eMerge Interactive Reports First Quarter Revenues of $325 Million, A 750 Percent Increase Over Prior Year

-- Number of Cattle Sold Increases to 659,000 from 66,000

-- Gross Margin per Head of Cattle Up Two-fold to $6.05

-- Adjusted Gross Profit Increases to $3.7 Million from $255,000

-- Adjusted Net Loss Per Share Improves to $0.16



Apr 26, 2001, 01:00 ET from eMerge Interactive, Inc.

    SEBASTIAN, Fla., April 26 /PRNewswire/ --
 eMerge Interactive, Inc. (Nasdaq: EMRG), a technology company providing supply
 chain management and technology solutions for the $40 billion U.S. beef
 production industry, today reported record first quarter revenues for the
 three-month period ending March 31, 2001.
     For the quarter, adjusted revenues increased to $325.2 million compared to
 $38.2 million in the same period last year and $326.7 million in the fourth
 quarter of 2000.  Adjusted net loss for period was $5.8 million, or $0.16 per
 share, compared to $4.6 million, or $0.20 per share, in the comparable prior
 year period and $5.9 million, or $0.17 per share, in the fourth quarter of
 2000.  Adjusted results exclude primarily non-cash charges such as
 amortization expense, a change in accounting principle, restructuring and
 related charges, and assumes the discontinuance of two product groups (noted
 below) as if they had occurred at the beginning of 2000.
 
     Results are presented on an adjusted basis to facilitate comparison.
 Adjusted comparisons exclude amortization expense, the cumulative effect of a
 change in accounting principle, restructuring and related charges and assume
 that the discontinuance of NutriCharge and Infrared Imaging products occurred
 at the beginning of 2000. Unadjusted revenues for the quarter increased to
 $325.2 million compared to $38.6 million in the same period last year, while
 unadjusted net loss for the quarter was $10.2 million, or $0.29 per share,
 compared to $5.5 million, or $0.24 per share, in the comparable prior year
 period.  See notes 1 and 2 in the accompanying financial information.
 
     During the first quarter, the Company sold 659,000 head of cattle,
 including 73,000 head that were sold online.  This compares to 66,000 head of
 cattle sold in the comparable period a year ago and 676,000 head of cattle
 sold in the fourth quarter of 2000, which included 26,500 head sold online.
 During the quarter, the cattle industry continued to be impacted by the
 remaining effects of the severe drought conditions that most of the Western
 United States experienced last fall.  This phenomenon, together with this
 year's harsh winter weather, particularly in the month of February, caused
 industry-wide feeder cattle availability to be down approximately 17 percent
 compared to a year earlier.
     "Our ability to maintain cattle sales at a consistent, high-level, within
 this challenging industry environment, is a tribute to the strength of
 CattleinfoNet, our on-site and online national interactive marketing network,
 as well as the significant adoption of our technology solutions and systems
 among industry participants," stated Mr. Abraham.  "With this industry
 strength and acceptance, we are poised to take advantage of the marketing of
 this year's cow/calf crop during the second half of this year.  Additionally,
 we expect margin expansion in the second half of 2001 to be driven by the
 continued adoption of our process verification and pre-conditioning techniques
 as well as new technology offerings, such as CattleLog, our exclusive cattle
 tracking system that de-commoditizes cattle and supports beef-verification and
 branding strategies.  This is important as we continue to work towards our
 goal of becoming cash flow positive, before amortization expense, in the third
 quarter of this year."
     First quarter gross margin per head-of-cattle increased 100 percent to
 $6.05 from $3.02 in the comparable quarter a year earlier and $5.74 in the
 fourth quarter of 2000, reflecting a seasonal increase in cattle sales from
 the Company's higher margin auction-barn facilities.  Due to the seasonal flow
 of cattle through the supply chain, the Company anticipates gross margins per
 head to be influenced by the shift in mix of cattle sales, particularly in the
 first and third quarters, when a greater proportion of its cattle sales are
 expected to be generated from its higher margin auction-barn facilities as
 opposed to lower margin order-buying facilities.  Adjusted gross profit for
 the first quarter was $3.7 million compared to $255,000 in the corresponding
 period a year ago and $3.7 million in the fourth quarter of 2000.
     Operating expenses from adjusted operations, as a percentage of sales,
 improved slightly over the fourth quarter of 2000 to 3.03 percent, reflecting
 the successful implementation of various cost-cutting programs as part of the
 Company's restructuring initiative, offset by increased depreciation expense
 of approximately $387,000, resulting from last year's accelerated acquisition
 program and technology infrastructure buildup.  Excluding depreciation,
 adjusted net loss for the quarter was $0.13 per share.
     The Company ended the quarter with $10.3 million in cash and cash
 equivalents as of March 31, 2001, which it believes will be adequate to meet
 its short-term business requirements.  Additionally, the Company is currently
 in the process of securing a line of credit to supplement its working capital
 requirements.
 
