The WaterfrontThe WaterfrontInvestor Presentation
May 2007
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
Service DescriptionBy Keiichiro Mori
Location: Kirkland Waterfront
Location• 40 yard stretch of prime waterfront
• 40,000 square feet of courts
• weight rooms
• banquet halls
Our Services
Professional Personal Trainers
Our nutritionist can provide personalized plans based on your lifestyle.
We provide work out plans to optimize your health goals
Dining at Polaris
Cooperating with Local Businesses
Summer Activities
Special Annual Event
Financial Plan
Preview• Our Model• Capital Expenditures• Sales• Expenses and EBIT• Net Cash Flow
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
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 CAPEX=14.49 million
• Long-lived assets
Revenues(thousands) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TV
0 1 2 3 4 5 6 7 8 9 10 TVSales 0 2,820 4,890 7,900 8,780 10,160 11,540 12,920 13,360 14,050 14,740 15,539
• Revenues include– $2500 initiation fees– $200 monthly fees– Proceeds from our services
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 membersSales Growth
0
5000
10000
15000
20000
1 2 3 4 5 6 7 8 9 10 TV
Period
(thousands) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 After0 1 2 3 4 5 6 7 8 9 10 TV
Gross Profit 0 2538 4401 7110 7902 9144 10386 11628 12024 12645 13266 13985 Op Exp 0 1128 1956 2765 3073 3556 4039 4522 4676 4918 5159 5438.6 Mortg PMT 0 2496 2496 2496 2496 2496 2496 2496 2496 2496 2496 0 Dep 0 1449 1449 1449 1449 1449 1449 1449 1449 1449 1449 1200EBIT 0 -2,535 -1,500 400 884 1,643 2,402 3,161 3,403 3,783 4,162 7,346Net Cash Flow -14,490 -1,096 -51 1,713 1,932 2,533 3,034 3,535 3,695 3,945 4,246 6,049
EBIT and NCF
•We predict 60% operating margins
•Break even point is 3 years
•NCFs turn positive in year 3
Net Cash Flow Growth
Sales and Free Cash Flow
-20000-15000-10000
-50000
5000100001500020000
0 1 2 3 4 5 6 7 8 9 10 TV
Timeline
Figures in thousands
SalesCash flows
Review• Strong sales growth• Tight cost control• Steady cash flows
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
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
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
Benefits• Board of Directors Seats • Complimentary memberships for you and your
families