Ceres Announces Fiscal Year 2013 Financial Results
- Plantings have commenced for the 2013-14 growing season in Brazil.
- Number of mills evaluating Ceres' sorghum hybrids has increased over
- Lower expenses forecast for fiscal year 2014.
THOUSAND OAKS, Calif., Nov. 21, 2013
THOUSAND OAKS, Calif., Nov. 21, 2013 /PRNewswire/ --Energy crop company
Ceres, Inc. (Nasdaq: CERE) today announced financial results for the fiscal
year ended August 31, 2013 and provided an update on its business in Brazil.
The company reported that plantings for the 2013-2014 sorghum growing season
in Brazil have commenced and are expected to continue through December. With
industrial processing of Ceres' sweet sorghum hybrids generally well
established, these plantings consist primarily of smaller, multi-hybrid
evaluations designed to determine yield potential, identify the best
performing hybrids for specific regions and to demonstrate various crop
"Our goal this season is to clearly demonstrate the economic basis for sweet
and high biomass sorghum cultivation and processing," said Richard Hamilton,
President and Chief Executive Officer of Ceres. "We have made a number of
adjustments to our product development process and go-to-market approach, with
an emphasis on consistent execution of our crop management protocols."
Mr. Hamilton noted that field performance will largely determine the scale and
pace at which the company's products will be adopted moving forward. "We have
significantly increased yields of fermentable sugars since our first
industrial evaluations in 2011 and we expect to continue to develop a stream
of higher-performing hybrids that provide a greater buffer to variable growing
conditions and crop management practices," he said.
Ceres Chief Financial Officer Paul Kuc indicated that the company is moving
forward with previously reported plans to reduce expenses in fiscal year 2014.
"The priority for our working capital will be product development and
commercial activities related to sorghum and our near-term opportunity in
Brazil. We will also continue to advance potentially high-value traits, like
yield and drought resistance, in our pipeline for use in sorghum as well as in
row crops," he said.
RECENT BUSINESS HIGHLIGHTS
oFor the 2013-2014 season, Ceres expects to evaluate its sorghum hybrids at
approximately 50 mills and mill suppliers. These evaluations include
approximately 10 hybrids, including commercial and pre-commercial
products. Plantings are expected to cover up to approximately 1,000
hectares compared to approximately 3,000 hectares the previous season due
primarily to a greater focus among mills on field performance, which can
be determined at a smaller scale than evaluations needed for confirming
industrial performance. Approximately 30 mills evaluated the company's
sorghum products last season.
oThe company has expanded the number of locations and scope of field
evaluations of pre-commercial products and advanced breeding materials in
Brazil in order to better position its future products among various
geographies, growing conditions and production practices. These breeding
materials have demonstrated, among other characteristics, step increases
in yields, greater yield stability, longer periods of industrial
utilization and greater adaptation to various growing conditions and
oFormer Brazil Agricultural Minister Roberto Rodrigues has agreed to chair
a sorghum advisory council established by the company's Brazilian
subsidiary. The council will provide strategic advice and support for the
introduction of the biofuel crop in Brazil. Members represent companies in
industrial ethanol processing, agricultural production and bioenergy.
oIn October, Ceres announced that the company extended a joint market
development agreement with Syngenta in Brazil. Under the renewed
agreement, Syngenta and Ceres will continue to collaborate on field
evaluations with mills. Syngenta indicated that it plans to move forward
with its evaluations aimed at registering additional crop protection
products for sorghum.
oIn China, field evaluations of several Ceres' biotech traits in corn have
demonstrated significantly higher grain yields under drought conditions.
The company intends to seek out-licensing opportunities for certain of
these traits in corn once further evaluations allow their commercial value
to be more definitively determined.
oIn India, results from rice evaluations completed this month confirmed
that genes developed by Ceres provided improved yield stability under
drought and other stress conditions that routinely limit
productivity.These genes are currently being introduced into breeding
lines by the company's commercialization partner in India.
oIn October, Ceres reported that it would further align expenditures with
its near-term commercial opportunity in Brazil, relocate its Northern
Hemisphere sorghum breeding activities, reduce research and development
expenditures for U.S. cellulosic feedstocks, reduce overall costs and
conserve cash. These changes are expected to deliver cash savings of up to
approximately $5.0 million in fiscal year 2014 and up to approximately
$8.0 to $10.0 million annually thereafter.
