On Aug. 31, electronic payments equipment maker VeriFone Holdings (NYSE:PAY) released Q3 2006 earnings for the period ended July 31.
- Wider margins plus increased sales equals happy shareholders, and VeriFone delivers on both counts this time.
- Share dilution is somewhat disappointing, though not outrageous. Those extra shares also complicate the finances a bit, accounting for $1.7 million of the operational costs.
- Cash flows turned south because of a $40 million increase in inventories in the quarter. That's presumably a stock buildup in anticipation of a new product release in the next quarter, a touch-screen device that can accept EMV "smart card" payments.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q3 2006 |
Q3 2005 |
Change | |
|---|---|---|---|---|
|
Sales |
$145,910 |
$147,617 |
$125,701 |
17.4% |
|
Pro Forma Net Profit |
-- |
$19,700 |
$13,100 |
50.4% |
|
Pro Forma EPS |
$0.26 |
$0.28 |
$0.20 |
40.0% |
|
Diluted Shares |
69,079 |
65,423 |
5.6% |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2006 |
Q3 2005 |
Change* | |
|---|---|---|---|
|
Gross Margin |
45.02% |
40.66% |
4.36 |
|
Operating Margin |
19.28% |
14.40% |
4.88 |
|
Net Margin |
13.28% |
10.42% |
2.86 |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$92,145 |
$20,091 |
358.6% |
|
Accounts Rec. |
$106,521 |
$74,304 |
43.4% |
|
Inventory |
$73,870 |
$33,016 |
123.7% |
|
Liabilities |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$62,583 |
$35,462 |
76.5% |
|
Long-Term Debt |
$179,379 |
$181,296 |
(1.1%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
Q3 2006 |
Q3 2005 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
($11,024) |
$11,738 |
N/A |
|
Capital Expenditures |
$1,945 |
$1,212 |
60.5% |
|
Free Cash Flow |
($12,969) |
$10,526 |
N/A |
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Diebold is a Motley Fool Inside Value recommendation, while Hypercom is a former Stock Advisor pick.
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At the time of publication, Fool contributor Anders Bylund had no positions in any company mentioned. Fool rules are here .
