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Non-Tech : Hvide Marine HMAR - High Growth, Undervalued
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To: Grommit who wrote (235)2/1/1998 10:47:00 AM
From: Grommit  Read Replies (1) of 547
 
...continued ...

(I lost my editing time -- twice.)

Let's estimate 1998 revenue. Use Q4 times 4 for the run rate ($67 million), not the 1997 full year of $210 million). So we are have $268 million revenue in 1998. But lower it a bit for utilization rate unusually high in Q4 -- $250 million.

From press releases, Kirby adds $24 Million and Care adds $90 Million. But some of Kirby is already in Q4 revenue. Towing revenue in Q4 was $7.4 compared to $4.5 in Q3. So Kirby was $3MM of Q4, which is $12 MM annual rate, so it must have been in at 1/2 qtr. So add $12MM for Kirby and $90MM for Care = 250 + 12 + 90 = $352 million for 1998.

They have 5 new boats coming on line: 5 boats * $8000 per day * 90% util * 1/2 year * 330 days per year = around $6 million. (How many days a year do they work? I guess 6 or 7.)

Now at $358 million revenue. Missing anything? Plus $10 million for dayrates continuing up in 1st half, then stabilizing? $368 million. Need a $35 million acquisition perhaps. Did they say in the conf call that $70 million was left in the line of credit? (I did not write it down.) If so, it is tight, but they can do it. In half a year they buy a $70 million annual revenue target.

(They also have cash flow from operations, and can issue a lower amount of equity than $300 million if needed -- say $70 million at $24 a share.)

And if they have no acquisitions and hit $350 million in revenue. EPS still be fine. My guess is $2.60 - $2.80

(If they do raise $200-300 million in the 1st half -- they could well blow past $450 million in revenue.)

....
Conspiracy theory: CIBC is upset that they did not get the christmas letter first and downgrades HMAR! ;o)
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