Investment Opportunity January An Opportunity to Invest in Health and Wellness and Digital Healthcare

Transcription

1 Investment Opportunity January 2017 An Opportunity to Invest in Health and Wellness and Digital Healthcare

2 This document is neither an offer to sell nor the solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any persons to whom, such an offer, solicitation or sale is unlawful. Cautionary Statement Regarding Forward-Looking Statements These materials contain for ard-looking statements. Forward-looking statements include statements about the Co pa s expectations, beliefs or intentions regarding its product offerings, business, financial condition, results of operations, strategies and prospects. You can identify such forward-looking statements by the words e pe ts, i te ds, pla s, proje ts, elie es, esti ates, likel, goal, assu es, targets and similar expressions and/or the use of future tense or conditional constructions (such as ill, a, ould, should and the like) and by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date such statements are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause the Co pa s actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause the Co pa s actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These forward-looking statements are only predictions and reflect the Co pa s views as of the date they are made with respect to future events and financial performance. The Co pa s undertakes no obligation to update these forwardlooking statements, except as required by applicable law. Member FINRA, SIPC & NYSE Euronext 2

3 The Opportunity I-Bankers Securities represents a leading provider of retail health and wellness and digital healthcare services to the greater Tokyo, Japan region (the Co pa ). The Company generated FY14 (1) /FY15 (2) revenue of $18m/$27m and FY14/FY15 EBITDA of $0.9m/$2.3m (3). FY16 revenue & EBITDA is forecasted at $24m/$1.1m based on actual figures through 3Q 2016 and projected 4Q 2016 financial performance. For 2015, SSS for stores open at least 24 months is 3.3% and the same figure projected for 2016 is 1.7%. (4) The Company is the #1 franchised therapeutic massage chain, also referred to as BodyWork in Japan, with 185 stores located in the greater Tokyo, Japan region. Transitioning its business model toward digital healthcare, the Company maintains an extensive database of patient-specific electronic health formation collected from more than 2.25 million customers. The collected data is leveraged to provide data to third parties. Customers 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Customers Served 10-Yr CAGR of 57% The Co pa s customer base has grown at a CAGR of 57% over the past 10 years. NOTES: (1) FY 2014 numbers are not audited figures, they are management figures. (2) FY 2015 figures are based on IFRS accounting rules. (3) Includes one-time gain of $1.8 mm USD related to asset sale (4) All USD figures are based on an exchange rate of 100 Japanese Yen to 1 USD. Member FINRA, SIPC & NYSE Euronext 3 Annual Sales Store Sales 5-Yr CAGR of 19% Direct Owned Franchised The Co pa s franchise model is capex light and scalable, allowing for rapid growth with minimum invested capital and recurring revenue streams from fees, in addition to core BodyWork sales.

4 Investment Highlights BodyWork Excellence Digital Healthcare >2.25m Unique Customers Served Prime Locations Top Rate Workplace and Employer Recurring Fees Model #1 BodyWork Chain in Tokyo Therapeutic massage; holistic and preventative healthcare services; widely recognized therapist training platform SSS increased 3.7% and 1.7% in 2015 and 2016E (1), respectively Annual sales per store opened more than 24 months of $251,000, $259,000, and $264,000 in 2014, 2015 and 2016E (1) The Company maintains an extensive database of patient-specific electronic health information collected from more than 2.25 million customers Avg. 60,000 monthly customers/store 60% repeat rate; average ticket of $56.95, $57.36 and $58.44 in 2014, 2015 and 2016E (1), respectively Tok o area populatio ~38, orld s ost populous city Stores in metros/subways, malls, plazas, high-traffic streets 112 HQ / 116 contractors/ 284 CLP therapists / 579 franchisee employees. #1 industry workplace/employer (EY) Therapist model integral to revenue growth Monthly education, marketing, real estate/retail lease related, and consulting HQ captures ~60% of franchisee revenue stream 185 stores (35 direct owned) as of June 2016 Base case FYE stores, excluding acquisitions NOTES: (1) FY 2016 figures are expected results, based on actual figures for the first nine months and projected figures for 4Q Member FINRA, SIPC & NYSE Euronext 4

5 Revenue A majority of the Co pa s retail sales come from fees, direct owned store revenue, franchise royalties, and ancillary services. Franchisees pay ~60% of their revenue stream (royalties, employees, fees) to HQ. The Company is committed to investing in its digital healthcare and tech businesses and is encouraged by results to date and new revenue opportunities. FY15 REVENUE SPLIT FY17E REVENUE SPLIT Franchise Fees Direct Owned Store Sales Franchise Fees Direct Owned Store Sales Franchise Royalties Sales to New Franchisees Franchise Royalties Sales to New Franchisees Real Media Other Real Media Other 14% 6% 5% 11% 1% 8% 38% 12% 37% 5% 32% 34% Member FINRA, SIPC & NYSE Euronext 5

6 Growth Strategy Priority 1: Saturate Greater Tokyo region: Prime metropolitan locations are cost prohibitive to lease and manage for most small operators Franchise model allows for pre-lease arrangements, bypassing bidding wars/overpaying Capacity limit for Company in greater Tokyo region is estimated at ~3,000 stores Grow through arket share gai s a d re ruiti g o petitors therapists Potential for industry consolidation M&A : +Target mom/pop stores and larger private chains whose owners look to exit business +Discount purchase multiple ~4x-10x earnings for highly motivated sellers +8 potential fit, 2 in pipeline Priority 2: International Expansion & Growth of Digital Businesses: China footprint (Chengdu, China launch); agreement in place; planned launch of 10 locations in 2Q 2017 Researching opportunities in Taiwan and SE Asia US presence: IR relations, plans for retail popups NY, SF, Honolulu At least $1 ear arked to gro Real Media, a seg e t of Co pa s digital health are usi ess Funding to build-out Medites usi ess i part ership ith Joh S ull s o pa, Misfit Transaction sought The Company seeks to raise $5 million to $10 million of growth equity capital in preparation for an IPO on NASDAQ or NYSE mkt. in 2Q17, a process already underway. Member FINRA, SIPC & NYSE Euronext 6

7 Contact The Investment Process will be managed in accordance with procedures established and communicated to interested parties by I-Bankers Securities. All inquiries or communications, including requests for additional information, should be directed to one of the following individuals at I-Bankers Securities: Mike McCrory CEO Tel: mike@ibankers.com Mike Marshall Managing Director Tel: Mike.marshall@ibankers.com Paul Fratamico Managing Director Tel: paul@ibsgroup.net