     Quarterly Web Cast
     eMerge will host a Web cast today at 10:00 a.m. (Eastern) to discuss first
 quarter results.  You can access the Web cast through the Company's Website
 address at www.emergeinteractive.com or through PRNewswire's Website address
 at  www.videonewswire.com/EMERGE/042601/.
 
     About eMerge Interactive
     eMerge Interactive, Inc. is a technology company providing supply chain
 management and marketing solutions for the $40-billion U.S. beef production
 industry.  Operating in major cattle producing states, eMerge owns and
 operates 12 interactive livestock marketing and order buying facilities that
 have the capacity to market 4 million head-of-cattle annually, which
 represents a 14% U.S. market share.  The Company's business model is aimed at
 positively affecting the manufacturing process and adding previously
 unrealized value to the nation's beef supply system via eMerge's powerful
 information management infrastructure, value enhancing technologies and an
 efficient e-marketplace.
 
     This release contains "forward-looking statements" within the meaning of
 the Private Securities Litigation Reform Act of 1995, including statements
 containing words such as "anticipates," "believes," "expects," "intends,"
 "may," "will" and words of similar meaning.  These statements involve various
 risks and uncertainties.  A number of factors could cause actual results to
 differ materially from those described in these forward-looking statements,
 including the acceptance by our customers of electronic commerce as a means of
 conducting business, our ability to grow revenue and margins, our ability to
 implement our acquisition and expansion strategy, the impact of competition on
 pricing, the impact of litigation, general economic conditions and other
 factors discussed in this release and as set forth from time to time in our
 other public filings and public statements.  Readers of this release are
 cautioned to consider these risks and uncertainties and to not place undue
 reliance on these forward-looking statements.
 
 
                            eMERGE INTERACTIVE, INC.
                Condensed Consolidated Statements of Operations
 
              (In thousands, except per share amounts; unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001            2000
 
     Cattle revenue                                  $324,529        $38,011
 
     Other revenue (1)                                    628            199
 
         Total revenue                                325,157         38,210
 
 
     Cost of cattle revenue                           320,543         37,812
 
     Cost of other revenue (1)                            911            143
 
         Adjusted gross profit                          3,703            255
 
 
     Operating expenses:
         General, administrative,
           sales and marketing                          7,316          4,855
         Technology and development                     1,229            956
         Depreciation expense                           1,304            194
             Total operating expenses (1)               9,849          6,005
 
             Adjusted operating loss (2)              (6,146)        (5,750)
 
     Interest and other income (expense), net             350          1,142
 
             Adjusted net loss (2)                    (5,796)        (4,608)
 
     Restructuring and related charges                  (344)            ---
     Discontinued products (1)                          (300)          (626)
     Amortization expense                             (3,549)          (318)
     Income from discontinued operations segment          ---             43
     Cumulative effect of change in
       accounting principle                             (233)            ---
 
         Net loss                                   $(10,222)       $(5,509)
 
     Adjusted net loss per share (1)                 $ (0.16)        $(0.20)
     Adjusted cash net loss per share
         (excludes depreciation expense)               (0.13)         (0.19)
 
     Weighted average number of common shares
       outstanding -- basic and diluted                35,429         23,248
 
