Cereplast Reports First Quarter 2011 Results
Grew First Quarter Revenue to $7.2 Million vs. $0.3 Million a Year AgoReiterates
2011 Annual Revenue Guidance of $28.0 to $34.0 Million
EL SEGUNDO, Calif., May 16, 2011 (BUSINESS WIRE) -- Cereplast, Inc. (CERP), a
leading manufacturer of proprietary bio-based, compostable and sustainable
plastics, announced financial results for its first quarter ended March 31, 2011.
"The first quarter 2011 results reflect the initial quarter of significant
revenues for the company and demonstrate the momentum of our business as we
continue to benefit from legislation banning the use of plastic bags and
suggesting the use of bioplastic in the European Union and other emerging
markets, as well as the higher cost of commodities," said Frederic Scheer,
Chairman and Chief Executive Officer of Cereplast. "This momentum sets the stage
for strong future growth as illustrated by the increased customer activity in
Europe and establishment of important distribution relationships that are
expected to ramp in scope and size throughout the remainder of the year."
Scheer continued, "To satisfy the expected growth in revenues, we announced plans
for a strategically located plant in Italy solidifying our continued commitment
to meet the increasing demand for bioplastic resin in Europe. This is one of
several initiatives in place to support growth and improve gross margins."
First Quarter 2011 and Recent Highlights
-- Opened initial sales office in Europe with facility in Bonen, Germany, in
January, to support the rapid expansion of its European operations.
-- Signed distribution agreements during the first quarter solidifying the
company's presence in the growing European market. -- Entered into a distribution
agreement with DMT Plasticolor, in March, to supply Cereplast bioplastic resins
to the Croatian marketplace.
-- Signed distribution agreements in January with BioWorks Pl, ColorTec S.r.l.,
and Euroink Romania, to supply bioplastic resin to the Southern Italian, Polish,
Romanian, and Slovenian markets.
-- Launched a new trademarked icon, in April, to help consumers identify products
made from bioplastics. The new symbol is a result of Cereplast's "Make Your Mark"
competition which produced a new icon that will represent the next generation of
plastics -- bio-based, biodegradable, and compostable plastics that protect and
preserve the environment. The new icon will be used in a similar fashion to the
recycling symbol as it will be stamped on products and serve as an identifying
mark of bioplastic material.
-- Announced Italy-based bioplastic manufacturing plant, in May, to create
efficiencies and enable continued expansion into European market. The plant is
expected to have 100,000 tons of capacity and is to be financed by local Italian
financial institutions.
First Quarter 2011 Financial Results
Revenues for the first quarter of 2011 of $7.2 million, compared to $0.3 million
for the first quarter of 2010. The increase is the result of the significant
growth in order flow from contracts signed in the last two quarters.
Gross profit in the first quarter of 2011 was $0.7 million, or 9.7% of revenue,
compared to $0.1 million, or 31.7% for the first quarter of 2010. The expected
decrease in gross margin reflects unusually high margins on very low volume sales
in the prior year period, combined with the company's stated strategy for the
first quarter 2011 to gain critical mass by offering low introductory pricing to
certain 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 as demonstrated by the increase in revenue for
the first quarter of 2011.
First quarter 2011 net loss was $1.8 million, or $0.12 per share, compared to a
net loss of $1.7 million, or $0.17 per share in the same period a year ago.
Financial Condition
As of March 31, 2011, the company had total cash and cash equivalents of $7.2
million, compared to $2.4 million as of December 31, 2010 and working capital of
$17.5 million. The net increase in cash is primarily proceeds received from a
private placement offering and additional growth capital received from a venture
loan facility. Shareholders' equity as of March 31, 2011 was $17.1 million,
compared to $6.9 million as of December 31, 2010. Net cash used in operating
activities for the first quarter of 2011 was $8.9 million, compared to $1.4
million for the same period in 2010. The increase in cash used for operating
activities was primarily a result of the expected increase in accounts receivable
amounts reflecting the significant sales growth.
Financial Guidance
The Company reiterates its 2011 revenue guidance of $28.0 million to $34.0
million, up from the originally stated 2011 guidance of $24.0 million to $32.0
million, representing a significant increase over its 2010 revenue of $6.3
million.
Conference Call
The Company will conduct a conference call and live webcast on May 16th, 2011 at
2:00 p.m. PDT (5:00 p.m. EDT), to discuss its first quarter 2011 financial
results. Participating in the call will be Mr. Frederic Scheer, Chairman and
Chief Executive Officer 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, 63834298.
About Cereplast, Inc.
