EL SEGUNDO, Calif., April 16, 2013 (GLOBE NEWSWIRE) -- Cereplast, Inc. (OTCQB:CERP) (the "Company"), a leading manufacturer of proprietary biobased, compostable and sustainable bioplastics, today announced its financial results for the year ending December 31, 2012.
Mr. Frederic Scheer, Chairman and Chief Executive Officer of Cereplast, stated, "2012 was a year of transition for Cereplast. Amidst the challenges we faced during the year, we improved the positioning of the Company for 2013. Despite the 2012 financial pressures, our focus has been on putting the adversity we have faced behind us as we move toward a brighter future. As we execute during this transitionary period, we have been intently focused on attracting new customers, further developing relationships with existing customers, with an emphasis on those who are capable of making large orders, and bolstering our intellectual property portfolio, all of which are essential to our success going forward. The momentum we are building is a testament to the persistence our team has shown, the validity of our technology and a foreshadowing of how the industry is maturing."
Mr. Scheer continued, "The recent legislation in Italy requiring merchants to discontinue the use of conventional single-use plastic bags in favor of bioplastic bags is a near-term driving factor for revenue going forward. As a result of this monumental legislation, we conservatively estimate that the total addressable market in Italy for bioplastic blown film resin exceeds $500 million annually. Cereplast is poised to capture approximately 10% or $50 million of that with our Cereplast Compostables® blown film resins per year. Based on certain provisions, we are well prepared to support this order size. A close second and third target market is India and the United States. We continue to build our relationships through feet on the ground in India and have received an increased amount of interest in our resins in the United States. All three present very large market opportunities for us."
Operational Highlights:
- Revenue for 2012 totaled approximately $900,000.
- The Italian plastic bag Application Decree was formally published and sanctions will be enforced as of May 27, 2013.
- Total addressable market in Italy is estimated to exceed $500 million.
- Cereplast's total addressable market in Italy is estimated to exceed $50 million.
- Manufacturing capacity at the Seymour, Indiana plant is currently 3,000 tons/month, which based on $4,500/ton is capable of producing in excess of $10 million per month at full capacity.
- Cereplast has begun to sell its first Cereplast Hybrid Resins® application in India.
- Cereplast received several purchase orders from existing clients in India. Management is encouraged by the progress made in India and anticipates their investments in this new market will translate into additional purchase orders and future revenue growth in 2013.
- In the United States, Cereplast received several orders for compostable resins that will be used for food service applications. Multiple large food chains have started to embrace the use of compostable material for food service ware items including straws, cups and cutlery, for which Cereplast's resins are in demand. Cereplast has fulfilled these orders and all payments have been received.
2012 Year End Financial Results:
Net sales for the year ended December 31, 2012 were approximately $0.9 million, compared to $20.3 million in the same period in 2011. The decrease in sales was due to transitioning significant resources and efforts toward recovery of past due accounts receivables from customers and minimizing any additional exposure to our accounts receivable credit risk. Our current period sales were primarily prepaid shipments of sample materials and nominal shipments to established existing customers with low risk credit limits.
Cost of sales is comprised of both fixed and variable costs, including materials and supplies, labor, facilities and other overhead costs associated with our product revenues. Cost of sales for the year ended December 31, 2012 were approximately $1.0 million, compared to $18.2 million for the same period in 2011. The decline in cost of sales is due to our lower variable manufacturing costs from our reduced sales volumes and the reclassification of fixed production overhead from cost of sales to selling, general and administrative expense due to extended period of abnormally low production volume experienced in 2012.
Gross profit (loss) for the year ended December 31, 2012 was approximately ($0.1) million, compared to $2.0 million for the same period in 2011. Our decline in gross profit was attributable to our decline in sales as stated above.
Research and development expenses for the year ended December 31, 2012 were $0.5 million, compared to approximately $1.0 million for the same period in 2011. Our decrease in research and development expenses was primarily attributable to lower outside services costs related to our current projects.
