On May 1, Cephalon
- Sales rose by 22.4%, backed by 35% growth in the company's central nervous system franchise. Cephalon's successful transition of its pain franchise to Fentora from Actiq ensured that sales ramped up smoothly.
- Strong top-line growth and a decline in operating expenses drove huge gains on the bottom line. Cephalon's margins are looking quite healthy.
- For fiscal 2007, the company expects sales of $1.675 billion to $1.725 billion, with the central nervous system franchise contributing $925 million to $950 million.
- Cephalon expects its EPS for fiscal 2007 to be $4.40 to $4.50. The stock is trading at just 18 times those estimates.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$437.0 |
$356.9 |
22.4% |
|
Net Profit |
$75.2 |
$3.6 |
2,007.8% |
|
EPS |
$0.99 |
$0.05 |
1,880.0% |
|
Diluted Shares |
75.8 |
73.5 |
3.2% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
80.2% |
78.2% |
2.0 |
|
Operating Margin |
26.1% |
5.0% |
21.1 |
|
Net Margin |
17.2% |
1.0% |
16.2 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$579.4 |
$541.5 |
7.0% |
|
Accounts Rec. |
$307.5 |
$225.4 |
36.5% |
|
Inventory |
$189.9 |
$150.5 |
26.2% |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$77.0 |
$87.2 |
(11.6%) |
|
Long-Term Debt |
$1,247.6 |
$1,695.9 |
(26.4%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$58.5 |
($33.8) |
N/A |
|
Capital Expenditures |
$21.4 |
$31.8 |
(32.7%) |
|
Free Cash Flow |
$37.2 |
($65.5) |
N/A |
Free cash flow is a Fool's best friend.
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