Candela Burned by Costs: Fool by Numbers

On Tuesday, Jan. 23, aesthetic-laser maker Candela (Nasdaq: CLZR  ) released second-quarter 2007 earnings for the period ending Dec. 30, 2006.

• Revenues were flat, coming in at $37.4 million versus $37.7 million last year.
• Net income, however, fell 77% to $1 million, or $0.04 per share, versus last year's $4.5 million, or $0.19 per share.
• Results were hurt by large increases in R&D spending, which soared to $4.6 million from $1.8 million in the year-ago quarter.
• Rising inventories in the face of stagnant sales are a worrisome sign that Candela can't move its products.
• Candela has a lowly one-star rating at Motley Fool CAPS.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Avg. Est.	Q2 2007	Q2 2006	Change
Sales	$42,900	$37.4	$37.7	(0.8%)
Net Profit	--	$1.0	$4.5	(77.3%)
EPS	$0.15	$0.04	$0.19	(79.0%)
Diluted Shares	--	23.4	23.5	(0.4%)

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

Margin Checkup

	Q2 2007	Q2 2006	Change*
Gross Margin	47.52%	50.30%	(2.78)
Operating Margin	1.67%	17.60%	(15.93)
Net Margin	2.73%	11.96%	(9.23)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q2 2007	Q2 2006	Change
Cash + ST Invest.	$54.9	$52.6	4.3%
Accounts Rec.	$32.2	$32.8	(1.9%)
Inventory	$18.0	$13.9	29.8%

Liabilities	Q2 2007	Q2 2006	Change
Accounts Payable	$11.6	$8.0	45.0%
Long-Term Debt	$0	$0	N/A

Learn the ways of the balance sheet.

Cash Flow Highlights
No cash flow statement provided in press release. Boo!

Find out why Fools always follow the money.

Related Companies:

• Palomar Medical Technologies (Nasdaq: PMTI  )
• Cutera (Nasdaq: CUTR  )
• Cynosure (Nasdaq: CYNO  )
• Syneron Medical (Nasdaq: ELOS  )

Related Foolishness:

• Foolish Forecast: Dim Hope for Candela
• Candela's October Surprise
• A Fuzzy Forecast for Candela
• Candela Singed by Patent Lawsuit

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, Rich Duprey owned shares of Candela, but had no positions in any of the other companies mentioned in the article. Fool rules are here.