SureBeam Corporation yesterday [Monday] reported revenues of US$11.6m for the Q4 of fiscal 2001, an increase of 18% year on year.
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This figure was prompted by the US$12.5m of sales related to the US Postal Service (USPS) subcontract to Surebeam’s majority owner Titan Corporation (Titan), and US$1.9m of other sales to Titan.
Revenue from third parties was negative US$2.8m, due to component parts that were transferred from third party contracts to the USPS subcontract in order to meet the contractual time constraints. SureBeam’s gross margin for the Q4 of 2001 and 2000 was 25%. Pro forma* net loss was US$9.1m, or US$0.16 per share, for the Q4 of fiscal 2001 compared to a pro forma* net income of US$631,000, or US$0.01 per share, year on year.
Including depreciation, amortization of goodwill and other purchased intangibles, and deferred compensation, the net loss, in accordance with generally accepted accounting principles, for the Q4 was US$16.9m, US$0.29 per share, compared to net income of US$44,000, US$0 per share, for the same period last year.
Larry Oberkfell, President and CEO of SureBeam, commented: “Almost one year ago, SureBeam became a public company and began the efforts to establish a new standard in food safety, and we are very pleased with the progress we have made since the IPO.
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By GlobalData“The Q4 was an eventful quarter for us with the impact of the USPS Contract and the entering into a more comprehensive license agreement with Titan, as well as other items. However, with all of this we are very pleased to have exceeded our guidance given in our Q3 earnings call in both revenue and EBITA.
“The effectiveness and safety of the SureBeam technology was demonstrated for all to see as we were instrumental in providing solutions to the USPS. At the same time, consumer acceptance grew, and just this month we rolled out fresh hamburger with large grocery retailers, significantly expanded distribution overall of SureBeam processed products, and gained momentum internationally. Additionally, the military has placed its first orders with its suppliers.”
Full Year
Revenues for the year ended 31 December 2001 were US$41.3m, an increase of 64% year on year, excluding the effect of the medical sterilization and government linear accelerator business. SureBeam’s gross margin for the twelve-month period was 34% compared to 38% for the same period in 2000, excluding the effect of the medical sterilization and government linear accelerator business. Pro forma net loss was US$16.4m, US$0.30 per share, for the year compared to a pro forma net income of US$302,000, US$0.01 per share, for 2000.
Including depreciation, amortization of goodwill and other purchased intangibles, and deferred compensation, the net loss, in accordance with generally accepted accounting principles, for the twelve-month period was US$74.4m, US$1.36 per share, compared to a net loss of US$1.4m, or US$0.03 per share, for the same period last year, excluding the effect of the medical sterilization and government linear accelerator business.
Gross margin for the Q4 was 25%, which represents a decrease from the 36% gross margin for the Q3 of 2001. The decrease in gross margin is primarily due to the high percentage of revenue from subcontracts with Titan, which are generally at a lower margin than third party commercial contracts, the reduction of revenue recognized on a third party contract discussed previously and lower revenue on processing.
Selling, General and Administrative expense includes bad debt expense of US$2.6m to establish reserves on accounts receivable and long-term receivables, US$800,000 of legal fees primarily related to the patent litigation, which was settled in January of 2002, and US$5.1m of amortization of deferred compensation.
Other income includes US$1m related to the license agreement signed with Titan, effective in the fourth quarter of 2001.
The provision for income taxes is a charge of US$4.1m due to a reduction of the estimated deferred tax benefit arising from the company’s losses. This is a result of the decreased amount of SureBeam’s tax losses that Titan has estimated it will utilize in its consolidated 2001 return.
As of today, all eight accelerators and related equipment purchased by the USPS have been shipped. The USPS is scheduled to make their second progress payment before the end of this month.
Although not all of the revenue will be recognized in 2002, the company had existing orders for system sales at December 31, 2001 of US$58m.
