car business.
 

Marketing MNCS Car Lots

Under the name "Nice Cars," the lots retain a high level of respect in their respective communities based on a history of top-level customer service, dependable vehicles, and a caring management and finance department. This "Word of Mouth" reputation has provided repeat business to each of the lots and a community-wide admiration for "fair dealing" and "reliable" business practices.

The MNCS car lots are very successful and well traveled by prospective buyers. Two of the main attractions are affordability and the in-house financing available that provides the consumer with an alternative to obtaining loans from banks and finance companies. The MNCS car lots also carry an inventory that can range up to a hundred vehicles on any particular lot and the sophisticated ability to cross-reference a customers need by different lots being able to directly and immediately communicate with one another. 
 

Investment Considerations

The target customers are good people with bad credit and those in the growing non-bank sector (those who can not even get a bank to open an account for them and must deal in cash). If the economy dips, this population only increases. It can be wives of deadbeats whose credit was destroyed by a husband and they are trying to rebuild on their own – it is difficult for anyone to rebuild without a vehicle.

Unlike new cars, these cars do not depreciate during any time of a repo. For  example if a Toyota Camry with 50,000 miles sells for $12,000, then if it is repo’ed in six months (after six months of payments by the way) and now has 55,000 miles it will still be sold for $12,000. In this way, more money can be made on repo vehicles than those that go to term.

The credit facility provides for leverage of 80% of receivables in the case of acquisitions and 60% in the case of new receivables generated after acquisition. This allows for more cash to be generated to pay off a target company’s existing lender and generate additional cash to be used as the cash component in paying the Seller. The acquired receivables are subsequently sold and the debt is paid off but Manchester Inc. still owns the acquired company with no debt and that company still generates new receivables every day. Since there will only be 60% debt against those receivables, the profit is tremendous when they are sold.

The terms of the debt are high but not for leverage buyout money that needs to move fast. The continuous sale of receivables to pay off debt limits the significance of high priced debt. Also, there are 100% of receivables paying 20% or more paying down a debt that is between 60% and 80% of the face amount at 17%. Furthermore fees are only one time, there is no prepayment penalty, and it is revolving so each time the loan is paid off it can be borrowed again and again and again with no fees to make further acquisitions, Consequently, the $300 million credit can be used to acquire several billion dollars in receivables and the underlying companies. It is very conceivable to grow in one year to a size where new receivables are being generated at a rate of more than $1 billion per year at 60% leverage and being sold at face for a gain of $400 million.

The receivables are installment contracts and the revenues are only recognized over the term of the contract and not in one year. The expenses associated with those contracts such as commission, lot expenses, and salaries are all current expenses, so as long as these companies continue to grow most if not all income taxes get deferred. The money borrowed against receivables is a loan and not income. At the time of sale a taxable event will take place but there is tremendous cash generated to pay the associated taxes.
 

Additionally, companies that sell their business to Manchester have this value proposition to consider:

•  Sellers escape personal guarantees
•  Have greater liquidity for their investment
•  Ability to compete with drive-time type products
•  Ability to expand production from existing facilities
•  Participation in growth through stock ownership with no direct exposure to securities matters
•  Corporate management and financing matters are no longer an operating issue
•  Ability to utilize higher margin, lower payment products resulting from a securitized product
•  Favorable capital gains treatment on the sale of their businesses
•  Continued operational security through employment agreements

Car Sales

The lot that opened in Marietta, Georgia on August 26, 2006 was opened by the Nice Cars, Inc. subsidiary of Manchester and took Nice Cars, Inc. from five lots to six lots 

The Marietta lot sold 190 cars from the opening through September and that lot alone has sold more than 200 cars through October 15

The total number of cars sold company wide in October was 393 and the total number of cars sold company wide for 2006 through October 15 is 5,970

a

Recent News From Manchester Inc.

Press Release Source: Manchester, Inc.
Thursday October 19, 4:35 pm ET 

DALLAS, Oct. 19 /PRNewswire-FirstCall/ -- Manchester, Inc. (OTC Bulletin Board: MNCS - News) is pleased to announce that its corporate and securities counsel in New York is in the process of preparing an application for the company's stock to be listed and traded on the American Stock Exchange. The Company expects the application to be submitted shortly. 

