I'll admit, at first when I looked at the financials of HRD I...

I'll admit, at first when I looked at the financials of HRD I went "wow!". $3 million positive cashflow 1st quarter - looks great! If they earn that each qarter and trade at a PE of 10, then they should be worth $120 million. But then I read up about the company. If only the truth were so blissful.

The $2 mil profit for FY04 included the revenue for the Latin contract. But this money was paid late - in q1 FY05 instead. So there is merely a difference between when the revenue was recorded and when it was received - nothing exciting about that. HDR had *negative* operating cash flows of $500k in FY04 then massive positive cash flows in Q1 FY05 of $3 mil. Add them together and you (approximately) get the profit for FY04.

I'm going to do further research on this one but I am wary that their next cashflow statement will "surprise" some people and it could take a hit.