Investment Thesis
SMHI is a financially distressed maritime company with deeply negative profitability (-35.7% net margin), negative operating cash flow (-$15.1M), and deteriorating revenue (-16% YoY). The company cannot service its substantial $297.1M debt load from operations due to negative operating income (-14.4% margin) and interest coverage of -0.3x, creating significant refinancing and default risk.
Strengths
- Positive gross margin of 15.2% indicates underlying business model viability
- Net loss improved 64.4% YoY showing operational improvement trajectory
- Current and Quick ratios at 2.36x and 2.32x suggest adequate near-term liquidity
Risks
- Negative operating and free cash flow (-$15.1M and -$21.2M respectively) with unsustainable cash burn rate
- Cannot service $297.1M debt from operations due to negative operating income (-14.4% margin) and -0.3x interest coverage creating default risk
- Revenue declining 16% YoY combined with 1.20x debt-to-equity leverage and deteriorating returns (ROE -6.4%, ROA -2.5%)
Key Metrics to Watch
- Operating Cash Flow and Free Cash Flow - fundamental to debt service capability and survival
- Revenue trends and operating margin improvement - path to profitability and cash generation
- Debt maturity schedule and refinancing risk - critical for liquidity and going concern
Financial Metrics
Revenue
44.3M
Net Income
-15.8M
EPS (Diluted)
$-0.61
Free Cash Flow
-21.2M
Total Assets
640.7M
Cash
38.7M
Profitability Ratios
Gross Margin
15.2%
Operating Margin
-14.4%
Net Margin
-35.7%
ROE
-6.4%
ROA
-2.5%
FCF Margin
-47.9%
Balance Sheet & Liquidity
Current Ratio
2.36x
Quick Ratio
2.32x
Debt/Equity
1.20x
Debt/Assets
61.3%
Interest Coverage
-0.31x
Long-term Debt
297.1M
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: 2026-05-06T16:21:29.725104 |
Data as of: 2026-03-31 |
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