Investment Thesis
Shimmick Corp exhibits critical financial distress with negative stockholders' equity of -$60.5M (technical insolvency), negative operating cash flow of -$7.5M, and a current ratio of 0.90x indicating inability to cover short-term obligations. The company is unprofitable at all levels with -$4.6M net income, burning cash while carrying $68.7M in long-term debt that cannot be serviced from negative operations.
Strengths
- Maintains $15.0M cash reserves providing temporary liquidity buffer
- Revenue growing 2.6% YoY despite profitability challenges
- Modest insider trading activity (3 Form 4 filings in 90 days) suggests some management confidence
Risks
- Technical insolvency with negative equity of -$60.5M; liabilities exceed assets by significant margin
- Liquidity crisis with current ratio of 0.90x; insufficient current assets to cover current liabilities
- Severe operational losses with -$2.3M operating income and -$7.5M operating cash flow indicates structural unprofitability
- Negative free cash flow of -$8.1M with unsustainable cash burn rate
- Heavy debt burden of $68.7M with negative interest coverage of -1.1x; unable to service debt from operations
- Critically low gross margin of 12.4% in construction industry limits recovery potential and pricing power
- Imminent default and restructuring/bankruptcy risk without significant operational turnaround
Key Metrics to Watch
- Operating cash flow trend and return to positive territory
- Stockholders' equity trajectory and path to positive equity
- Current ratio sustainability and working capital management
- Gross margin expansion and operational leverage improvement
- Debt refinancing ability and default covenant compliance
- Revenue sustainability and contract backlog quality
Financial Metrics
Revenue
88.0M
Net Income
-4.6M
EPS (Diluted)
$-0.13
Free Cash Flow
-8.1M
Total Assets
202.3M
Cash
15.0M
Profitability Ratios
Gross Margin
12.4%
Operating Margin
-2.6%
Net Margin
-5.2%
ROE
N/A
ROA
-2.3%
FCF Margin
-9.2%
Balance Sheet & Liquidity
Current Ratio
0.90x
Quick Ratio
0.90x
Debt/Equity
N/A
Debt/Assets
129.9%
Interest Coverage
-1.06x
Long-term Debt
68.7M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-16T08:22:01.619725 |
Data as of: 2026-04-03 |
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