Looks like the TRBO turnaround has started ...or is MYG dumb???????.....Company Press Release
SOURCE: TurboChef, Inc.
TurboChef Reports 1997 Fourth Quarter and Annual Results
DALLAS, March 5 /PRNewswire/ -- TurboChef, Inc. (Nasdaq: TRBO - news) today announced revenues for the fourth quarter ended December 31, 1997 of $1.8 million compared to $.5 million reported in the same quarter of 1996. The net loss for the 1997 quarter was $1.0 million, or $.07 per share, on 14.5 million weighted average shares outstanding, versus a loss of $1.4 million, or $.10 per share, on 13.8 million weighted average shares outstanding in the fourth quarter of 1996.
The increase in fourth quarter revenues is attributable to the Maytag Corporation [NYSE:MYG - news] payment of $750 thousand in research and development fees, an increase in oven shipments and a higher average selling price for the Model D-2 cooking system.
For the full year 1997, revenues were $4.2 million, compared to $2.8 million in 1996. The net loss for 1997 was $4.7 million, or $.33 per share, on 14.0 million weighted average shares outstanding, compared to a loss of $2.9 million, or $.22 per share, on 13.3 million weighted average shares outstanding in 1996.
The increase in 1997 revenues is primarily the result of the Maytag payment in the fourth quarter and a higher average selling price for the Model D-2 cooking system. The increase in net loss is due primarily to the increase in US sales and marketing and other administrative costs with only marginal increases in commercial sales over the previous year. The Company initiated a number of US marketing initiatives to build awareness and to explore a broad range of customer applications of its proprietary technologies including building infrastructure, trade show participation and other marketing related efforts. The 1997 results also include charges totaling $.03 per share (with $.02 per share occurring in the fourth quarter) for parts inventory made obsolete by product design enhancements and an expected adjustment for future warranty expense. Excluding the inventory and warranty charges, gross margin increased from 20% in 1996 to 27% in 1997. This improvement is attributable to a higher average selling price and lower manufacturing costs in 1997.
''The Company's mission to grow through licensing its technologies, joint ventures and strategic alliances took a giant leap forward with the establishment of the Maytag alliance last September,'' remarked Jeff Bogatin, TurboChef's Chairman of the Board. ''This agreement represents for TurboChef the culmination of more than two years of specific product development and the successful search for the right strategic partner. The 1997 results reflect the beginning of the financial benefits of this alliance along with the progress the Company has made in broadening its customer base in Europe and in the US.''
Maytag Alliance
On September 29, 1997, the Company announced a strategic alliance with Maytag Corporation. The alliance is aimed at the development and commercialization of innovative products based on TurboChef's leading-edge technologies in heat transfer, thermodynamics and control systems. The goal of the alliance is the successful commercialization of new products through the combination of Maytag's expertise in manufacturing, marketing and distribution in residential and commercial appliance markets, and the Company's proprietary technologies and product development capabilities. The alliance entails a mutual purchase of each company's common stock valued at approximately $10 million and Maytag's payment to TurboChef for certain research and development activities related to targeted product initiatives.
Phil McKee, TurboChef's President and CEO added, ''Both Maytag and TurboChef are extremely pleased with the progress and potential benefits of this alliance. While it is premature to disclose any specifics, the exploration of the applications of TurboChef technologies in residential and commercial products is progressing as expected. Since October 1997, Maytag has been paying $250 thousand per month for R & D efforts focused on its interests. Maytag has recently agreed to increase this payment to $300 thousand per month for such R & D efforts over the next year.''
US Commercial Sales
The US sales and marketing strategies in 1997 centered on building awareness and gaining experience within as many different foodservice venues as possible. The purpose of this time consuming and costly, yet crucial, process is to begin to determine what the foodservice marketplace actually considers the primary benefits of TurboChef's cooking technologies. While the strategy has not yet produced significant increases in commercial sales, the Company has been able to gain trial in several quick service, casual dining, hotel, convenience store, theater and institutional locations, resulting in valuable exposure to a whole new universe of information about the utilization of the Company's technologies.
The US marketing focus in 1998 is to apply what has been learned from the Company's ''missionary sales'' efforts and to duplicate the successes wherever possible. In addition, management is exploring the prospects of engaging a major foodservice equipment distributor for the US market. If such an agreement is reached, this relationship could significantly extend TurboChef's marketing, commercial sales and distribution reach in the US.
