Cereplast, Inc. (OTCBB:CERP), manufacturer of proprietary bio-based sustainable plastics, today reported financial results for the nine months ended September 30, 2007.
For the first nine months of 2007, Cereplast reported gross sales of $1.6 million, a 258% increase over the comparable 2006 period. The increase in sales can be directly attributed to the commercial launch of Cereplast Compostables™ resins, which resulted in a larger customer base and increased volume from existing customers. Cereplast reported net cash used in operating activities of $4.0 million for the first nine months 2007, which compares to net cash used in operating activities of $2.3 million for the comparable first nine months 2006. Cash and short-term investments at September 30, 2007 totaled $10.9 million.
The Company reported a net loss of $1.6 million or $0.01 per share for the third quarter of 2007 as compared to a net loss of $1.1 million or $0.01 per share for the third quarter 2006. The number of shares used in the calculation of earnings per share was 258.2 million for the third quarter 2007 as compared to 200.4 million for the third quarter 2006. The increase in the number of shares primarily reflects the shares issued in the Company’s July 2007 private offering.
“Over the last nine months, we have experienced tremendous success in all aspects of our operations and have established Cereplast as a leader in the bio-plastics field,” said Frederic Scheer, Cereplast’s Chairman, CEO and President. “We are pleased to see that our proprietary resins are answering a growing demand for more sustainability in the plastic industry and that more customers are testing and introducing products made from Cereplast resins.
Operating Highlights
Product Development and Intellectual Property - The Company now has two distinct families of resins that are available for commercial sale. These resins are covered under nine formulation patents and patent applications:
a) Cereplast CompostablesTM, which are made from annually renewable resources and certified biodegradable and compostable by the BPI, were launched commercially in November of 2006. Cereplast CompostablesTM target single use disposable markets, including foodservice ware and packaging applications. Cereplast currently has 15 grades of compostable resins in its product portfolio, including a higher heat resistant compostable resin launched on November 4, 2007.
b) Cereplast Hybrids™, which are blends of traditional petroleum based resins and a proprietary basket of starches, were launched in October 2007. The target markets for these resins include consumer goods, consumer electronics, toys and the automotive industry. Cereplast currently has one grade of Hybrid Resins™, Biopropylene™, and will continue to develop and introduce resins to meet market demand. This new family of resins significantly expands the market applications for Cereplast resins. In excess of 25 companies have requested samples for testing and many major trade magazines have published articles on the properties and commercial benefits of the new resin.
Commercial Manufacturing - During the first nine months of the year, the Company focused on refining and improving its production process and capacity. The Company currently has 45 million pounds of production capacity, with a proprietary state-of-the-art process designed by Cereplast specifically for processing bio-plastics at high speed. Management is actively looking for a location to establish a second facility to further expand production capacity.
Customer Development - The Company’s pipeline of customer prospects continues to grow. Currently, there are approximately 65 prospective customers evaluating more than 100 different potential product applications for both the Compostables™ and the Hybrids™ resins. Of these prospects, approximately 30 are in various stages of prototype product testing and qualification. This comes in addition to the existing 57 products already being commercialized by large companies such as Alcoa, Genpak, Innoware, SoloCup and other converters.
Genpak - Genpak, LLC, a leader in providing single use food service items, introduced its “Harvest Collection™” in early spring 2007. This full line of biodegradable and compostable food service ware is made exclusively with Cereplast resin. Thus far the product has been very successfully accepted by consumers around the Country and Genpak is satisfied with the growth of the new line.
Alcoa, Inc. (NYSE:AA)- Following the signing of a multi-year supply agreement with the Company, Alcoa-Kama, a wholly-owned subsidiary of Alcoa, continued its testing of Cereplast resins and recently started to market a new thermoformed sheet under the brand name “PlasTerra™,” a brand specifically designed by Alcoa for the Cereplast resin.
Innoware - In early Summer 2007, Innoware, Inc. (previously known as Duni) started to actively market its new line of bioplastics material made of Cereplast’s resins under the brand name: “ECO”. The first products introduced to market were the ECO-Expressions container now being used by several of Innoware’s clients around the country.
Corporate Infrastructure - Emerging from its research and development stage into commercialization of its proprietary bio-resins, the Company has been very successful in attracting and retaining the necessary talent to manage its growth, including adding several well-known scientists and process engineers. The Company now has 43 full time employees. At the Board level, the addition of Petros Kitsos brings to the Company an extensive knowledge of M&A and joint venture structuring that will be critical in the growth of the Company. Also, after having identified key target markets for its resins, Cereplast has been focused on developing its sales force domestically and internationally, including opening a sales office in Hong Kong earlier this year.
“Cereplast has become the solutions provider of choice to the converting industry,” added Scheer. “Cereplast Compostables™ and Cereplast Hybrids™ resins have received great reviews from the marketplace and are starting to become a daily reality for major converters around the country.”
About Cereplast
Cereplast, Inc. (OTCBB: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™ are ideally suited for single use applications where high bio-based content and compostability are advantageous, especially in the food service industry. Cereplast Hybrid Resins™ combine the 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.
Contacts:
For Cereplast, Inc.
Athan Demakos,
312-375-1957
Athan.demakos@ketchum.com
or
Media
Contact:
Kevin Oates, 310-584-8331
kevin.oates@ketchum.com
