Dynamic Technologies Group Inc - Class A ERILF

RE:RE:RE:RE:RE:Free Cash Flow

[billy4325]

InstitutionalPM wrote: The accounts receivable includes unbilled construction contracts receivable.  When building these rides surely they need to cross certain milestones before they can bill their customers.  As the company grows, there will be periods where they need to make an upfront investment in working capital that eventually reverses.  This will be lumpy from quarter to quarter.  There does not seem to be any risk of a material write down on A/R.  Empire's customers are extremely well funded (Disney, Universal, etc). If you look at free cash flow excluding the changes in working capital balances, then the company is generating significant free cash flow aside from Q4/14 where there was some noise (non-recurring).

Exactly, trade receivables was basically unchanged year over year (2014 - 15,645 vs. 2013 of 15,409).  Increase is due to unbilled construction contract receivables (it's kind of hard to collect receivables which haven't been billed yet).  This is part of the business, when you have contracts which stretch over multiple years you cannot bill until certain milestones under the contract are met.