Cereplast Announces Third Quarter 2012 Financial Results
EL SEGUNDO, Calif., Nov 14, 2012 (GlobeNewswire via COMTEX) -- Cereplast, Inc.
(CERP), a leading manufacturer of proprietary biobased, sustainable bioplastics,
today announced its financial results for the third quarter ended September 30,
2012.
Mr. Frederic Scheer, Chairman and Chief Executive Officer of Cereplast, stated,
"Thus far in 2012 we have focused on several areas which have resulted in the
achievement of key milestones, new product launches and important strategic
relationships. Since the opening of our offices with a dedicated team in India,
we have begun selling our Cereplast Hybrid Resins(R) product line in this
emerging marketplace, which is the world's third largest consumer of polymers.
The Cereplast Hybrid Resins(R) products are being tested with a large polymer
converter for other applications and are part of the unsold inventory we recouped
from our European clients. We continue to move our relationship with A.R.M.Y.
forward, which has resulted in the introduction of key strategic relationships
including the engineering and marketing team of Tirumala Thirupathi Devastanam,
an independent trust to the largest shrine in the world. Our Cereplast
Compostables(R) resins are being tested on 25,000 bags for their expected use by
millions of annual visitors to their shrine. Lastly, the Italian government has
moved toward reinstating legislation to ban non-compostable resins. Several large
supermarket chains have expressed an interest in testing our products, while
multiple product lines are currently in progress. As we work diligently towards
transforming these opportunities into revenue, we will continue managing our cash
flow accordingly."
Mr. Scheer continued, "Heading into 2013 we are refining our strategy to ensure
we give ourselves the greatest opportunity for revenue growth. The experience we
have gained through our recent history of operating within the bioplastics
industry has allowed us to understand what the market demands; we therefore find
it more important to target specific applications rather than the broader
approach we have taken in the past. We believe that by tailoring our offerings
specifically for the customer's product application, the adoption of our product
will become greater. With the plan I just described I want to reassure our
shareholders that Cereplast's management team is focused and working very hard
every day to ensure that we will prevail over our challenging environment."
Operational Highlights:
--Cereplast has begun to sell its first Cereplast Hybrid Resins(R)
application in India. This milestone follows the Company's opening of a
corporate office in India to service its partners in South Asia and the
appointment of a Technical Services Engineer to provide on-site
services. Management visited India several times to assist with the
marketing launch of our resin.
--The same Cereplast Hybrid Resins(R) grade utilized for the safety helmet
application was qualified by a large converter of S-B Polymers to make
bioplastic buckets. This potential customer is one of three dedicated
converters who manufacture buckets for a large consumer products company
in India. This relationship has a projected demand of several thousand
tons per month.
--Each of these opportunities in India would allow us to monetize the
inventory recouped from our European customers.
--A.R.M.Y. made a formal presentation of Cereplast's Compostable 3002
resin to the engineering and marketing departments of "Tirumala
Thirupathi Devastanam," an independent trust which manages the Tirumala
Venkateswara Temple, the largest shrine in the world. The presentation
resulted in the commercial test of 25,000 bags over a 60 day period to
test strength and reception of the product.
--The Italian government has reinstated legislation calling for the ban of
non-compostable resins. Management believes this legislation will be
implemented by the end of 2012.
--Several large supermarket chains have expressed an interest in Cereplast
Compostables(R) resins for bags and orders have been made to test the
product.
--Cereplast successfully tested their Hybrid 101 product for fruit and
vegetable shipping baskets. The addressable market for this application
is several thousand tons per month.
--Cereplast Hybrid 651D wins MATERIALICA Design + Technology 2012 silver
award for outstanding innovation in the "Material" category.
2012 Third Quarter and First Nine Months Financial Results:
Net sales for the three months ended September 30, 2012 were approximately
$477,000, compared to $5.4 million for the same period in 2011. Net sales for the
first nine months of 2012 were approximately $0.8 million, compared to $20.2
million in the same period in 2011. The decrease in sales was due to
transitioning significant resources and efforts toward recovery of past due
accounts receivables from customers and minimizing any additional exposure to our
accounts receivable credit risk. Our current period sales were primarily prepaid
shipments of sample materials and nominal shipments to established existing
customers with low risk credit limits.
Cost of sales for the three months ended September 30, 2012 were approximately
$910,000, compared to $4.5 million for the same period in 2011. Costs of sales
for the first nine months of 2012 were approximately $2.1 million, compared to
$17.7 million for the same period in 2011. The decline in cost of sales is due to
our lower variable manufacturing costs from our reduced sales volumes and
reduction in manufacturing overhead through reduced supplies and headcount.
Research and development expenses for the three months ended September 30, 2012
were approximately $115,000, compared to $280,000 for the same period in 2011.
Research and development expenses for the first nine months of 2012 were $0.4
million, compared to approximately $0.8 million for the same period in 2011. Our
decrease in research and development expenses was primarily attributable to lower
outside services costs related to our current projects.
