On Nov. 7, PolyMedica (NASDAQ:PLMD), which makes diabetes testing supplies, released second-quarter earnings for the period ended Sept. 30.

  • Sales increased by 41% to $164.1 million, primarily driven by the company's focus on its core diabetes business and investment in the Medicare Part D drug program.
  • Net income decreased by 21% to $8 million, because of the increased cost of sales, and selling and administrative expenses.
  • PolyMedica's shift into lower-margin businesses hurt earnings, despite the robust revenue growth.
  • Free cash flow decreased by 37.4% to $16 million, as cash from operations decreased by 29.2%; capital spending increased 22.6%.
  • Long-term debt rose 95.3% during the period.

(Figures in millions, except per-share data)

Income Statement Highlights

Q2 2006

Q2 2005

Change

Sales

$164.1

$116.4

41.0%

Net Profit*

$8.0

$10.1

(21.0%)

EPS

$0.34

$0.40

(15.0%)

Diluted Shares

23.6

25.1

(5.9%)

*From continuing operations

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

Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin

46.3%

54.1%

(7.8)

Operating Margin

9.6%

14.3%

(4.7)

Net Margin

4.9%

8.7%

(3.8)

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$7.4

$60.3

(87.7%)

Accounts Rec.

$106.6

$72.1

47.9%

Inventory

$41.4

$37.3

11.0%



Q2 2006

Q2 2005

Change

Accounts Payable

$49.8

$39.4

26.4%

Long-Term Debt

$263.6

$135.0

95.3%



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$21.0

$29.6

(29.2%)

Capital Expenditures

$5.0

$4.1

22.6%

Free Cash Flow

$16.0

$25.5

(37.4%)



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Related Companies:

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  • Medtronic (NYSE:MDT)

Related Foolishness:

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