Valuation Analysis¶
Asking Price¶
| Component | Asking | Counter Target |
|---|---|---|
| Business | $2,250,000 | TBD |
| Real Estate | $1,000,000 | $900,000 |
| Total | $3,250,000 | ~$3,150,000 |
SDE (Seller's Discretionary Earnings)¶
Working estimate: 2025 SDE is still likely around $1.0M+, but the new financial uploads show that the 2025 source numbers need reconciliation before final modeling.
| Source | Revenue | Net / Ordinary Income | Notes |
|---|---|---|---|
| 2025 full-year P&L PDF | $3,892,993 | $799,168 | Prior basis for ~$1.06M SDE estimate |
| 2025 monthly P&L workbook | $3,617,208 | $480,814 | Includes large Dec depreciation expense |
| 2025 federal tax return | $3,707,280 | $585,209 | Form 1120-S ordinary business income; Section 179 shown separately |
| Q1 2026 P&L workbook | $1,522,053 | $849,046 | Jan-Mar only, very strong but likely lumpy |
Potential addbacks to validate:
| Item | Amount / Status |
|---|---|
| Owner salary/draws | TBD |
| Depreciation | Significant; 2025 monthly workbook shows $161,828 depreciation expense in Dec |
| Section 179 | 2025 tax return shows $138,095 |
| Owner auto / personal expenses | Confirmed some personal expenses run through business |
| Interest | Small addback if debt not assumed |
| One-time items | TBD |
Multiple Analysis¶
| Metric | Calculation | Result |
|---|---|---|
| Price / SDE | $2.25M / ~$1.06M working estimate | ~2.1x |
| Price / Revenue | $2.25M / $3.71M tax-return revenue | 0.61x |
| Price / Net Income | $2.25M / $585K tax OBI | 3.8x |
| Price / Q1 2026 annualized revenue | $2.25M / $6.09M | 0.37x, not safe to rely on without April/TTM confirmation |
~2.1x working-estimate SDE remains reasonable for a machine shop with: - Strong revenue growth trajectory - Customer concentration risk (LANL at 94% — see company/customers) - Certification moat (see company/certifications) - Owner dependency (see people/owner-dependency) - Modern core equipment (see equipment/machine-inventory)
Typical machine shop multiples: 2.0-3.5x SDE depending on size, growth, and customer diversification.
Hidden Value Not in Asking Price¶
| Asset | Value | Notes |
|---|---|---|
| Tooling inventory | $773K | See equipment/tooling-inventory — massive consumable asset |
| Equipment replacement value | $1.2M | vs. $210K net book value (see equipment/capex-assessment) |
| Cash on hand | $726K at Mar 31, 2026 | financials/balance-sheet - likely retained by seller |
| Accounts receivable | $67K at Mar 31, 2026 | likely retained or adjusted at close; down from $305K at Dec 31, 2025 |
| Signed 2026 contracts | $2.9M | Revenue visibility (see company/customers) |
Terms & Conditions of Sale¶
Per the CIM listing: (Source: CIM)
| Term | Detail |
|---|---|
| List Price | $2,250,000 |
| Seller training | Will introduce purchaser to all significant parties and train in operation |
| Contract transfer | Seller will help facilitate transfer or acquisition of current and future contracts |
| FF&E condition | Furniture, fixtures, and equipment will be in good working condition at closing |
| FF&E transfer | All FF&E transfers to purchaser at closing |
| Inventory transfer | Inventory ($903K per CIM) and media collateral transfer at closing |
| Cash & A/R | ⚠️ Seller retains all cash and accounts receivable |
| A/P & Debt | Seller retires all accounts payable and other debt as of closing |
Important: Cash and A/R do NOT come with the business per the FAQ. As of Mar 31, 2026, cash was $726K and A/R was $67K. Budget working capital of $200K-$300K to operate from day one. (Source: FAQ and financials/balance-sheet)
Key Operating Metrics for Valuation¶
| Metric | Value | Source |
|---|---|---|
| Working capital required | $200,000–$300,000 | FAQ |
| Payment terms | Net 30 (usually paid in ~15 days) | FAQ |
| Collection issues | None — no uncollectable debt | FAQ |
| Security clearances | NOT required — work is unclassified | FAQ |
| Equipment depreciation | 100% write-offs used to reduce taxable profit | FAQ |
| Machine utilization | 50–60% single shift | FAQ |
| Revenue per employee | ~$309K using 2025 tax revenue ($3.707M / 12 employees) | Calculated |
| Q1 2026 revenue | $1.522M | financials/profit-and-loss |
| Q1 2026 net income | $849K | financials/profit-and-loss |
| Inventory (CIM) | $903K | CIM |
| FF&E (CIM) | $1.2M | CIM |
| Website & media collateral | $4K | CIM |
See: company/operations for full operational details.