Salinas, California. Simmons & Associates Pacific, Inc.

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Tobias King
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1 Animal Health Center Salinas, California

2 GENERAL INFORMATION Listing # CO3 LOCATION Animal Health Center 1261 B. South Main St. Salinas, CA Salinas is the boyhood home of Nobel Prize winning author John Steinbeck, who describes the town, people and surrounding area in his timeless novels. In a personal letter he once wrote, "I think I would like to write the story of this whole valley, of all the little towns and all the farms and the ranches in the wider hills. I can see how I would like to do it so that it would be the valley of the world." The Salinas Valley sits between the Gabilan and Santa Lucia mountain ranges, and follows the Salinas River to the Monterey Bay. Salinas is located 20 miles northeast of Monterey on Highway 68, 60 miles south of San Jose and 101 miles south of San Francisco, and 325 miles north of Los Angeles on Highway 101. The moderate climate is ideal, with an average temperature of 68 degrees and Mediterranean-like weather in the summer. Salinas is the seat of Monterey County, with a population of 148,400. The population of Monterey County is 410,772. Salinas is the regional shopping area with a new auto center, a number of shopping malls, and antique and boutique shops in Old town Salinas. The strong economy of the local agriculture industry is partnered with a relaxed lifestyle to create a high quality of life in the Salinas Valley. Salinas and the Salinas Valley offer a unique combination of climate, natural resources and people. The City of Salinas was born after Mexico seceded from Spain in 1822 and began granting rancho lands. Named for a nearby salt marsh, Salinas became the seat of Monterey County in 1872 and incorporated in Today the Salinas Valley is known as "The Salad Bowl of the World" for the production of lettuce, broccoli, mushrooms and strawberries, along with numerous other crops. The climate is also ideal for the floral industry and grape vineyards planted by world-famous vintners. Although agriculture forms an economic base, more than 100 manufacturing firms call Salinas home. Some of the largest employers in the area include: Dole Fresh Vegetable, the County of Monterey, Household Credit Services and Salinas Valley Memorial Hospital. Salinas hospitality blends yesterday s charm with today s modern conveniences. The California Rodeo, California International Air show, and the world famous Steinbeck Festival are major attractions of our colorful and diverse city. Visitors can also explore the nearby Monterey Peninsula: the historic missions of San Jan Bautista, Soledad, Carmel and San Antonio de Padus, the world class wineries of South Monterey County and the beauty of nearby beaches and Pinnacles National Monument. As "Salad Bowl Of The World," the Salinas Valley: Is in the largest vegetable producing county in the US, and is home to a $2 billion international agribusiness industry Hosts the nation's premier growers, including Fresh Express and Monterey Vineyards Grows more wine grapes in Monterey County than any other county in California Old town Salinas is expected to be home-base for a new Salinas Valley agri-tourism industry

3 Salinas Statistics City Demographics Indicate A Healthy Diversity, Skilled Work force, And Opportunity For Economic Growth Population: 130,000+ Area Size: 18.7 square miles Persons Per Household: 3.49 Minority Percentage: 61% Median Family Income: $49,400 Percentage of Home Ownership: 43% Weather: 68.2 average temperature 14.14" rainfall/year Employment base: 50,000 jobs Work force Distribution by Industry Manufacturing 10% Agriculture 20% Trade (Retail/Whsle) 21% Services & Govt. 49% Salinas Valley: miles wide 150 miles long 640,000 acres of farmland Educational Institutions: Hartnell Community College Monterey Peninsula College Chapman University (private) Golden Gate University (private) California State University, Monterey Bay (CSUMB) Old town, at the heart of Salinas, is easily accessible: From San Jose/San Francisco on US 101, take the Main Street exit From Hwy. 1, take Hwy. 183 East through Castroville From South on US 101, take the John Street exit From Monterey Peninsula, take Hwy. 68 East Salinas is located: 100 miles South of San Francisco on US miles South of Silicon Valley on US miles East of Monterey/Carmel on Hwy miles to our South County lakes 30 minutes to 24 golf courses 25 minutes to the playgrounds of Monterey, Carmel and Pebble Beach 10 miles to the Pacific ocean Weather Stats Average Maximum Temp. (F*) Average Minimum Temp. (F*) Average Rainfall (in.) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

