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Ceres Announces Fiscal Second Quarter 2012 Financial Results

Energy crop company Ceres, Inc. (Nasdaq: CERE) today reported financial results for the second quarter ended February 29, 2012 and provided an update on its business in Brazil. This is the first quarterly report since the company completed its initial public offering of common stock on February 27, 2012.

Richard Hamilton, President and Chief Executive Officer, said that Ceres continues to move ahead with the expansion of its sweet sorghum seed business in Brazil – its largest immediate commercial opportunity. “We continue to take a leading role in supporting the mills in Brazil as they evaluate our current products at commercial scale. We have also established the local resources we need to develop and evaluate additional improved hybrids,” said Hamilton.

Hamilton reported that Brazilian ethanol mills began harvesting sweet sorghum produced from Ceres seeds in mid-to-late March. “Our second season of commercial-scale evaluations is underway, and our customers are producing ethanol during a time of year when their mills would have been otherwise idle,” said Hamilton. “This opportunity comes at a time when domestic Brazilian demand for ethanol is increasing and sugarcane supplies appear to be stretched thin.”

BUSINESS HIGHLIGHTS

  • On February 27, 2012, Ceres completed its initial public offering, issuing 5,750,000 shares of Common Stock at $13 per share, including 750,000 shares issued pursuant to the full exercise of the underwriters’ option to purchase additional shares, resulting in net proceeds, after deducting net underwriting discounts, commissions and offering expenses, of $65.3 million.
  • In Brazil, Ceres received a Certificate of Quality in Biosafety from the National Technical Commission of Biosafety, or CTNBio, the Brazilian government’s commission that regulates biotechnology crop traits. This certification allows Ceres to submit requests to import and evaluate traits developed through biotechnology. The company’s current product offerings in Brazil do not include biotechnology products.
  • Ceres and a research collaborator in the U.K. completed the first high-resolution genetic map of a promising energy grass known as miscanthus. This milestone is expected to speed development of economically viable seeded miscanthus varieties. The mapping project in miscanthus also allows Ceres to identify equivalent genes in related crops, such as sweet sorghum and switchgrass.
  • During the quarter ended February 29, 2012, Ceres was awarded four U.S. patents related to methods for improving plants, plants and plant parts and compositions of matter for DNA and protein sequences.

FINANCIAL RESULTS

Total revenues for the three months ended February 29, 2012 were $1.3 million compared to $1.6 million in the same period in fiscal year 2011. Product sales increased by $0.1 million as a result of sweet sorghum sales in Brazil during the second quarter of fiscal year 2012. This increase was offset by a $0.4 million decrease in collaborative research and government grants during the same period. Due to the seasonality of seed sales, quarterly seed sales are not indicative of full year results. The sale of seeds in Brazil will typically be higher in the first and second fiscal quarters due to the timing of planting decisions made by customers. The company may experience different seasonality patterns as it expands into new markets in different geographies.

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