Blackboard Squeaks: Fool by Numbers

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On Nov. 7, education software provider Blackboard (Nasdaq: BBBB) released third-quarter earnings for the period ended Sept. 30.

• Revenues increased 40% to $50.4 million, driven by annual license fees.
• The acquisition of WebCT and stock-options expensing were part of the $0.17-per-share loss. However, even the pro-forma gain of $0.02 per share doesn't compare well to the same period last year, which saw a $0.25-per-share profit.
• Year-to-date free cash flow also dropped, down 86% to $2.4 million.
• Management raised Q4 and full-year guidance by a modest amount.
• This Hidden Gems recommendation receives four out of five stars from our Motley Fool CAPS players.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Q3 2006	Q3 2005	Change
Sales	$50,354.0	$35,927.0	40.2%
Net Profit	($4,775.0)	$7,269.0	N/A
EPS	($0.17)	$0.25	N/A
Diluted Shares	27,922.9	28,829.8	(3.1%)

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

Margin Checkup

	Q3 2006	Q3 2005	Change*
Gross Margin	68.2%	97.2%	(29.0)
Operating Margin	(10.1%)	18.4%	(28.5)
Net Margin	(9.5%)	20.2%	(29.7)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q3 2006	Q3 2005	Change
Cash + ST Invest.	$37,045	$122,617	(69.8%)
Accounts Rec.	$61,360	$33,200	84.8%
Inventory	$2,443	$2,053	19.0%

Liabilities	Q3 2006	Q3 2005	Change
Accounts Payable	$153	$1,225	(87.5%)
Long-Term Debt	$42,411	$0	N/A

Learn the ways of the balance sheet.

Cash Flow Highlights

	YTD 2006	YTD 2005	Change
Cash From Ops.	$10,584	$23,366	(54.7%)
Capital Expenditures	$8,188	$6,696	22.3%
Free Cash Flow	$2,396	$16,670	(85.6%)

Find out why Fools always follow the money.

Related Companies:

• eCollege.com (Nasdaq: ECLG)

Related Foolishness:

• Blackboard: Enticing Math, but Fuzzy
• Blackboard Scribblings
• eCollege Flunked

Blackboard is a Motley Fool Hidden Gems recommendation. Want to know about more small companies poised for big returns? Take a 30-day free trial of the newsletter.

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. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.