On Aug. 15, data-storage specialist Network Appliance
- Strong results from support services balanced tepid growth in product sales for a fairly decent overall revenue boost.
- Operating margins hit the skids because NetApp has been hiring a lot of salespeople and technical staff over the past year. CFO Steven Gomo says that the hiring will slow down now, with an eye toward hitting a 16% operating margin in the fourth quarter.
- Cash is flowing through these offices, free and clear and beautiful: $167 million of free cash flow is about 24% of revenues, and cash is king.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q1 2008 |
Q1 2007 |
Change |
|
|---|---|---|---|
|
Sales |
$689.2 |
$621.3 |
10.9% |
|
Net Profit |
$34.3 |
$54.7 |
(37.2%) |
|
EPS |
$0.09 |
$0.14 |
(35.7%) |
|
Diluted Shares |
377.6 |
391.3 |
(3.5%) |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2008 |
Q1 2007 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
60.5% |
60.6% |
(0.1) |
|
Operating Margin |
3.6% |
9.1% |
(5.5) |
|
Net Margin |
5% |
8.8% |
(3.8) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$1,330.3 |
$1,272.4 |
4.5% |
|
Accounts Rec. |
$403.2 |
$376.9 |
7% |
|
Inventory |
$58.0 |
$56.2 |
3.2% |
|
Liabilities |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Accounts Payable |
$136.1 |
$99.9 |
36.2% |
|
Long-Term Debt |
$69.2 |
$108.8 |
(36.4%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2008 |
Q1 2007 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$200.9 |
$164.6 |
22.1% |
|
Capital Expenditures |
$33.6 |
$23.1 |
45.7% |
|
Free Cash Flow |
$167.3 |
$141.5 |
18.2% |
|
$34.4 |
$55.5 |
(38.1%) |
Free cash flow is a Fool's best friend.
Related Foolishness:
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.
