Cereplast Reports Third Quarter 2011 Results (Nov 14th)
Reports Gross Margins of 16.7%, Representing a Sequential Increase of 460 Basis
Points
EL SEGUNDO, Calif., Nov 14, 2011 (GlobeNewswire via COMTEX) -- Cereplast, Inc.
(CERP), a leading manufacturer of proprietary biobased, compostable and
sustainable plastics, reported financial results for its third quarter ended
September 30, 2011.
"Demand for bioplastic resin remains very strong as a result of new legislation
across Europe; however, macro-economic factors impacted the company during the
third quarter," stated Frederic Scheer, chairman and chief executive officer.
"The European financial crisis has precipitated, leading to longer payment terms
than typical for even Europe. While the quality of the receivables remains high,
the length is unacceptable, and we have taken action. In addition to aggressive
collections, we implemented more stringent controls for customer orders and
stopped shipments to customers with account balances aged beyond 150 days."
"Although this impacted our revenue in the near term, we are confident in our
ability to drive long term growth. In fact to meet increasing demand, we secured
an Italy-based manufacturing plant to broaden our reach. In addition, we extended
our agreement with Italy-based Colortec S.r.l to supply bioplastic resin to the
Italian marketplace. Meanwhile, our disciplined pricing strategy has been well
accepted. As a result, we sequentially increased our third quarter 2011 gross
margins by 460 basis points to 16.7%, positioning us to exit the year with
margins in the 20% range."
Recent Operating Highlights
--Raised $5.0 million in a registered direct offering.
--Extended its agreement with Italy-based Colortec S.r.l, to supply
bioplastic resin to the Italian and Slovenian markets. Under the terms
of the agreement, Colortec is projecting to purchase $20 million of
materials in 2012.
--Purchased an Italy-based industrial plant to create efficiencies and to
continue expansion in the European market.
--Appointed bioplastics expert Dr. Michael Thielen as ombudsman for the
new bioplastics symbol; Thielen will oversee all matters related to the
usage and licensing requirements surrounding the symbol.
Financial Results Third Quarter 2011
For the third quarter of 2011, net sales were $5.4 million, compared to $1.5
million for the third quarter of 2010. This increase reflects growth in order
flow, relating to the growing demand for bioplastics. Gross profit for the third
quarter of 2011 was $894,000, or a 16.7% gross margin, compared to 25.2% for the
third quarter of 2010 and 12.1% in the second quarter of 2011. The expected
year-over-year gross margin decrease reflects the company's stated strategy to
offer introductory pricing to certain key customers while Cereplast strives to
gain critical mass, and the sequential gross margin improvement reflects
operational efficiencies, and positive pricing trends. Third quarter 2011 net
loss was $3.6 million, or $0.23 per share, compared to a net loss of $2.2
million, or $0.17 per share in the same period a year ago.
Nine Months Ended September 30, 2011 Financial Results
Net sales for the first nine months of 2011 were $20.2 million, compared to $2.4
million for the same period a year ago. Gross profit was $2.5 million, or 12.5%
of net sales, compared to $671,000, or 27.4% for the same period a year ago. Net
loss was $7.7 million, or $0.50 per share, compared to a net loss of $5.6
million, or $0.49 per share in the same period a year ago.
Net cash used in operating activities for the nine months ended September 30,
2011 was $22.2 million, compared to $5.3 million for the same period in 2010,
reflecting the increase in accounts receivable amounts.
At September 30, 2011, total cash and cash equivalents were $4.0 million,
compared to $2.4 million at December 31, 2010. At September 30, 2011, working
capital reached $21.4 million, compared to $5.2 million at December 31, 2010.
Shareholders' equity at September 30, 2011 was $11.3 million, compared to $6.9
million at December 31, 2010.
Outlook
Management expects to report revenue for 2011 in the range of $25.0 million to
$28.0 million, representing a significant increase over its 2010 net sales of
$6.3 million. In addition, management expects to exit the year with gross margins
of 20% or higher.
Conference Call
The company will conduct a conference call and live webcast on November 14, 2011
at 2:00 p.m. PST (5:00 p.m. EST), to discuss its third quarter 2011 financial
results. Participants include Frederic Scheer, Chairman and Chief Executive
Officer, and Heather Sheehan, Chief Financial Officer.
To join the live conference call five to ten minutes prior to the scheduled
conference call time, please dial: 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
855-859-2056, international callers dial 404-537-3406, and enter the Conference
ID 20491688.
About Cereplast, Inc.
