SEYMOUR, Ind., Aug. 14, 2013 (GLOBE NEWSWIRE) -- Cereplast, Inc. (OTCQB:CERP) (the "Company"), a leading manufacturer of proprietary biobased, compostable and sustainable bioplastics, today announced $1.7 million in net revenues during the first half of 2013 compared to $305,000 for the same period the prior year and $911,000 for all of 2012.
Cereplast Chairman and Chief Executive Officer, Mr. Frederic Scheer, stated, "On a comparable basis to 2012, we are pleased with the revenue growth we have enjoyed thus far in 2013. The majority of this growth is from Italy, and we expect this trend to accelerate as legislation is officially passed. In addition to our focus in Italy, we have taken aggressive steps to strengthen our sales team in India and North America and have already received orders. Both geographic areas have the potential to provide significant sales opportunities for the Company. We anticipate comparable growth to occur during the remainder of the year and have received several orders that are expected to begin shipping during the fourth quarter."
2013 Operational Highlights to Date:
- As of June 1, 2013, the Company successfully completed its corporate restructuring by relocating its corporate headquarters from California to its production facility in Indiana, as well as by relocating its European headquarters from Germany to its offices in Italy. The closure of the offices in California and Germany is expected to reduce annual operating expenses by $600,000 to $800,000.
- The Company received multiple purchase orders for its Cereplast Compostables® blown film resins totaling approximately $200,000. These resins will be used for the manufacture of single-use plastic bags for use at about 45 supermarkets located in the Veneto and Trentino Regions in Italy. The resin is being produced this month at the Company's manufacturing facility in Indiana.
- Cereplast strengthened its North American sales team through the appointment Mr. Reddy Tudi as Vice President of Business Development and Mr. Kevin J. Fina as Regional Sales Manager. Together, Mr. Tudi and Mr. Fina are working on approximately 30 projects in North America for Cereplast Compostables® blown film and blow molding resins, as well as Cereplast Sustainables® resins for injection molding applications. The potential volume of these projects is $10 million per year.
- The Company recently received and shipped orders to both new and existing customers in India, one of which is a well-known polymer solution provider that has been in business for over ten years in Hyderbad, India.
2013 First Six Months Financial Results:
Net sales for the six months ended June 30, 2013 were approximately $1.7 million, compared to $0.3 million in the same period in 2012. Sales increased from the prior year due to growing demand in the European markets primarily due to pending legislation in Italy that will ban traditional plastic bags.
Cost of sales is comprised of variable costs associated with product revenues. Cost of sales for the six months ended June 30, 2013 was approximately $1.5 million, compared to $0.4 million for the same period in 2012. The increase in cost of sales is due to an increase in sales.
Gross profit (loss) for the six months ended June 30, 2013 was approximately $0.2 million, compared to ($0.1) million for the same period in 2012. The increase in gross profit was attributable to an increase in sales as stated above.
Research and development expenses for the six months ended June 30, 2013 were $0.2 million, compared to approximately $0.3 million for the same period in 2012. Research and development expenses have slightly decreased due to cost containment efforts to preserve working capital.
Selling, general and administrative expenses for the six months ended June 30, 2013 were $2.7 million, compared to $3.7 million for the same period in 2012. The decrease in sales, general and administrative expenses was primarily due to reduced headcount and a reduction in fixed production overhead costs classified as selling, general and administrative expense due to an extended period of abnormally low production volume.
Other income and expense, net for the six months ended June 30, 2013 was primarily non-cash net expenses of $24.1 million, as compared to a net expense of $2.3 million in the same period in 2012. The increase in other income and expense was primarily a result of the change in the derivative liability related to warrants, short-term convertible debt and preferred stock agreements. In addition, the Company recorded $1.8 million in debt extinguishment costs related to the exchange of certain term loan and convertible notes.
Net loss for the six months ended June 30, 2013 was $26.8 million, as compared to $6.3 million in the same period in 2012.
2013 Second Quarter Financial Results:
Net sales for the three months ended June 30, 2013 were approximately $0.7 million, compared to $0.2 million in the same period in 2012.
Cost of sales is comprised of variable costs associated with product revenues. Cost of sales for the three months ended June 30, 2013 was approximately $0.7 million, compared to $0.2 million for the same period in 2012.
