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Cereplast Reports Record Fourth Quarter And Full Year 2010 Results

Stocks in this article: CERP

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.

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.

“Our 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. “A 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 ‘greener’ products, packaging and practices.”

Scheer continued, “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.”

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 Company’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 Company’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.

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