Cereplast Reports Record Fourth Quarter and Full Year 2010 Results
2010 Revenue Increases 133% from 2009 to $6.3 Million
EL SEGUNDO, Calif., Mar 31, 2011 (BUSINESS WIRE) -- --Fourth Quarter Revenue
Surges 547%
--Reiterates 2011 Annual Revenue Target of $24 to 32 Million
Cereplast, Inc. (CERP), a leading manufacturer of proprietary bio-based,
compostable and sustainable plastics, today announced financial results for its
2010 fourth quarter and full year, ended December 31, 2010.
Cereplast reported revenues for the fourth quarter of 2010 of $3.9 million, an
increase of 547% compared to fourth quarter 2009. For the year ended December 31,
2010, the Company reported net revenue of $6.3 million, an increase of 133%
compared to the previous year and a reduced net loss per share of $0.63 or $7.5
million.
"Our strong fourth quarter and full year 2010 results were due to robust growth
in demand for Cereplast resin across the globe," said Frederic Scheer, Cereplast
Chairman and Chief Executive Officer. "A key driver for the surge in demand for
bioplastics has been governmental policy sweeping across Europe toward protecting
and preserving the environment, evidenced by the ban on petroleum-based plastic
bags in Italy that went into effect early this year. In a number of European
countries, the law now requires plastic bag distributors to find alternative
materials, like bioplastics, to manufacture disposable bags. With 60 to 100
million barrels of oil used each year for the manufacturing of plastic bags, a
burgeoning opportunity for the bioplastics market has emerged as consumers and
manufacturers move toward 'greener' products, packaging and practices."
Scheer continued, "We remain confident that with our business strategy and our
increasing market penetration in Europe, Cereplast will reach its revenue target
of $24 to $32 million this year, a projected 300% to 400% increase from 2010."
Fourth Quarter and Full Year Financial Highlights
-- Record fourth quarter revenues increase 547% to $3.9 million, compared to
sales of $602,000 in the fourth quarter of 2009
-- Record 2010 annual sales increase 133% to $6.3 million, compared to sales of
$2.7 million in 2009
-- Record gross profit of $1.1 million for 2010, compared to $338,000 in 2009
-- Gross margins for the year improved to 17% from 12% in 2009
-- Cash and cash equivalents were $2.4 million at December 31, 2010
-- Secured $5 million in capital in the fourth quarter to support the Company's
growth and expansion
-- Subsequent to the close of the year, the Company secured an additional $12
million in growth capital through a private placement
Fourth Quarter and Full Year Operational Highlights
-- Current Product Markets and Customers: During the fourth quarter, Cereplast
opened a new European headquarters in Germany to provide its growing roster of
European based clients with regional support, as well as provide the Company with
an effective platform to grow its European operations. Cereplast is actively
exploring options for local manufacturing in Europe to support the exponential
growth in demand for bioplastic materials to replace traditional petroleum-based
plastics.
-- Product Development Advances: The Company's upgraded application development
and resin-testing laboratory became fully operational in Q4 2010, enabling
Cereplast to conduct all standard product development and qualification testing
in-house, bringing more efficiency and speed to the development cycle for new
resin and enhancing the technical support to customers.
-- Production Improvements: During the fourth quarter, we continued to work to
improve efficiency in the plant installing new equipment on our production lines.
This improved plant automation will allow for higher output with a lower level of
labor. Additionally, the Company has ordered the necessary auxiliary equipment to
make the rail spur it installed in the third quarter of 2010 operational by
mid-2011.
Fourth Quarter 2010 Financial Results
Revenues for the fourth quarter ended December 31, 2010 increased 547% to $3.9
million compared to $602,000 in the fourth quarter last year. The year-over-year
increase was primarily due to the significant growth in order flow associated
with an increasing demand for bioplastic resin from existing and new customer
contracts with European manufacturers.
Gross profit in the fourth quarter increased a staggering 620% to $425,000
compared to gross profits of $59,000 for the fourth quarter last year. As a
percentage of net sales, gross profit margin increased to 10.9% in the fourth
quarter of 2010, compared to 9.8% in the fourth quarter last year.
Net loss for the fourth quarter was $1.8 million, or a loss of $0.14 per share,
compared to a net loss of $1.8 million, or a loss of $0.21 per share for the same
quarter a year ago.
2010 Full Year Financial Results
Revenues for the 2010 fiscal year ended December 31, 2010 increased 133% to a
record $6.3 million compared to revenues of $2.7 million for fiscal 2009. The
sales increase for the period was attributable to volume increases associated
with both existing customer contracts and new contracts entered into during the
third and fourth quarters of 2010 with European customers. Gross margin increased
to 17%, compared to 12% for 2009. The increase is primarily due to cost savings
from the Company's new facility and increased production efficiencies on higher
production volumes. Net loss for fiscal 2010 was $7.5 million, or a loss of $0.63
per share, compared to a net loss of $6.1 million, or a loss of $0.75 per share,
in 2009.