Gross profit (loss) for the three months ended June 30, 2013 was approximately $0.1 million, compared to $7,000 for the same period in 2012.
Research and development expenses for the three months ended June 30, 2013 were $0.1 million, compared to approximately $0.1 million for the same period in 2012. Research and development expenses have not increased due to the Company's cost containment effort to preserve working capital.
Selling, general and administrative expenses for the three months ended June 30, 2013 were $1.2 million, compared to $2.0 million for the same period in 2012. The decrease in sales, general and administrative expenses was primarily due to reduced headcount and a reduction in fixed production overhead costs classified as selling, general and administrative expense due to an extended period of abnormally low production volume.
Other income and expense, net for the three months ended June 30, 2013 was primarily non-cash net expenses of $7.5 million, as compared to a net expense of $1.8 million in the same period in 2012. The increase in expense was primarily a result of the change in derivative liability related to the Company's warrants, short-term convertible debt and preferred stock agreements.
Net loss for the three months ended June 30, 2013 was $8.7 million, as compared to $3.9 million in the same period in 2012.
| Conference Call Details: | |
| Date: | Wednesday, August 14th |
| Time: | 4:30 p.m. Eastern |
| Participant Dial-In: | (480) 629-9666 |
| Live Webcast: | http://www.cereplast.com/investors/events-presentations/ |
It is recommended that participants dial in approximately 10 minutes prior to the start of the 4:30 p.m. Eastern call. There will also be a simultaneous live webcast of the conference call which can be accessed through the following audio feed link and archived recording of the conference call available under the Investor Relations section of the company website at http://www.cereplast.com/investors/events-presentations/.
About Cereplast, Inc.
Cereplast, Inc. (OTCQB: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® resins are ideally suited for single-use applications where high biobased content and compostability are advantageous, especially in the food service industry. Cereplast Sustainables® 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 www.cereplast.com. You may also visit the Cereplast social networking pages at Facebook.com/Cereplast, Twitter.com/Cereplast and Youtube.com/Cereplastinc.
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, 2013 | December 31, 2012 | |
| (Unaudited) | ||
| ASSETS | ||
| Current Assets | ||
| Cash | $ 223 | $ 183 |
| Accounts Receivable, Net | 1,166 | 149 |
| Inventory, Net | 5,444 | 6,941 |
| Prepaid Expenses and Other Current Assets | 178 | 227 |
| Total Current Assets | 7,011 | 7,500 |
| Property and Equipment | ||
| Property and Equipment | 11,535 | 11,601 |
| Accumulated Depreciation and Amortization | (4,433) | (4,004) |
| Property and Equipment, Net | 7,102 | 7,597 |
| Other Assets | ||
| Restricted Cash | -- | 43 |
| Deferred Loan Costs | 484 | 750 |
| Intangible Assets, Net | 241 | 245 |
| Deposits | 48 | 47 |
| Total Other Assets | 773 | 1,085 |
| Total Assets | $ 14,886 | $ 16,182 |
| LIABILITIES AND SHAREHOLDERS' DEFICIT | ||
| Current Liabilities | ||
| Accounts Payable | $ 968 | $ 803 |
| Accrued Expenses | 3,406 | 3,663 |
| Capital Leases, Current Portion | 97 | 85 |
| Loan Payable, Current Portion | 5,762 | 5,978 |
| Convertible Subordinated Notes, Current Portion | 819 | 891 |
| Derivative Liability | 13,739 | 3,189 |
| Preferred Stock, $0.001 par value; 5,000,000 shares authorized; 294 and 92 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively | 1,213 | 500 |
| Total Current Liabilities | 26,004 | 15,109 |
| Long-Term Liabilities | ||
| Loan Payable | 452 | 923 |
| Convertible Subordinated Notes | 8,176 | 10,000 |
| Capital Leases, Long-Term | 131 | 173 |
