On Thursday, card company American Greetings (NYSE:AM) released Q2 2007 earnings for the period ended Aug. 25.

  • Margins sagged across the board, which usually indicates a problem with the company's pricing power and contract negotiations.
  • The company had dramatically lower receivables, but the summer is its slowest sales season every year.
  • For a discussion about the income statement and the reverse share dilution, look for the full earnings Take.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2007

Q2 2006

Change

Sales

$360

$360.1

$385.0

(6.5%)

Net Profit

--

-$10.5

$3.2

N/A

EPS

($0.16)

($0.18)

$0.05

N/A

Diluted Shares

58.1

67.9

(14.4%)


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

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

51.62%

54.65%

(3.03)

Operating Margin

(6.79%)

1.52%

(8.31)

Net Margin

(2.92%)

0.84%

(3.76)
*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$89.1

$368.5

(75.8%)

Accounts Rec.

$86.3

$169.9

(49.2%)

Inventory

$277.5

$291.3

(4.8%)


Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$122.2

$130.8

(6.6%)

Long-Term Debt

$224.1

$476.2

(52.9%)


Learn the ways of the balance sheet.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$4.9

$5.1

(3.5%)

Capital Expenditures

$9.1

$10.1

(9.8%)

Free Cash Flow

-$4.2

-$5.0

16.2%


Find out why Fools always follow the money.

Competitors and partners:

  • CSS Industries (NYSE:CSS)
  • Factory Card & Party Outlet (NASDAQ:FCPO)
  • 99 Cents Only Stores (NYSE:NDN)
  • Hallmark Cards (private)

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