On Jan. 4, Healthways (NASDAQ:HWAY) released first-quarter earnings for the period ended Nov. 30.

  • Revenues increased 29%, and profits increased 83%. This substantial growth was the result of the outstanding performance of its core commercial business, which produced earnings 10% above the high end.
  • Cash flow from operations increased 108.4%, thanks to substantial increase in the net income and 18% decline to capital expenditure, resulting in a positive free cash flow.
  • The company's guidance for revenues for fiscal 2007 is in a range of $667 million to $701 million, a 62% to 70% increase over 2006 revenues of $412 million.
  • Healthways has a strong four-star rating in Motley Fool CAPS, the Fool's community-driven stock rating service.

(Figures in millions, except per-share data)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$117.1

$90.6

29.2%

Net Profit

$11.8

$6.5

83.3%

EPS

$0.32

$0.18

77.8%

Diluted Shares

36.6

36.0

1.8%



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

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

33.8%

29.5%

4.2

Operating Margin

17.2%

12.1%

5.1

Net Margin

10.1%

7.1%

3.0

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$161.9

$68.7

135.7%

Accounts Rec.

$60.4

$50.6

19.4%

Inventory

N/A N/A N/A


Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$12.2

$4.7

159.6%

Long-Term Debt

$0.4

$0.6

(33.3%)

*Includes other non-current liabilities

Learn the ways of the balance sheet.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

$9.4

$4.5

108.4%

Capital Expenditures

$3.9

$4.7

(18.0%)

Free Cash Flow

$5.5

($0.2)

N/A



Find out why Fools always follow the money.

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