Ceres Announces Financial Results for Fiscal Year 2012

  Ceres Announces Financial Results for Fiscal Year 2012

  *Number of mills planting sweet sorghum increases over previous season.
  *Performance of new sweet sorghum hybrids confirmed in U.S. trials.
  *Plant breeding results show yield gains across energy crop portfolio.

Business Wire

THOUSAND OAKS, Calif. -- November 20, 2012

Energy crop company Ceres, Inc. (Nasdaq: CERE) today announced financial
results for the fiscal fourth quarter and year ended August 31, 2012 and
provided an update on its business and product development pipeline.

The company reported that ethanol mills have begun plantings of Ceres’ sweet
sorghum hybrids for the 2012-2013 production season in Brazil. Seed sales and
deliveries are ongoing and are expected to be completed by mid-December.

“Our goals this season are to expand the base of mills, establish showcase
evaluations with innovators in strategic areas, and demonstrate the
performance benefits of our new generation of hybrids,” said Richard Hamilton,
President and Chief Executive Officer of Ceres. He noted that while the total
number of hectares planted this year was impacted by the drought last season,
the adoption of sweet sorghum remains a strategic priority for many mills and
for the Brazilian government. “We believe that we can demonstrate the full
profit potential of our hybrids this season, while at the same time building
the broad base of experience that will accelerate widespread adoption and
market growth.”

Paul Kuc, Chief Financial Officer, reported that the company’s expenses in the
fiscal year ended August 31, 2012 were largely in line with management’s
expectations. “We will continue to manage our working capital toward driving
growth in the business through the adoption of our sweet sorghum products, and
by moving our best traits and products forward for the emerging biomass
markets,” said Kuc. “Given the seed industry’s relatively low requirements for
capital expenditures, we have the flexibility of when and where we direct our
working capital among these promising market opportunities.”

FOURTH QUARTER BUSINESS HIGHLIGHTS

  *The company completed the registration process in Brazil for its new
    generation of sweet sorghum hybrids, and is currently marketing these
    products. Last season in Brazil trials of these new hybrids demonstrated
    large increases in biomass, extractable juice volume and total harvestable
    sugar compared to commercial products introduced just last year. In
    product development trials and at the company’s breeding center, where
    field evaluation plots are irrigated and managed more closely than
    commercial fields, these hybrids averaged 80 or more metric tons per
    hectare. Subsequent field evaluations in the Southeast U.S. this summer
    have confirmed similar results.
  *Ceres reported that it will be working with more mills than last season,
    including many of the top-30 ethanol producers in Brazil by volume. The
    mills will focus primarily on the agronomic performance of Ceres’ sweet
    sorghum hybrids, having already validated the industrial processing of
    sweet sorghum during the past two seasons. The company expects the total
    number of hectares planted with its products will be in the thousands of
    hectares for the 2012-2013 production season, which is lower than it
    originally anticipated. This is due in part to the effects of the drought
    last season and the focus among the company’s customer base on the field
    performance of its new hybrids, which can be determined at a smaller
    scale.
  *The company’s plant breeding and product development field trials have
    demonstrated yield gains across all of its energy crops during the 2012
    summer season in the northern hemisphere. Among the gains, Ceres’ new
    generation of switchgrass products – the first hybrids developed for
    bioenergy – have demonstrated double-digit percentage increases in yield
    over existing products. Pre-commercial miscanthus hybrids adapted for the
    warmer south of the U.S. have outperformed the industry standard by a
    large margin – nearly double the yield in the first year.
  *Ceres announced earlier this month that the U.S. Agency for International
    Development, or USAID, has expanded its grant to the company to develop
    traits in rice for Asia. USAID will provide an additional $3.5 million to
    Ceres over the next four years to extend field trialing and development of
    the company’s biotech traits and trait stacks in rice. The performance of
    these traits was successfully validated in experimental lines this fall in
    India and, subject to regulatory approval, field evaluations of the first
    commercial hybrids with the Ceres traits could begin as early as mid-2013.
    The company expects this development work in rice to inform and accelerate
    its trait development activities in energy crops.
  *The company announced in August that former BP Chief Scientist and U.S.
    Undersecretary of Energy for Science, Steven E. Koonin, PhD., joined the
    company's board of directors.