Selling, general and administrative expenses for the three months ended September
30, 2012 were approximately $6.4 million, compared to $3.7 million for the same
period in 2011. Selling, general and administrative expenses for the first nine
months of 2012 were $9.3 million, compared to $8.5 million for the same period in
2011. Our increase in sales, general and administrative expenses was primarily
due to an increase in our allowance for doubtful accounts of $4.8 million during
the third quarter of 2012, offset by reduced headcount and variable sales and
marketing expenses due to lower sales volume in the current year.
Other income and expense, net for the three months ended September 30, 2012 was
approximately 3.0 million, compared to $0.5 million for the same period in 2011.
Other income and expense, net for the first nine months of 2012 was $5.2 million,
as compared to $1.0 million in the same period in 2011. The increase was
primarily related to additional interest expense related to the issuance of our
convertible debentures in May 2011, the impact from our Forbearance and Exchange
Agreement with certain holders of our convertible debentures and the change in
our derivative liability related to our warrants.
On the balance sheet, the Company had approximately $237,000 in cash and $7.3
million in accounts receivable, net of allowance for doubtful accounts. Current
assets and total assets were $14.1 million and $25.5 million respectively.
Current liabilities and total liabilities were $9.0 million and $22.1 million
respectively. Total shareholders' equity was $3.3 million as of September 30,
2012, with approximately 29 million shares of common stock issued and
outstanding.
Conference Call
Details:
Date:Wednesday, November 14, 2012
Time:4:30 p.m. EST
Dial-In:(877) 312-5508
International
Dial-In:(253) 237-1135
investor.cereplast.com
Live Webcast:nts.cfm
A live webcast and archive of the call will also be available on the Investor
Relations section of Cereplast's website at cereplast.com. If you are
unable to participate on the call at this time, a telephonic replay will be
available for three days starting two hours after the conclusion of the call. To
access the telephonic replay, dial 855-859-2056, international callers dial
404-537-3406, and enter the Conference ID 64671679.
About Cereplast, Inc.
Cereplast, Inc. (CERP) designs and manufactures proprietary biobased, sustainable
bioplastics which are used as substitutes for traditional plastics in all major
converting processes-such as injection molding, thermoforming, blow molding
and extrusions-at a pricing structure that is competitive with traditional
plastics. On the cutting-edge of biobased plastic material development, Cereplast
now offers resins to meet a variety of customer demands. Cereplast
Compostables(R) resins are ideally suited for single-use applications where high
biobased content and compostability are advantageous, especially in the food
service industry. Cereplast Sustainables(R) resins combine high biobased content
with the durability and endurance of traditional plastic, making them ideal for
applications in industries such as automotive, consumer electronics and
packaging. Learn more at cereplast.com. You may also visit the
Cereplast social networking pages at Facebook.com/Cereplast,
Twitter.com/Cereplast and Youtube.com/Cereplastinc.
The Cereplast, Inc. logo is available at
globenewswire.com
Safe Harbor Statement
Matters discussed in this press release contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. When used in
this press release, the words "anticipate," "believe," "estimate," "may,"
"intend," "expect" and similar expressions identify such forward-looking
statements. Actual results, performance or achievements could differ materially
from those contemplated, expressed or implied by the forward-looking statements
contained herein. These forward-looking statements are based largely on the
expectations of the Company and are subject to a number of risks and
uncertainties. These include, but are not limited to, risks and uncertainties
associated with: the impact of economic, competitive and other factors affecting
the Company and its operations, markets, product, and distributor performance,
the impact on the national and local economies resulting from terrorist actions,
and U.S. actions subsequently; and other factors detailed in reports filed by the
Company.
