Pool, Spa & Backyard Recreation Industry

LDI will be a manufacturer and retailer of outdoor, backyard recreational products that will be able to deliver its products directly to consumers nationwide. LDI intends to expand its product lines to include a greater variety of outdoor and home entertainment products.

The growing pool and spa industry is a $30 billion industry, of which LDI will initially be targeting a $12 billion segment of that total. The retail channels in this industry are extremely fragmented with only a small number of companies having any sort of nationwide presence. There are more than 6,300 dealerships for pool and spa products east of the Mississippi River (in excess of 10,000 nationally), all competing with each other for local sales, with no coordinated approach to either customers or suppliers. This fragmentation of product retail outlets creates the ideal opportunity for Consolidation and then funneling and directing consumer demand with a Direct Marketing approach.

LDI markets to the Pool, Spa & Backyard Recreation markets through the brand name of Olympic Pools & Spas.

In the development of its business plan, LDI has taken extreme care in reducing risks and uncertainties. It has done this through the following:

Application of the successful consolidation and direct marketing models The purchase of an existing direct marketing manufacturer with a proven performance Selective strategic acquisitions of dealers with existing business success to establish as service centers Total control over own distribution network Additions of product line to leverage service center capabilities The creation of a publicly traded stock through a merger with an existing public company The growing pool and spa industry is a $30 billion industry of which LDI will initially be targeting a $12 billion segment of that total. The retail channels in this industry are extremely fragmented with only a small number of companies having any sort of nationwide presence. There are more than 6,300 dealerships for pool and spa products east of the Mississippi River (in excess of 10,000 nationally), all competing with each other for local sales, with no coordinated approach to either customers or suppliers. This fragmentation of product distribution channels and retail outlets creates the ideal opportunity for Consolidation and then funneling and directing consumer demand with a Direct Marketing approach. LDI intends to achieve Consolidation through the acquisition of a selected number of pool and spa dealers and then converting these dealers into Customer Service Centers that market LDI products directly to the consumer. The outcome will be a significant increase in the distribution system for LDI products. This strategy will also cause the transformation of LDI from a manufacturer of leisure products to a manufacturer and Direct Marketer of these products.

This Direct Marketing strategy will resemble the Dell Sales Offices and Gateway Country Store approaches and will give the company low-cost showrooms for its distributed products, with the singular focus being on the customer with whom we will have a direct relationship. The centers will also be used to coordinate local installation.

The 4 tenets of the LDI model are:

• Most efficient path to the customer
• Single Point of Accountability
• Build-to-Order
• Low-Cost Leader
• The benefit of this strategy will be a national marketing presence and the capacity to provide local delivery and service.

As LDI consolidates the retail distribution of its products, LDI will also add to its product lines by vertically integrating existing manufacturing operations of complimentary products. This vertical integration will be implemented by combining existing manufacturers of pool, spa, patio and other leisure products with LDI’s current manufacturing capacity.

The result of LDI’s dual strategies will be a manufacturing and Direct Marketing company that has control of its distribution network, while at the same time increasing its product offerings to include those of other manufacturers.

LDI’s experienced management team is confident that the following are the keys that will make this investment a success:

• Consolidation of an extremely fragmented market
• Employment of a direct marketing and direct distribution strategy
• Establishment and building of a national brand name
• Cross-selling of a multitude of related products
• Establishment of a one-stop shopping source for customers
• Creation of greater value by a lower cost to the customer and larger profit margins for LDI
• Mitigation of risk and uncertainty for investors