A Bigger Vault for Secure Computing: Fool by Numbers

On Thursday, April 26, Rule Breakers selection Secure Computing (Nasdaq: SCUR  ) released earnings for the first quarter ended March 31.

  • Our table below reports revenue and income in accordance with Generally Accepted Accounting Principles, or GAAP. Sadly, that won't help you understand this business. On a non-GAAP basis -- which adds back certain charges for acquired deferred revenue and stock-based compensation -- Secure Computing booked $60.5 million in revenue and $0.05 in per-share earnings.
  • More impressive, though, is that Secure is winning against tough competitors like Check Point Software (Nasdaq: CHKP  ) , Trend Micro (Nasdaq: TMIC  ) , and Cisco (Nasdaq: CSCO  ) . For example, management says that 118 deals completed during the quarter were valued at $100,000 or more -- a company record.
  • That's impressive momentum, and it may explain why the 400 professional and amateur investors tracking the stock in CAPS collectively give Secure Computing four out of five stars.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$53,772

$42,617

26.2%

Net Profit

($11,489)

($12,759)

N/A

EPS

($0.18)

($0.25)

N/A

Diluted Shares

65,272

51,705

26.2%

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

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

70.06%

72.00%

(1.94)

Operating Margin

(14.68%)

1.80%

(16.48)

Net Margin

(21.37%)

(29.94%)

8.57

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$9,317

$15,276

(39%)

Accounts Rec.

$55,045

$7,699

615%

Inventory

$5,153

$8,996

(42.7%)

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$9,639

$5,580

72.8%

Long-Term Debt

$73,169

$0

N/A

Learn the ways of the balance sheet.

Cash Flow Checkup

Q1 2007

Q1 2006

Change

Cash From Ops.

$12,004

$11,699

2.6%

Capital Expenditures

$2,884

$3,837

(24.8%)

Free Cash Flow

$9,120

$7,862

16%

Find out why Fools always follow the money.

Related Foolishness:

Secure Computing is a Motley Fool Rule Breakers pick. David Gardner and his team of analysts have unearthed four stocks that have more than doubled in the first two years of this market-beating service. Want to find out who they are? Click here to test-drive Rule Breakers for 30 days. There's no obligation to subscribe.

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.

Fool contributor Tim Beyers, ranked 3,120 out of more than 27,900 in Motley Fool CAPS, owns shares of Secure Computing. Get the skinny on all the stocks he owns by checking Tim's Fool profile. The Motley Fool's disclosure policy always adds up.


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