Although H.J. Heinz (NYSE:HNZ) remains in the news because of Teresa Heinz Kerry, wife of presidential hopeful John Kerry and benefactor of the ketchup fortune, I still associate the company most closely with Carly Simon's early '70s song "Anticipation."

Heinz first aired the commercials featuring ketchup slowly spilling onto hamburgers, hot dogs, and french fries as Simon sang in 1974. I remember the pitches as if they were yesterday. Ironically, today's earnings call proves the imagery is just as appropriate now as it was 30 years ago.

Heinz reported this morning that global sales of ketchup rose 10%, helping fuel rising earnings and income. After excluding $0.15 of per-share income from operations spun off to Del Monte Foods (NYSE:DLM) and $0.03 of one-time charges, Heinz grew its third quarter per-share earnings to $0.57 from $0.54 a year ago, a 6% gain. Per-share income from continuing operations grew to $1.62 for the first nine months of fiscal 2004, 7% better than last year's $1.51.

Heinz attributed some of the growth to new foods for the carb-conscious, including its One-Carb ketchup and frozen entrees co-branded with Weight Watchers (NYSE:WTW) that offer a balance between carbs, fat, and protein.

But what makes Heinz most attractive is an increasingly successful financial fitness program. Executives say three days have been cut out of the average time its takes to collect money owed, and its average payments to vendors have been pushed back by four days. Fools love to see this kind of fiscal discipline, because it often indicates higher free cash flow. It's no different here.

Heinz increased free cash flow to $279 million for the quarter, a 141% improvement over last year. Year-to-date free cash flow came in at $697 million, 49% better than 2003's first nine months. Best of all, free cash flow for both periods easily outpaced net income. (Heinz reported $202 million in net income for the quarter and $608 million for the nine-month period.)

Heinz predicts 2004 net income will be between $2.19 and $2.21 per share, an improvement of at least 8% over last year. Annual free cash flow is expected to grow by at least $98 million. These are very positive indicators, and Heinz officially makes my watch list as a result.

But while I really like Heinz's discipline, its debt, which exceeds cash by more than $3.5 billion, scares me. I want to see free cash flow taking huge chunks out of that total.

Until that happens, I remain in... anticipation.

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Motley Fool contributor Tim Beyers loves ketchup, but not as much as his kids, who consume it liberally with his wife's homemade fries. He has no stake in any of the companies mentioned here.