On Feb. 27, online audio-book pioneer Audible (NASDAQ:ADBL) released fourth-quarter 2006 earnings for the period ending Dec. 31.

  • For the full scoop on Audible, read the earnings take here.
  • Audible is oh-so-close to breaking through to GAAP net profitability, a feat it hasn't pulled off since the summer of 2005. Perhaps that's why the company released a full set of financial data with all the bragging rights involved, despite being knee-deep in the same sort of accounting review that makes many companies provide just a revenue estimate.
  • It's reassuring to see that Audible hasn't seen a need to raise cash by issuing new shares since 2004. Other small, fast-growing technology operations like Syntax-Brillian (NASDAQ:BRLC) and Access Integrated Technologies (NASDAQ:AIXD) haven't been so lucky -- or so shareholder-friendly -- of late.
  • Take a look at that cash flow statement. When you add back deferred items like royalty payments and revenues, there's plenty of fresh cash in those coffers, paid in advance for services and products yet to be delivered. These lines will trickle into net earnings in due time.
  • A healthy portion of Audible's new customers came in through Apple's (NASDAQ:AAPL) iTunes music downloading portal, for which Audible handles all spoken-word content.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$23,296

$18,264

27.6%

Net Profit

($700)

($2,177)

67.8%

EPS

($0.03)

($0.09)

66.7%

Diluted Shares

24,159

24,310

(0.6%)


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

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

54.6%

51.0%

3.6

Operating Margin

(9.4%)

(20.1%)

10.7

Net Margin

(3.0%)

(11.9%)

8.9
*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Management Effectiveness

Q4 2006

Q4 2005

Change*

Return on Assets

(3.5%)

(11.1%)

(7.6)

Return on Equity

(5.4%)

(14.7%)

(9.3)
*Expressed in percentage points.

See how management puts its financial tools to work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$66,220

$67,165

(1.4%)

Accounts Rec.

$4,205

$2,931

43.5%

Inventory

$212

$498

(57.4%)


Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$3,120

$4,750

(34.3%)

Long-Term Debt

$0

$0

N/A


Learn the ways of the balance sheet.

Cash Flow Highlights

Q4 2006

Q4 2005

Change

Cash From Ops.

$6,782

$2,622

158.7%

Capital Expenditures

$231

$1,600

(85.6%)

Free Cash Flow

$6,551

$1,022

541.0%

Owner Earnings

$377

($3,348)

N/A


Find out why Fools always follow the money.

Cash Conversion Checkup

Q4 2006

Q4 2005

Change

Days in Inventory

1.6

3.0

(1.4)

Days in Receivables

14.6

11.2

3.5

Days Payables Outstanding

23.3

32.6

(9.3)

Cash Conversion Cycle

(7.1)

(18.4)

11.3


Read up on cash conversion metrics.

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. His "outperform" rating of Audible has cost him lots of points in our Motley Fool CAPS market intelligence game, driving him down to a ranking of 19,135 out of more than 23,500 players. Fool rules are here.