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Uranium Resources, Inc. (URRE) Message Board

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  • alw59saw alw59saw Oct 8, 2008 10:01 AM Flag

    URRE longs! You better READ THIS

    Look at URRE's income statement, filed with the SEC. It shows a continued used of borrowed money and interest expense from a revolving credit agreement that most companies use to finance operations (including capital expenses and R&D). It will be very difficult for URRE to renew this credit facility because of lack of loan money in the marketplace --- that's what this financial crisis is all about ... banks aren't lending money (except to the very best companies with excellent credit rating and ability to repay --- URRE doesn't fit that description).

    With the price of uranium continuing to drop in the commodities market, URRE's income will also drop and its cash flow (currently 1% - 2% of revenue) will go from + to -. New sales (e.g., India) haven't materialized, so revenue growth from new sources is still a ways off, perhaps years.

    Sorry, your case/explanation just doesn't hold water.

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    • It's not my case/explanation... it's a fact.

      From the conference call

      "Jimmy Gibert: Hi, Dave. How are you? It's certainly encouraging that the Company is cash flow positive.
      How do you see that playing out for the rest of the year? Do you anticipate being cash flow positive in the
      next two quarters?

      David Clark: We are generating cash from operations. And our intent is to simply focus on making wise investment decisions, cutting costs as rapidly and as deeply as we can to toss all nonessential spending out the door. I think, given current plans, we expect to have a very comfortable cash position by the end of next year. So, I really can't say any more than that. As you bring on wellfields, you are making investments. As those wellfields come on, you get the cash back. That's just how the business operates."

      http://files.shareholder.com/downloads/URRE/434015929x0x222571/205af88a-f103-4dcf-9ad9-e9c1429b5c77/URRE%20Q2%2008%20Transcript.pdf

      • 1 Reply to satckimoto
      • And you believe corporate executives in a conference call? I guess you believed those ENRON and Leiman executives also. Market conditions have changed substantially in recent weeks. Most executives haven't a clue how these changes will affect their company and its operations. That's what happened to the real estate market, that's what happened to banks, that's what happened to mortgage brokers and lenders, and its happening to commodities (like uranium, unlike gold), too. You just can't base investment decisions on what those executives say --- they have their jobs to protect.

        You did not address the credit issue and URRE's continuing interest expense.

        You did not address the continuing price decline of URRE stock, and you did not address the possibility of stock delisting by NASDAQ.

        All of those aspects have considerable continuing risk to investors that has to be weighed against holding for potential future profits if/when (months or years) the stock rises.

 
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