Ceres Announces Fiscal Third Quarter 2013 Financial Results

  Ceres Announces Fiscal Third Quarter 2013 Financial Results

  *Calculated ethanol yields reached a peak of more than 3,600 liters per
    hectare.
  *Ceres hybrids out-performed competitors for second straight year.
  *Sweet sorghum yields were 50% higher year over year, but with greater
    variability than expected.

Business Wire

THOUSAND OAKS, Calif. -- July 11, 2013

Energy crop company Ceres, Inc. (Nasdaq:CERE) today announced financial
results for the quarter ended May 31, 2013 and provided an update on its
business in Brazil, its largest immediate commercial opportunity.

The company reported that its mill customers in Brazil have made continued
progress in crop performance this season, which concluded in May. For mills
that reported results, yields of sugars that can be fermented into ethanol
were approximately 50% higher on average across mill locations than the
previous season primarily as a result of product improvements related to
biomass quality and productivity, better crop management and favorable growing
conditions at most planting locations. Yields from location to location,
however, showed greater variability than expected. Ceres sweet sorghum hybrids
were developed to complement existing sugarcane feedstock supplies and extend
the ethanol production season in Brazil.

“We have clearly demonstrated that economically compelling yields can be
achieved with our products,” said Richard Hamilton, President and Chief
Executive Officer of Ceres. “While further optimizations and additional
hybrids are needed to consistently achieve high yields across wide-area
plantings, we believe that we are well positioned to take a leading role in
the ongoing development of the sweet sorghum market in Brazil.”

Due in part to the variability of this season’s yields, the company
anticipates that many of its mill customers will repeat smaller scale
commercial plantings before committing to broad, large-scale adoption. “As a
result, we expect total sweet sorghum seed sales next season to grow more
modestly than originally anticipated,” said Hamilton.

Ceres Chief Financial Officer Paul Kuc noted that the company continues to
prioritize investments in its sorghum pipeline and its opportunity in Brazil,
while closely monitoring its working capital levels. “As we move forward, we
intend to maintain the strength of our balance sheet with these priorities in
mind,” he said.

THIRD QUARTER BUSINESS HIGHLIGHTS

  *Based on customer reports, Ceres’ portfolio of sweet sorghum hybrids has
    outyielded competing products this season at multiple locations where
    side-by-side comparisons were available.
  *For mills that reported results, ethanol yields from Ceres products ranged
    from approximately 450 to 3,600 liters per hectare, according to customer
    and company calculations. Mills representing the top 20% of yields, and
    which generally followed established crop management practices, achieved
    average yields ranging from 2,100 to 3,300 liters per hectare. Lower
    yields were primarily due to deviations from recommended crop management
    practices, weather-related delays during planting and disease infection
    late in the growing season. Yield results were available from
    approximately two-thirds of the mills that planted Ceres' hybrids;
    remaining mills reported incomplete results, did not complete the
    evaluation or chose not to report results.
  *Ceres has completed field trials required to register more than 10 new
    sweet sorghum hybrids with the Brazilian government. The company plans to
    begin commercial evaluations of the first of these products during the
    upcoming 2013-2014 growing season.
  *The company plans to evaluate hundreds of pre-commercial and experimental
    hybrids in Brazil next season, with dozens included in field evaluations
    at multiple locations. These cultivars have demonstrated higher yields,
    better adaptation to certain environmental conditions and other
    performance improvements over existing products in initial field
    evaluations.

THIRD QUARTER FINANCIAL RESULTS

Total revenues for the quarter ended May 31, 2013 were $1.4 million compared
to $1.1 million for the same period last year. The increase was due to higher
product sales of $0.4 million, which consisted primarily of biomass sales as
well as recognition of deferred revenue related to certain sales incentive and
promotional programs during the 2012-2013 growing season in Brazil. The
increase was partially offset by reduced billings of $0.1 million under the
company’s various grants and collaborations.

Cost of product sales was $2.1 million for quarter ended May 31, 2013 compared
to $0.6 million for the same period last year. The increase was due to
expenses of $1.0 million for crop management services performed under the
company’s sales incentive and promotional programs in Brazil, and $0.5 million
for obsolete seed inventory relating to the company’s sweet sorghum products.

Research and development expenses decreased by $1.2 million to $4.1 million
for the quarter ended May 31, 2013 from $5.3 million for the same period last
year. The decrease was primarily due to reduced personnel and related expenses
as well as reduced external R&D expenses.

