The Waterfront

1
The Waterfront

• Investor Presentation
• May 2007

2
The Team

• List CEO and key management by name.
• Include previous accomplishments to show that
  these are people with a record of success.
• Summarize number of years of experience in this
  field.
• Alisher Khussainov CFO
• Graduated from the Wharton MBA Program
• Prior Experience
• Fixed income trader with Goldman Sachs
• Investment banking analyst

3
Service Description

• By Keiichiro Mori

4
Location Kirkland Waterfront
5
Location

• 40 yard stretch of prime waterfront
• 40,000 square feet of courts
• weight rooms
• banquet halls

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Our Services
Professional Personal Trainers
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Our nutritionist can provide personalized plans
based on your lifestyle.
We provide work out plans to optimize your health
goals
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Dining at Polaris
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(No Transcript)
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Cooperating with Local Businesses
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Summer Activities
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Special Annual Event
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Financial Plan
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Preview

• Our Model
• Capital Expenditures
• Sales
• Expenses and EBIT
• Net Cash Flow

15
Our Model

• Forward looking income statements
• 10 years into the future
• Terminal value year 11 and onward, into
  perpetuity
• Fairly typical valuation approach
• Determine economic value of the company

16
Capital Expenditures

• Start up costs
• 1.75m down payment on building
• Price is 17.5m
• 12.74m renovation costs
• Remodeling expenses
• Include weight lifting equipment, restaurant
  equipment
• Total CAPEX14.49 million
• Long-lived assets

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Revenues

• Revenues include
• 2500 initiation fees
• 200 monthly fees
• Proceeds from our services

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Revenue Growth

• Membership grows to 600 by year 2
• Growth will slow to 70 and start tapering off
• 2100 members by year 10
• Year 11 onward, 2130 members

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EBIT and NCF

• We predict 60 operating margins
• Break even point is 3 years
• NCFs turn positive in year 3

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Net Cash Flow Growth
21
Review

• Strong sales growth
• Tight cost control
• Steady cash flows

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Our Offering

• Our capital need is 20 of initial capital
  expenditures, and 20 investment in years 1
• 2.9m now
• 219 thousand in Year 1
• We are offering a 20 equity stake in our company
• An excellent opportunity for a great return

23
Dividends

• Main source of return
• Dividends will start as soon as NCF becomes
  positive
• Private shares
• May be room for capital gains
• Will put in dividends table

24
Risk-Return Profile

• What should you be earning?
• Risk adjusted 16.5
• What you will be earning
• 19 annualized
• Outsized returns
• Higher return with the same level of risk

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Benefits

• Board of Directors Seats
• Complimentary memberships for you and your
  families