FOURTH QUARTER FINANCIAL RESULTS

Total revenues for the three months ended August 31, 2012 were $1.2 million
compared to $1.7 million for three months ended August 31, 2011. Due to the
seasonality of seed sales, quarterly revenues are not indicative of full year
results.

Cost of product sales was $0.5 million for the quarter ended August 31, 2012
compared to $0.6 million for the quarter ended August 31, 2011.

Research and development expenses were $3.6 million for the quarter ended
August 31, 2012 compared to $5.2 million for the quarter ended August 31,
2011.

Selling, general and administrative expenses were $3.7million for the quarter
ended August 31, 2012 compared to $3.1 million for the quarter ended August
31, 2011.

For the quarter ended August 31, 2012, Ceres reported a net loss of $6.6
million, or $0.27 per share, compared to a net loss of $16.8 million, or $8.34
per share, for the quarter ended August 31, 2011.

YEAR-END FINANCIAL RESULTS

Total revenues for the year ended August 31, 2012 were $5.4 million compared
to $6.6 million for the prior fiscal year. The decrease was driven primarily
by decreased activity under collaborative research and government grants. The
decrease was partially offset by an increase in product sales in Brazil.

Cost of product sales was $2.4 million for the year ended August 31, 2012
compared to $2.5 million for the previous fiscal year. The decrease was
primarily due to reduced seed production of certain products targeting the
U.S. biomass-to-bioenergy markets. This decrease was mostly offset by
increased costs in Brazil related to increased sweet sorghum seed sales.

Research and development expenses increased by $0.1 million to $19.2 million
for the year ended August 31, 2012 compared to the previous fiscal year. This
increase is partially attributable to increased R&D expenses in Brazil of $1.7
million relating to additional personnel and costs associated with the
company’s Brazil sorghum breeding and agronomy operations. The remaining
increase is attributable to an increase in personnel and other related
overhead expenses in the U.S. of $0.6 million. These cost increases were
offset by reduced non-cash expenses related to warrants issued in connection
with our collaborations of $1.8 million and reduced costs in consulting,
licensing and external research and development of $0.4 million.

Selling, general and administrative expenses were $12.6million for the year
ended August 31, 2012 compared to $10.0 million for the previous fiscal year.
The increase is attributable primarily to increased personnel expenses and
fees for professional services.

For the year ended August 31, 2012, Ceres reported a net loss of $29.4
million, or $2.18 per share, compared to a net loss of $36.3 million, or
$18.34 per share, for fiscal year 2011. Shares used in the calculation of net
loss per share (basic and diluted) were 13,488,336 for the year ended August
31, 2012 and 1,981,627 for the previous fiscal year.

For the year ended August 31, 2012, capital expenditures were $1.3 million.

At August 31, 2012, Ceres had cash and cash equivalents of $21.1 million and
marketable securities of $39.3 million.

2012-2013 SWEET SORGHUM SALES IN BRAZIL

The company expects to announce the final number of hectares and number of
mills evaluating its products with its fiscal first quarter financial results
in January 2013.

Ceres has launched several marketing programs to promote its new generation of
sweet sorghum products in Brazil. The programs include
variousperformance-based incentives and crop management and agronomy support
services. Recognition of seed sales revenue for some products sold under
certain promotions will be deferred by the company until the 2012-2013 sweet
sorghum harvest season is concluded. The company may also incur additional
costs of sales, which it believes will be largely covered by reimbursements
for services provided under certain programs.

CONFERENCE CALL AND WEBCAST INFORMATION

Ceres has scheduled a conference call for 4:30 p.m. EST (1:30 p.m. PST) today
to discuss fourth quarter and year-end results. The webcast of the conference
call may be accessed at investor.ceres.net. Audio of the teleconference is
also available by dialing:

                            North America callers:
                                (877) 838-4153

                            International callers:
                              +1 (720) 545-0037

An audio replay of the call will be available two hours after the conclusion
of the live call, and remain available on the Ceres website for approximately
30 days.

ABOUT CERES

Ceres, Inc. is an agricultural biotechnology company that markets seeds for
energy crops used in the production of renewable transportation fuels,
electricity and bio-based products. The company combines advanced plant
breeding and biotechnology to develop products that can address the
limitations of first-generation bioenergy feedstocks, increase biomass
productivity, reduce crop inputs and improve cultivation on marginal land. Its
development activities include sweet sorghum, high-biomass sorghum,
switchgrass and miscanthus. Ceres markets its products under its Blade brand.

