Headwaters' Heady Quarter: Fool by Numbers

On May 8, Headwaters (NYSE: HW  ) released Q2 2006 earnings for the period ended March 31.

  • Per-share earnings of $0.40 failed to meet Street estimates because management (Foolishly) decided not to recognize roughly $10 million worth of licensing revenue subject to at-risk Sec 29 alternative energy tax credits.
  • Regardless, Headwaters saw major improvements in several areas of its business. For example, long-term debt declined by just about $80 million. That, in turn, created $10 million in interest savings that flowed to the bottom line.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

Change

Sales

$252,550

$269,683

$222,392

21.3%

Net Profit

--

$18,401

$9,974

84.5%

EPS

$0.44

$0.40

$0.26

53.8%



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

Margin Checkup

Q2 2006

Q2 2005

Change

Gross Margin

29.48%

36.69%

(7.20%)

Op. Margin

13.99%

16.13%

(2.13%)

Net Margin

6.82%

4.48%

2.34%



Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash+ ST Invest.

$56,775

$5,943

855.3%

Inventory

$68,202

$57,002

19.6%

Accounts Rec.

$127,494

$122,900

3.7%



Liabilities

Q2 2006

Q2 2005

Change

Long-Term Debt

$654,018

$734,662

(11%)

Accounts Pay.

$43,957

$36,739

19.6%



Learn the ways of the balance sheet.

Cash Flow Checkup

No cash flow statement provided. (Whatever.)

Find out why Fools always follow the money.

Related Companies:

  • Arch Coal (NYSE: ACI  )
  • Alliance Resource Partners (Nasdaq: ALRP  )
  • CEMEX SA de C.V. (NYSE: CX  )
  • Foundation Coal (NYSE: FCL  )
  • Lafarge North America (NYSE: LAF  )
  • Nalco (NYSE: NLC  )

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.

Headwaters is aMotley Fool Rule Breakersselection. Ask us for an all-access pass and you'll get a behind-the-scenes look at a portfolio that is beating the market by more than 17% as of this writing. It's free for 30 days.

Fool contributor Tim Beyers owns shares of Headwaters. You can find out what else is in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.


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