On June 28, middleware specialist TIBCO (NASDAQ:TIBX) released second-quarter earnings for the period ended June 3.

  • The gross margin dip might be forgiven, considering the lumpy nature of a small company's revenue streams.
  • Operating income suffered under increased spending on sales and marketing. OK, that's a legit way to grow the business, so I'll let that one slip as well.
  • Net income was seriously hampered by a $6.5 million tax provision, compared to a $5.1 million tax benefit one year ago. That's an $11.6 million tax-related bottom-line hit, or almost half of the company's year-ago income.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2007

Q2 2006

Change

Sales

$130.5

$121.2

7.6%

Net Profit

$9.2

$24.5

(62.3%)

EPS

$0.04

$0.11

(63.6%)

Diluted Shares

211.9

219.8

(3.6%)

Get back to basics with the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

72.1%

73.5%

(1.4)

Operating Margin

8.4%

12.4%

(3.9)

Net Margin

7.1%

20.2%

(13.1)
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$470.1

$495.3

(5.1%)

Accounts Rec.

$115.2

$119.8

(3.8%)

Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$9.7

$9.8

(1.7%)

Long-Term Debt

$45.5

$47.4

(4.1%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$10.6

$15.0

(29.2%)

Capital Expenditures

$4.0

$2.3

72.8%

Free Cash Flow

$6.6

$12.7

(47.8%)

Owner Earnings

$13.2

$29.6

(55.6%)

Free cash flow is a Fool's best friend.

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