Cereplast Reports 2011 Year End Financial Results
EL SEGUNDO, Calif., Apr 16, 2012 (GlobeNewswire via COMTEX) -- Cereplast, Inc.
(CERP), a leading manufacturer of proprietary biobased, sustainable plastics,
today announced its financial results for the year ending December 31, 2011.
Frederic Scheer, Chairman and CEO of Cereplast, stated, "On a year over year
basis, revenue increased over 200% which is a significant growth rate for a
company of our size. While we faced some challenges with clients associated with
the economic downturn in Europe during 2011, our company was forced to reevaluate
and improve our risk management related to the financial structure of our working
relationships. We are confident these improvements will restore the financial
health of our company going forward. During the first quarter of 2012 we
continued to establish strong, new distribution partnerships worldwide broadening
our footprint in the industry while bringing innovative products to market, and
strengthening our team."
2011 and Year to Date Operational Highlights:
--Distribution Agreements: Cereplast entered into a distribution agreement
with Italy-based ColorTec to supply bioplastic resin to the Southern
Italian and Slovenian markets. Other distribution agreements include
BioWorks in Poland, Euroink in Romania, DMT Plasticolor in Croatia, Gama
Plastik in Turkey, and Mastercolor AB in Scandinavia, and we are
actively continuing to look beyond Europe and the Euro zone.
--DIN CERTCO Certifications: Three new resin grades, Compostable 3002,
Compostable 3010, and Compostable 3020, have received DIN CERTCO
certifications of compostability. DIN CERTCO is the most prominent
institute for standardization in Germany, and is highly regarded
world-wide. DIN CERTCO is one of two certifying bodies recognized by EU
Bioplastics for the certification of bioplastics, a requirement for
selling compostable resin in Europe.
--New Bioplastic Resin Grades: Unveiled several new technologically
advanced bioplastic resin grades at the International Plastics Showcase,
NPE 2012, especially in the biobased polyolefin segment of our business.
--Completed a Life Cycle Assessment of Cereplast resins showing major
environmental benefits.
--Appointed Paul Pelosi Jr. to the Board of Directors.
--Appointed Michael Okada as Chief Accounting Officer and Interim Chief
Financial Officer.
--Strengthened Sales Team: Added two plastics industry veterans to key
roles in North America and Europe. William G. Mashy has been appointed
as Vice President of Sales and Marketing of North America, and will lead
the Company's strategy to maximize sales and profitability in the
region. Emilio Sitta has been appointed as Regional Sales Director in
Italy, and will identify new markets and drive sales for the Cereplast
Hybrid Resins(R) product line in the country.
Bioplastics Industry Overview:
According to Reportlinker, it is estimated that the industry will grow over 7
fold in the global market for bioplastics reaching 1.9 million metric tons by
2017 compared to only 264,000 in 2007. Cereplast is at the heart of this movement
and will continue to see its growth be driven by both sales efforts and the
overall trends of the industry. The steady increase in the price of oil will
continue to make the cost of bioplastics more competitive, and will reduce the
market share for certain polyolefins such as the shrinking market for
polyethylene in Europe.
New regulation continues to drive growth of the worldwide movement to ban the use
of traditional plastic bags.
--Italy: Following legislation published by the Italian Parliament in
December 2010, which banned the use of polyethylene for bag
applications, the Parliament filed an Application Decree further
amending the details of the Law and implements strict enforceable
conditions. The Decree is enforcing large and costly sanctions from
2,500 euros to 25,000 euros per infraction for companies that do not
follow the legal requirements. This Decree is positive but it is
important to note that the sanctions will not go into effect for a few
months.
--Bulgaria: On October 1, 2011, Bulgaria implemented a tax on the use of
plastic bags. The tax will be increased each year from BGN 0.35 (USD
$0.23) per bag currently to BGN 0.55 (USD $0.37) per bag in 2014.
--China: In February 2008, China's State Council enacted a nationwide ban
on plastic bags. The ban prohibits shops, supermarkets and sales outlets
from handing out free plastic bags and bans the production, sales and
use of ultra-thin plastic bags.
