Cereplast releases 2011 financial results, announces new products
California-based bioplastics producer Cereplast Inc. has released its 2011 financial results on April 16, demonstrating significant growth over the past year. The company’s net sales for 2011 more than tripled compared with the previous year, increasing from $6.3 million in 2010 to $20.3 million in 2011.
“On a year-over-year basis, revenue increased over 200 percent, which is a significant growth rate for a company of our size,” said Cereplast Chairman and CEO Frederic Scheer. “While we faced some challenges with clients associated with the economic downturn in Europe during 2011, our company was forced to reevaluate and improve our risk management related to the financial structure of our working relationships. We are confident these improvements will restore the financial health of our company going forward. During the first quarter of 2012 we continued to establish strong, new distribution partnerships worldwide broadening our footprint in the industry while bringing innovative products to market, and strengthening our team.”
According to Scheer, external issues related to the financial crisis in Europe have affected his company’s near-term growth opportunities. He added that Cereplast’s liquidity has been impacted due to slow progress in the recovery of the company’s accounts receivables. “Also, broadly speaking, current and potential customers in Europe are having liquidity issues of their own,” Scheer continued. “The demand and need for our products are still strong, although we are seeing an increased sales cycle due to economic risk. We are working diligently with our European clients who have been affected by the Euro Zone financial crisis on an amicable resolution. Due to progress taking longer than anticipated, we are taking a more aggressive role in facilitating the sale of our inventory to third parties and broadening our activities outside of Europe to North America and Asia.”
Cereplast attributes its impressive net sales increase last year to volume increases associated with existing customer contracts as well as new contracts with European customers. In its report, the company also noted that cost of sales for 2011 totaled $18.2 million, an increase of 247 percent and 90 percent of revenue. The cost of sales for 2010 was $5.2 million, or 82.7 percent of revenue.
The company’s gross profits also grew by 85 percent, from $1.1 million in 2010 to $2 million in 2011. Cereplast reported a net loss of $14 million for the 12 months ended Dec. 31, 2011, compared to a net loss of $7.5 million for the year prior. According to Cereplast’s financial report, the company had $3.9 million in cash and approximately $14.7 million in account receivables on its balance sheet at year end.
In addition to the year-end financial report, Cereplast has also made several product announcements in April. On April 2 the company reported that an analysis completed by Sustainmetrics found that Cereplast Hybrid 101 is superior to all conventional plastics evaluated in terms of overall environmental impact. The following day Cereplast announced the introduction of Hybrid 106D, a new grade of Cereplast Hybrid Resins. The new addition is a high starch, high melt flow polypropylene starch compound that offers a unique combination of mechanical properties, ease of processing and a highly aesthetic surface. On April 4, Cereplast announced the introduction of a new category of bioplastics, Ethylene-Vinyl Acetate (EVA) and starch hybrid compounds. The first product in the new category, Hybrid 651D, is a tough, soft touch, pliable material ideal for extrusions and soft injection moldable applications. Finally, on April 5 the company launched Hybrid 111D and Hybrid 112D thermoplastic elastomer starch hybrid compounds for injection molding applications.