Secure Computing Satisfies: Fool by Numbers

On Thursday, Motley Fool Rule Breakers pick Secure Computing (Nasdaq: SCUR  ) released earnings for the second quarter, which ended June 30.

  • On a Non-GAAP basis, which includes acquired deferred revenue and excludes intangibles, stock-based compensation, and other non-cash charges, Secure Computing earned $0.07 a share from $63.7 million in revenue.
  • More than 100 deals worth at least $100,000 were booked during the quarter. Seven deals worth at least $1 million were closed. And that's with increased competitive pressure from the likes of Cisco (Nasdaq: CSCO  ) , Websense (Nasdaq: WBSN  ) , and Google (Nasdaq: GOOG  ) .
  • Billings, a measure of Secure's success in multimonth or multiyear service contracts, were up 75% over last year's Q2. (Though a good portion of the gain was a result of the August 2006 acquisition of CipherTrust.)
  • So far, Motley Fool CAPS investors like what they see. They give the stock five out of five stars. What's your take? Click here and let us know.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$57,648

$38,746

48.8%

Net Profit

($10,948)

$6,659

N/A

EPS

($0.18)

$0.11

N/A

Diluted Shares

 65,756

 60,994

7.8%

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

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

70.42%

74.39%

(3.97)

Operating Margin

(11.48%)

(6.99%)

(4.49)

Net Margin

(18.99%)

17.19%

(36.18)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$9,253

$102,561

(91.0%)

Accounts Rec.

$55,235

$30,527

80.9%

Inventory

$4,567

$3,810

19.9%

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$11,586

$4,580

153.0%

Long-Term Debt

$63,275

$0

N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$24,659

$19,568

26.0%

Capital Expenditures

$6,059

$6,355

(4.7%)

Free Cash Flow

$18,600

$13,213

40.8%

Free cash flow is a Fool's best friend.

Related Foolishness:

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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 owned shares of Secure Computing at the time of publication. Find Tim's portfolio here and his latest blog commentary here. The Motley Fool's disclosure policy always adds up.


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