YEAR-END FINANCIAL RESULTS
Total revenues for the year ended August 31, 2013 were $5.2 million compared
to $5.4 million for the previous fiscal year due primarily to a decrease in
collaborative research revenue.
Cost of product sales was $6.2 million for the year ended August 31, 2013
compared to $2.4 million for the previous fiscal year. The increase was
primarily due to write-down expenses of $2.2 million for obsolete seed
inventory relating to the company's sweet sorghum products and $1.7 million
for crop management services performed under certain sales incentive and
performance-based promotional programs for the 2012-2013 growing season in
Research and development expenses decreased by $2.8 million to $16.4 million
for the year ended August 31, 2013 compared to the previous fiscal year due
primarily to reduced personnel and related expenses in the U.S. as well as
reduced external R&D expenses.
Selling, general and administrative expenses were $15.2 million for the year
ended August31, 2013 compared to $12.6 million for the previous fiscal year
due primarily to increased personnel and related administrative expenses in
For the fiscal year ended August 31, 2013, Ceres reported a net loss of $32.5
million, or $1.31 per share, compared to a net loss of $29.4 million, or $2.18
per share, for the fiscal year ended August 31, 2012.
At August 31, 2013, cash and cash equivalents and marketable securities
totaled $30.5 million.
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 year-end results. The webcast of the conference call may be
accessed at investor.ceres.net. Audio of the teleconference is also available
North America 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.
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)
Three Months Ended Year Ended
August 31, August 31,
2013 2012 2013 2012
Product sales $ — $ $ $
3 462 432
research and government 898 1,161 4,781 4,939
Total revenues 898 1,164 5,243 5,371
Cost and operating
Cost of product 1,132 507 6,245 2,384
Research and 3,617 3,634 16,401 19,155
Selling, general and 3,488 3,673 15,187 12,634
Total cost and 8,237 7,814 37,833 34,173
Loss from operations (7,339) (6,650) (32,590) (28,802)
Interest expense (11) (1) (46) (560)
Interest income 19 30 126 39
Other expense — — — (84)
Loss before income (7,331) (6,621) (32,510) (29,407)
Income tax expense — (2) (1) (3)
Net loss $ (7,331) $ $ (32,511) $
Basic and diluted net $ (0.29) $ $ $
loss per share (0.27) (1.31) (2.18)
Basic and diluted
outstanding common 24,886,140 25,509,940 24,796,030 13,488,336
shares used for net loss
CERES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
August 31, August 31,
Cash and cash equivalents $ 8,881 $ 21,069
Marketable securities 21,630 33,565
Prepaid expenses 791 1,050
Accounts receivable 957 765
Inventories 20 841
Other current assets 157 278
Total current assets 32,436 57,568
Property and equipment, net 4,633 5,756
Marketable securities — 5,720
Other assets 109 203
Total long-term assets 4,742 11,679
Total assets $ 37,178 $ 69,247
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $ 3,825 $ 5,476
Deferred revenue — 701
Deferred rent 18 31
Current portion of long-term debt 154 134
Total current liabilities 3,997 6,342
Deferred rent 93 88
Long-term debt, net of current portion 82 256
Total liabilities 4,172 6,686
Commitments and contingencies
Common stock, $0.01 par value;
24,897,199shares issued and outstanding at 248 245
August 31, 2013; 24,549,029 shares issued and
outstanding at August 31, 2012.
Additional paid-in capital 308,038 304,672
Accumulated other comprehensive loss (696) (283)
Accumulated deficit (274,584) (242,073)
Total stockholders' equity 33,006 62,561
Total liabilities and stockholders' equity $ 37,178 $ 69,247
SOURCE Ceres, Inc.
Contact: Ceres, Inc., Gary Koppenjan, Investors, +1-805-375-7801, email@example.com
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