On Dec. 7, video-on-demand infrastructure expert SeaChangeInternational (NASDAQ:SEAC) released Q3 2007 earnings for the period ended Oct. 31.

  • Sales growth was healthy and the net loss was cut in half. That's an operational tour de force, considering the narrowing gross margin.
  • SeaChange has a healthy balance sheet with plenty of cash, no debt, and a rising ratio of payables to receivables. The company can survive many more quarters of losses like this one before even considering a bank loan.
  • This is a four-star Motley Fool CAPS stock, and nearly half of all players with an opinion on the stock are all-star Bulls. Has the community found a diamond in the rough here? Let us know what you think.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$42,254

$35,321

19.6%

Net Profit

($1,033)

($2,108)

N/A

EPS

($0.04)

($0.07)

N/A

Diluted Shares

29,031

28,308

2.6%



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

46.32%

41.36%

4.96

Operating Margin

(5.15%)

(10.26%)

5.11

Net Margin

(2.44%)

(5.97%)

3.53

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$39,051

$51,237

(23.8%)

Accounts Rec.

$32,243

$25,611

25.9%

Inventory

$18,067

$19,385

(6.8%)



Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$16,332

$8,513

91.8%

Long-Term Debt

$0

$0

N/A



Learn the ways of the balance sheet.

Cash Flow Highlights

Is it going to take a sea change to get these companies to release a cash flow statement with earnings?

Find out why Fools always follow the money.

Related Companies:

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  • Concurrent Computer (NASDAQ:CCUR)
  • LodgeNet Entertainment (NASDAQ:LNET)
  • Thomson (NYSE:TMS)
  • C-COR (NASDAQ:CCBL)

Related Foolishness:

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here.