Ceres, Inc.

Jul 12, 2012

Ceres Announces Fiscal Third Quarter 2012 Financial Results

THOUSAND OAKS, Calif.--(BUSINESS WIRE)-- Energy crop company Ceres, Inc. (Nasdaq: CERE) today announced financial results for the third quarter ended May 31, 2012 and provided an update on its business in Brazil, its largest immediate commercial opportunity.

The company reported that ethanol mills have completed their second season of commercial-scale evaluations of Ceres' sweet sorghum hybrids in Brazil. The crops were successfully grown, harvested and processed into ethanol, despite severe drought conditions that resulted in 40% to 70% less rainfall than normal during the growing season.

"The increasing demand for ethanol and ongoing sugarcane shortages continue to place an imperative on Brazil's mills to find new ways to expand supply," said Richard Hamilton, President and Chief Executive Officer of Ceres. "We believe that sweet sorghum offers a compelling opportunity to do so with existing steel in the ground.

"Under some very challenging agricultural conditions we outperformed commercial competitors and, at locations where adequate rainfall was available, we demonstrated the economic potential of our products as a season-opening feedstock for biofuel and biopower. In the coming season, we plan to expand our portfolio of products with new hybrids from our development pipeline. These new hybrids will fill a late-season harvest window and have demonstrated significantly higher performance than current products," Hamilton said.



Total revenues for the three months ended May 31, 2012 declined to $1.2 million from $1.6 million in the same period in fiscal year 2011 due to decreased activity under the company's various grants and collaborations. Due to the seasonality of seed sales, quarterly revenues are not indicative of full year results.

Cost of product sales remained at $0.6 million for the three months ended May 31, 2012 compared to the three months ended May 31, 2011.

Research and development expenses increased to $5.3 million in the quarter ended May 31, 2012 compared to $5.2 million in the same period in fiscal year 2011. This increase was due primarily to increases in headcount and other resources deployed to support Ceres' plant breeding activities in Brazil. The increase was almost fully offset by reduced expenses related to warrants issued in connection with collaborations as well as lower consulting and external research and development expenses in the U.S.

Selling, general and administrative expenses increased to $3.3 million in the quarter ended May 31, 2012 compared to $2.5 million in the three months ended May 31, 2011. The increase is attributable primarily to increased personnel expenses and fees for professional services.

For the quarter ended May 31, 2012, Ceres reported a net loss of $8.4 million, or $0.34 per share, compared to a net loss of $8.3 million, or $4.18 per share, in the same period in fiscal year 2011. Shares used in the calculation of net loss per share (basic and diluted) were 24,423,042 for the quarter ended May 31, 2012 and 1,983,127 for the same period in fiscal year 2011.

For the quarter ended May 31, 2012, capital purchases were $0.4 million.

At May 31, 2012, Ceres had cash and cash equivalents of $67.7 million.


Ceres has scheduled a webcast and conference call for 4:30 p.m. EDT (1:30 p.m. PDT) today to discuss third quarter results. To access the webcast of the conference call, go to the Investors section of the Ceres website, www.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 approximately two hours after the conclusion of the live call, and remain available on the Ceres website for approximately 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.


This press release may contain forward-looking statements. All statements, other than statements of historical facts, including statements regarding our efforts to develop and commercialize our products, our 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 our 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.

(In thousands, except share and per share amounts)
Three months ended Nine months ended
May 31, May 31,
2012 2011 2012 2011
Product sales $ 42 $ 88 $ 429 $ 97
Collaborative research and government grants   1,106     1,479     3,778     4,799  
Total revenues   1,148     1,567     4,207     4,896  
Cost and operating expenses:
Cost of product sales 627 610 1,876 1,940
Research and development 5,255 5,196 15,522 13,837
Selling, general and administrative   3,344     2,561     8,962     6,900  
Total cost and operating expenses   9,226     8,367     26,360     22,677  
Loss from operations (8,078 ) (6,800 ) (22,153 ) (17,781 )
Interest expense (341 ) (117 ) (559 ) (365 )
Interest income 3 (28 ) 9 6
Other income (expense)   -     (1,365 )   (84 )   (1,450 )
Loss before income taxes (8,416 ) (8,310 ) (22,787 ) (19,590 )
Income tax benefit (expense)   -     29     (1 )   28  
Net loss $ (8,416 ) $ (8,281 ) $ (22,788 ) $ (19,562 )
Net loss per share:
Basic and diluted $ (0.34 ) $ (4.18 ) $ (2.33 ) $ (9.92 )
Shares used in calculation of net loss per share:
Basic and diluted 24,423,042 1,983,127 9,787,652 1,972,468
(In thousands, except share and per share amounts)
May 31, August 31,
2012 2011
Current assets:
Cash and cash equivalents $ 67,720 $ 21,911
Prepaid expenses 1,002 631
Trade receivables, net 579 1,292
Other current assets   445     3,000  
Total current assets 69,746 26,834
Property and equipment, net 5,168 6,780
Restricted cash and investment - 3,000
Other assets   99     183  
Total assets $ 75,013   $ 36,797  
Current liabilities:
Accounts payable and accrued expenses $ 5,285 $ 6,972

Other current liabilities

835 955
Current portion of long-term debt   25     2,168  
Total current liabilities 6,145 10,095
Other non-current liabilities 106 149
Long-term debt, net of current portion 230 2,013
Convertible notes - 13,630
Common and preferred stock warrant liabilities - 17,726
Contingencies and commitments
Convertible preferred stock - 197,502
Stockholders' equity (deficit):
Common stock and additional paid-in capital; $0.01 par value; 25,000,000 shares authorized; 2,014,168 shares issued and outstanding at August 31, 2011; 490,000,000 shares authorized; 24,493,067 shares issued; 24,487,250 outstanding at May 31, 2012. 304,131 8,372
Accumulated other comprehensive income (148 ) (27 )
Accumulated deficit   (235,451 )   (212,663 )
Total stockholders' equity (deficit)   68,532     (204,318 )
Total liabilities and stockholders' equity $ 75,013 $ 36,797

Ceres, Inc.
Gary Koppenjan, (805) 375-7801

Source: Ceres, Inc.

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