Balance Sheet
As of December 31, 2010, the Company had cash and cash equivalents of $2.4
million, compared to $1.3 million as of December 31, 2009 and working capital of
$5.2 million. The net increase in unrestricted cash is attributable principally
to funds received through successful private placements, sale of shares made
pursuant to an effective Registration Statement on Form S-3 and venture loan
proceeds. Stockholders' equity as of December 31, 2010 was $6.9 million, an
increase of 33% from stockholders' equity of $5.2 million as of December 31,
2009. Net cash used in operating activities for the fiscal 2010 year ended
December 31, 2010 was $6.8 million, up from $2.8 million in fiscal 2009. The
increase in cash used for operating activities was primarily a result of an
increase in accounts receivable and inventory amounts reflecting the significant
increase in sales growth in 2010 compared to 2009.
Financial Guidance
The Company reiterates its 2011 annual revenue target of $24 to $32 million, a
projected 300% to 400% increase over 2010.
Conference Call
The Company will conduct a conference call and live webcast at 2:00 p.m. Pacific
Time (5:00 p.m. ET) on Thursday, March 31, 2011, to discuss its 2010 fourth
quarter and full year financial results. Participating in the call will be Mr.
Frederic Scheer, Chairman and Chief Executive Officer of Cereplast and Heather
Sheehan, Chief Financial Officer.
To join the live conference call, please dial the following number five to ten
minutes prior to the scheduled conference call time: 877-312-5508. International
callers should dial 253-237-1135. 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 in 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
800-642-1687, international callers dial 706-645-9291, and enter the Conference
ID, 54879601.
About Cereplast, Inc.
Cereplast, Inc. (CERP) designs and manufactures proprietary bio-based,
sustainable plastics which are used as substitutes for petroleum-based plastics
in all major converting processes - such as injection molding, thermoforming,
blow molding and extrusions - at a pricing structure that is competitive with
petroleum-based plastics. On the cutting-edge of bio-based 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 bio-based content and compostability are advantageous, especially in
the food service industry. Cereplast Sustainables(TM) Resins combine high
bio-based 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.
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 share and per share data)
12/31/201012/31/2009
--------------------
ASSETS
Current Assets
Cash$2,391$1,306
Accounts Receivable, Net5,289325
Inventory, Net1,392847
Prepaid Expenses65215
--------------------
Total Current Assets9,1372,693
--------------------
Property and Equipment
Property and Equipment5,5645,416
Accumulated Depreciation and Amortization(2,213)(1,520)
---------- ----------- -
Net Property and Equipment3,3513,896
--------------------
Other Assets
Restricted Cash43-
Deferred Loan Costs266-
Intangibles, Net173184
Deposits1489
--------------------
Total Other Assets496273
--------------------
Total Assets$12,984$6,862
= =========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable$2,566$989
Other Payables11
Accrued Expenses1,251604
Capital Leases, Current Portion925
Loan Payable, Current Portion14953
--------------------
Total Current Liabilities3,9761,672
--------------------
Long-Term Liabilities
Loan Payable2,1199
--------------------
Total Long-Term Liabilities2,1199
--------------------
Total Liabilities6,0951,681
--------------------
Shareholders' Equity
--
Preferred Stock, $0.001 Par Value; 5,000,0000 Authorized Preferred
Shares, zero outstanding
1310
Common Stock, $0.001 Par Value; 495,000,000 Authorized Shares;
12,992,195 Shares & 9,825,476 Shares Issued and Outstanding,
Respectively
Additional Paid in Capital49,73740,578
Retained Earnings/(Deficit)(42,933)(35,444)
Other Comprehensive Income7237
--------------------
Total Shareholders' Equity6,8895,181
--------------------
Total Liabilities and Shareholders' Equity$12,984$6,862
= =========== ==========
See accompanying notes to consolidated financial statements.
