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FreeSeas Inc. Message Board

  • PhanManLover PhanManLover May 26, 2010 7:23 PM Flag

    Items to look for in Q1 earnings

    My forecast for Q1 is for .04 EPS with 4.8 mill of free cash and net 1.0 mill of free cash after debt repayment.

    1. EPS doesnt really matter. But what matters is how much free cash FREE generated?

    1b. Was the utilization rate greater than or equal to 0.94?

    1c. Did FREE incur additional expenses for ship maintenance.

    2. Did FREE generate positive cash flow after principal debt payment? The payment is 3.8mill.

    3. Did FREE buy any new ships or refinance the 17.6mill ballon payment coming due in 2011?

    I will revisit this post after earnings are announced.

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    • 1. EPS doesnt really matter. But what matters is how much free cash FREE generated?

      FREE generated FREE cash of 7.3mill which was more than 2 million above my lower-bound forecast!

      1b. Was the utilization rate greater than or equal to 0.94?

      Yes. It came in at .939

      1c. Did FREE incur additional expenses for ship maintenance.

      No. Good to see.

      2. Did FREE generate positive cash flow after principal debt payment? The payment is 3.8mill.

      Big time. They generated 3.3 mill net of debt repayment. They currently have almost 10.0mill in cash (up from the 6.3 mill Q409).

      3. Did FREE buy any new ships or refinance the 17.6mill ballon payment coming due in 2011?

      No, but FREE is hinting that they are on the lookout to acquire a ship. They said "The steadily improving Handysize chartering market positions us to renew our fleet by exploring second-hand and newbuilding opportunities".

      No mention of the 17.6mill balloon payment refinance, but at this rate, given their debt reduction and free cash flow generation, they should have no problem either paying it off or refinancing.

    • Great summary. I'm also hoping for some indication of charters through Q2 (given that we're over half way through it!).

      I see the BHSI has pulled back 1% or so but is holding above 1500. I wonder if they'll comment on where they see charter rates through the rest of the year.

      Many thanks. Fingers crossed!

 
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