| Total Long-Term Liabilities | 8,759 | 11,096 |
| Total Liabilities | 34,763 | 26,205 |
| Shareholders' Deficit | ||
| Common Stock, $0.001 par value; 2,000,000,000 shares authorized; 622,359,545 and 63,463,659 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively | 622 | 63 |
| Common Stock Subscribed, not issued | 586 | -- |
| Additional Paid in Capital | 92,738 | 76,919 |
| Accumulated Deficit | (113,865) | (87,097) |
| Accumulated Other Comprehensive Income | 38 | 88 |
| (19,881) | (10,027) | |
| Noncontrolling Interests | 4 | 4 |
| Total Shareholders' Deficit | (19,877) | (10,023) |
| Total Liabilities and Shareholders' Deficit | $ 14,886 | $ 16,182 |
| CEREPLAST, INC. | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME | ||||
| (unaudited, in thousands, except per share data) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |
| Gross Product Sales | $ 747 | $ 191 | $ 1,697 | $ 305 |
| Sales Discounts, Returns and Allowances | -- | (1) | (1) | (12) |
| Net Sales | 747 | 190 | 1,696 | 293 |
| Cost of Goods Sold | 654 | 197 | 1,498 | 387 |
| Gross Profit (Loss) | 93 | (7) | 198 | (94) |
| Operating Expenses: | ||||
| Research and Development | 114 | 126 | 220 | 255 |
| Selling, General and Administrative | 1,159 | 2,009 | 2,662 | 3,673 |
| Total Operating Expenses | 1,273 | 2,135 | 2,882 | 3,928 |
| Operating Loss | (1,180) | (2,142) | (2,684) | (4,022) |
| Debt Extinguishment Costs | (173) | (427) | (1,756) | (427) |
| Change in Derivative Liability | (5,921) | (99) | (19,237) | (99) |
| Interest and Other Income | -- | -- | -- | 18 |
| Interest Expense | (1,442) | (1,253) | (3,091) | (1,777) |
| Loss Before Provision for Income Taxes | (8,716) | (3,921) | (26,768) | (6,307) |
| Provision for Income Taxes | -- | -- | -- | -- |
| Net Loss | $ (8,716) | $ (3,921) | $ (26,768) | $ (6,307) |
| Net Loss Per Share - Basic and Diluted | $ (0.02) | $ (0.20) | $ (0.08) | $ (0.32) |
| Weighted Average Common Shares Outstanding - Basic and Diluted | 474,847,995 | 19,947,205 | 355,084,811 | 19,471,441 |
| CEREPLAST, INC. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (unaudited, in thousands, except shares data) | ||
| Six Months Ended | ||
| June 30, 2013 | June 30, 2012 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net Loss | $ (26,768) | $ (6,307) |
| Adjustment to Reconcile Net Loss to Net Cash Used in Operating Activities | ||
| Depreciation and Amortization | 435 | 356 |
| Common Stock Issued for Services, Salaries and Wages | 87 | 143 |
| Amortization of Loan Discount | 2,254 | 779 |
| Extinguishment of Convertible Debt | 1,756 | 348 |
| Change in Warrant Derivative Liability | 19,237 | 99 |
| Allowance for Doubtful Accounts | -- | 521 |
| Changes in Operating Assets and Liabilities | ||
| Accounts Receivable | (1,020) | (95) |
| Deferred Loan Costs | 265 | 262 |
| Inventory | 1,460 | 336 |
| Prepaid Expenses | 49 | 2 |
| Restricted Cash | 43 | -- |
| Accounts Payable | 164 | (402) |
| Accrued Expenses | 621 | 34 |
| NET CASH USED IN OPERATING ACTIVITIES | (1,417) | (3,924) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchase of Property and Equipment, and Intangibles | (3) | (125) |
| Proceeds from Sale of Equipment | -- | 15 |
| NET CASH USED IN INVESTING ACTIVITIES | (3) | (110) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Payments on Capital Leases | (30) | (36) |
| Payments made on Notes Payable | -- | (603) |
| Proceeds from Convertible Notes, Net of Issuance Costs | 63 | 450 |
| Proceeds from Issuance of Preferred Stock | 1,500 | -- |
| Proceeds from Issuance of Common Stock and Subscriptions, Net of Issuance Costs | (23) | 488 |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,510 | 299 |
| FOREIGN CURRENCY TRANSLATION | (50) | (15) |
| NET INCREASE (DECREASE) IN CASH | 40 | (3,750) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 183 | 3,940 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 223 | $ 190 |