N@N

Cereplast Reports Record Fourth Quarter and Full Year 2010 Results

^{Published on 2011-03-31 13:20:16 - Market Wire}
 

EL SEGUNDO, Calif.--([ BUSINESS WIRE ])--[ Cereplast, Inc. ] (NASDAQ: CERP), a leading manufacturer of proprietary bio-based, compostable and sustainable plastics, today announced financial results for its 2010 fourth quarter and full year, ended December 31, 2010.

"We remain confident that with our business strategy and our increasing market penetration in Europe, Cereplast will reach its revenue target of $24 to $32 million this year, a projected 300% to 400% increase from 2010."

Cereplast reported revenues for the fourth quarter of 2010 of $3.9 million, an increase of 547% compared to fourth quarter 2009. For the year ended December 31, 2010, the Company reported net revenue of $6.3 million, an increase of 133% compared to the previous year and a reduced net loss per share of $0.63 or $7.5 million.

aOur strong fourth quarter and full year 2010 results were due to robust growth in demand for Cereplast resin across the globe," said Frederic Scheer, Cereplast Chairman and Chief Executive Officer. aA key driver for the surge in demand for bioplastics has been governmental policy sweeping across Europe toward protecting and preserving the environment, evidenced by the ban on petroleum-based plastic bags in Italy that went into effect early this year. In a number of European countries, the law now requires plastic bag distributors to find alternative materials, like bioplastics, to manufacture disposable bags. With 60 to 100 million barrels of oil used each year for the manufacturing of plastic bags, a burgeoning opportunity for the bioplastics market has emerged as consumers and manufacturers move toward agreenera™ products, packaging and practices.a

Scheer continued, aWe remain confident that with our business strategy and our increasing market penetration in Europe, Cereplast will reach its revenue target of $24 to $32 million this year, a projected 300% to 400% increase from 2010.a

Fourth Quarter and Full Year Financial Highlights

• Record fourth quarter revenues increase 547% to $3.9 million, compared to sales of $602,000 in the fourth quarter of 2009
• Record 2010 annual sales increase 133% to $6.3 million, compared to sales of $2.7 million in 2009
• Record gross profit of $1.1 million for 2010, compared to $338,000 in 2009
• Gross margins for the year improved to 17% from 12% in 2009
• Cash and cash equivalents were $2.4 million at December 31, 2010
• Secured $5 million in capital in the fourth quarter to support the Companya™s growth and expansion
• Subsequent to the close of the year, the Company secured an additional $12 million in growth capital through a private placement

Fourth Quarter and Full Year Operational Highlights

• Current Product Markets and Customers: During the fourth quarter, Cereplast opened a new European headquarters in Germany to provide its growing roster of European based clients with regional support, as well as provide the Company with an effective platform to grow its European operations. Cereplast is actively exploring options for local manufacturing in Europe to support the exponential growth in demand for bioplastic materials to replace traditional petroleum-based plastics.
• Product Development Advances: The Companya™s upgraded application development and resin-testing laboratory became fully operational in Q4 2010, enabling Cereplast to conduct all standard product development and qualification testing in-house, bringing more efficiency and speed to the development cycle for new resin and enhancing the technical support to customers.
• Production Improvements: During the fourth quarter, we continued to work to improve efficiency in the plant installing new equipment on our production lines. This improved plant automation will allow for higher output with a lower level of labor. Additionally, the Company has ordered the necessary auxiliary equipment to make the rail spur it installed in the third quarter of 2010 operational by mid-2011.

Fourth Quarter 2010 Financial Results

Revenues for the fourth quarter ended December 31, 2010 increased 547% to $3.9 million compared to $602,000 in the fourth quarter last year. The year-over-year increase was primarily due to the significant growth in order flow associated with an increasing demand for bioplastic resin from existing and new customer contracts with European manufacturers.

Gross profit in the fourth quarter increased a staggering 620% to $425,000 compared to gross profits of $59,000 for the fourth quarter last year. As a percentage of net sales, gross profit margin increased to 10.9% in the fourth quarter of 2010, compared to 9.8% in the fourth quarter last year.

Net loss for the fourth quarter was $1.8 million, or a loss of $0.14 per share, compared to a net loss of $1.8 million, or a loss of $0.21 per share for the same quarter a year ago.

2010 Full Year Financial Results

Revenues for the 2010 fiscal year ended December 31, 2010 increased 133% to a record $6.3 million compared to revenues of $2.7 million for fiscal 2009. The sales increase for the period was attributable to volume increases associated with both existing customer contracts and new contracts entered into during the third and fourth quarters of 2010 with European customers. Gross margin increased to 17%, compared to 12% for 2009. The increase is primarily due to cost savings from the Companya™s new facility and increased production efficiencies on higher production volumes. Net loss for fiscal 2010 was $7.5 million, or a loss of $0.63 per share, compared to a net loss of $6.1 million, or a loss of $0.75 per share, in 2009.

Balance Sheet

As of December 31, 2010, the Company had cash and cash equivalents of $2.4 million, compared to $1.3 million as of December 31, 2009 and working capital of $5.2 million. The net increase in unrestricted cash is attributable principally to funds received through successful private placements, sale of shares made pursuant to an effective Registration Statement on Form S-3 and venture loan proceeds. Stockholdersa™ equity as of December 31, 2010 was $6.9 million, an increase of 33% from stockholdersa™ equity of $5.2 million as of December 31, 2009. Net cash used in operating activities for the fiscal 2010 year ended December 31, 2010 was $6.8 million, up from $2.8 million in fiscal 2009. The increase in cash used for operating activities was primarily a result of an increase in accounts receivable and inventory amounts reflecting the significant increase in sales growth in 2010 compared to 2009.

Financial Guidance

The Company reiterates its 2011 annual revenue target of $24 to $32 million, a projected 300% to 400% increase over 2010.

Conference Call

The Company will conduct a conference call and live webcast at 2:00 p.m. Pacific Time (5:00 p.m. ET) on Thursday, March 31, 2011, to discuss its 2010 fourth quarter and full year financial results. Participating in the call will be Mr. Frederic Scheer, Chairman and Chief Executive Officer of Cereplast 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 Cereplasta™s website at [ www.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, 54879601.

About Cereplast, Inc.

Cereplast, Inc. (NASDAQ: CERP) designs and manufactures proprietary bio-based, 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® Resins are ideally suited for single use applications where high bio-based content and compostability are advantageous, especially in the food service industry. Cereplast Sustainablesa" 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 [ www.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.