Post by
nozzpack on Apr 27, 2021 8:44am
Forecasted Cash flows in 2021
1..Simple Method
Balance sheet Cash increased by $10.5 million in January 2021.
Annualized, that is 12 X $10.5 m = $126 million.
Conversion rate of cash flows to cash = 86% in 2020.
That is, cash flows in 2021 = $126 m / 0.86 = $146 million
2..Operating gains and losses
Revenue declined by 17 % in 2020 to $334 m
Assume decline is 11 % in 2021 to $300 m.
At 60 % gross margin, cash flows will be reduced by $34 m X 60 % = $20.5 m .
Cash flows Gains and losses in 2021
reduced gross margin effect -$20.5 reduced Interest Expense ( 7/12 X $11.1m ) +6.5 m
Reduced Restruct Expenses ( $8.1 m -$2.1 m) +6.0 m
one time cost CEO LTIP +4.0 m
Reduction in Capex ( $5.6 m -$3.6 m ) +2.0 m
Reduction in NCIB ( $5 m - $3.3 m) +1.6 m
Total -$0.4 m
A couple of issues are more complicated to estimate.
Other operating expenses were $204 million in 2020 but only $196 m in Q4 /20 annualized , which is a gain of $8 million.
I chose Q4/20 , as manpower expenses were lowest due to accrued reductions in 2020 head counts in Q4.
Including this gain relative to 2020, and operating cash flows in 2021 relative to 2020 will be that of 2020 ( $127.1 m ) plus $7.6 m which is
$134.7 m .
Q1/21 will have additional data with which to fine tune these calculations.
But, as it stands right now, 2021 cash flows are forecast to be in the $134.7 m to $146 m range.
In 2020, 86 % of cash flows was converted to cash.
That is cash levels in 2021 will increase by $116 m to $125 million.
This places cash levels at exit 2021 at or very near $200 m ( $7.15 per share ) and no debt.
Comments will be welcome.