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Myers Industries Inc. Message Board

  • Finwonder Finwonder Apr 18, 2000 10:35 PM Flag

    Free Cash Flow

    After reviewing today's earnings release I was
    wondering if anyone has any idea of what kind of cash flow
    generation MYE had in Q1. The sales and earnings were not
    much of a surprise. I didn't think they would have a
    bang up quarter earnings wise. I have been long MYE
    for many years now and I approve of their levering of
    the company to pursue acquisitions as long as they
    have ample cash flow to tend to the debt. My feelings
    are that in a couple years from now as the debt is
    paid off MYE will be quite a cash generating machine.

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    • Cash provided by operating activities was $19.9 million for the three months ended March 31, 2000 compared with $23.1 million
      for same period in the prior year.

    • OK, what I did was look at the 10K, at 12/31/99
      the company has Long Term Debt of

      From the news release, they indicate that Long Term
      Debt is 273,288,754 or roughly 7,000,000

      Is that "Free Cash Flow" I'm not quite certain what
      that term means. Calculating a statement of cash flows
      is almost impossible unless you know what the
      depreciation and amortization is.

      Condensed Balance
      Sheets force one into making assumptions that I am
      reluctent to share, and you should be reluctant to rely

      Anyway, they are making money, and maybe we can get a
      bigger dividend [7 cents???] out of the Board of Dirs.
      this year.

      • 2 Replies to Capital_Gains_Tax
      • Here is a quick and dirty example of how to
        calculate free cash flow...

        Start with Operating
        Earnings or Earnings Before Interest & Taxes (EBIT)
        effect it... meaning use the corporate tax rate to
        calculate the taxes.
        Subtract taxes from EBIT.
        you have Net operating profit after tax

        Add back depreciation & ammortization from the
        statement of cash flows.
        Subtract Capital
        Subtract changes in working capital.

        You now have
        debt free cash flow.

        I asked if anyone knew
        MYE's free cash flow, because some companies report it.

        Just as an FYI, calculating Free Cash Flow is the
        first step in the process of valuing a company by the
        Discounted Cash Flow Model. I follow FCF very closely
        because it is a far more important measure of a company's
        performance than earnings. First rule of finance is CASH IS
        KING. Earnings are an accounting construct; they have
        very little to do with cash generation. This is even
        more important that the second rule which states.. BUY
        LOW SELL HIGH!!! :-)

      • The latest 10K will be out next week and cash flow analysis and conclusions should be drawn from that.

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