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Cereplast Reports Financial Results for the First Nine Months of 2013



Cereplast Reports Financial Results for the First Nine Months of 2013

SEYMOUR, Ind., Nov. 14, 2013 (GLOBE NEWSWIRE) -- Cereplast, Inc. (OTCQB:CERP)
(the "Company"), a leading manufacturer of proprietary biobased, compostable
and sustainable bioplastics, today announced $2.1 million in revenue during
the first nine months of 2013 compared to $786,000 for the same period the
prior year and a total of $911,000 for the 2012 full year.

Cereplast Chairman and Chief Executive Officer Mr. Frederic Scheer stated, "We
are pleased with the year-over-year growth we have experienced for the first
nine months of 2013 and we expect to continue this trend as the global market
opportunity continues to increase. The most immediate growth driver is the
ongoing legislation in Italy for the sanctions of traditional plastic bags. We
continue to work closely with customers who are capable of placing orders much
larger than they are today in the anticipation of the ruling."

Mr. Scheer continued, "Italy and subsequent European countries have created an
immense opportunity for us but we are not putting all of our eggs in one
basket. We foresee India and the United States as significant markets for us
as well. Both markets are already enforcing sanctions in select areas. We have
feet on the ground in each market and are beginning to secure contracts by
first educating the marketplace about the benefits of our technology. In India
we recently received a $1.4 million order and in the U.S. we are actively
pursuing 30 projects with a potential value of over $10 million per year. We
anticipate continued traction in both markets."

2013 Industry, Financial and Operational Highlights to Date:

  o Revenue for the first nine months of 2013 totaled $2.1 million.
  o In a recent document, the European Union Environmental Commission stated
    that they are in support of an amendment to this legislation, which is
    scheduled to go into effect in November and member states will have two
    years to comply.
  o Cereplast has estimated annual revenue potential from Italy alone to
    exceed $50 million.
  o For the past 18 months, the Company has worked closely with over 70
    companies in Italy that have completed multiple successful tests with
    various grades of their blown film resins.
  o In India, Cereplast recently received a $1.4 million purchase order, which
    will ship over the next 10 months.
  o Additionally, Cereplast received five purchase orders in India totaling
    $450,000 for blown film resins which will be delivered throughout the
    remainder of 2013.
  o In the United States, regional and federal laws are supporting growth of
    the bioplastics industry as seen by movements in San Francisco, Portland
    and New York City.
  o Cereplast has valued the bioplastic industry in the United States today to
    be $180 million and expects to begin generating meaningful revenue in
    2014.
  o Cereplast is actively pursuing 30 projects in North America with potential
    value of $10 million per year.
  o Cereplast recently launched reVive™ bioplastic resins, the first
    bioplastics to combine recycled polymers with biobased resins for improved
    sustainability, reducing the carbon footprint of this type of bioplastic
    by adding the environmental benefits of recycled plastic.

2013 First Nine Months Financial Results:

Net sales for the nine months ended September 30, 2013 were approximately $2.1
million, compared to $0.8 million in the same period in 2012. Sales increased
from the prior year due to growing demand in European markets primarily due to
anticipated legislation in Italy banning traditional plastic bags.

Cost of sales is comprised of variable costs associated with product revenues.
Cost of sales for the nine months ended September 30, 2013 was approximately
$1.9 million, compared to $0.9 million for the same period in 2012. The
increase in cost of sales is due to an increase in sales.

Gross profit (loss) for the nine months ended September 30, 2013 was
approximately $0.3 million, compared to ($0.1) million for the same period in
2012. The increase in gross profit was attributable to an increase in sales,
as stated above.

Research and development expenses for the nine months ended September 30, 2013
were $0.3 million, compared to approximately $0.4 million for the same period
in 2012. Research and development expenses have slightly decreased due to a
cost containment effort to preserve working capital.

Selling, general and administrative expenses for the nine months ended
September 30, 2013 were $3.8 million, compared to $10.5 million for the same
period in 2012. The decrease in sales, general and administrative expenses was
primarily due to bad debt expense of $5.1 million recorded in the third
quarter of 2013. In addition, the sales, general and administrative expenses
decreased due to reduced headcount and a reduction in fixed production
overhead costs classified as selling, general and administrative expense due
to an extended period of abnormally low production volume.

Other income and expense, net for the nine months ended September 30, 2013 was
a net expense of $29.6 million, as compared to a net expense of $5.3 million
in the same period in 2012. The increase in expense was primarily a result of
the change in our derivative liability related to our warrants, short-term
convertible debt and preferred stock agreements. In addition, we recorded $2.8
million in debt extinguishment costs related to the exchange of certain of our
term loan and convertible notes.

