Hecla Mining Company (HL) Cash Flow Statement

The persistent OCF/NI ratio above 1.0, even in loss quarters like 2026Q1 and 2024Q1, indicates that non-cash charges such as depreciation and amortization are substantial relative to net income. The gap between net income and operating cash flow is largely explained by D&A, which averaged around $40M per quarter, and working capital swings that often reversed. This suggests that reported earnings are of high quality, with cash generation not dependent on aggressive accrual accounting.

The FCF margin expanded from -16.1% in 2024Q1 to 40.7% in 2026Q2, a dramatic swing that aligns with the 53% YoY revenue surge noted in the income statement analysis. However, the sustainability of this trajectory is questionable given that 2026 guidance was softened and costs are rising, as flagged in recent earnings commentary. Investors should monitor whether FCF can remain above 30% of revenue if metal prices retreat.

The CapEx/Revenue ratio has declined steadily over the past six quarters, even as absolute CapEx remained in the $40-80M range, implying that revenue growth is outpacing investment. This could signal that the company is past a heavy investment phase, but it also raises questions about whether maintenance capex is sufficient for aging assets like Casa Berardi. The recent increase in CapEx in 2025Q4 to $82.3M suggests some lumpiness, but the overall trend is toward lower capital intensity.

The large positive working capital change in 2024Q4 and the negative changes in 2025Q1 and 2026Q1 appear to reflect timing of concentrate sales and inventory builds at remote sites like Greens Creek. These swings can obscure the true cash generation trend, but the overall pattern suggests that management is not aggressively stretching payables or tightening collections. The negative working capital changes in recent quarters may indicate inventory build-up, which could be a response to higher metal prices or a sign of slowing sales.

Despite a fortress balance sheet with near-zero debt, Hecla is returning very little cash to shareholders, with a dividend yield likely below 1% and buybacks almost negligible. The $173.3M acquisition in 2026Q1, likely for the Nevada assets, indicates that management is deploying cash into M&A rather than buybacks. This conservative approach may appeal to investors seeking balance sheet strength, but it also implies that the market's expectation of capital returns may be low.