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Secure Computing Stumbles: Fool by Numbers

Yesterday, Motley Fool Rule Breakers pick Secure Computing (Nasdaq: SCUR  ) released earnings for the third quarter ended Sept. 30, 2007.

  • Secure's conservative accounting understates its true earnings power. On a non-GAAP basis, which includes acquired deferred revenue and excludes intangibles, stock-based compensation, and other non-cash charges, Secure Computing earned $0.09 a share from $65.2 million in revenue.
  • Investors didn't take kindly to those numbers, though. Secure's total revenue all but scraped the bottom end of management's guidance and was well under what analysts had expected.
  • And while I remain a long-term bull, my inner bear can appreciate the sell-off. Sort of. Secure has lost several key executives in recent months, including its former head of sales. With peers Blue Coat (Nasdaq: BCSI  ) , CheckPoint (NYSE: CKP  ) , and Cisco (Nasdaq: CSCO  ) all vying with Secure for business, the battle for revenue growth will continue to be hard fought.
  • Nevertheless, 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

Q3 2007

Q3 2006






Net Profit








Diluted Shares




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

Margin Checkup

Q3 2007

Q3 2006


Gross Margin




Operating Margin




Net Margin




*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights


Q3 2007

Q3 2006


Cash + ST Invest.




Accounts Rec.









Q3 2007

Q3 2006


Accounts Payable




Long-Term Debt




The balance sheet reflects the company's health.

Cash Flow Highlights

Nine Mos. 2007

Nine Mos. 2006


Cash From Ops.




Capital Expenditures




Free Cash Flow




Free cash flow is a Fool's best friend.

Related Foolishness:

  • Secure was a hot stock under $10 last month.
  • As with the last quarter, it's best these numbers not deceive you.
  • These are the numbers I'm talking about.

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Tim Beyers

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at or send email to For more insights, follow Tim on Google+ and Twitter.

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