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
Three Months EndedNine Months Ended
--------------------------------------------
SeptemberSeptemberSeptemberSeptember
30, 201230, 201130, 201230, 2011
----------------------------------------
Gross Product Sales$ 481$ 5,414$ 786$ 20,849
Sales Discounts, Returns and
Allowances(4)(45)(16)(628)
----------------------------------------
Net Sales4775,36977020,221
Cost of Goods Sold9104,4752,09317,701
----------------------------------------
Gross Profit (Loss)(433)894(1,323)2,520
Operating Expenses:
Research and Development115280371789
Selling, General and
Administrative6,4103,6899,2868,457
----------------------------------------
Total Operating Expenses6,5253,9699,6579,246
----------------------------------------
Operating Loss(6,958)(3,075)(10,980)(6,726)
Debt Extinguishment Costs----(427)--
Loss on Derivative Liability47--(52)--
Interest and Other Income----18--
Interest Expense(3,057)(513)(4,834)(999)
----------------------------------------
Loss Before Provision for
Income Taxes(9,968)(3,588)(16,275)(7,725)
Provision for Income Taxes--------
----------------------------------------
Net Loss$ (9,968)$ (3,588)$ (16,275)$ (7,725)
========================================
Net Loss Per Share--Basic and
Diluted$ (0.40)$ (0.23)$ (0.77)$ (0.50)
========================================
Weighted Average Common
Shares Outstanding--Basic
and Diluted24,739,44915,777,79321,242,11515,470,324
========================================
CEREPLAST, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except shares data)
SeptemberDecember
30, 201231, 2011
-------------------
(Unaudited)
ASSETS
Current Assets
Cash$237$3,940
Accounts Receivable, Net7,29314,744
Inventory, Net5,4244,406
Prepaid Expenses and Other
Current Assets1,136966
-------------------
Total Current Assets14,09024,056
-------------------
Property and Equipment
Property and Equipment13,83613,752
Accumulated Depreciation
and Amortization(3,668)(3,151)
-------------------
Property and Equipment,
Net10,16810,601
-------------------
Other Assets
Restricted Cash4343
Deferred Loan Costs8671,321
Intangible Assets, Net248183
Deposits4747
-------------------
Total Other Assets1,2051,594
-------------------
Total Assets$25,463$36,251
===================
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable$1,134$1,813
Accrued Expenses3,0492,760
Capital Leases, Current
Portion7773
Loan Payable, Current
Portion4,0231,855
Convertible Subordinated
Notes, Current Portion357--
Derivative Liability344--
-------------------
Total Current Liabilities8,9846,501
-------------------
Long-Term Liabilities
Loan Payable4,4237,307
Convertible Subordinated
Notes8,53212,500
Capital Leases, Long-Term191245
-------------------
Total Long-Term
Liabilities13,14620,052
-------------------
Total Liabilities22,13026,553
-------------------
Shareholders' Equity
Preferred Stock, $0.001 par
value; 5,000,000 shares
authorized; 73 and 0
shares issued and
outstanding at September
30, 2012 and December 31,
2011, respectively----
Common Stock, $0.001 par
value; 495,000,000 shares
authorized; 28,989,829 and
18,933,139 shares issued
and outstanding at
September 30, 2012 and
December 31, 2011,
respectively2919
Additional Paid in Capital76,39866,524
Accumulated Deficit(73,210)(56,935)
Accumulated Other
Comprehensive Income11286
-------------------
3,3299,694
Noncontrolling Interests44
-------------------
Total Equity3,3339,698
-------------------
Total Liabilities and
Shareholders' Equity$25,463$36,251
===================
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except shares data)
Nine Months Ended
---------------------
SeptemberSeptember
30, 201230, 2011
-------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss$ (16,275)$ (7,725)
Adjustment to Reconcile Net Loss to
Net Cash Used in Operating
Activities
Depreciation and Amortization536694
Allowance for Doubtful Accounts5,0821,780
Common Stock Issued for Services,
Salaries and Wages160874
Amortization of Loan Discount3,22357
Impairment of Intangible Assets--64
Extinguishment of Convertible Debt368--
Loss on Derivative Liability52--
Changes in Operating Assets and
Liabilities
Accounts Receivable537(15,609)
Deferred Loan Costs458223
Inventory814(2,095)
Deposits--(35)
Prepaid Expenses(171)(1,514)
Accounts Payable659269
Accrued Expenses288864
-------------------
NET CASH USED IN OPERATING
ACTIVITIES(4,269)(22,153)
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment,
and Intangibles(180)(1,290)
Proceeds from Sale of Equipment15--
-------------------
NET CASH USED IN INVESTING
ACTIVITIES(165)(1,290)
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Capital Leases(50)(13)
Proceeds from Capital Leases--96
Noncontrolling Interest Activities--4
Payments made on Notes Payable(603)--
Proceeds from Loan Payable, Net of
Loan Costs--2,500
Proceeds from Convertible Notes, Net
of Issuance Costs60011,225
Proceeds from Issuance of Common
Stock and Subscriptions, Net of
Issuance Costs40011,363
Proceeds from Issuance of Preferred
Stock, Net of Issuance Costs400--
-------------------
NET CASH (USED) PROVIDED BY
FINANCING ACTIVITIES74725,175
-------------------
FOREIGN CURRENCY TRANSLATION(15)(93)
-------------------
NET INCREASE (DECREASE) IN CASH(3,702)1,639
CASH, BEGINNING OF PERIOD3,9402,391
-------------------
CASH, END OF PERIOD$ 237$ 4,030
===================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash Paid During the Year For:
Interest$ 460$ 417
Income Taxes$ --$ --
SUPPLEMENTAL DISCLOSURE OF NON-CASH
TRANSACTIONS
This news release was distributed by GlobeNewswire, globenewswire.com
SOURCE: Cereplast, Inc.
CONTACT: Cereplast, Inc.
Public Relations
Nicole Robertson
(310) 615-1900 x154
nrobertson@cereplast.com
Investor Relations:
Alliance Advisors, LLC
Alan Sheinwald
914-669-0222
asheinwald@allianceadvisors.net
allianceadvisors.net |
