MedSpas of America, Inc. (OTC: MDSP)
MedSpas Releases CEO Letter to Shareholders
ATLANTA, GA–(MARKET WIRE)–MedSpas of America, Inc. (Other OTC:MDSP.PK – News), www.medspasofamerica.com, released on January 16th a letter to the Company’s shareholders from Chairman and CEO Paul R. Smith.
Dear Fellow and Valued Shareholder,
With the start of the New Year, it seems an appropriate time to review our achievements during the past year and share our plans for the upcoming year. Our Company today is much different from that of the beginning of 2006. After exhaustive research, the management of the Company decided to enter into the medspa industry at a most opportune period in the industry’s development.
The medspa industry is driven by Baby-Boomers, some 40 million women who are focused on feeling better, looking better and aging gracefully. This is the largest consumer market our country has ever experienced. In the past 7 years, the anti-aging industry has grown to a market size of $44 billion and is expected to double in the next three years. There are some 1,000 medspas operating today in a market that can absorb 12,000 medspas. The growth potential is phenomenal.
To prepare the Company for entry into this exciting industry, we re-organized in June 2006 and changed the company’s name to MedSpas of America, Inc. (”MDSP”). Management was faced with the decision to either build a significant overhead to facilitate a national brand roll-out or to find a joint venture partner that had built a strong management team with a proven track record of medspa development. We were extremely fortunate to find Solana Medspas, www.solanamedspas.com, the country’s most significant developer of medspas. We signed a joint venture agreement with Solana in the fall of 2006 that calls for the development of 50 Virtuoso Medspas in the USA over the next five years. They provide MDSP with expertise in brand development, operational and regulatory oversight, human resource development, and most importantly, marketing strategy. Today, MDSP has a management team that is unparalleled in the medspa industry.
Immediately after joining forces, we began building the foundation of our Virtuoso Medspa brand consisting of logo design, brand imagery, medical protocol, patient service offering, operational procedures, unit economic model, and unit marketing strategy. During this process, management decided that an opportunity existed in the industry for the company to acquire and convert existing medspas to our Virtuoso Medspa brand. Solana identified some 160 medspas currently operating in the USA that are prime candidates for a roll-up and brand conversion strategy.
In November 2006, MDSP acquired an existing medspa in Birmingham, Alabama. Our acquisition in Birmingham brought 18 months of operational experience with trailing 12-month sales of $391,000 and a strong management team. It lacked brand identification and a commitment to marketing, however, was located in an excellent market. MDSP is now in the middle of its brand conversion strategy in the Birmingham market. Once we have completed our brand conversion in Birmingham, the company will move forward with our roll-up strategy applying the acquisition and brand conversion model developed in Birmingham.
Our 2007 Plan
MDSP intends to acquire an additional five medspas in 2007 utilizing our brand conversion model. Our strategy is to acquire these operations through an assumption of necessary financial obligations, such as equipment and property leases accompanied by a nominal short-term purchase note. We will then invest approximately $200,000 per acquisition for brand conversion and an aggressive community-based marketing campaign. We project the first year revenues of each acquisition will be approximately $750,000 per medspa with an approximate breakeven of $600,000 annual sales, growing to annual revenues of $1,800,000 in the third year.
Assuming the successful achievement of our goals for 2007, the company’s revenues are expected to be in excess of $2,000,000 by the end of the upcoming year with net operating profits expected to be 8% of sales. We are actively seeking funding to achieve our goals for the upcoming year.
Beyond 2007
Our goal is to build Virtuoso Medspa into a national chain consisting of 50 units. Assuming achievement of this goal, MDSP will become a recognized leader in the industry that is positioned for significant growth as the industry moves up a projected 20-year growth curve.
In conclusion, the Company has now completed its transition into the medspa industry and looks forward to continual growth. On behalf of all of us at MedSpas of America, please accept our best wishes for happy, health and prosperous New Year.
Sincerely,
Paul R. Smith
Chairman & CEO
This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance. Such statements are subject to risks and uncertainties and other factors as may be discussed from time to time in the Company’s public filings with the U.S. Securities and Exchange Commission (”Commission”), press releases and verbal statements that may be made by our officers, directors or employees acting on our behalf which could cause actual results to differ materially from those discussed in the forward-looking statements and from historical results of operations. In addition to statements, which explicitly describe such risks and uncertainties, statements with the terms “believes,” “belief,” “expects,” “plans,” “anticipates” and similar statements should be considered uncertain and forward looking. Factors that might cause such a difference include, without limitation: the uncertainty of the Company’s ability to meet capital needs and as further set forth in our public filings filed with the Commission and our press releases.
Contact:
Investor Contact Information:
500 Australian Avenue S., Suite 700
West Palm Beach, FL 33401
Telephone
561-514-0194
Email
Email Contact
Source: MedSpas of America, Inc.
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