Cereplast announces 2012, preliminary Q1 2013 financial results

By Erin Voegele | April 18, 2013

Bioplastics manufacturer Cereplast has released financial results for both 2012 and the first quarter of 2013. According to the company’s financial statements, preliminary financial results for the three-month period ended March 31 demonstrate that total revenue for the first quarter of this year exceeds the entire revenue reported for 2012.

Information released by Cereplast specifies that the company expects to report revenue of $900,000 to $1 million for the first quarter of 2013. Total revenue for 2012 was only $900,000.

Cereplast attributes approximately 65 percent of first quarter 2013 revenue to demand from Italy, which recently required merchants to discontinue the use of traditional, single-use plastics bags in favor of bioplastic bags or other alternatives. According to Cereplast, Italy will begin enforcing sanctions for non-compliance in May. As such, the company expects to see increased demand for its products during the second half of 2013.

"We are pleased with our encouraging preliminary revenue results during the first quarter of 2013 and are optimistic for the remainder of 2013,” said Cereplast Chairman and CEO Frederic Scheer. “In Italy alone, we conservatively estimate our market opportunity to be approximately $50 million. Additionally, we expect other European nations to enact similar mandates which will exponentially increase our opportunity in Europe. We are excited about these favorable trends and will provide future updates as significant events occur.”

Regarding financial results for 2012, Cereplast reported net sales of approximately $900,000 million, down from the $20.3 million reported in 2011. The company attributes the decrease to transitioning resources, efforts toward the recovery of past due accounts receivables, and minimizing additional exposure to accounts receivables credit risk.

The cost of sales for 2012 was approximately $1 million, down from $18.2 million in 2011. Gross profits for the year were approximately $100,000, down from $2 million in 2011. Research and development expenses also dropped, from $1 million in 2011 to $500,000 in 2012. However, selling, general and administrative expenses increased $18.9 million in 2012, up from $13.4 million in 2011. Other net income and expenses for the 2012 measured -$10.7 in 2012, compared to -$1.6 in 2011.

"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,” Scheer said. “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."