To read the complete release and disclaimer, Click Here.

Press Release Source: Manchester, Inc.
Tuesday October 24, 9:35 am ET

DALLAS, Oct. 24 /PRNewswire-FirstCall/ -- Manchester, Inc. (OTC Bulletin Board: MNCS.OB - News) today announced that the Company has appointed the public accounting firm of Rodefer Moss & Co, PLLC ("Rodefer Moss") as its new independent auditor effective October 20. Rodefer Moss had previously undertaken and completed the three year combined audit of Nice Cars, Inc. and Nice Cars Capital Acceptance Corporation in connection with the October 4, 2006 acquisition of These companies by Manchester Inc. The financial statements of the Nice Cars companies audited by Rodefer Moss were included as exhibits to the Company's disclosure statement filed on Form 8-K with the U.S. Securities & Exchange Commission on October 11, 2006.

Rodefer Moss is a regional accounting and consulting firm which Operates from offices in Knoxville, Nashville, Greeneville and the Tri-Cities Of Tennessee. Rodefer Moss is a registered member of the Public Company Accounting Oversight Board. They are also a member of the AICPA Center for Public Company Auditing Firms. Rodefer Moss serves many of the Strongest private companies, governmental units and non-profit organizations in Middle and East Tennessee, Western North Carolina, and contiguous states. Rodefer Moss also serves several large national and international companies, including other public companies.

To read the complete release and disclaimer, Click Here.
 

Financial Highlights For MNCS

Recent Trade: $3.40 (11/14/06)
Market Cap: $120.95M (approx.)
52-Week High (11-Oct-06) $8.60
52-Week Low (13-Oct-06) $2.70
Fiscal Year Ends: 30-Nov
Most Recent Quarter: May-06
Shares Outstanding: 33.14 Million 
Float: 19.94 Million
State of Incorporation: Nevada

ABOUT THE RECENT FINANCING ATTAINED BY MANCHESTER
AND THE PURCHASE OF NICE CARS INC.

Under the terms of the agreement, Manchester, Inc. paid an aggregate of $25 million in cash and issued 6.25 million shares of the Company's common stock to the previous owners of the two entities, aggregating to a total value of $72.5 million based upon the average trading price of the Company's common stock on the day of Closing.. In addition, the owners of these entities will receive 5 year employment contracts to continue running the dealerships. The Company financed the cash portion of the purchase price through the utilization of its $300 million credit facility.

TO CONTACT MANCHESTER INC.

100 Crescent Court, 7th Floor, Dallas, TX 75201
Phone: 778-889-8774
http://www.manchesterinc.net

---

*** The Bull is Running. ***
There may never be a better time to feature YOUR company
to over 1 MILLION investors.

To learn more about our programs email us directly at info@stockupticks.com

Disclaimer: StockUpTicks.com is a property of Market Pathways Financial Relations Incorporated (MP).  The information, opinions and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. Past performance is no guarantee of future results. This report is a paid advertisement and is for information purposes only and should not be used as the basis for any investment decision.  MP has been paid twenty four thousand five hundred dollars by Blue Chip IR Group LLC for preparation and distribution of this report and other advertising services over a ninety-day period. This constitutes a conflict of interest as to MP’s ability to remain objective in its communication regarding the subject company.  Write or call MP for detailed disclosure as required by Rule 17b of the Securities Act of 1933/1934 - Market Pathways 17595 Harvard Ave., Suite C519 Irvine, CA  92614.  MP is not an investment advisor and this report is not investment advice. This information is neither a solicitation to buy nor an offer to sell securities but is a paid advertisement.  Information contained herein contains forward-looking statements and is subject to significant risks and uncertainties, which will affect the results.  The opinions contained herein reflect our current judgment and are subject to change without notice. MP and/or its affiliates, associates and employees from time to time may have either a long or short position in securities mentioned.  Information contained herein may not be reproduced in whole or in part without the express written consent of Market Pathways Financial Relations Incorporated.