Cereplast, Inc. (OTCBB: CERP), a manufacturer of bio-based sustainable plastics, reported a wider loss for the six months and quarter ending June 30, 2008.
The Company reported a net loss of $7,026,316, or $0.03 per share,
for the first half of 2008 as compared with a net loss of $3,302,562,
or $0.02 per share, for the comparable period in 2007. For 2Q08 the net loss was $3,181,907, or $.01 per share, versus
a net loss of $2,019,435, or $.01 per share, for the comparable quarter
in 2007.
The increase in net loss for each of the respective periods
was the result of higher operating and development expenses associated
with the growth of the Company’s resin operations, Cereplast said in a release.
For the first six months of 2008, Cereplast reported gross sales of $1,973,109, a 108% increase over the comparable 2007 period. Gross sales increased by $502,441 or 90% to $1,059,957 for the three months ending June 30, 2008 compared to 1Q07. The increase in sales for each of the respective periods is the result of volume growth in the Company’s bioplastic resins from existing customers and new customers launching commercial products.
Operating expenses were $7,168,407 for the six months ending June 30, 2008, an increase of $3,874,219 or 118%, versus the comparable 2007 period. For 2Q08 operating expenses increased by $1,165,903, or 59%, to $3,131,752 compared to 2Q07. The increase for each of the respective periods is attributable to increased spending, both cash and non-cash related, to support the commercial development of the Company’s two resin families, introduction of new products and business growth. Non-cash compensation to employees and directors included the issuance of restricted stock and expensing of stock options as part of long-term compensation.
The weighted average number of shares used in the calculation of earnings per share was 260.6 million for first half of 2008 compared to 218.6 million for the first half of 2007; for 2Q08 the weighted average number of shares was 261.7 million versus 222.1 million for the same period in 2007. The increase in the weighted average number of shares primarily reflects the shares issued by the Company as part of long-term compensation.
During the six months ended June 30, 2008, the Company used $5,802,682 of cash for operating activities, compared to net cash used in operating activities of $2,662,102 for the first six months of 2007. The increase in the use of cash for operating activities was a result of increased manufacturing and operational upgrading expenses, inventory builds to support business growth, and higher research, development and marketing expenses to support the introduction of new products. Cash and short-term investments at June 30, 2008 totaled $667,985.
"The triple-digit demand growth trend for our bioplastics continued in the first half of this year," said Frederic Scheer, Cereplast’s Chairman and CEO. "Supported by both continually mounting environmental awareness and high fossil fuel prices, we see tremendous interest in our products from the marketplace. Expectations for the second half continue in line with our own robust 2008 plan and industry analyst projections."
"Cereplast made great progress during the second quarter towards our goal of becoming a mainstream bioplastics supplier," said Randy Woelfel, President and Chief Operating Officer. "Cereplast’s sales growth is starting to accelerate and several key development grades of resin are in commercialization. Our Seymour facility is nearing start-up, bringing step changes in our capacity and cost efficiency, and our strengthened management, sales and development teams are driving improvements in all aspects of our operations. The outlook for our business is very strong."
About Cereplast
Cereplast, Inc. designs and manufactures proprietary bio-based, sustainable plastics which are used as substitutes for petroleum-based plastics in all major converting processes – such as injection molding, thermoforming, blow molding and extrusions–at a pricing structure that is competitive with petroleum-based plastics. On the cutting-edge of bio-based 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 bio-based content and compostability are advantageous, especially in the food service industry. Cereplast Hybrid Resins® combine high bio-based content with the durability and endurance of traditional plastic, making them ideal for applications in industries such as automotive, consumer electronics and packaging.
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