Estimated $17.8 Million Sterilox® Fresh Agreement
19 March 2015 – PuriCore plc (AIM: PURI), an international company focused on safe and effective protection against the spread of infectious pathogens, today announces it has signed a new Sterilox® Fresh agreement worth approximately $17.8 million over the next six years, with a top-three US supermarket retailer.
Over the past 18 months, the Company has expanded its product platforms to provide customers with flexible purchasing options for its proprietary food-safe sanitising solution that can be adapted to suit their business needs. Customers can now choose between the traditional capital equipment route, purchasing a Sterilox® Fresh System, which can be beneficial to high volume users, and ProduceFresh®, the concentrate product, which is a bottled consumable version supplied through a concentrate delivery system (CDS). PuriCore’s strategy remains to establish increasing recurring revenue and a more predictable business, whilst providing the option for a capital equipment purchase to those customers for whom it is more suitable.
Under the terms of the agreement, the retailer will purchase the Sterilox Fresh Systems and an extended five-year warranty contract. Installation of the equipment will commence in late Q2 2015, with completion expected in Q1 2016 and the capital revenue, totalling approximately $11.4 million, will be recognised over this period. The recurring revenue from the service agreement, totalling approximately $6.4 million, will be recognised over the term of the warranty, which extends into 2021.
As a high volume user of the solution, the customer in this agreement, currently using ProduceFresh, has decided to purchase capital equipment after determining that it is the most appropriate option for the majority of its enterprise. The CDSs already installed at the stores will remain in place and the customer will continue to purchase ProduceFresh on a limited, as-needed basis, to supplement the capital equipment. Those stores in the enterprise not adopting the capital equipment will continue to use ProduceFresh to meet all their solution needs.
Michael Ashton, Chief Executive Officer of PuriCore, said:
“We are delighted to announce this significant agreement with a leading retailer. Importantly, this contract re-affirms the considerable value realised by customers who use our solution. With the launch of our concentrate product line, we are able to offer our customers expanded options to obtain our solution, but remain able to meet the needs of customers who prefer to purchase equipment based on their level of usage and preference.
“Under this agreement, we will recognise capital equipment revenue and substantial recurring revenue in the form of warranty contracts as well as some continuing consumables revenue from stores remaining on the ProduceFresh platform. Our strategy remains to increase revenue derived from recurring sources, while continuing to offer a capital equipment sale to those customers for whom it is a better fit.”
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Enquiries:
PuriCore plc +44 (0) 20 3727 1000
Michael Ashton, Chief Executive Officer
Marella Thorell, Chief Financial Officer and Chief Operating Officer
FTI Consulting +44 (0) 20 3727 1000
Simon Conway / Mo Noonan / Victoria Foster Mitchell
N+1 Singer (Nominated Adviser & Broker) +44 (0) 20 7496 3000
Aubrey Powell/ Jen Boorer/ Thomas Smale
About PuriCore
PuriCore is an international company focused on developing and commercialising safe and effective products to protect against the spread of infectious pathogens based on its proprietary hypochlorous acid platform technology. Its products are currently used in two broad market segments: Supermarket Retail and Health Sciences. PuriCore’s products do not cause harm to human or animal life or to the environment.
In the Supermarket Retail segment, PuriCore offers products to US retailers for use in their fresh produce departments to improve food safety and quality, to extend shelf life and to decrease food wastage. Our product is an eco-friendly, food-safe sanitising solution at a neutral PH that is used to protect produce from cross contamination and improve freshness. Our Sterilox Fresh Systems are capital equipment that are installed at customer locations and allow for generation of solution as needed at the store. ProduceFresh is our concentrate bottled version providing the same levels of stability, freshness and quality in a convenient consumable package. Additionally, the Company’s FloraFresh® products, also sold as a concentrate in bottled form, protect against fungal growth and extend the life of cut flowers, with an initial focus on supermarket floral departments.
In Health Sciences, PuriCore’s Wound Care business provides products that are used to treat chronic and acute wounds, including diabetic ulcers and burns in humans. A range of products have also been developed to manage wounds in companion and farm animals. The Company’s Dermatology business is currently focused on treatments for atopic dermatitis. PuriCore is headquartered in Malvern, Pennsylvania.
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