4 Climate: Salinas weather is influenced by our near proximity to Monterey Bay. Afternoon breezes generally clear the morning fog. The average temperature is 68.2 degrees, with summer temperatures in the 70 s, dipping at night into the 50 s. Winter temperatures are generally in the low 60 s, dropping at night into the middle 30 s. Average rainfall is 14.4 inches, usually occurring in winter and early spring. Population: Salinas County of Monterey State of California , , , ,762 29,760,521 33,871,648 Housing: Salinas is a community of neighborhoods with a wide variety of housing options. With Victorians and the historic Spanish influence, Salinas provides renters and homebuyers a housing assortment, from modest cottages and modern townhouses to spacious "rancheros" nestled in the oak-dotted countryside. Newer developments provide attractive and imaginative tract homes and condominiums, while there are many modern homes in well-established neighborhoods. Newcomers and longtime residents will find a neighborhood to their liking, regardless of whether they are looking for something larger to accommodate a growing family, or simply want to find smaller quarters for their retirement years. OWNER Terry G. Spencer, DVM is the owner of the practice. TYPE This is a 100% small animal practice that provides high quality general medical and surgical services. The practice provides a small percent of grooming services, and no boarding, emergency or specialty services. ZONING The clinic is zoned for general veterinary practice appropriate for daily operation of the facility as a full service veterinary hospital. FACILITY The facility is located in a freestanding leased facility that is located within a shopping center. The current lease payment is $2,600 per month. The facility size is approximately 1,800 sq. ft., 1,600 sq. ft. for small animal and 200 sq. ft. for kennels/grooming. The practice currently shares one-third occupancy of the building.

5 The Hospital features: Adequate Parking Bright and open waiting area Sizeable reception area 2 exam rooms Treatment Room Surgery Room X-ray Room 2 Animal Wards Grooming / Laundry Room Staff lounge area Doctor s office 3 bathrooms ESTABLISHED/PURCHASED Dr. Spencer and Dr. Regelson established the practice in August of SERVICES The practice mainly provides high quality, low volume general medical and surgical services. In addition to clinical medicine ancillary veterinary services, including a small percent (5%) of grooming are also available for clientele. A new owner who would like offering many of the services common to community pet practices, as well as specialty, emergency, or extended grooming services, will find the clients willing to choose this hospital as the site for those services. Typically from this clientele the services chosen by the clients will base more on what services are offered, rather than being limited only to those items the client can afford. Income: SA 100% 1. Grooming 5% 2. Retail 1% Services: 1. Outpatient 100% (Illness/Lameness 50% Wellness 50%) 2. Surgery 100%(Soft tissue 95% Ortho 5%) Species: 1. SA 100% (canine 50% feline 50%) 2. EX 1% (avian 0% pocket pets 1% reptiles 0%) MARKETING INFORMATION: Advertising Yellow pages Internal Marketing Reminder system Recall system Referral acknowledgement New Client Follow up System Brochure Handouts

6 Extra Services Early drop off, late pick up Delivery services Evening hours Weekend or special appointments House calls Promotions and Education Programs: Membership in organizations Schools and Clubs Intership/Externship/Preceptorship MANAGEMENT Written Procedure and Policy Manuals in place: Reception Vet Assistants/Techs Employee manual OSHA Cal OSHA Haz-mat Illness and Injury Prevention Emergency and Disaster Preparedness Program POTENTIAL SERVICES FOR INCREASED GROWTH Continued advertising and daily attention to marketing would aid in the continued growth of the practice. Simmons & Associates can arrange an initial marketing study to the buyer, from a professional veterinary marketing firm to further illustrate the potential of this practice. A new owner could increase the availability of current services being offered, such as surgical services. There is also the potential to increase diagnostic and specialty services as well as boarding and grooming services. Other areas of growth include extended office hours during the week, Saturday hours, or offering emergency services. In doing so, the buyer will find a steady increase in clients willing to choose this hospital as the site for new and existing services. STAFF POSITION YEARS HRS/WK Owner/DVM 4yrs 40 Owner/DVM 4yrs 8 Office Manager 1yr 40 Head Nurse 2yrs 40 Nurse 4yrs 35 Assistant 2yrs 25 Assistant 3mo 25 Receptionist 1.5yrs 40