Net loss for the nine months ended September 30, 2013 was $34 million, as
compared to $16.3 million in the same period in 2012. The increase in net loss
was primarily driven by an increase in Other Expense related to financing
transactions. As discussed above, Other Income and Expense, net was
unfavorably impacted by losses on derivative liabilities totaling $21.6
million. The increase in net loss was partially offset by a decrease in bad
debt expense recorded in the first nine months of 2013 compared to the first
nine months of 2012.

Conference Call        
Details:
Date:                 Thursday, November 14^th
Time:                 4:30 p.m. Eastern
Participant Dial-In:  (480) 629-9761
Live Webcast:         http://www.cereplast.com/investors/events-presentations/

It is recommended that participants dial in approximately 10 minutes prior to
the start of the 4:30 p.m. Eastern call. There will also be a simultaneous
live webcast of the conference call which can be accessed through the
following audio feed link and archived recording of the conference call
available under the Investor Relations section of the company website at
http://www.cereplast.com/investors/events-presentations/.

About Cereplast, Inc.

Cereplast, Inc. (OTCQB:CERP) designs and manufactures proprietary biobased,
sustainable bioplastics which are used as substitutes for traditional plastics
in all major converting processes - such as injection molding, thermoforming,
blow molding and extrusions - at a pricing structure that is competitive with
traditional plastics. On the cutting-edge of biobased plastic material
development, Cereplast now offers resins to meet a variety of customer
demands. Cereplast Compostables® resins are ideally suited for single-use
applications where high biobased content and compostability are advantageous,
especially in the food service industry. Cereplast Sustainables® resins
combine high biobased content with the durability and endurance of traditional
plastic, making them ideal for applications in industries such as automotive,
consumer electronics and packaging. Learn more at www.cereplast.com. You may
also visit the Cereplast social networking pages at Facebook.com/Cereplast,
Twitter.com/Cereplast and Youtube.com/Cereplastinc.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
When used in this press release, the words "anticipate," "believe,"
"estimate," "may," "intend," "expect" and similar expressions identify such
forward-looking statements. Actual results, performance or achievements could
differ materially from those contemplated, expressed or implied by the
forward-looking statements contained herein. These forward-looking statements
are based largely on the expectations of the Company and are subject to a
number of risks and uncertainties. These include, but are not limited to,
risks and uncertainties associated with: the impact of economic, competitive
and other factors affecting the Company and its operations, markets, product,
and distributor performance, the impact on the national and local economies
resulting from terrorist actions, and U.S. actions subsequently; and other
factors detailed in reports filed by the Company.

CEREPLAST, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except shares data)
                                                                   
                                               September 30, 2013 December 31,
                                                                  2012
                                               (Unaudited)
ASSETS                                                             
Current Assets                                                     
Cash                                            $ 233              $ 183
Accounts Receivable, Net                       1,021               149
Inventory, Net                                 5,722               6,941
Prepaid Expenses and Other Current Assets       199                227
Total Current Assets                           7,175               7,500
                                                                   
Property and Equipment                                             
Property and Equipment                         11,152              11,601
Accumulated Depreciation and Amortization      (4,660)             (4,004)
Property and Equipment, Net                    6,492               7,597
                                                                   
Other Assets                                                       
Restricted Cash                                 --                 43
Deferred Loan Costs                             350                750
Intangible Assets, Net                         239                 245
Deposits                                       48                  47
Total Other Assets                             637                1,085
                                                                   
Total Assets                                    $ 14,304           $ 16,182
                                                                   
LIABILITIES AND SHAREHOLDERS' DEFICIT                              
Current Liabilities                                                
Accounts Payable                                $ 920              $ 803
Accrued Expenses                               3,386               3,663
Capital Leases, Current Portion                97                  85
Loan Payable, Current Portion                  6,224               5,978
Convertible Subordinated Notes, Current        1,122               891
Portion
Derivative Liability                           15,142              3,189
Preferred Stock, $0.001 par value; 5,000,000
shares authorized; 490 and 92 shares issued     2,213              500
and outstanding at September 30, 2013 and
December 31, 2012, respectively
Total Current Liabilities                      29,104             15,109
                                                                   
Long-Term Liabilities                                              
Loan Payable                                    --                 923
Convertible Subordinated Notes                  7,500              10,000
Capital Leases, Long-Term                       120                173
Total Long-Term Liabilities                    7,620              11,096
Total Liabilities                              36,724             26,205
                                                                   
