PuriCore plc (PuriCore), a US based medical device company, has reported total revenues of $33.8 million for the full year of 2008, up 81%, compared with the total revenues of $18.6 million in the previous year-end. It has reported gross margins improved to about 22.2%, for the full year of 2008, compared with the gross margins of $15.8% in the previous year-end.
2008 financial results
US Food Safety revenue increased 147% to $19.4 million
UK Endoscopy revenue increased 35.2% to $13.9 million (42.5% at constant currency)
Total selling, general, and administrative expenses reduced approximately 10% versus prior year (net of non-cash stock compensation)
Earnings in line with market expectations
Cash outflow from operations halved to approximately $7 million (2007: $14.1 million)
Cash of $20.7 million at period end
2008 Operational Highlights
Major contracts received
Safeway, a top-five US supermarket retailer, announced the implementation of Sterilox
Food Safety Systems throughout its North American stores
$11.1 million in contract extensions awarded from the largest existing Sterilox Food
GBP8.4 million equity (gross) raised in a Placing and Open Offer
$9.7 million raised through issuance of debt
Product development: next-generation Sterilox Food Safety System launched
Sterilox Solution approved for use with organic food by the Organic Materials Review Institute
Greg Bosch, chief executive of PuriCore, said:
“2008 was a strong year for PuriCore with record revenues in both core businesses: US Food Safety and UK Endoscopy. We believe that these two markets — retail food grocery and non-elective medical procedures — will be less susceptible to the current challenging economic climate. Looking ahead, we remain keenly focused on increasing revenue and improving gross margins while leveraging our operating expenses. These efforts, combined with our successful equity and debt fund raisings in 2008, leave us well-positioned to execute on our business plan.”
PuriCore achieved record results for the year with 81% top-line growth and total revenue of $33.8 million and significant operating loss reduction. Excluding the negative impact of the stronger dollar, revenue grew 85.1% over the prior year. Despite very difficult financial markets, PuriCore completed two fundraisings during the year: a Placing and Open Offer raised GBP8.4 million in equity (gross), and the issuance of debt raised $9.7 million. Even with the significant sales growth, PuriCore reduced expenses in both core businesses as well as in corporate expenses. The Company’s cash position at
the year end was $20.7 million.
PuriCore’s Food Safety business in the US achieved outstanding growth, driven in large part by implementation of Sterilox Systems by the major national chains. In the second half of the year, PuriCore received a contract for Safeway’s remaining North American supermarkets, marking the chain-wide implementation for this top-five US supermarket retailer. Additionally, PuriCore received contract extensions totalling $11.1 million from its largest existing Sterilox Food Safety customer, a top-five US supermarket, and another major Sterilox Food Safety customer. Late in the year, PuriCore launched its next-generation Sterilox Food Safety System Model 2200. The Company placed 820 new Sterilox Food Safety Systems in 2008 bringing its total installed base to 2,400 Systems, representing approximately 10% of targeted US supermarkets. PuriCore has further sales opportunities within its active customer base, which in total accounts for nearly 30% of its 24,000 US target market.
PuriCore’s Sterilox Endoscopy business in the UK also had significant growth of 43% in 2008 on a constant currency basis. The business grew at its fastest pace ever despite clearly challenging economic times and in a relatively mature market. This growth performance was a function of increased unit placements as well as a focus to develop recurring revenue streams from lease contracts, service agreements, and related consumable products. The UK business was also able to achieve this growth whilst greatly reducing operating expenses throughout the year.
PuriCore anticipates profitability in each of its two core businesses in 2009. These businesses will continue to drive the majority of PuriCore revenue in 2009 with some early sales in the Wound Care business. Additionally with reductions already made across the Company’s operating expenses and further diligent cost controls in place as noted in the Interim Results, PuriCore expects to realize further cost reductions of approximately 10% in 2009. PuriCore’s 2008 year-end cash position of $20.7 million enables the company to execute on its business plan.