Frederic Scheer, Chairman and CEO of Cereplast, continued, "Several external
issues related to the financial crisis in the Euro zone have negatively affected
our near term growth. We have experienced slower progress in the recovery of our
Accounts Receivables which has impacted our liquidity. Also, broadly speaking,
current and potential customers in Europe are having liquidity issues of their
own. The demand and need for our products are still strong, although we are
seeing an increased sales cycle due to economic risk. We are working diligently
with our European clients who have been affected by the Euro Zone financial
crisis on an amicable resolution. Due to progress taking longer than anticipated,
we are taking a more aggressive role in facilitating the sale of our inventory to
third parties and broadening our activities outside of Europe to North America
and Asia."
2011 Financial Results:
Net sales for the year ending December 31, 2011 totaled $20.3 million, an
increase of 219% or $13.9 million, as compared to $6.3 million for the year
ending December 31, 2010. The sales increase for the period is attributable to
volume increases associated with both existing customer contracts and new
contracts with European customers. Environmental legislation in Italy for
example, as well as the increased volatility in oil prices were key drivers of
demand for our bioplastic resins in the current year.
Cost of sales include both fixed and variable costs, such as raw materials and
supplies, labor, facilities and other overhead costs associated with product
revenues. Cost of sales for the year ending December 31, 2011 totaled $18.2
million, an increase of 247% and 90% of revenue, as compared to $5.2 million or
82.7% of revenue for the year ending December 31, 2010. The increase in cost of
sales year-over-year is attributable to two main factors. First, cost of sales in
the prior year period cannot be considered representative of normal sales or
operations as the Company was in the process of relocating production operations
from California to Indiana and therefore had minimal production during this
period in 2010. Second, cost of sales in the current period reflects the
tremendous growth in sales volume from the prior year.
Gross profit for the year ending December 31, 2011 totaled $2.0 million, an
increase of 85%, as compared to $1.1 million for the year ending December 31,
2010. Gross profit margin in 2011 was 10.0% as compared to 17.3% in 2010. The
decrease in gross profit margin reflects the unusually high margins on very low
volume sales in the prior year period combined with the Company's sales strategy
to gain critical market share in 2011 by offering low introductory pricing to
some key customers to support their programs to bring new bioplastic products to
market. This strategy has proven effective in contributing to strong sales growth
and growing market share. The Company expects that margins will improve gradually
in future periods as the Company continues to capitalize on demand growth to
diversify its customer base, implement strategic price increases and continue to
gain operational efficiencies.
Research and development expenses for the year ended December 31, 2011 were $1.0
million, or 5.2% of net sales, compared to $0.5 million, or 7.3% of net sales,
for the same period in 2010. The increase is primarily due to additional
headcount and increased manufacturing supplies used for new product development.
Selling, general and administrative expenses for the year ended December 31, 2011
were $13.4 million, or 66.1% of net sales, compared to $7.5 million, or 118.5% of
net sales, for the same period in 2010. The increase is primarily attributable to
the $5.3 million increase in our allowance for doubtful accounts during the year
ended December 31, 2011. In addition, Cereplast incurred incremental expenses in
2011 across all areas of the business to support our sales growth.
Net loss for the period ending December 31, 2011 totaled $14.0 million as
compared to $7.5 million for the period ending December 31, 2010.
On the balance sheet, the Company had $3.9 million in cash and approximately
$14.7 million in account receivables. Total current assets and total assets were
$24.1 million and $36.3 million respectively. Total current liabilities and total
liabilities were $6.5 million and $26.6 million respectively. Total shareholders'
equity was $9.7 million or $0.61 per share based on approximately 16 million
weighted average shares outstanding.
Conference Call Details:
Date:Monday, April 16, 2012
Time:4:30 p.m. EDT
Dial-In:(877) 312-5508
International Dial-In:(253) 237-1135
investor.cereplast.com
Live Webcast:m
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 71639491.
