Cereplast Announces 2012 Second Quarter Financial Results
EL SEGUNDO, Calif., Aug 14, 2012 (GlobeNewswire via COMTEX) -- Cereplast, Inc.
(CERP), a leading manufacturer of proprietary biobased, sustainable bioplastics,
today announced its financial results for the second quarter ending June 30,
2012.
"Bringing liquidity into our company and controlling our costs has remained the
focus of the entire management team," stated Cereplast Chairman and Chief
Executive Officer, Mr. Frederic Scheer. "We continue to make progress with our
partner in India to distribute the Cereplast Hybrid Resins(R) products. We remain
excited about this relationship, as we believe it will resolve our receivables
issue in the near term while opening the door to multiple revenue generating
opportunities. I recently visited Hyderabad with key members from Cereplast's
senior management team; we met with our partners in India to review the strategy
and progress to date. Based on the trials that have been completed, several
parties have been identified that are interested in purchasing up to 2000 tons
per month depending on the application."
Mr. Scheer continued, "Although the financial constraints forced us to conserve
our working capital, we have maintained our existing research and development
capability, and as a result we have been awarded patent protection for high heat
resistant polymer composition formulations having polylactic acid. This further
improvement of our already valuable intellectual property portfolio, coupled with
new distribution agreements with Albis to distribute bioplastic resins in the
United Kingdom and Ireland, enables us to maintain our optimism for the future of
Cereplast."
Second Quarter 2012 and Recent Highlights:
--The United States Patent and Trademark Office (USPTO) granted Cereplast
patent protection for high heat resistant polymer compositions having
polylactic acid (PLA). PLA has limitations in terms of melt strength and
heat resistance, which has restricted its use for high temperature
applications. In contrast, Cereplast's high heat PLA compositions can be
industrially compostable and can retain their structural properties at
temperatures greater than 165 degrees Fahrenheit (74 degrees Celsius).
--Entered into a distribution agreement with Hamburg, Germany-based ALBIS
PLASTIC GMBH to supply Cereplast bioplastic resins to the United Kingdom
and Ireland. Cereplast has shipped the first purchase order to ALBIS
PLASTIC, who will distribute both Cereplast Compostables(R) resins, with
an emphasis on blown film grades and blow molding grades, as well as
Cereplast Sustainables(R) resins, including the Cereplast Hybrid
Resins(R) product line. This contract signifies the growing demand in
Europe for bioplastic resins, and expands Cereplast's foothold on the
continent.
2012 Second Quarter and First Six Months Financial Results:
Net sales for the three months ended June 30, 2012 were approximately $190,000,
compared to $7.6 million for the same period in 2011. Net sales for the first six
months of 2012 totaled $293,000 as compared to $14.9 million for the first six
months of 2011. The decrease in sales over the prior year was due to our planned
transition of all our sales and marketing resources, as well as senior
management's efforts toward recovery of past due accounts receivables from our
customers and minimizing any additional exposure to our accounts receivable
credit risk. Our current period sales were primarily to our established existing
U.S. customers with low risk credit limits and prepaid shipments of sample
material.
Cost of sales for the three months ended June 30, 2012 were approximately
$545,000, compared to $6.7 million for the same period in 2011. Cost of sales for
the first six months of 2012 totaled $1.2 million as compared to $13.2 million
for the first six months of 2011. The decline in cost of sales is due to our
lower variable manufacturing costs from the Company's reduced sales volumes and
reduction in manufacturing overhead through lower supplies utilization and
headcount attrition.
Research and development expenses for the three months ended June 30, 2012 were
approximately $126,000, compared to approximately $259,000 for the same period of
2011, or a decline of over 51%. Research and development expenses for the first
six months of 2012 were approximately $255,000, compared to approximately
$509,000 for the first six months of 2011, or a decline of nearly 50%. The
decrease was primarily due to a reduction in legal expenses and outside services
used in our current product development projects.
Selling, general and administrative expenses for the three months ended June 30,
2012 were approximately $1.7 million as compared to $2.7 million for the same
period in 2011. Selling, general and administrative expenses for the first six
months of 2012 totaled approximately $2.9 million as compared to $4.8 million for
the first six months of 2011, for a decline in both periods of over 39%. The
decrease was primarily due to reduced headcount and variable sales and marketing
expenses due to lower sales volume in the current year, offset by an increase in
our allowance for doubtful accounts of $0.5 million in the second quarter of
2012.
Net loss for the three months ended June 30, 2012 was approximately $3.9 million
as compared to $2.4 million for the same period in 2011. Net loss for the first
six months of 2012 was approximately $6.7 million as compared to approximately
$4.1 million for the first six months of 2011. The increase in our net loss for
2012 was primarily due to a full period of interest expense related to the coupon
of our Convertible Debentures issued in May 2011, non-cash interest expense of
$734,000 recognized from our Forbearance Agreement with the holders of our
Convertible Debentures which reduced the conversion price in the Indenture from
$5.80 to $1.00 per share, debt extinguishment costs of $427,000 related to
exchange and retirement of $1 million of our Convertible Debentures and a loss of
$99,000 on the change of an embedded derivative within our Warrants.
On the balance sheet, the Company had approximately $190,000 in cash and $14.3
million in accounts receivable, net of allowance for doubtful accounts. Current
assets and total assets were $19.5 million and $31.2 million respectively.
Current liabilities and total liabilities were $6.4 million and $21.1 million
respectively, for working capital of $13.1 million. As of June 30, 2012, the
Company had approximately 21 million shares issued and outstanding.
