II-VI Gets Deep-Sixed: Fool by Numbers

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On April 24, II-VI (Nasdaq: IIVI), which makes crystalline compounds for lasers and other electronics, released third-quarter earnings for the period ended March 31.

• Shares dropped over 20% after the earnings report, mostly because of disappointing full-year guidance.
• Management now expects revenues in the range of $67.5 million to $69.5 million for the fourth quarter and $259 million to $261 million for full-year 2007. It also said EPS will likely be in the range of $0.30-$0.33 in Q4 and $1.19-$1.22 for the full year.
• This Motley Fool Hidden Gems recommendation carries a five-star rating in Motley Fool CAPS.

(Figures in thousands, except per-share data.)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Sales	$67,085	$59,363	13.0%
Net Profit	$10,049	$7,450	34.9%
EPS	$0.33	$0.25	32.0%
Diluted Shares	30,336	29,931	1.4%

Get back to basics with the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
Gross Margin	46.0%	44.5%	1.5
Operating Margin	18.1%	19.4%	(1.3)
Net Margin	15.0%	12.6%	2.4

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$26,048	$24,316	7.1%
Accounts Rec.	$45,446	$39,712	14.4%
Inventory	$54,877	$50,305	9.1%

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable	$13,039	$10,754	21.2%
Long-Term Debt	$11,708	$29,439	(60.2%)

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q3 2007	Q3 2006	Change
Capital Expenditures	$5,398	$3,112	73.5%

Free cash flow is a Fool's best friend.

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