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Strategies & Market Trends : YEEHAW CANDIDATES -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (1390)	2/20/2003 9:27:36 PM
From: JoeinIowa	Read Replies (1) \| Respond to of 23958

Sergio, Looks like SURE is going to get hit in the morning. I thought the numbers going forward looked good. They are obviously just really starting out. Of course they are looking at $80M in revenue which is not bad. On the portfolio you need to change SYBR to SYBRD after their 1-4 reverse stock split. Not sure when the symbol will revert back. Joe

To: Sergio H who wrote (1390)	2/21/2003 10:00:47 PM
From: JoeinIowa	Read Replies (1) \| Respond to of 23958

Caught this on Yahoo. AG Edwards opinion..... by: exchequer13 02/21/03 06:12 pm Msg: 45038 of 45059 "SureBeam Corporation reported fourth quarter results today. Revenues of $12 million were in line with expectations. The bottom line loss of $0.14 was $0.04 greater than expected but included a $0.06 charge for a loan made to Hawaii Pride. Excluding this non-operational charge, earnings would have been modestly better than expectations. The decision to take the $4 million reserve against the entire loan made to Hawaii Pride was made due to the bankruptcy of Hawaii Pride’s biggest distributor in the fourth quarter and a lack of historical cash flows to provide reasonable assurance that the loan could be collected. Nonetheless, SureBeam management believes that this reserve could be reversed since demand for Hawaii Pride’s product has continued to rise and its customer base continued to expand. During the fourth quarter SureBeam signed a $5.7 million equipment contract with New Zealand. In fact, SureBeam expects to sign two to three international equipment sales contracts per quarter in 2003. Visibility of these sales would lend credence to the financial expectations that are in place. Such visibility could become available over the next 60 days. From a services perspective, the company continues to make good progress. The total number of stores selling fresh ground meat has now risen to 3,300. Although data on throughput is limited, SureBeam stated that on average stores were selling 45 lbs of meat per store per week. Wegman’s (one of the first grocery chains to sell product) is selling 300 lbs per week per store. With grocery chains beginning to sell incremental SKUs, early indications of increased same-store sales appear good. It is noteworthy that no chain has decided to discontinue sale of irradiated meat. SureBeam’s goal is to sell product in 15,000 stores by yearend.SureBeam provided detailed quarterly guidance for 2003. Although the initial ramp is slower than our original modeling, guidance for the full year supports our projections for 2003. Specific guidance for the year was as follows Q1 Q2 Q3 Q4 2003* Revenue(mill) $10 $17 $23 $30 $75 to $85 EBITDA (2.5) 0.5 4 8 4 to 16 EPS (0.10) (0.05) 0.0 0.04 (0.19) to (0.03) In addition to fresh ground meat, the poultry market represents a large market opportunity for SureBeam. Two of the top 3 poultry producers in the US have expressed interest in irradiating chicken. SureBeam believes initial introduction of irradiated poultry products could begin as soon as Q2. The total US poultry market is estimated to be 35 billion pounds. The other large market, Processed Meats, which is estimated to be roughly 25 billion pounds per year, is awaiting passage of regulatory approval. The best estimate for the timing of regulatory approval remains mid-year. We should note that the company’s guidance does not include any expectation for processing of processed meats. Clear visibility of 2003 earnings still requires announcement of international contracts. However, Q4 results and today’s commentary suggest that SureBeam is making slow but steady progress. Our Price objective remains $7. Assuming SureBeam continues to execute per plan, we believe the company can earn around $0.25 per share in 2004. Using a P/E multiple of 40, we arrive at a longer-term price objective of $10. We believe a 40 P/E multiple on 2004 earnings would be justified by SureBeam’s emergence as a profitable and rapidly growing company. With potential revenue growth in excess of 50% and the potential for earnings to grow faster than revenues, we believe a 40 P/E multiple on potential 2004 earnings would be justified if Sure Beam were successful in accelerating its growth over the next 18 months.