     (1) Other revenue and costs and expenses of discontinued products for the
 three-month period ended March 31, 2001 and 2000 were $51, $37, and $314, and
 $343, $246 and $723, respectively.  These amounts are excluded from other
 revenue, other costs and operating expense and included in discontinued
 products in each of their respective periods.
     (1) Adjusted operating loss excludes amortization expense, restructuring
 and related charges and assumes that the discontinuance of NutriCharge and
 Infrared Imaging products occurred at the beginning of 2000.  Adjusted net
 loss and adjusted net loss per share excludes all of the above as well as the
 cumulative effect of a change in accounting principle.  Adjusted results are
 not intended to reflect our actual net loss per share as determined under GAAP
 and reported in our quarterly and annual filings with the Securities and
 Exchange Commission.
 
                            eMERGE INTERACTIVE, INC.
                     Condensed Consolidated Balance Sheets
                           (In thousands; unaudited)
 
                                                      March 31,    December 31,
                                                        2001           2000
 
                                Assets
     Current assets:
       Cash and cash equivalents                      $10,281        $42,812
       Trade accounts receivable                       17,502         12,142
       Inventories                                      8,649          3,704
       Other current assets                            11,016          7,433
         Total current assets                          47,448         66,091
 
     Property and equipment, net                       24,491         20,568
     Investment in Turnkey Computer Systems, Inc.       2,972          3,011
     Intangibles, net                                  57,481         57,377
     Restricted cash                                    1,505          1,505
 
             Total assets                            $133,897       $148,552
 
 
           Liabilities and Stockholders' Equity
 
     Current liabilities:
       Current installments of capital lease             $170           $217
       Note payable                                       ---             10
       Accounts payable                                 5,629          9,509
       Accrued liabilities                              4,340          6,765
       Advance payments from customers                  1,143            664
       Due to related parties                           1,719          1,219
         Total current liabilities                     13,001         18,384
 
     Capital lease obligation,
        excluding current installments                     24             91
 
             Total liabilities                         13,025         18,475
 
     Stockholders' equity:
       Common stock                                       284            281
       Additional paid-in capital                     196,377        195,348
       Accumulated deficit                           (75,733)       (65,511)
       Unearned compensation                             (56)           (41)
         Total stockholders' equity                   120,872        130,077
 
             Total liabilities and
               stockholders' equity                  $133,897       $148,552
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X13004810
 
 

SOURCE eMerge Interactive, Inc.
    SEBASTIAN, Fla., April 26 /PRNewswire/ --
 eMerge Interactive, Inc. (Nasdaq: EMRG), a technology company providing supply
 chain management and technology solutions for the $40 billion U.S. beef
 production industry, today reported record first quarter revenues for the
 three-month period ending March 31, 2001.
     For the quarter, adjusted revenues increased to $325.2 million compared to
 $38.2 million in the same period last year and $326.7 million in the fourth
 quarter of 2000.  Adjusted net loss for period was $5.8 million, or $0.16 per
 share, compared to $4.6 million, or $0.20 per share, in the comparable prior
 year period and $5.9 million, or $0.17 per share, in the fourth quarter of
 2000.  Adjusted results exclude primarily non-cash charges such as
 amortization expense, a change in accounting principle, restructuring and
 related charges, and assumes the discontinuance of two product groups (noted
 below) as if they had occurred at the beginning of 2000.
 
     Results are presented on an adjusted basis to facilitate comparison.
 Adjusted comparisons exclude amortization expense, the cumulative effect of a
 change in accounting principle, restructuring and related charges and assume
 that the discontinuance of NutriCharge and Infrared Imaging products occurred
 at the beginning of 2000. Unadjusted revenues for the quarter increased to
 $325.2 million compared to $38.6 million in the same period last year, while
 unadjusted net loss for the quarter was $10.2 million, or $0.29 per share,
 compared to $5.5 million, or $0.24 per share, in the comparable prior year
 period.  See notes 1 and 2 in the accompanying financial information.
 