Conference Call Details:
Date:Tuesday, August 14, 2012
Time:4:30 p.m. EDT
Dial-In:(877) 312-5508
International
Dial-In:(253) 237-1135
investor.cereplast.com
Live Webcast:/events.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 18839439.
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 BALANCE SHEETS
(in thousands, except shares data)
June 30,December
201231, 2011
-------------------
(Unaudited)
ASSETS
Current Assets
Cash$190$3,940
Accounts Receivable, Net14,31814,744
Inventory, Net4,0704,406
Prepaid Expenses and Other
Current Assets964966
-------------------
Total Current Assets19,54224,056
-------------------
Property and Equipment
Property and Equipment13,81313,752
Accumulated Depreciation
and Amortization(3,492)(3,151)
-------------------
Property and Equipment,
Net10,32110,601
-------------------
Other Assets
Restricted Cash4343
Deferred Loan Costs1,0621,321
Intangible Assets, Net217183
Deposits4747
-------------------
Total Other Assets1,3691,594
-------------------
Total Assets$31,232$36,251
===================
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable$1,411$1,813
Accrued Expenses2,7942,760
Capital Leases, Current
Portion7773
Loan Payable, Current
Portion1,6551,855
Convertible Subordinated
Notes, Current Portion164--
Derivative Liability297--
-------------------
Total Current Liabilities6,3986,501
-------------------
Long-Term Liabilities
Loan Payable6,6577,307
Convertible Subordinated
Notes7,83112,500
Capital Leases, Long-Term206245
-------------------
Total Long-Term
Liabilities14,69420,052
-------------------
Total Liabilities21,09226,553
-------------------
Shareholders' Equity
Preferred Stock, $0.001 par
value; 5,000,000 shares
authorized and none
outstanding----
Common Stock, $0.001 par
value; 495,000,000 shares
authorized; 21,027,204 and
18,933,139 shares issued
and outstanding at June
30, 2012 and December 31,
2011, respectively2119
Additional Paid in Capital73,15066,524
Accumulated Deficit(63,242)(56,935)
Accumulated Other
Comprehensive Income20786
-------------------
10,1369,694
Noncontrolling Interests44
-------------------
Total Equity10,1409,698
-------------------
Total Liabilities and
Shareholders' Equity$31,232$36,251
===================
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
(unaudited, in thousands, except per share data)
Three Months EndedSix Months Ended
--------------------------------------------
June 30,June 30,June 30,June 30,
2012201120122011
----------------------------------------
Gross Product Sales$191$8,149$305$15,435
Sales Discounts, Returns and
Allowances(1)(538)(12)(583)
----------------------------------------
Net Sales1907,61129314,852
Cost of Goods Sold5456,6881,18313,226
----------------------------------------
Gross Profit (Loss)(355)923(890)1,626
Operating Expenses:
Research and Development126259255509
Selling, General and
Administrative1,6612,7242,8774,768
----------------------------------------
Total Operating Expenses1,7872,9833,1325,277
----------------------------------------
Operating Loss(2,142)(2,060)(4,022)(3,651)
Debt Extinguishment Costs(427)--(427)--
Loss on Derivative Liability(99)--(99)--
Interest and Other Income----18--
Interest Expense(1,253)(327)(1,777)(486)
----------------------------------------
Loss Before Provision for
Income Taxes(3,921)(2,387)(6,307)(4,137)
Provision for Income Taxes--------
----------------------------------------
Net Loss(3,921)(2,387)(6,307)(4,137)
Gain (Loss) on Foreign
Currency Translation1198121(39)
----------------------------------------
Total Comprehensive Loss($3,802)($2,379)($6,186)($4,176)
========================================
Net Loss Per Share--Basic and
Diluted($0.20)($0.15)($0.32)($0.27)
========================================
Weighted Average Common
Shares Outstanding--Basic
and Diluted19,947,20515,750,21719,471,44115,314,040
========================================
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except shares data)
Six Months Ended
------------------
June 30,June 30,
20122011
----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss($6,307)($4,137)
Adjustment to Reconcile Net Loss to
Net Cash Used in Operating
Activities
Depreciation and Amortization356449
Allowance for Doubtful Accounts52197
Common Stock Issued for Services,
Salaries and Wages143747
Amortization of Loan Discount77938
Impairment of Intangible Assets--64
Extinguishment of Convertible Debt348--
Loss on Derivative Liability99--
Changes in Operating Assets and
Liabilities
Accounts Receivable(95)(10,646)
Deferred Loan Costs26298
Inventory336(544)
Deposits--(35)
Prepaid Expenses2(1,381)
Accounts Payable(402)341
Accrued Expenses341,192
----------------
NET CASH USED IN OPERATING
ACTIVITIES(3,924)(13,717)
----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment,
and Intangibles(125)(638)
Proceeds from Sale of Equipment15--
----------------
NET CASH USED IN INVESTING
ACTIVITIES(110)(638)
----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Capital Leases(36)(4)
Proceeds from Capital Leases--32
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 Costs45011,243
Proceeds from Issuance of Common
Stock and Subscriptions, Net of
Issuance Costs48811,364
----------------
NET CASH (USED) PROVIDED BY
FINANCING ACTIVITIES29925,139
----------------
FOREIGN CURRENCY TRANSLATION(15)(39)
----------------
NET INCREASE (DECREASE) IN CASH(3,750)10,745
CASH, BEGINNING OF PERIOD3,9402,391
----------------
CASH, END OF PERIOD$190$13,136
================ |