CERES FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. All statements,
other than statements of historical facts, including statements regarding our
efforts to develop and commercialize our products, our short-term and
long-term business strategies, market and industry expectations, future
operating metrics, product yields and future results of operations and
financial position, are forward-looking statements. You should not place undue
reliance on these forward-looking statements because they involve known and
unknown risks, uncertainties and other factors that are, in some cases, beyond
our control. Factors that could materially affect actual results can be found
in Ceres’ filings with the U.S. Securities and Exchange Commission. Ceres
undertakes no intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. These forward-looking statements should not be relied upon as
representing Ceres’ views as of any date subsequent to the date of this press
release.



CERES, INC.
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
                                                                
                   Three Months Ended                 Year Ended
                   August 31,                         August 31,
                   2012             2011              2012             2011
                                                                       
Revenues:
Product sales      $ 3              $ 19              $ 432            $ 116
Collaborative
research and        1,161          1,701           4,939          6,500     
government
grants
Total revenues      1,164          1,720           5,371          6,616     
Cost and
operating
expenses:
Cost of              507              553               2,384            2,492
product sales
Research and         3,634            5,177             19,155           19,014
development
Selling,
general and         3,673          3,099           12,634         10,008    
administrative
Total cost and
operating           7,814          8,829           34,173         31,514    
expenses
Loss from            (6,650     )     (7,109    )       (28,802    )     (24,898   )
operations
Interest             (1         )     (91       )       (560       )     (456      )
expense
Interest             30               31                39               7
income
Other expense       —              (9,570    )      (84        )    (11,020   )
Loss before          (6,621     )     (16,739   )       (29,407    )     (36,367   )
income taxes
Income tax
(expense)           (2         )    (26       )      (3         )    31        
benefit
Net Loss           $ (6,623     )   $ (16,765   )     $ (29,410    )   $ (36,336   )
Basic and
diluted net        $ (0.27      )   $ (8.34     )     $ (2.18      )   $ (18.34    )
loss per share
Basic and
diluted
weighted
average              24,509,940       2,009,524         13,488,336       1,981,627
outstanding
common shares
used for net
loss per share
                                                                                   
                                                                                   

                                                              
                                                                  
CERES, INC.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
                                                                  
                                                   August 31,
                                                   2012           2011
                                                                  
Assets
Current assets:
Cash and cash equivalents                          $ 21,069       $ 21,911
Marketable securities                                33,565         —
Prepaid expenses                                     1,050          631
Accounts receivable                                  765            1,292
Inventories                                          841            —
Deferred offering costs                              —              2,775
Other current assets                                278          225      
Total current assets                                57,568       26,834   
Property and equipment, net                          5,756          6,780
Restricted cash and investment                       —              3,000
Marketable securities                                5,720          —
Other assets                                        203          183      
Total long-term assets                              11,679       9,963    
Total assets                                       $ 69,247      $ 36,797   
                                                                  
Liabilities, Convertible Preferred Stock and
Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable and accrued expenses              $ 5,476        $ 6,972
Deferred revenue                                     701            924
Deferred rent                                        31             31
Current portion of long-term debt                   134          2,168    
Total current liabilities                            6,342          10,095
Deferred rent                                        88             149
Long-term debt, net of current portion               256            2,013
Convertible notes                                    —              13,630
Preferred Stock warrant liabilities                  —              276
Common Stock warrant liabilities                    —            17,450   
Total liabilities                                   6,686        43,613   
Commitments and contingencies
Convertible preferred stock                          —              197,502
Stockholders’ (deficit) equity:
Common Stock, $0.01 par value; 25,000,000
shares authorized; 2,014,168 shares issued and
outstanding at August 31, 2011; 490,000,000          245            20
shares authorized; 24,549,029 shares issued
and outstanding at August 31, 2012.
Additional paid-in capital                           304,672        8,352
Accumulated other comprehensive loss                 (283     )     (27      )
Accumulated deficit                                 (242,073 )    (212,663 )
Total stockholders’ (deficit) equity                62,561       (204,318 )
Total liabilities, convertible preferred stock     $ 69,247      $ 36,797   
and stockholders’ (deficit) equity
                                                                             

Contact:

Ceres, Inc.
Gary Koppenjan
Investors (805)375-7801
Media (805)376-6546
ir@ceres.net
 
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