Bunker Hill Capital Partners with California Family Fitness

Bunker Hill Capital, L.P. announced today that it has made a significant investment in California Family Health, Inc. (d/b/a California Family Fitness), a leading operator of health and fitness clubs in the greater Sacramento, CA area. California Family Fitness opened its first club in Elk Grove, CA in 1994, and it currently operates a total of 13 clubs with two additional club openings planned for 2007. California Family Fitness provides members with spacious, modern facilities, a family-friendly club atmosphere, and an extensive selection of services and amenities that appeal to members of all ages.

Co-founders Larry Gury and Russ Kuhn remain significant owners of the company and continue to oversee day-to-day operations as Co-Presidents together with their senior management team. “We joined forces with Bunker Hill Capital because they have proven that they are a value-added partner. They will provide our business with a new level of expertise that will help us grow while still maintaining the same level of quality service to our members. In addition, they share our commitment to maintaining the family atmosphere throughout our company,” Gury said in support of the partnership.

Kuhn added, “Bunker Hill Capital will help us to continue to expand the company for the benefit of all of our members and employees. We are constantly looking for new sites to further expand our footprint. We are very excited about our new clubs that will open next year in Natomas and Elk Grove, as well as the site we are planning to add downtown in The Towers on Capitol Mall.”

Bunker Hill Capital’s principals are also enthusiastic about the investment. According to Rufus Clark, a Managing Partner at Bunker Hill Capital, “We are looking forward to our partnership with Russ and Larry and the entire California Family Fitness team. We continue to be impressed by how hard the company’s employees work to make every visit to a club a great experience. This enthusiasm, combined with the superior facilities offered at reasonable rates, makes it obvious why California Family Fitness is so highly-regarded by its employees and members.”

Clark’s sentiments were echoed by Brian Kinsman, also a Managing Partner at Bunker Hill Capital. “California Family Fitness represents an ideal investment for our firm. The company has a superior product offering and a strong incumbent management team that is looking to accelerate growth with the help of a strategic partner. We look forward to working with the management team to help them achieve their goals.”

About California Family Fitness

California Family Fitness operates 13 health and fitness clubs in and around Sacramento, CA. The company’s ability to offer an extensive selection of modern exercise equipment, amenities such as pools and basketball courts, and services including child care and fitness class instruction in a large club format and at a monthly dues rate that is competitive with other clubs creates a compelling value proposition for its members. In recognition of its high quality services, California Family Fitness has been voted “Best Fitness Club in Sacramento” for seven years in a row (1999-2005) by Sacramento Magazine. For more information on California Family Fitness, please go to www.californiafamilyfitness.com.

About Bunker Hill Capital, L.P.

Bunker Hill Capital, L.P. is a private equity firm that makes investments in lower middle market companies with enterprise values up to $150 million. The principals of Bunker Hill Capital have invested over $380 million in 27 transactions and target opportunities across four industry sectors, including industrial products, business services, consumer products, and specialty retail. For more information on Bunker Hill Capital, please go to www.bunkerhillcapital.com.