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Metalduster

7,852 Posts.

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28/10/16

09:59

Post #: 20189993

Originally posted by Metalduster ↑

"substantive milestone" ? My question is how many Products UNIS have that have reached full substantive milestones?

Below I have highlighted certain passages and I'm not sure whether this term (customer agreements) means one or more? Just from 2015/2016 it reads as though they have fully customised products completed. BUT the terms for "substantive milestone payments" imo are ambiguous. The revenue is a pittance considering what Shortall spruiked.

Revenue Recognition Page 43
We recognize revenue from industrialization and development fees, licensing fees and product sales. We recognize revenue from sales of products at the time of shipment when title passes to the customer. We recognize up front, non-refundable fees ratably over the expected life of the related agreement. Revenue from industrialization and development fees is recognized as services are rendered, under the completed contract method, under the proportional performance method or upon achievement of the “at risk” substantive milestone events, which represent the culmination of the earnings process related to such events. Substantive milestones can include specific deliverables such as product design, prototype availability, user tests, manufacturing proof of principle and the various steps to complete the industrialization of the product. The terms of these contracts provide for customer payments to be made as services are rendered or substantive milestones are achieved. We consider whether a milestone is substantive at the inception of the agreement. The consideration earned from the achievement of a milestone must meet all of the following criteria to be considered substantive:

Column 1 Column 2 Column 3

1
•
It is commensurate with either our performance to achieve the milestone, or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from our performance to achieve the milestone;

Column 1 Column 2 Column 3

1
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It relates solely to past performance; and

Column 1 Column 2 Column 3

1
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It is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement.

Payment terms are considered to be standard commercial terms. Revenue is recognized when each substantive milestone has been achieved and we have no future performance obligations related to the substantive milestone. Fees for completed substantive milestones which are dependent upon customer acceptance for non-refundable payment or, if paid, are refundable pending customer acceptance are recognized upon customer acceptance and the termination of refund rights.

Next Page Page 44
We recognized $ 14.8 million, $ 13.2 million and $ 14 .7 million of revenue during fiscal years 201 6 , 201 5 and 201 4 , respectively, as follows:
During the fiscal year 2016, we recognized $4.5 million in revenue related to substantive milestones that were completed during the year pursuant to customer agreements to provide customization and development services, clinical support services, collaborative research activities and testing support services. Milestones completed during the year included various customization activities, device design, devices developed for use in customer evaluation testing, compatibility testing, user studies, and verification activities.
During fiscal year 2016, we recognized $5.3 million in revenue related to services rendered on a time and materials basis, proportional performance method and/or straight-line basis over the requisite service period pursuant to customer agreements to provide various customization and development services. During the fiscal year ended June 30, 2016, we recognized $5.0 million in revenue related to an agreement with a customer to provide exclusivity for a defined period of time to evaluate certain drug delivery alternatives as the requisite exclusivity period expired during the fiscal year.

##################################################################

Basis of Presentation Page 47
Revenue
We derive revenue primarily from industrialization and development programs with our customers and licensing agreements. The agreements with our customers generally provide for fees to be paid to us for providing specific products or services. Certain of these agreements provide for fees to be paid upon completion of certain agreed-upon milestones. In instances where these milestones are substantive, we recognize revenue when these agreed-upon substantive milestones have been completed and there is no further performance obligation related to the substantive milestone. Certain of our agreements provide for fees to be paid for specific services to be rendered or the provision of certain deliverables, and we recognize revenue upon completion of the related service or deliverable. Certain of our agreements provide for fees to be paid on an ongoing basis over the life of the agreement for agreed-upon services, and we recognize revenue ratably over the requisite service period. We also recognize revenue on certain agreements under the proportional performance method.

Fiscal Year 2016 Compared to Fiscal Year 2015 Page 47
Revenue . Revenue increased by $1.7 million, or 12.8%, during fiscal year 2016 compared to fiscal year 2015 due to more revenue being recognized related to development activities for various customers.
During fiscal year 2016, we recognized $4.5 million in revenue related to substantive milestones that were completed during the year pursuant to customer agreements to provide customization and development services, clinical support services, collaborative research activities and testing support services.
During fiscal year 2016, we recognized $5.3 million in revenue related to services rendered on a time and materials basis, proportional performance method, completed contract method, and/or straight-line basis over the requisite service period pursuant to customer agreements to provide various customization and development services. During fiscal 2016, we recognized $5.0 million in revenue related to an agreement with a customer to provide exclusivity for a defined period of time to evaluate certain drug delivery alternatives as the requisite exclusivity period expired during the fiscal year.
During fiscal year 2015, we recognized $5.1 million in revenue related to substantive milestones that were completed during the year pursuant to customer agreements to provide customization and development services, clinical support services, collaborative research activities and testing support services.
During fiscal year 2015, we recognized $8.1 million in revenue related to services rendered on a time and materials basis pursuant to customer agreements to provide various customization and development services.

Md

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Source 10-k (30/6/2016)

UNS Price at posting: 6.1¢ Sentiment: None Disclosure: Held

0 Great analysis

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