Two specific businesses highlighted in previous information releases are HFS Incorporated (now Cendant Corporation [NYSE:CD - news]) and The Southland Corporation. To date, thirteen HFS (Cendant) franchisees have commenced initial field testing of the TurboChef system with the purchase of sixteen units. Others are in the process of evaluating the results of these initial installations, completing their own internal development of proprietary menus or evaluating other foodservice brand partners before proceeding with the purchase of a TurboChef cooking system. While the Company believes that Cendant views its technologies as key components of their hotel foodservice strategy and expects revenues from this relationship to increase in 1998, it is not possible to predict the timing and number of system purchases that might occur.
The Southland Corporation, parent of the 7-Eleven convenience store chain, had placed a purchase order calling for the development of a reduced size unit with a ''self-serve'' operating configuration. While progress has been made in the development of a prototype unit, the Company elected to direct most of its engineering resources to the Maytag alliance projects. Due to the certainty of near-term revenues from Maytag, TurboChef expects its engineering emphasis to remain on the Maytag projects and does not anticipate significant revenues from sales of a convenience store oven model in 1998.
European Commercial Sales
One of the initiatives undertaken in 1997 was the establishment of a joint venture, TurboChef Europe, to establish distributorships and direct sales relationships within certain Western European countries. As of February 1998, TurboChef Europe has taken delivery of about 50 units, resulting in a total of over 400 TurboChef installations in Europe (primarily in the UK). The Company has also experienced initial success in its early sales efforts to other UK based companies that are not direct competitors of Whitbread.
During 1997, Whitbread completed the installation of the Beefeater chain, its 300 unit casual dining, steak and seafood concept. Additional cooking systems were also purchased by Whitbread to explore the application of TurboChef's technologies within its other restaurant concepts. Whitbread purchased 152 systems in 1997 compared to 214 in 1996. While it is not possible to predict their future purchases, Whitbread continues to view TurboChef as an important strategic partner in executing its business development plans.
European sales efforts in 1998 will continue to center on building upon the TurboChef Europe foundation and supporting the integration of TurboChef's cooking systems into Whitbread's varied concepts. These efforts, combined with the planned addition of a managing director to oversee the European group, will enable the Company to market more effectively in the region.
TurboChef is a foodservice technology company engaged in designing, developing and marketing high-speed cooking systems and in applying the Company's proprietary technologies in other foodservice products, processes and concepts for customers seeking a competitive advantage in foodservice markets. The TurboChef cooking system employs proprietary hardware and software technologies to ''cook-to-order'' a variety of foods at faster speeds and with superior quality compared to other ovens currently available. For example, the TurboChef system can cook an 18-ounce beef tenderloin in 180 seconds (versus 40-45 minutes in a conventional commercial oven), a 16-inch pizza in 60 seconds (versus 8-12 minutes) and a personal lasagna in 80 seconds (versus 12-18 minutes).
''Safe Harbor'' Statement under the Private Securities litigation Reform Act of 1995: Statements in this release which are not historical facts are forward-looking and involve a number of risks and uncertainties, including but not limited to, the Company's limited operating history, uncertainty of market acceptance, dependence on a significant customer, likelihood of contracting new customers, uncertainty of new product development and other risks described in the Company's Securities and Exchange Commission filings.
TURBOCHEF, INC.
CONDENSED OPERATING RESULTS
(in thousands except per share data)
Fourth Quarter Ended Twelve Months Ended
December 31 December 31
(unaudited) (unaudited)
1997 1996 1997 1996
Total Revenues $1,764 $540 $4,222 $2,802
Total Expenses 2,766 1,946 8,884 5,743
Net Loss $(1,002) $(1,406) $(4,662) $(2,941)
Loss per Common Share-Basic
and Diluted $(0.07) $(0.10) $(0.33) $(0.22)
Weighted Average Shares
Outstanding 14,493 13,757 14,033 13,339
CONDENSED BALANCE SHEETS
(in thousands)
December 31, December 31,
1997 1996
(unaudited)
Cash and Marketable Securities $8,674 $7,787
Other Current Assets 1,683 1,546
Net Property and Equipment 491 305
Other Assets 5,592 105
Total Assets $16,440 $9,743
Total Current Liabilities $776 $810
Other Liabilities 36 ---
Total Stockholders' Equity 15,628 8,933
Total Liabilities and Stockholders' Equity $16,440 $9,743
SOURCE: TurboChef, Inc.
--------------------------------------------------------------------------------
More Quotes
and News: Cendant Corp (NYSE:CD - news)
Maytag Corp (NYSE:MYG - news)
Turbochef Inc (Nasdaq:TRBO - news)
Related News Categories: household/consumer, restraunt, retail
-------------------------------------------------------------------------------- |
