The Business A charming, vintage, single-screen, 249-seat movie theater in the heart of Idaho's scenic Big Lost River Valley, approximately 45 miles northeast of Sun Valley. The theater operated from Christmas Day, 1940, until 1982, closed for eight years, then reopened in May 1991 after a complete -- and historically sensitive -- overhaul by the sellers. Currently there are six screenings a week, and ticket sales produce 75% of revenues. (Concessions account for the rest.) The sellers, a young couple enamored of weekend travel, want a change of lifestyle.* * *
Financial Summary 1992 1993*
Gross revenues $50,000 $75,000
Recast earnings before $10,700 $18,500
interest, taxes, depreciation,
and owner compensation
*projected* * *
Outlook This theater is pure Americana, but it belongs to a dying breed: since the late 1960s, single-screen facilities have been gradually supplanted by department-store-like multiplexes. And though ticket-price inflation has kept the movie industry's box-office gross rising (to nearly $5 billion at last count), movie-theater attendance, thanks to video and cable, has been flat for a decade. Insiders wonder, Do nonmultiplex theaters make economic sense anymore?
Price Rationale The price includes 4,000 square feet of Mackay, Idaho (population 530), history: the theater was originally the town grocery store, and the adjacent concession area was the corner saloon and later a restaurant. (Counter stools, antique wooden booths, and jukebox are still in place.) The current owners spent $90,000 on renovations, and industry gurus say their 21% first-year margin was good. The price, according to those same gurus, may not be. Earnings multiples for independent theaters generally run to 5 or 6, not the 7.3 (on projections) sought here. But reopen the restaurant, and the equation could change.* * *
Pros The potential (there's room inside to expand), the fun, and the complete lack of competition -- the closest rival is more than 100 miles away.* * *
Cons The gross (don't quit your day job), the price, and the reason there's no competition -- with 7,000 people in the valley, there's not much of a customer base, either.
-- Alessandra Bianchi* * *
Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Jim and Ruth Muffett, 208-588-2285.* * *