Shareholders' Deficit                                              
Common Stock, $0.001 par value; 2,000,000,000
shares authorized; 810,757,671 and 63,463,659   811                63
shares issued and outstanding at September 30,
2013 and December 31, 2012, respectively
Common Stock Subscribed, not issued             1,358              -- 
Additional Paid in Capital                      96,416             76,919
Accumulated Deficit                             (121,136)          (87,097)
Accumulated Other Comprehensive Income          127                88
                                                (22,424)           (10,027)
Noncontrolling Interests                        4                  4
Total Shareholders' Deficit                    (22,420)            (10,023)
Total Liabilities and Shareholders' Deficit     $ 14,304           $ 16,182

 
 
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
(unaudited, in thousands, except per share data)
                                                                  
                        Three Months Ended          Nine Months Ended 
                       September 30, September 30, September 30, September 30,
                       2013          2012          2013          2012
                                                                  
Gross Product Sales     $ 438         $ 481         $ 2,135       $ 786
Sales Discounts,        (2)           (4)           (3)           (16)
Returns and Allowances
Net Sales               436           477           2,132         770
                                                                  
Cost of Goods Sold      382           473           1,880         861
Gross Profit (Loss)     54            4             252           (91)
                                                                  
Operating Expenses:                                               
Research and            75            115           295           370
Development
Selling, General and    1,134         6,847         3,796         10,519
Administrative
Impairment of           547           --            547           --
Long-Lived Assets
Total Operating         1,756         6,962         4,638         10,889
Expenses
Operating Loss          (1,702)       (6,958)       (4,386)       (10,980)
                                                                  
Debt Extinguishment     (1,065)       --            (2,821)       (427)
Costs
Change in Derivative    (2,392)       47            (21,629)      (52)
Liabilities
Interest and Other      --            --            --            18
Income
Interest Expense        (2,112)       (3,057)       (5,203)       (4,834)
Loss Before Provision   (7,271)       (9,968)       (34,039)      (16,275)
for Income Taxes
Provision for Income    --            --            --            --
Taxes
Net Loss                $ (7,271)     $ (9,968)     $ (34,039)    $ (16,275)
                                                                  
                                                                  
Net Loss Per Share -    $ (0.01)      $ (0.40)      $ (0.07)      $ (0.77)
Basic and Diluted
                                                                  
Weighted Average
Common Shares           731,817,081   24,739,449    482,042,209   21,242,115
Outstanding - Basic
and Diluted

 
 
CEREPLAST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except shares data)
                                                             
                                         Nine Months Ended
                                         September 30, 2013 September 30, 2012
                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                        
Net Loss                                  $ (34,039)         $ (16,275)
Adjustment to Reconcile Net Loss to Net                      
Cash Used in Operating Activities
Depreciation and Amortization             665                536
Allowance for Doubtful Accounts           3                  5,082
Common Stock Issued for Services,         171                160
Salaries and Wages
Amortization of Loan Discount             4,230              3,223
Extinguishment of Convertible Debt        2,821              368
Loss on Derivative Liabilities            21,629             52
Impairment of Long-Lived Assets           547                --
Changes in Operating Assets and                              
Liabilities
Accounts Receivable                       (875)              537
Deferred Loan Costs                       400                458
Inventory                                 1,219              814
Prepaid Expenses                          28                 (171)
Restricted Cash                           43                 --
Accounts Payable                          116                659
Accrued Expenses                          749                288
NET CASH USED IN OPERATING ACTIVITIES     (2,293)            (4,269)
                                                             
CASH FLOWS FROM INVESTING ACTIVITIES:                        
Purchase of Property and Equipment, and   (3)                (180)
Intangibles
Proceeds from Sale of Equipment           --                 15
NET CASH USED IN INVESTING ACTIVITIES     (3)                (165)
                                                             
CASH FLOWS FROM FINANCING ACTIVITIES:                        
Payments on Capital Leases                (41)               (50)
Payments made on Notes Payable            (63)               (603)
Proceeds from Convertible Notes, Net of   63                 600
Issuance Costs
Proceeds from Issuance of Preferred       2,750              400
Stock
Proceeds from Issuance of Common Stock    (23)               400
and Subscriptions, Net of Issuance Costs
NET CASH PROVIDED BY FINANCING            2,686              747
ACTIVITIES
                                                             
FOREIGN CURRENCY TRANSLATION              (340)              (16)
                                                             
NET INCREASE (DECREASE) IN CASH          50                 (3,703)
                                                             
CASH AND CASH EQUIVALENTS, BEGINNING OF   183                3,940
PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD  $ 233              $ 237

CONTACT: Cereplast, Inc.
         Public Relations
         Nicole Robertson
         812.220.5400 X1013
         nrobertson@cereplast.com
        
         Investor Relations:
         Alliance Advisors, LLC
         Valter Pinto
         914-669-0222 x201
         valter@allianceadvisors.net
         www.AllianceAdvisors.net

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