Cereplast, Inc. (CERP) designs and manufactures proprietary bio-based,
biodegradable, compostable and 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 shares data)
March 31, 2011December 31, 2010
------------------------------------
(Unaudited)
ASSETS
Current Assets
Cash$7,185$2,391
Accounts Receivable, Net11,6655,289
Inventory, Net1,7941,392
Prepaid Expenses and Other Current Assets14265
--------------
Total Current Assets20,7869,137
--------------
Property and Equipment
Property and Equipment5,6475,564
Accumulated Depreciation and Amortization(2,423)(2,213)
------- ----------- ---
Property and Equipment, Net3,2243,351
--------------
Other Assets
Restricted Cash4343
Deferred Loan Costs387266
Intangible Assets, Net109173
Deposits2414
--------------
Total Other Assets563496
--------------
Total Assets$24,573$12,984
==== ============ =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable$1,380$2,567
Accrued Expenses1,3271,251
Capital Leases, Current Portion119
Loan Payable, Current Portion584149
--------------
Total Current Liabilities3,3023,976
--------------
Long-Term Liabilities
Loan Payable4,2022,119
--------------
Total Long-Term Liabilities4,2022,119
--------------
Total Liabilities7,5046,095
--------------
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; 15,688,634 and 12,992,195
shares issued and outstanding at March 31, 2011 and
December 31, 2010, respectively1613
Common Stock Subscribed, not issued154-
Additional Paid in Capital61,55749,737
Accumulated Deficit(44,683)(42,933)
Accumulated Other Comprehensive Income2572
--------------
Total Shareholders' Equity17,0696,889
--------------
Total Liabilities and Shareholders' Equity$24,573$12,984
==== ============ =======
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE
INCOME
(unaudited, in thousands, except per share data)
Three months ended
--------------------------------
March 31, 2011March 31, 2010
------------------------------
GROSS SALES$7,285$319
Sales Discounts, Returns and Allowances(45)(29)
------ ------- -
NET SALES7,240290
COST OF SALES6,538198
------------
GROSS PROFIT70292
Research and Development25077
Selling, General and Administrative2,0431,480
------------
LOSS FROM OPERATIONS BEFORE OTHER EXPENSES(1,591)(1,465)
OTHER EXPENSES
Restructuring Costs-219
Interest Expense, Net1591
------------
TOTAL OTHER EXPENSE, NET159220
------------
NET LOSS$ (1,750)$ (1,685)
OTHER COMPREHENSIVE INCOME
(Loss) Gain on Foreign Currency Translation(47)18
------ -------
TOTAL COMPREHENSIVE LOSS$ (1,797)$ (1,667)
===== ====== ====== ====== =
BASIC AND DILUTED LOSS PER SHARE$(0.12)$(0.17)
===== ====== ====== ====== =
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING, BASIC AND DILUTED14,8739,868
============
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except shares data)
Three Months Ended
------------------------------------
March 31, 2011March 31, 2010
----------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss$ (1,750)$ (1,685)
Adjustment to Reconcile Net Loss to Net Cash Used in Operating
Activities
Depreciation and Amortization216155
Allowance for Doubtful Accounts42(1)
Common Stock Issued for Services, Salaries and Wages584175
Amortization of Loan Discount19-
Loss on Disposal of Leasehold Improvements-12
Impairment of Intangible Assets64-
Changes in Operating Assets and Liabilities
Accounts Receivable(6,417)64
Deferred Loan Costs28-
Inventory(403)(110)
Deposits(10)42
Prepaid Expenses(76)181
Restricted Cash-(43)
Intangibles-(1)
Accounts Payable(1,337)(223)
Accrued Expenses9781
------------
NET CASH USED IN OPERATING ACTIVITIES(8,943)(1,353)
------ ---------- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment, and Intangibles(89)(53)
------ ---------- ----
NET CASH USED IN INVESTING ACTIVITIES(89)(53)
------ ---------- ----
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Capital Leases(1)(9)
Payments made on Notes Payable-(54)
Proceeds from Loan Payable, Net of Loan Costs2,50221
Proceeds from Issuance of Common Stock and Subscriptions, Net of11,3721,289
Issuance Costs
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES13,8731,247
------------
FOREIGN CURRENCY TRANSLATION(47)18
------ ----------
NET INCREASE (DECREASE) IN CASH4,794(141)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD2,3911,306
------------
CASH AND CASH EQUIVALENTS, END OF PERIOD$7,185$1,165
==== ========== ======
SOURCE: Cereplast, Inc.
Cereplast, Inc.
Public Relations
Nicole Cardi
(310) 615-1900 x154
ncardi@cereplast.com
or
Lippert/Heilshorn & Associates, Inc.
Investor Relations
Mary Magnani/Tim Dien
(415) 433-3777
cereplast@lhai.com |