Selling, general and administrative expenses for the year ended December 31, 2012 were $18.9 million, compared to $13.4 million for the same period in 2011. Our increase in sales, general and administrative expenses was primarily due to bad debt expense of $12.3 million in 2012, offset by reduced headcount and variable sales and marketing expenses due to lower sales volume in the current year.
Other income and expense, net for the year ended December 31, 2012 was ($10.7) million, as compared to ($1.6) million in the same period in 2011. The increase was primarily related to additional interest expense related to the issuance of our convertible debentures in May 2011, the impact from our Forbearance and Exchange Agreement with certain holders of our convertible debentures and the change in our derivative liability related to our warrants, short term convertible debt and preferred stock agreements.
On the balance sheet, the Company had approximately $183,000 in cash and $6.9 million in inventory. Current assets and total assets were $7.5 million and $16.2 million, respectively. Current liabilities and total liabilities were $15.1 million and $26.2 million, respectively.
| Conference Call Details: | |
| Date: | Tuesday, April 16th |
| Time: | 4:30 p.m. Eastern |
| Participant Dial-In: | (480) 629-9712 |
| 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) | ||
| December 31, 2012 | December 31, 2011 | |
| ASSETS | ||
| Current Assets | ||
| Cash | $ 183 | $ 3,940 |
| Accounts Receivable, Net | 149 | 14,744 |
| Inventory, Net | 6,941 | 4,406 |
| Prepaid Expenses and Other Current Assets | 227 | 966 |
| Total Current Assets | 7,500 | 24,056 |
| Property and Equipment | ||
| Property and Equipment | 11,601 | 13,752 |
| Accumulated Depreciation and Amortization | (4,004) | (3,151) |
| Property and Equipment, Net | 7,597 | 10,601 |
| Other Assets | ||
| Restricted Cash | 43 | 43 |
| Deferred Loan Costs | 750 | 1,321 |
| Intangible Assets, Net | 245 | 183 |
| Deposits | 47 | 47 |
| Total Other Assets | 1,085 | 1,594 |
| Total Assets | $ 16,182 | $ 36,251 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current Liabilities | ||
| Accounts Payable | $ 803 | $ 1,813 |
| Accrued Expenses | 3,663 | 2,760 |
| Capital Leases, Current Portion | 85 | 73 |
| Loan Payable, Current Portion | 5,978 | 1,855 |
| Convertible Subordinated Notes, Current Portion | 891 | -- |
| Derivative Liability | 3,189 | -- |
| Preferred Stock, $0.001 par value; | ||
| 5,000,0000 shares authorized; 92 and 0 shares issued and | ||
| outstanding at December 31, 2012 and December 31, 2011, | ||
| respectively | 500 | -- |
| Total Current Liabilities | 15,109 | 6,501 |
| Long-Term Liabilities | ||
| Loan Payable | 923 | 7,307 |
| Convertible Subordinated Notes | 10,000 | 12,500 |
| Capital Leases, Long-Term | 173 | 245 |
| Total Long-Term Liabilities | 11,096 | 20,052 |
| Total Liabilities | 26,205 | 26,553 |
| Equity | ||
| Shareholders' Equity | ||
| Common Stock, $0.001 par value; | ||
| 495,000,000 shares authorized; 63,463,659 and 18,933,139 | ||
| shares issued and outstanding at December 31, 2012 and | ||
| December 31, 2011, respectively | 63 | 19 |
| Additional Paid in Capital | 76,919 | 66,524 |
| Accumulated Deficit | (87,097) | (56,935) |
| Accumulated Other Comprehensive Income | 88 | 86 |
| Total Shareholders' Equity | (10,027) | 9,694 |
| Noncontrolling Interests | 4 | 4 |
| Total Equity | (10,023) | 9,698 |
| Total Liabilities and Shareholders' Equity | $ 16,182 | $ 36,251 |
