Just as your pulse is checked during a routine physical, free cash flow is used as an indicator of a company's health. It equals the cash brought in from operations minus the money needed to pay the bills. Think about leftover money in your checking account after you pay this month's bills.

Investors and analysts see this leftover money as a gauge of a company's ability to perform. It is available for transactions such as handing out dividends and working on new products.

Some argue free cash flow is wrongly overshadowed by the emphasis often placed on earnings. Earnings numbers can be manipulated and don't always tell the whole story -- and earnings don't mean much if there's nothing left over after a company pays its expenses. Even if you bring in a six-figure salary, but no money left after paying the bills, are you in great financial shape?

You don't have to be Einstein to figure out free cash flow. To calculate the number, subtract the company's expenditures and dividends from its operating cash flow.

If the free cash flow is written in red ink, it doesn't necessarily signal curtains. This is common for young companies looking to grow. It also could be a result of heavy investments, which in the long run could be worth a standing ovation.

Home / Markets / Industries / Technology

Friday, June 27, 2008

Cavico Announces Upward Inflation Adjustments in Construction Contract Values

Email this Story | Respond to Editor | Print

Comtex

HANOI, Vietnam, Jun 27, 2008 (BUSINESS WIRE) ----Cavico Corporation (OTCBB:CVIC) today announced that certain Vietnamese government agencies have made favorable price adjustments to building material prices related to active and ongoing construction contracts between the government and the company. These upward adjustments were made by the government in favor of contractors in response to inflationary pressures that would have sharply reduced the value of government contracts.

More than 90% of Cavico's projects are performed under Vietnamese governmental contracts. The Company believes that more than 80% of its existing contracts will be favorably impacted by the price adjustments, although the exact impact of the adjustments remains unknown at the present time.

"Cavico Corp. has an extensive and experienced finance department supported by a strong legal team. We have a close working relationship with the Vietnamese government and are carefully assessing the effects of inflation on all active and future agreements," noted Hieu Van Phan, Vice President of Cavico Corp.

"Currently, we expect to see Cavico's contractual values upwardly adjusted pursuant to the Company's request for inflationary adjustment to existing government contracts. Initial inflation adjustment payments are expected by late July and are expected to enhance revenue and reduce inflation risk," said Hieu Van Phan, Vice President of Cavico Corp.

About Cavico Corp. (OTCBB:CVIC)

Cavico Corp. is focused on large infrastructure projects which include the construction of hydropower facilities, dams, bridges, tunnels, roads, mines and urban buildings. Cavico is also making investments in hydropower facilities, cement production plants and urban developments in Vietnam. Headquartered in Hanoi, with 3000 employees at projects worldwide, the company has offices throughout Vietnam and a satellite office in Australia.

Founded in 2000, Cavico is a major infrastructure construction, infrastructure investment and natural resources conglomerate headquartered in Hanoi, Vietnam. Cavico is highly respected for its core competency in the construction of mission-critical infrastructure including hydroelectric plants, highways, bridges, tunnels, ports and urban community developments. One of the company's primary competitive advantages is its ability to nurture a project "from concept through completion" with a vertical portfolio of interrelated investment, permitting, design, construction management and facility maintenance services. Cavico's project partners include top multi-national corporations and government organizations. The company employs more than 3,000 people. For more information, visit http://www.cavicocorp.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the company's ability to obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems; compliance with laws and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE: Cavico Corporation

Cavico
   Corp. Timothy Pham, Vice President and Director, 714-838-5456 Cavicohq@cavico.us or Investor Relations Contact: CCG Investor
   Relations Roger Ellis, Senior Vice President, 310-231-8600 roger.ellis@ccgir.com