Cereplast, Inc. (CERP) designs and manufactures proprietary biobased, sustainable
plastics 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)
SeptemberDecember
30, 201131, 2010
-------------------
(Unaudited)
ASSETS
Current Assets
Cash$4,030$2,391
Accounts Receivable, Net19,1195,289
Inventory, Net3,4861,392
Prepaid Expenses and Other
Current Assets1,59365
-------------------
Total Current Assets28,2289,137
-------------------
Property and Equipment
Property and Equipment7,0075,564
Accumulated Depreciation
and Amortization(2,894)(2,213)
-------------------
Property and Equipment,
Net4,1133,351
-------------------
Other Assets
Restricted Cash4343
Deferred Loan Costs1,459266
Intangible Assets, Net160173
Deposits4914
-------------------
Total Other Assets1,711496
-------------------
Total Assets$34,052$12,984
===================
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable$3,207$2,567
Accrued Expenses2,0951,251
Capital Leases, Current
Portion369
Loan Payable, Current
Portion1,504149
-------------------
Total Current Liabilities6,8423,976
-------------------
Long-Term Liabilities
Loan Payable3,3182,119
Convertible Subordinated
Notes12,500--
Capital Leases, Long-Term59--
-------------------
Total Long-Term
Liabilities15,8772,119
-------------------
Total Liabilities22,7196,095
-------------------
Equity
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; 15,793,553 and
12,992,195 shares issued
and outstanding at
September 30, 2011 and
December 31, 2010,
respectively1613
Additional Paid in Capital61,99249,737
Accumulated Deficit(50,658)(42,933)
Accumulated Other
Comprehensive Income(21)72
-------------------
Total Shareholders' Equity11,3296,889
Noncontrolling Interests4--
-------------------
Total Equity11,3336,889
-------------------
Total Liabilities and
Shareholders' Equity$34,052$12,984
===================
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
(unaudited, in thousands, except per share data)
Three months endedNine months ended
----------------------------------------
SeptemberSeptemberSeptemberSeptember
30, 201130, 201030, 201130, 2010
------------------------------------
GROSS SALES$5,414$1,515$20,849$2,519
Sales Discounts, Returns and
Allowances(45)(2)(628)(70)
------------------------------------
NET SALES5,3691,51320,2212,449
COST OF SALES4,4751,13217,7011,778
------------------------------------
GROSS PROFIT8943812,520671
Research and Development280106789302
Selling, General and
Administrative3,6892,2338,4575,432
------------------------------------
LOSS FROM OPERATIONS BEFORE
OTHER EXPENSES(3,075)(1,958)(6,726)(5,063)
OTHER EXPENSES
Restructuring Costs--(275)--(586)
Interest Expense, Net(513)1(999)--
------------------------------------
TOTAL OTHER EXPENSE, NET(513)(274)(999)(586)
------------------------------------
NET LOSS BEFORE PROVISION FOR
INCOME TAXES(3,588)(2,232)(7,725)(5,649)
Provision for Income Taxes--------
------------------------------------
NET LOSS(3,588)(2,232)(7,725)(5,649)
OTHER COMPREHENSIVE INCOME
Gain (Loss) on Foreign Currency
Translation(54)52(93)52
------------------------------------
TOTAL COMPREHENSIVE LOSS$(3,642)$(2,180)$(7,818)$(5,597)
====================================
BASIC AND DILUTED LOSS PER
SHARE$(0.23)$(0.17)$(0.50)$(0.49)
====================================
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, BASIC AND DILUTED15,77812,92515,47011,400
====================================
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except shares data)
Nine Months Ended
--------------------
SeptemberSeptember
30, 201130, 2010
------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss$(7,725)$(5,649)
Adjustment to Reconcile Net Loss to Net
Cash Used in Operating Activities
Depreciation and Amortization694588
Allowance for Doubtful Accounts1,78033
Common Stock Issued for Services,
Salaries and Wages8741,333
Amortization of Loan Discount57--
Loss on Disposal of Leasehold
Improvements--15
Impairment of Intangible Assets64--
Changes in Operating Assets and
Liabilities
Accounts Receivable(15,609)(1,263)
Deferred Loan Costs223--
Inventory(2,095)(210)
Deposits(35)56
Prepaid Expenses and Other Current
Assets(1,514)92
Restricted Cash--(43)
Accounts Payable269(315)
Accrued Expenses86458
------------------
NET CASH USED IN OPERATING ACTIVITIES(22,153)(5,305)
------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment, and
Intangibles(1,290)(184)
------------------
NET CASH USED IN INVESTING ACTIVITIES(1,290)(184)
------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Capital Leases(13)(23)
Proceeds from Capital Leases96--
Noncontrolling Interest Activities4--
Payments made on Notes Payable--(59)
Proceeds from Loan Payable, Net of Loan
Costs2,50020
Proceeds from Convertible Subordinated
Notes, Net of Issuance Costs11,225--
Proceeds from Issuance of Common Stock
and Subscriptions,11,3637,507
Net of Issuance Costs
------------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES25,1757,445
------------------
FOREIGN CURRENCY TRANSLATION(93)52
------------------
NET INCREASE IN CASH1,6392,008
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD2,3911,306
------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD$4,030$3,314
==================
This news release was distributed by GlobeNewswire, globenewswire.com
SOURCE: Cereplast, Inc.
CONTACT: Cereplast, Inc.
Public Relations
Nicole Cardi
(310) 615-1900 x154
ncardi@cereplast.com
LHA
Investor Relations
Mary Magnani
(415) 433-3777
cereplast@lhai.com |