     During the first quarter, the Company sold 659,000 head of cattle,
 including 73,000 head that were sold online.  This compares to 66,000 head of
 cattle sold in the comparable period a year ago and 676,000 head of cattle
 sold in the fourth quarter of 2000, which included 26,500 head sold online.
 During the quarter, the cattle industry continued to be impacted by the
 remaining effects of the severe drought conditions that most of the Western
 United States experienced last fall.  This phenomenon, together with this
 year's harsh winter weather, particularly in the month of February, caused
 industry-wide feeder cattle availability to be down approximately 17 percent
 compared to a year earlier.
     "Our ability to maintain cattle sales at a consistent, high-level, within
 this challenging industry environment, is a tribute to the strength of
 CattleinfoNet, our on-site and online national interactive marketing network,
 as well as the significant adoption of our technology solutions and systems
 among industry participants," stated Mr. Abraham.  "With this industry
 strength and acceptance, we are poised to take advantage of the marketing of
 this year's cow/calf crop during the second half of this year.  Additionally,
 we expect margin expansion in the second half of 2001 to be driven by the
 continued adoption of our process verification and pre-conditioning techniques
 as well as new technology offerings, such as CattleLog, our exclusive cattle
 tracking system that de-commoditizes cattle and supports beef-verification and
 branding strategies.  This is important as we continue to work towards our
 goal of becoming cash flow positive, before amortization expense, in the third
 quarter of this year."
     First quarter gross margin per head-of-cattle increased 100 percent to
 $6.05 from $3.02 in the comparable quarter a year earlier and $5.74 in the
 fourth quarter of 2000, reflecting a seasonal increase in cattle sales from
 the Company's higher margin auction-barn facilities.  Due to the seasonal flow
 of cattle through the supply chain, the Company anticipates gross margins per
 head to be influenced by the shift in mix of cattle sales, particularly in the
 first and third quarters, when a greater proportion of its cattle sales are
 expected to be generated from its higher margin auction-barn facilities as
 opposed to lower margin order-buying facilities.  Adjusted gross profit for
 the first quarter was $3.7 million compared to $255,000 in the corresponding
 period a year ago and $3.7 million in the fourth quarter of 2000.
     Operating expenses from adjusted operations, as a percentage of sales,
 improved slightly over the fourth quarter of 2000 to 3.03 percent, reflecting
 the successful implementation of various cost-cutting programs as part of the
 Company's restructuring initiative, offset by increased depreciation expense
 of approximately $387,000, resulting from last year's accelerated acquisition
 program and technology infrastructure buildup.  Excluding depreciation,
 adjusted net loss for the quarter was $0.13 per share.
     The Company ended the quarter with $10.3 million in cash and cash
 equivalents as of March 31, 2001, which it believes will be adequate to meet
 its short-term business requirements.  Additionally, the Company is currently
 in the process of securing a line of credit to supplement its working capital
 requirements.
 
     Quarterly Web Cast
     eMerge will host a Web cast today at 10:00 a.m. (Eastern) to discuss first
 quarter results.  You can access the Web cast through the Company's Website
 address at www.emergeinteractive.com or through PRNewswire's Website address
 at  www.videonewswire.com/EMERGE/042601/.
 
     About eMerge Interactive
     eMerge Interactive, Inc. is a technology company providing supply chain
 management and marketing solutions for the $40-billion U.S. beef production
 industry.  Operating in major cattle producing states, eMerge owns and
 operates 12 interactive livestock marketing and order buying facilities that
 have the capacity to market 4 million head-of-cattle annually, which
 represents a 14% U.S. market share.  The Company's business model is aimed at
 positively affecting the manufacturing process and adding previously
 unrealized value to the nation's beef supply system via eMerge's powerful
 information management infrastructure, value enhancing technologies and an
 efficient e-marketplace.
 
     This release contains "forward-looking statements" within the meaning of
 the Private Securities Litigation Reform Act of 1995, including statements
 containing words such as "anticipates," "believes," "expects," "intends,"
 "may," "will" and words of similar meaning.  These statements involve various
 risks and uncertainties.  A number of factors could cause actual results to
 differ materially from those described in these forward-looking statements,
 including the acceptance by our customers of electronic commerce as a means of
 conducting business, our ability to grow revenue and margins, our ability to
 implement our acquisition and expansion strategy, the impact of competition on
 pricing, the impact of litigation, general economic conditions and other
 factors discussed in this release and as set forth from time to time in our
 other public filings and public statements.  Readers of this release are
 cautioned to consider these risks and uncertainties and to not place undue
 reliance on these forward-looking statements.
 