Selling, general and administrative expenses were $4.5 million for the quarter
ended May 31, 2013 compared to $3.3 million for the same period last year. The
increase was primarily due to higher expenses related to expanded business
operations and market development support in Brazil, which was partially
offset by reduced patent, legal and professional fees in the U.S.

For the quarter ended May 31, 2013, Ceres reported a net loss of $9.3 million,
or $0.38 per share, compared to a net loss of $8.4 million, or $0.34 per
share, for the quarter ended May 31, 2012.

At May 31, 2013, cash and cash equivalents and marketable securities totaled
$37.4 million.

CONFERENCE CALL AND WEBCAST INFORMATION

Ceres has scheduled a conference call for 4:30 p.m. EDT (1:30 p.m. PDT) today
to discuss third quarter 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 30 days.

UPCOMING EVENTS

Ceres is scheduled to present at the Jefferies Global Industrials Conference
on August 12, 2013 in New York City as well as at the Advanced Biofuels
Leadership Conference to be held October 9 to 11, 2013 in San Francisco,
Calif. The company’s slide presentations will be posted on the investor events
page of the company’s website, www.ceres.net.

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
Ceres’ efforts to develop and commercialize its products, 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
Ceres’ 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. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)

                  Three Months Ended                     Nine Months Ended
                     May 31,                                   May 31,
                     2013              2012                 2013              2012
                                                                                    
Revenues:
Product sales        $ 389                $ 42                 $ 462                $ 429
Collaborative
research and          966                1,106              3,884              3,778     
government
grants
Total revenues        1,355              1,148              4,346              4,207     
Cost and
operating
expenses:
Cost of                2,134                627                  5,114                1,876
product sales
Research and           4,074                5,255                12,784               15,522
development
Selling,
general and           4,464              3,344              11,700             8,962     
administrative
Total cost and
operating             10,672             9,226              29,598             26,360    
expenses
Loss from              (9,317     )         (8,078     )         (25,252    )         (22,153   )
operations
Interest               (34        )         (341       )         (35        )         (559      )
expense
Interest               28                   3                    106                  9
income
Other income          —                  —                  —                  (84       )
(expense)
Loss before            (9,323     )         (8,416     )         (25,181    )         (22,787   )
income taxes
Income tax
benefit               —                  —                  (1         )        (1        )
(expense)
Net loss             $ (9,323     )       $ (8,416     )       $ (25,182    )       $ (22,788   )
Basic and
diluted net
loss per share
attributable         $ (0.38      )       $ (0.34      )       $ (1.02      )       $ (2.33     )
to
common
stockholders
Basic and
diluted
weighted
average                24,801,705           24,423,042           24,765,664           9,787,652
outstanding
common shares
used for net
loss per share


CERES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
(Unaudited)

                                            May 31,         August 31,
                                               2013               2012
                                                                  
Assets
Current assets:
Cash and cash equivalents                      $ 18,821           $ 21,069
Marketable securities                            18,554             33,565
Prepaid expenses                                 1,027              1,050
Accounts receivable                              848                765
Inventories                                      352                841
Other current assets                            232              278      
Total current assets                             39,834             57,568
Property and equipment, net                      4,915              5,756
Marketable securities                            —                  5,720
Other assets                                    108              203      
Total assets                                   $ 44,857          $ 69,247   
                                                                  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses          $ 4,899            $ 5,476
Other current liabilities                        26                 732
Current portion of long-term debt               84               134      
Total current liabilities                        5,009              6,342
Other non-current liabilities                    97                 88
Long-term debt, net of current portion          130              256      
Total liabilities                               5,236            6,686    
Commitments and contingencies
Stockholders’ equity:
Common stock and additional paid in
capital, $0.01 par value; 490,000,000
shares
authorized; 24,800,624 shares issued and         307,448            304,917
outstanding at May 31, 2013; 24,549,029
shares issued and outstanding at August
31, 2012
Accumulated other comprehensive loss             (572     )         (283     )
Accumulated deficit                             (267,255 )        (242,073 )
Total stockholders’ equity                      39,621           62,561   
Total liabilities and stockholders’            $ 44,857          $ 69,247   
equity

Contact:

Ceres, Inc.
Gary Koppenjan
Investors 805-375-7801
ir@ceres.net
 
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