We found an interesting deal in episode 332—a theatrical supply and construction company based in Wisconsin that’s been around since 1981. It’s a niche player in stage setup and lighting for venues like theaters, casinos, and schools. The company is projected to hit $28M in revenue for 2024 with $1.3M in EBITDA. The two brothers running it are looking to exit, though one may stay on for a transition.

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At A Glance

• Business Type: Theatrical supply and construction
• Location: Wisconsin
• Revenue: $28M (2024 projected)
• EBITDA: $1.3M (2024 projected)
• Employees: 74
• Established: 1981
• Customer Base: Theaters, casinos, schools, TV studios, and theme parks
• Owners: Two brothers, one ready to fully retire

What We Thought:

Red Flags

• Inconsistent EBITDA over the years—especially the 2020 peak during COVID.
• Margins are razor thin for a business with $28M revenue.
• Large employee headcount could be a drag on profitability.
• Owners possibly running personal expenses through the business.
• Inventory management could be difficult with old or obsolete equipment.

Green Flags

• Strong, diversified customer base, from casinos to schools and theme parks.
• The business is rebounding after COVID, with steady revenue projections.
• Potential for growth with AV companies needing high-end lighting and rigging.
• One owner is open to staying on for a smooth transition.

The Verdict

Michael likes the business and thinks it’s the right type of specialty contracting company, but there’s likely something odd under the hood. The inconsistencies in EBITDA and odd financial behavior raise red flags. Heather gives it a thumbs down, particularly from a lender's perspective, as the unpredictable margins and unclear financials would make financing a nightmare.

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