Keynote's Q4 Off-Key: Fool by Numbers

On Nov. 2, Keynote Systems (Nasdaq: KEYN  ) released earnings for its 2005 fourth quarter, which ended Sept. 30.

  • Net income and EPS benefited from a $2.7 million tax credit from the partial recognition of a deferred tax asset. Without it, EPS would have been $0.08 per stub, still ahead of Wall Street estimates.
  • Management says it bought back 2 million shares from March to October. (Find out why buybacks aren't always a good thing by clicking here.)
  • Keynote expects to book between $13.3 million and $13.7 million in sales and $0.01 and $0.03 in per-share earnings during the first quarter of fiscal 2006. That's well below Street expectations of $13.83 million and $0.08 per stub. Bummer.

Figures in thousands, except per-share data

Income Statement Highlights (What's this?)

Avg.
Est.

Q4
2005

Q4
2004

%
Change

Sales

$13,630

$13,474

$12,147

10.9%

Net Profit

--

$4,342

$1,317

229.7%

EPS

$0.07

$0.21

$0.06

250%



Margin Checkup(What's this?)

Q4 2005

Q4 2004

Change

Gross Margin

73.38%

75.20%

-1.82%

Op. Margin

5.98%

3.30%

2.68%

Net Margin

32.23%

10.84%

21.38%



Balance Sheet Highlights(What's this?)

Assets

Q4 2005

Q4 2004

% Change

Cash + ST Invest.

$133,803

$148,117

-9.7%

Inventory

$-

$-

N/A

Accounts Rec.

$6,387

$6,138

4.1%



Liabilities

Q4 2005

Q4 2004

% Change

Capital Leases

$67

$115

-41.7%

Accounts Pay.

$538

$1,692

-68.2%



Cash Flow Highlights*(What's this?)

Q4 2005

Q4 2004

% Change

Cash From Ops

$3,562

$3,016

18.1%

Capital Expend.

$1,179

$2,334

-49.5%

Free Cash Flow

$2,383

$682

249.4%

*Cash flow data is for the three months ending Sept. 30, 2005.

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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 checkFool.comfor more of our in-depth discussion of what the numbers mean.

The Motley Fool has kicked off its ninth annual Foolanthropy campaign! Nominate your favorite charities on ourFoolanthropy discussion boardthrough Nov. 9. For guidelines on what makes a charity Foolish, visitwww.foolanthropy.com.

Fool contributorTim Beyersowns shares of Akamai, aRule Breakersrecommendation. You can find out what else is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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