On Tuesday, August 7, luxury denim wrangler True Religion
- Management says that the gross margin growth comes from strong sales in the company-owned retail stores, of which there are now eight in fashionable shopping centers from Miami to L.A. The company is obviously pleased with this development and expects to open seven more by the end of the year.
- Building or leasing these things costs money, though, and you can see that in the surge in capital spending.
- As for the bleak operating cash flow picture, True Religion built up its inventories by $3.9 million over the past quarter to prepare for the fall season and paid down $5.1 million of income taxes in advance versus none last year.
- True Religion hired Goldman Sachs
(NYSE:GS) to "explore strategic alternatives" earlier this year; the usual outcome of such advisory sessions is a sale or merger. But the company has gotten what it wanted out of Goldman, cut ties with it, and is moving on as a stand-alone entity.
(Figures in thousands, except per-share data.)
Income Statement Highlights
|
Q2 2007 |
Q2 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$35,732 |
$30,734 |
16.3% |
|
Net Profit |
$5,056 |
$4,874 |
3.7% |
|
EPS |
$0.21 |
$0.21 |
0.0% |
|
Diluted Shares |
23,561.2 |
23,404.0 |
0.7% |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2007 |
Q2 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
57.2% |
53.2% |
4.0 |
|
Operating Margin |
23.1% |
25.6% |
(2.5) |
|
Net Margin |
14.2% |
15.9% |
(1.7) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$41,081 |
$30,612 |
34.2% |
|
Accounts Rec. |
$18,047 |
$14,049 |
28.5% |
|
Inventory |
$12,732 |
$11,265 |
13.0% |
|
Liabilities |
Q2 2007 |
Q2 2006 |
Change |
|---|---|---|---|
|
Accounts Payable + Accrued Expenses |
$9,195 |
$5,615 |
63.8% |
|
Long-Term Debt |
$0 |
$0 |
N/A |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q2 2007 |
Q2 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
($4,996) |
$9,286 |
N/A |
|
Capital Expenditures |
$1,437 |
$18 |
7,883.6% |
|
Free Cash Flow |
($6,433) |
$9,268 |
N/A |
|
$4,847 |
$6,130 |
(20.9%) |
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.
At the time of publication, Fool contributor Anders Bylund was a happy True Religion shareholder but had no other position in any company mentioned. Fool rules are here.
