The Business: Amazon.com has nothing on this retailer of maritime books and electronic charts that serves a loyal clientele of luxury-yacht owners while earning enough in profits to keep its skipper afloat on his own cruiser. Catch this wave: after 12 years of consecutive growth, this 4,500-square-foot retail store is still debt free, while boasting a robust walk-in business, a popular mail-order catalog, and a thriving 4,000-page Web site. Other enhancements are about $750,000 worth of inventory, plus $300,000 worth of equipment, including a sophisticated database that tracks customers' spending (and cruising) patterns. The current owner is ready for a water-based retirement, but his 27 employees probably aren't going to jump ship.

Price: $2,250,000

Outlook: Thanks to a booming U.S. economy, the high end of the yachting business is swimming along beautifully, with record boat-industry sales of $19.2 billion in 1998 alone. (Luxury-yacht owners--this company's target customer base--were responsible for much of the increase in boat sales.) While it's true that most bookstores are navigating through choppy seas these days, this retailer's unusual niche--combining electronic nautical charts with maritime publications--helps it stay buoyantly afloat. It's also got plenty of growth options, including creating special-interest mail-order catalogs, enhancing its Web site (which currently accounts for about 7% of sales), and even opening additional retail outlets in other ports.

Price Rationale: The biggest problem with one-of-a-kind companies like this one? They're tough to value. So, for lack of a better alternative, start with the typical rule of thumb for bookstores: They currently sell for about 40% to 45% of annual gross revenues (in this case, figure around $1.6 million to $1.8 million) plus inventory, which brings this company to a range of $2.3 million to $2.5 million--figures which, by this valuation, are actually higher than the asking price. What about all those electronic charts? On the one hand, their profit margins are lower than those earned by this retailer on its book sales; on the other, the E-charts are the fastest-growing part of this company's business. Throw in the fact that the owner has already turned down a handful of bids, and it probably makes sense to price this deal close to asking.

Pros: Imagine a lifestyle company that's awash in profits and growth prospects! Then jump aboard.

Cons: If you don't have your sea legs and fear being drowned in maritime impedimenta, you'll probably be better off looking for something that will really float your boat.

FINANCIALS

Gross Revenues Recast Earnings*
1996 $3,006,000 $114,000
1997 $3,689,000 $696,000**
1998 $3,947,000 $328,000

*Before interest, taxes, depreciation, and owners' compensation.
**The company's first independent audit yielded an inventory valuation that was much higher than the company expected, which contributed to an unusually large recast-earnings number for 1997.

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 Bill Russell of Southeast Business Partners Inc., at 954-229-5000.