American Greetings' Slowdown: Fool by Numbers (AM)

American Greetings' Slowdown: Fool by Numbers

On Thursday, card company American Greetings (NYSE: AM ) released Q2 2007 earnings for the period ended Aug. 25.

Margins sagged across the board, which usually indicates a problem with the company's pricing power and contract negotiations.
The company had dramatically lower receivables, but the summer is its slowest sales season every year.
For a discussion about the income statement and the reverse share dilution, look for the full earnings Take.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q2 2007	Q2 2006	Change
Sales	$360	$360.1	$385.0	(6.5%)
Net Profit	--	-$10.5	$3.2	N/A
EPS	($0.16)	($0.18)	$0.05	N/A
Diluted Shares		58.1	67.9	(14.4%)

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

Margin Checkup

	Q2 2007	Q2 2006	Change*
Gross Margin	51.62%	54.65%	(3.03)
Operating Margin	(6.79%)	1.52%	(8.31)
Net Margin	(2.92%)	0.84%	(3.76)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q2 2007	Q2 2006	Change
Cash + ST Invest.	$89.1	$368.5	(75.8%)
Accounts Rec.	$86.3	$169.9	(49.2%)
Inventory	$277.5	$291.3	(4.8%)

Liabilities	Q2 2007	Q2 2006	Change
Accounts Payable	$122.2	$130.8	(6.6%)
Long-Term Debt	$224.1	$476.2	(52.9%)

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q2 2007	Q2 2006	Change
Cash From Ops.	$4.9	$5.1	(3.5%)
Capital Expenditures	$9.1	$10.1	(9.8%)
Free Cash Flow	-$4.2	-$5.0	16.2%

Find out why Fools always follow the money.

Competitors and partners:

CSS Industries (NYSE: CSS )
Factory Card & Party Outlet (Nasdaq: FCPO )
99 Cents Only Stores (NYSE: NDN )
Hallmark Cards (private)

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Related Foolishness:

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 had no position in any company mentioned. Fool rules are here.

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