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)
DecemberDecember
31, 201131, 2010
------------------
ASSETS
Current Assets
Cash$ 3,940$ 2,391
Accounts Receivable, Net14,7445,285
Inventory, Net4,4061,392
Prepaid Expenses and Other
Current Assets96669
------------------
Total Current Assets24,0569,137
------------------
Property and Equipment
Property and Equipment13,7525,564
Accumulated Depreciation
and Amortization(3,151)(2,213)
------------------
Property and Equipment,
Net10,6013,351
------------------
Other Assets
Restricted Cash4343
Deferred Loan Costs1,321266
Intangible Assets, Net183170
Deposits4717
------------------
Total Other Assets1,594496
------------------
Total Assets$ 36,251$ 12,984
==================
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable$ 1,813$ 2,567
Accrued Expenses2,7601,251
Capital Leases, Current
Portion739
Loan Payable, Current
Portion1,855149
------------------
Total Current Liabilities6,5013,976
------------------
Long-Term Liabilities
Loan Payable7,3072,119
Convertible Subordinated
Notes12,500--
Capital Leases, Long-Term245--
------------------
Total Long-Term
Liabilities20,0522,119
------------------
Total Liabilities26,5536,095
------------------
Shareholders' Equity
Preferred Stock, $0.001 par
value; 5,000,0000 shares
authorized and none
outstanding----
Common Stock, $0.001 par
value; 495,000,000 shares
authorized; 18,933,139 and
12,992,195 shares issued
and outstanding at
December 31, 2011 and
2010, respectively1913
Additional Paid in Capital
----------------------------66,52449,737
Accumulated Deficit(56,935)(42,933)
Accumulated Other
Comprehensive Income8672
------------------
9,6946,889
Noncontrolling Interests4--
------------------
Total Shareholders'
Equity9,6986,889
------------------
Total Liabilities and
Shareholders' Equity$ 36,251$ 12,984
==================
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE INCOME
(in thousands, except per share data)
Year ended
------------------------
DecemberDecember
31, 201131, 2010
----------------------
GROSS SALES$ 20,893$ 6,416
Sales Discounts, Returns and
Allowances(637)(72)
----------------------
NET SALES20,2566,344
COST OF SALES18,2235,247
----------------------
GROSS PROFIT2,0331,097
Research and Development1,048466
Selling, General and
Administrative13,3977,519
----------------------
LOSS FROM OPERATIONS BEFORE
OTHER EXPENSES(12,412)(6,888)
OTHER EXPENSES
Restructuring Costs--586
Interest Expense, Net1,59015
----------------------
TOTAL OTHER EXPENSE, NET1,590601
----------------------
LOSS BEFORE PROVISION FOR
INCOME TAXES(14,002)(7,489)
Provision for Income Taxes----
----------------------
NET LOSS$ (14,002)$ (7,489)
======================
BASIC AND DILUTED LOSS PER
SHARE$ (0.88)$ (0.64)
======================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING, BASIC
AND DILUTED15,989,39711,779,087
======================
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended
-----------------------
DecemberDecember
31, 201131, 2010
---------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss$ (14,002)$ (7,489)
Adjustment to Reconcile Net Loss to
Net Cash Used in Operating Activities
Depreciation and Amortization944803
Reserve for Inventory Obsolescence229--
Allowance for Doubtful Accounts5,33832
Common Stock Issued for Services,
Salaries and Wages9121,407
Amortization of Loan Discount762
Loss on Disposal of Leasehold
Improvements--14
Impairment of Intangible Assets61--
Changes in Operating Assets and
Liabilities
Accounts Receivable(14,797)(4,992)
Deferred Loan Costs361(130)
Inventory(3,243)(543)
Deposits(29)75
Prepaid Expenses and Other Current
Assets(896)147
Restricted Cash--(43)
Accounts Payable(1,246)1,578
Accrued Expenses1,530511
---------------------
NET CASH USED IN OPERATING
ACTIVITIES(24,762)(8,628)
---------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property, Equipment and
Intangibles(7,918)(263)
---------------------
NET CASH USED IN INVESTING
ACTIVITIES(7,918)(263)
---------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Capital Leases(47)(25)
Proceeds from Capital Leases356
Noncontrolling Interest Activities4
Payments on Notes and Loan Payable(145)(59)
Proceeds from Loan Payable, Net of
Loan Costs6,9622,520
Proceeds from Convertible Subordinated
Notes, Net of Issuance Costs of
$1,27511,225
Proceeds from Issuance of Common Stock
and Subscriptions, Net of Issuance
Costs of $1,61915,8607,505
---------------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES34,2159,941
---------------------
FOREIGN CURRENCY TRANSLATION1435
---------------------
NET INCREASE IN CASH1,5491,085
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD2,3911,306
---------------------
CASH AND CASH EQUIVALENTS, END OF
PERIOD$ 3,940$ 2,391
=====================
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
Investor Relations:
Alliance Advisors, LLC
Alan Sheinwald
914-669-0222
asheinwald@allianceadvisors.net
allianceadvisors.net |
