Free cash flow remains highly erratic, swinging from a $7.4M outflow in 2023Q2 to a $2.2M inflow in 2023Q4, highlighting significant volatility in cash conversion.
| Cash from Operations | 1.87M | 7.38M | -9.08M | -3.18M | 5.05M | 3.62M | 2.49M |
| Operating CF Margin % | - | 9.93% | -12.52% | -4.61% | 9.28% | 7.54% | 5.21% |
| Operating CF Growth % | -77.75% | 181.28% | -185.28% | -163% | 39.45% | 45.72% | - |
| Net Income | -3.77M | -2.22M | -3.24M | -2.55M | -1.26M | 5.36M | 309.76K |
| Depreciation & Amortization | 6.72M | 3.98M | 3.87M | 3.66M | 3.07M | 2.66M | 1.88M |
| Stock-Based Compensation | 0 | 1.77M | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 76.27K |
| Other Non-Cash Items | 8.61M | 323K | 3K | -47.51K | -32.61K | 27.65K | 142.74K |
| Working Capital Changes | -964.6K | 3.53M | -9.72M | -4.25M | 3.28M | -4.43M | 156.53K |
| Change in Receivables | -1.49M | 2.78M | -3.33M | -3.15M | 2.22M | -1.19M | 1.12M |
| Change in Inventory | 5.42K | 11K | 84K | 5.42K | -14.22K | 0 | -1.35M |
| Change in Payables | 4.18M | 879K | -1.33M | 1.97M | 2.21M | -776.77K | 310.63K |
| Cash from Investing | -3.68M | -1.03M | -807K | -1.13M | -2.55M | -3.22M | -733.46K |
| Capital Expenditures | -4.57M | -1.1M | -909K | -2M | -2.57M | -1.11M | -1.21M |
| CapEx % of Revenue | 3.7% | 1.48% | 1.25% | 2.9% | 4.72% | 2.32% | 2.54% |
| Acquisitions | 889.92K | 67K | 102K | 871.2K | -618.46K | -2.26M | 478.43K |
| Investments | - | - | - | - | - | - | - |
| Other Investing | 0 | 67K | 102K | 871.2K | 637.18K | 153.78K | 478.43K |
| Cash from Financing | 4.38M | -4.39M | 8.18M | 8.01M | -3.63M | 2.31M | -2.96M |
| Debt Issued (Net) | 0 | -4.39M | -1.84M | 8.33M | -1.77M | 1.68M | 2.08M |
| Equity Issued (Net) | 0 | 0 | 9.47M | 0 | 0 | 0 | 0 |
| Dividends Paid | -2.17M | 0 | 0 | -316.54K | -1.85M | -440.36K | -16.02K |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 6.55M | 0 | 545K | 236K | -783.98K | -1.56M | -5.02M |
| Net Change in Cash | 2.26M | 2.5M | -1.42M | 3.93M | -1.67M | 3.84M | -1.41M |
| Free Cash Flow | -2.7M | 6.28M | -9.99M | -5.19M | 2.49M | 2.51M | 1.27M |
| FCF Margin % | -2.19% | 8.45% | -13.78% | -7.52% | 4.56% | 5.22% | 2.67% |
| FCF Growth % | - | 162.9% | -92.6% | -308.74% | -0.97% | 96.84% | - |
| FCF per Share | -0.08 | 0.17 | -0.29 | -0.15 | 0.07 | 0.07 | 0.04 |
| FCF Conversion (FCF/Net Income) | 0.72x | -3.80x | 2.80x | 1.26x | -4.08x | 0.68x | 8.03x |
| Interest Paid | 0 | 789K | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Labor cost inflation exposure
As reported in financial statements, PMEC's operating cash flow frequently diverges from net income, with the OCF/NI ratio reaching an extreme 3.22 in 2023Q2, suggesting that reported earnings are heavily influenced by non-cash items and significant working capital fluctuations rather than core operational profitability.
The persistent disconnect between net income and operating cash flow indicates that the company's accounting earnings may not accurately reflect its underlying cash-generating capacity. Investors should monitor whether this volatility stems from lumpy contract mobilization costs or aggressive revenue recognition practices that fail to translate into actual liquidity.
Based on PMEC's reported figures, free cash flow has exhibited extreme instability, swinging from a $7.4M outflow in 2023Q2 to a $3.3M inflow in 2022Q4, which highlights the company's inability to maintain a consistent cash-generative profile amidst its current operational and capital expenditure requirements.
The erratic FCF trajectory suggests that the business model is highly sensitive to timing differences in contract payments and operational outlays. This lack of predictability makes it difficult to assess the company's long-term ability to self-fund its growth initiatives without relying on external financing or cash reserves.
According to recent SEC filings, PMEC's working capital changes have been a primary driver of cash flow volatility, with a $5.8M outflow in 2023Q2 followed by a $1.5M inflow in 2023Q4, indicating significant friction in the company's cash conversion cycle and receivables management.
These sharp swings in working capital suggest that the company may be struggling with the timing of collections from its public sector clients or managing inventory levels within its D'Bond manufacturing segment. Such fluctuations often obscure the true underlying cash performance of the core facilities management business.
As indicated by the data, PMEC maintains a modest capital intensity, with CapEx/Revenue ratios generally remaining below 5% in most periods, suggesting that the firm's primary operational burden is labor-related rather than driven by heavy investment in property, plant, or equipment.
While the low capital intensity is typical for a service-oriented business, the occasional spikes in CapEx warrant investigation to determine if they represent necessary maintenance or speculative growth investments. The current level of spending appears insufficient to drive meaningful operational efficiency gains given the ongoing negative net margins.
Quick answers to the most common questions about buying PMEC stock.
Primech Holdings Ltd. Ordinary Shares (PMEC) generated $7.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Primech Holdings Ltd. Ordinary Shares (PMEC) generated $6.3M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Primech Holdings Ltd. Ordinary Shares (PMEC) spent $1.1M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.