| CEREPLAST, INC. | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (unaudited, in thousands, except per share data) | ||
| Year ended | ||
| December 31, 2012 | December 31, 2011 | |
| GROSS SALES | $ 911 | $ 20,893 |
| Sales Discounts, Returns and Allowances | (17) | (637) |
| NET SALES | 894 | 20,256 |
| COST OF SALES | 975 | 18,223 |
| GROSS PROFIT | (81) | 2,033 |
| Research and Development | 471 | 1,048 |
| Selling, General and Administrative | 18,877 | 13,397 |
| LOSS FROM OPERATIONS BEFORE OTHER EXPENSES | (19,429) | (12,412) |
| OTHER EXPENSES | ||
| Debt Extinguishment Costs | (954) | -- |
| Loss on Derivative Liability | (1,800) | -- |
| Interest and Other Income | 18 | -- |
| Interest Expense, Net | (7,997) | (1,590) |
| TOTAL OTHER EXPENSE, NET | (10,733) | (1,590) |
| NET LOSS BEFORE PROVISION FOR INCOME TAXES | (30,162) | (14,002) |
| Provision for Income Taxes | -- | -- |
| NET LOSS | $ (30,162) | $ (14,002) |
| BASIC AND DILUTED LOSS PER SHARE | $ (1.16) | $ (0.88) |
| WEIGHTED AVERAGE COMMON SHARES | ||
| OUTSTANDING, BASIC AND DILUTED | 25,975,227 | 15,989,397 |
| CEREPLAST, INC. | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (unaudited, in thousands, except shares data) | ||
| Year Ended | ||
| December 31, 2012 | December 31, 2011 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net Loss | $ (30,162) | $ (14,002) |
| Adjustment to Reconcile Net Loss to Net Cash Used in Operating Activities | ||
| Depreciation and Amortization | 874 | 944 |
| Reserve for Inventory Obsolescence | (31) | 229 |
| Allowance for Doubtful Accounts | 12,279 | 5,338 |
| Common Stock Issued for Services, Salaries and Wages | 185 | 912 |
| Amortization of Loan Discount | 5,698 | 76 |
| Impairment of Intangible Assets | -- | 61 |
| Extinguishment of Convertible Debt | 954 | -- |
| Loss on Derivative Liability | 1,800 | -- |
| Changes in Operating Assets and Liabilities | ||
| Accounts Receivable | 530 | (14,797) |
| Deferred Loan Costs | 710 | 361 |
| Inventory | 671 | (3,243) |
| Deposits | -- | (29) |
| Prepaid Expenses and Other Current Assets | 319 | (896) |
| Accounts Payable | (219) | (1,246) |
| Accrued Expenses | 939 | 1,530 |
| NET CASH USED IN OPERATING ACTIVITIES | (5,453) | (24,762) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchase of Property and Equipment, and Intangibles | (182) | (7,918) |
| Proceeds from Sale of Equipment | 15 | -- |
| NET CASH USED IN INVESTING ACTIVITIES | (167) | (7,918) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Payments on Capital Leases | (60) | (47) |
| Proceeds from Capital Leases | -- | 356 |
| Noncontrolling Interest Activities | -- | 4 |
| Payments made on Notes Payable | (366) | (145) |
| Proceeds from Loan Payable, Net of Loan Costs | 400 | 6,962 |
| Proceeds from Convertible Subordinated Notes, Net of Issuance Costs | 1,050 | 11,225 |
| Proceeds from Issuance of Common Stock and Subscriptions, Net of Issuance Costs | 400 | 15,860 |
| Proceeds from Issuance of Preferred Stock, Net of Issuance Costs | 437 | -- |
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,861 | 34,215 |
| FOREIGN CURRENCY TRANSLATION | 2 | 14 |
| NET INCREASE IN CASH | (3,757) | 1,549 |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 3,940 | 2,391 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 183 | $ 3,940 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
| Cash Paid During the Year For: | ||
| Interest | $ 700 | $ 1,025 |
| Income Taxes | $ -- | $ -- |