Fools who read my column on coal stocks last week already know how much I enjoy finding emerging trends. Here's another that has been building for the last three months: America's job-full recovery.
As far back as April, we were already seeing evidence that the much-ballyhooed "jobless recovery" was turning into a story in need of a fact-checker. Back then, temporary staffing agency KForce
The trend continued to build through last month, when fellow Fool Alyce Lomax described headhunting firm Korn/Ferry's
For the second quarter of 2004, Heidrick notched revenue gains of 20% over the second quarter of 2003 and diluted earnings per share up a whopping 55%. Now, GAAP profits are a lovely thing to have and much preferable to the make-believe numbers that companies often wrap in the cloak of Latin respectability and release as pro forma earnings (Latin for "we call 'em like we wished we saw 'em"). But what Foolish investors really like to see their companies produce is free cash flow.
Heidrick's earnings release suggests that it was indeed free cash flow positive for the quarter. In the fifth highlight of the release, the company brags that its cash hoard now stands at $118.7 million -- a 24% increase over the year-ago quarter. That looks good until you scroll down to the balance sheet and see that over the past six months the company's net cash has hardly changed at all.
Hmm. So is the company still making real cash money? We don't know, and if the company holds true to its past practice, it will be about two weeks before it files its 10-Q with the SEC. Only then will we be able to get a truly accurate view of Heidrick's success this quarter as well as an idea of how far along the economic recovery has come.
Fool contributor Rich Smith has no interest in any of the companies mentioned in this article.
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