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
(In thousands, except per share data)
Year EndedYear Ended
12/31/201012/31/2009
--------------------
GROSS SALES$6,416$2,751
Sales Discounts, Returns & Allowances(72)(12)
---------- ----------- -
NET SALES6,3442,739
COST OF SALES5,2472,401
--------------------
GROSS PROFIT1,097338
--------------------
OPERATING EXPENSES
Depreciation and Amortization803538
Marketing Expense1,789371
Professional Fees867728
Rent Expense425550
Research and Development447313
Salaries & Wages1,7211,709
Salaries & Wages - Stock Based Compensation490274
Other Operating Expenses1,4431,231
--------------------
TOTAL OPERATING EXPENSES7,9855,714
--------------------
LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSES)(6,888)(5,376)
---------- ----------- -
OTHER INCOME (EXPENSES)
Restructuring Costs(586)(449)
Loss on Settlement of Litigation-(67)
Loss on Sale of Equipment-(172)
Interest Income221
Interest Expense(17)(29)
---------- ----------- -
TOTAL OTHER INCOME (EXPENSES)(601)(696)
---------- ----------- -
LOSS BEFORE PROVISIONS FOR TAXES(7,489)(6,072)
Provision for Taxes--
--------------------
NET LOSS(7,489)(6,072)
OTHER COMPREHENSIVE INCOME
Gain on Foreign Currency Translation358
--------------------
TOTAL COMPREHENSIVE LOSS$(7,454)$(6,064)
= ========== == ========== =
BASIC AND DILUTED LOSS PER SHARE$(0.63)$(0.75)
= ========== == ========== =
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
BASIC AND DILUTED11,779,0878,044,487
====================
See accompanying notes to consolidated financial statements.
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except share data)
Year EndedYear Ended
12/31/201012/31/2009
--------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(7,489)$(6,072)
Adjustment to Reconcile Net Loss to Net Cash
Used in Operating Activities
Depreciation and Amortization803538
Reserve for Inventory Obsolescence-(132)
Allowance for Doubtful Accounts325
Loss on Sale of Equipment-172
Loss on Disposal of Leasehold Improvements Due to Restructuring14-
Common Stock Issued for Services, Salaries & Wages1,407712
Amortization of Debt Discount2-
Loss on Settlement of Litigation-67
(Increase) Decrease in:
Accounts Receivable(4,992)(50)
Deferred Loan Costs(130)-
Inventory(543)1,123
Deposits75(44)
Prepaid Expenses1491,026
Restricted Cash(43)49
Intangibles(2)(19)
Increase (Decrease) in:
Accounts Payable1,57888
Accrued Expenses511(226)
Other Payables-(32)
-------------------- ----
NET CASH USED IN OPERATING ACTIVITIES(8,628)(2,795)
---------- -------------- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment, and Intangibles(263)(18)
Proceeds from Sale of Equipment-4
--------------------
NET CASH USED IN INVESTING ACTIVITIES(263)(14)
---------- -------------- ----
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Capital Leases(25)(53)
Payments from Notes Payable(59)(4)
Proceeds on Loan Payable, Net of Loan Costs2,520(37)
Proceeds from Issuance of Common Stock and Subscription Receivable7,5054,196
Stock Offering Costs-(496)
-------------------- ----
NET CASH PROVIDED BY FINANCING ACTIVITIES9,9413,606
--------------------
FOREIGN CURRENCY TRANSLATION358
--------------------
NET INCREASE (DECREASE) IN CASH1,085805
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD1,306501
--------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD$2,391$1,306
==== ============== ==========
During the year ended December 31, 2010 the Company issued 2,137,642
shares in exchange for net proceeds of $6,216 pursuant to an
effective Registration Statement on Form S-3 and 705,000 shares for
net cash proceeds of $1,289 in a private placement. During the year
ended December 31, 2009 the Company issued 1,948,170 shares in
exchange for gross proceeds of $3,896 under private placements,
114,207 shares in exchange for net proceeds of $300 pursuant to a
Periodic Equity Investment Agreement, and 125,000 shares in
fulfillment of subscription payable of $250.
SUPPLEMENTAL SCHEDULE OF NON-CASH TRANSACTIONS
During the year ended December 31, 2010, the Company issued 31,250
shares valued at $125 for fees associated with an early lease
termination, 12,500 shares valued at $50 for board member services,
153,802 shares valued at $782 for professional services and rent and
20,162 shares of common stock valued at $75 pursuant to a settlement
agreement and 104,785 shares valued at $375 to employees for
services. During the year ended December 31, 2009 the Company issued
212,400 shares valued at $860 for services to directors and
employees and 318,590 shares valued at $1,301 for prepaid services
and debt repayment to third parties. 61,250 shares of restricted
common stock valued at $213 were issued to one of our shareholders
in repayment of a convertible shareholder loan and 17,500 shares of
restricted stock valued at $67 were issued under the terms of a
litigation settlement. The Company also recognized $(259) of net
expense related to vesting of employee stock options for the same
period.
SOURCE: Cereplast, Inc.
Cereplast, Inc.
Nicole Cardi
310-615-1900 x154
ncardi@cereplast.com
or
MKR Group, Inc.
Investor Relations
Charles Messman or Todd Kehrli
323-468-2300
cerp@mkr-group.com |