 
                            eMERGE INTERACTIVE, INC.
                Condensed Consolidated Statements of Operations
 
              (In thousands, except per share amounts; unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001            2000
 
     Cattle revenue                                  $324,529        $38,011
 
     Other revenue (1)                                    628            199
 
         Total revenue                                325,157         38,210
 
 
     Cost of cattle revenue                           320,543         37,812
 
     Cost of other revenue (1)                            911            143
 
         Adjusted gross profit                          3,703            255
 
 
     Operating expenses:
         General, administrative,
           sales and marketing                          7,316          4,855
         Technology and development                     1,229            956
         Depreciation expense                           1,304            194
             Total operating expenses (1)               9,849          6,005
 
             Adjusted operating loss (2)              (6,146)        (5,750)
 
     Interest and other income (expense), net             350          1,142
 
             Adjusted net loss (2)                    (5,796)        (4,608)
 
     Restructuring and related charges                  (344)            ---
     Discontinued products (1)                          (300)          (626)
     Amortization expense                             (3,549)          (318)
     Income from discontinued operations segment          ---             43
     Cumulative effect of change in
       accounting principle                             (233)            ---
 
         Net loss                                   $(10,222)       $(5,509)
 
     Adjusted net loss per share (1)                 $ (0.16)        $(0.20)
     Adjusted cash net loss per share
         (excludes depreciation expense)               (0.13)         (0.19)
 
     Weighted average number of common shares
       outstanding -- basic and diluted                35,429         23,248
 
     (1) Other revenue and costs and expenses of discontinued products for the
 three-month period ended March 31, 2001 and 2000 were $51, $37, and $314, and
 $343, $246 and $723, respectively.  These amounts are excluded from other
 revenue, other costs and operating expense and included in discontinued
 products in each of their respective periods.
     (1) Adjusted operating loss excludes amortization expense, restructuring
 and related charges and assumes that the discontinuance of NutriCharge and
 Infrared Imaging products occurred at the beginning of 2000.  Adjusted net
 loss and adjusted net loss per share excludes all of the above as well as the
 cumulative effect of a change in accounting principle.  Adjusted results are
 not intended to reflect our actual net loss per share as determined under GAAP
 and reported in our quarterly and annual filings with the Securities and
 Exchange Commission.
 
                            eMERGE INTERACTIVE, INC.
                     Condensed Consolidated Balance Sheets
                           (In thousands; unaudited)
 
                                                      March 31,    December 31,
                                                        2001           2000
 
                                Assets
     Current assets:
       Cash and cash equivalents                      $10,281        $42,812
       Trade accounts receivable                       17,502         12,142
       Inventories                                      8,649          3,704
       Other current assets                            11,016          7,433
         Total current assets                          47,448         66,091
 
     Property and equipment, net                       24,491         20,568
     Investment in Turnkey Computer Systems, Inc.       2,972          3,011
     Intangibles, net                                  57,481         57,377
     Restricted cash                                    1,505          1,505
 
             Total assets                            $133,897       $148,552
 
 
           Liabilities and Stockholders' Equity
 
     Current liabilities:
       Current installments of capital lease             $170           $217
       Note payable                                       ---             10
       Accounts payable                                 5,629          9,509
       Accrued liabilities                              4,340          6,765
       Advance payments from customers                  1,143            664
       Due to related parties                           1,719          1,219
         Total current liabilities                     13,001         18,384
 
     Capital lease obligation,
        excluding current installments                     24             91
 
             Total liabilities                         13,025         18,475
 
     Stockholders' equity:
       Common stock                                       284            281
       Additional paid-in capital                     196,377        195,348
       Accumulated deficit                           (75,733)       (65,511)
       Unearned compensation                             (56)           (41)
         Total stockholders' equity                   120,872        130,077
 
             Total liabilities and
               stockholders' equity                  $133,897       $148,552
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X13004810
 
 SOURCE  eMerge Interactive, Inc.