Yesterday, Motley Fool Rule Breakers pick Secure Computing (NASDAQ:SCUR) released earnings for the third quarter ended Sept. 30, 2007.
- Secure's conservative accounting understates its true earnings power. On a non-GAAP basis, which includes acquired deferred revenue and excludes intangibles, stock-based compensation, and other non-cash charges, Secure Computing earned $0.09 a share from $65.2 million in revenue.
- Investors didn't take kindly to those numbers, though. Secure's total revenue all but scraped the bottom end of management's guidance and was well under what analysts had expected.
- And while I remain a long-term bull, my inner bear can appreciate the sell-off. Sort of. Secure has lost several key executives in recent months, including its former head of sales. With peers Blue Coat (NASDAQ:BCSI), CheckPoint (NYSE:CKP), and Cisco (NASDAQ:CSCO) all vying with Secure for business, the battle for revenue growth will continue to be hard fought.
- Nevertheless, CAPS investors like what they see. They give the stock five out of five stars. What's your take? Click here and let us know.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Q3 2007 |
Q3 2006 |
Change | |
|---|---|---|---|
|
Sales |
$60,018 |
$43,748 |
37.2% |
|
Net Profit |
($10,052) |
($7,291) |
N/A |
|
EPS |
($0.17) |
($0.14) |
N/A |
|
Diluted Shares |
66,268 |
57,378 |
15.5% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2007 |
Q3 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
71.74% |
73.06% |
(1.32) |
|
Operating Margin |
(8.10%) |
(14.51%) |
6.41 |
|
Net Margin |
(16.75%) |
(16.67%) |
(0.08) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$10,666 |
$8,370 |
27.4% |
|
Accounts Rec. |
$60,029 |
$51,733 |
16.0% |
|
Inventory |
$5,369 |
$4,533 |
18.4% |
|
Liabilities |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$12,295 |
$13,628 |
(9.8%) |
|
Long-Term Debt |
$53,371 |
$86,005 |
(37.9%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Nine Mos. 2007 |
Nine Mos. 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$37,436 |
$26,008 |
43.9% |
|
Capital Expenditures |
$8,896 |
$8,368 |
6.3% |
|
Free Cash Flow |
$28,540 |
$17,640 |
61.8% |
Free cash flow is a Fool's best friend.
Related Foolishness:
- Secure was a hot stock under $10 last month.
- As with the last quarter, it's best these numbers not deceive you.
- These are the numbers I'm talking about.