7 PRODUCTIVITY OFFICE HOURS Average transaction fee $ Average number of clients per day 17 Number of active client files (who visited within the last 2 years) 1,700 Number of new patients (within this fiscal year) 361 Number of patient visits during the past year (2001) 3,572 Monday 8:00am 5:30pm Tuesday 8:00am 5:30pm Wednesday 8:00am 5:30pm Thursday 8:00am 7:00pm Friday 8:00am 5:30pm Saturday Closed Sunday Closed DVM AVAILABILITY A doctor is usually available most hours of operation, with the exception of lunch breaks. EMERGENCIES Emergencies are referred to an emergency facility located about 6 miles from the clinic. The new owner could offer emergency services if desired. TRANSITION Negotiable. It is expected that the seller would be willing to provide a reasonable transition period for the new buyer. Compensation to the seller for clinical hours with the purpose of generating income for the practice can be negotiated prior to purchase. The seller will provide advisory and historical information during the transition period at no additional cost to the buyer. TANGIBLE ASSETS (2) Dell Computers Intravet Computer System Muratec F60 Fax Machine Newer Matrix Isoflurane Machine Nellcor Pulse Oximeter Dentalaire Combo Polisher/Scaler HP 6P Printer Portable Isoflurane Machine Defibrillator Newer Tattnaur Autoclave 8008 IDEXX Blood Chemistry Machine Tube & Microhematocrit Centrifuge SRX 101A Konica Automatic Processor Laser Unit Inovet 300MA Digital X-Ray Machine Meiji Binocular Microscope This is only a partial listing of the tangible assets. A more complete list of equipment is either attached, or will be forwarded when received by our office. The buyer is encouraged to inspect these and perform due diligence to his or her satisfaction. These tangible assets have not been appraised separately. They are an integral part of the practice, involved with the production of income, and considered when pricing the practice as a business entity.

8 COMPETITION There are 2 practices within a 1-mile radius, 1 practice within a 3-mile radius, and 3 practices within a 5- mile radius. The remaining practices in the area are either outside of a 5-mile radius, or consist of equine and specialty practices. The practice mainly pulls it s clientele from the neighboring communities of King City, Green field, Gonzales, Marina and Seaside. Although these are small communities, they reside within miles of the practice, and are scarce in veterinary service providers. Animal Health Center Veterinary Service providers in the area OPPORTUNITIES The main opportunity is to continue providing excellent high quality medical and surgical services while maintaining good client relations. Also offering extended grooming services, emergency services, and other services not currently being offered, could easily grow this practice aggressively in the initial period of ownership if desired.

9 SITE VISITATION Interested parties are encouraged to visit the owner and community as soon as possible. Appointments must be arranged through Simmons & Associates. FINANCIAL HISTORY Chief of Staff Earnings Net Cash Flow Gross Income Year *Chief of Staff 80,000 85,000 85,000 Earnings 51,002 87,248 94,523 Net Cash Flow 131, , ,523 Gross Income 504, , , Gross income $514, Gross income through June 30, approximately $250,000 *Chief of Staff = appropriated portion of owner s total compensation for clinical services as a veterinarian. The current owner would take as total compensation both the chief of staff and earnings as the owner s total annual compensation assuming ownership is debt free. Essentially the current owner will take home the Net Cash Flow as his/her compensation representing both income as a DVM, and as an owner. (2002: 94,523+85,000 or 179,523 would be the current owner s comp) PRICE FOR PRACTICE $300,000 A typical finance and approximate after-debt income scenario could look like this: Price $200,000 Down payment from Buyer $ 30,000 Balanced financed by Lender $270,000 1 st 12 months projected cash flow 178,200 Less debt service on $355,000 8% for 10 years Buyer s pre-tax after-debt income $138,800!!!!!!!

10 For these calculations we considered that a full time owner could produce at least the weighted average gross that has been produced over the past two years. (540,000). S & A statistics show that most buyers will outperform our projections, and will increase the gross income by approximately 25% in the first 12 months. We also used the weighted average cash flow of (33 %) described above. Therefore cash flow is projected as (wt. Gross projected $540,000 x 33 % = $ 178,200 in net cashflow). FEES AND DISCLOSURE: The owner and buyer will be responsible for their own consultant s and/or broker fees. Simmons and Associates is acting as agent for the owner. When assisting the buyer in the purchase of this property, Simmons and Associates will be representing the interests of the owner. As such, the firm and all of its agents must work to obtain for the owner the best price and terms possible. Information provided by Simmons and Associates has not been audited or otherwise verified, and Simmons and Associates therefore make no representation or warranty (implied or expressed) as to its accuracy or completeness. Recipient of practice information is expected to perform due diligence to his/her own satisfaction. THIS PACKET, ALL ENCLOSED INFORMATION AND MATERIALS ARE CONFIDENTIAL. ALL INFORMATION BOTH VERBAL AND WRITTEN REGARDING THIS PRACTICE IS CONFIDENTIAL. THE RECIPIENT OF THIS INFORMATION IS BOUND BY THE TERMS OF THE NON-DISCLOSURE (CONFIDENTIALITY) AGREEMENT SIGNED BY THE ORIGINAL INQUIRING PARTY. ALL AGENTS AND ADVISORS OF THE INQUIRING PARTY ARE BOUND BY THE TERMS OF THE AGREEMENT, AND LIABLE FOR DAMAGES IF CONFIDENTIALITY IS BREACHED.

95 % Small Animal Practice & 5% Exotics. Profitable. Otowi Suspension Bridge

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