On May 16, Napster (NASDAQ:NAPS) released fourth-quarter earnings for the period ended March 31.
- Napster showed signs of improvement; its 830,000 subscribers generated 8.8% more revenue than in the previous year's quarter.
- New subscribers increased year-over-year by 47%, mainly from the acquisition of paid subscribers from AOL Music Now.
- The $11.1 million cash buyout for AOL subscribers contributed to the 36.2% decline in cash on the balance sheet.
- New marketing partnerships with AT&T (NYSE:T), Circuit City (NYSE:CC), and Motorola (NYSE:MOT) have helped the company post lower operating expenses.
(Figures in thousands, except per-share data.)
Income Statement Highlights
|
Q4 2007 |
Q4 2006 |
Change | |
|---|---|---|---|
|
Sales |
$29,133.0 |
$26,779.0 |
8.8% |
|
Net Profit* |
($7,543.0) |
($7,314.0) |
N/A |
|
EPS |
($0.17) |
($0.17) |
N/A |
|
Diluted Shares |
43,239.0 |
43,026.0 |
0.5% |
Get back to basics with the income statement.
Margin Checkup
|
Q4 2007 |
Q4 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
27.3% |
28.0% |
(0.6) |
|
Operating Margin |
(27.2%) |
(37.2%) |
9.9 |
|
Net Margin |
(25.9%) |
(27.3%) |
1.4 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q4 2007 |
Q4 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$66,483.0 |
$104,169.0 |
(36.2%) |
|
Accounts Rec. |
$1,418.0 |
$1,042.0 |
36.1% |
|
Liabilities |
Q4 2007 |
Q4 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$2,231.0 |
$3,279.0 |
(32.0%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
Management was so busy downloading tunes that they forgot to post free cash flow.
Related Foolishness:
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