1ST QUARTER: CERES' LOSS WIDENS
Jan. 13, 2014
Source: Ceres news release
Energy crop company Ceres, Inc. (Nasdaq: CERE) today announced financial results for the three months ended November 30, 2013 and provided an update on its business in Brazil.
The company reported that mill plantings for the 2013-2014 sorghum growing season in Brazil have been successfully completed on time and according to Ceres crop management protocols. Growing conditions have been generally favorable to date across most regions.
"The adjustments we have made to our go-to-market approach and product development processes have had a positive impact on the start of the season," said Richard Hamilton, President and Chief Executive Officer of Ceres. He noted that Ceres agronomists will continue to work closely with ethanol mills to help their agricultural teams gain confidence in producing the crop and adhering to the company's crop management protocols.
"Our primary goal is to duplicate the individual successes we demonstrated last season across a broader range of customers and geographies," said Hamilton.
Chief Financial Officer Paul Kuc reported that expenses for the company's first fiscal quarter reflect operational changes and cost saving measures initiated during the quarter. "We expect expenditures to begin to decline in the near term as we prioritize our commercialization and product development activities in Brazil and remain vigilant over the use of our working capital," said Kuc.
RECENT BUSINESS HIGHLIGHTS
•Plantings of the company's sorghum hybrids for the 2013-2014 sorghum growing season in Brazil have been successfully completed with 49 customers, including mills and mill suppliers, across 55 different locations. As previously reported, these plantings consist primarily of smaller, multi-hybrid evaluations designed to determine yield potential and identify the best performing hybrids for specific regions.
•As part of its product development process, Ceres has also established a number of breeding and product development field evaluations across various geographies. These trials consist of hundreds of hybrids, including a subset of hybrids in advanced evaluations in Brazil and other countries in South America that have demonstrated higher yields and other performance benefits over current products.
•Total plantings of the company's commercial and pre-commercial sorghum hybrids cover approximately 1,000 hectares this season. Harvests are expected to commence in late February to early March and continue through May.
•In December, the company successfully completed all elements of a multi-year project funded by a competitive grant from the U.S. Department of Energy's Advanced Research Project Agency for Energy (ARPA-E). The Ceres project consisted of multi-state field evaluations of the company's high yield, low input biotech traits in three energy crops. Based on the positive results of the project, Ceres has advanced a number of these traits in its product development pipeline.
•During the quarter ended November 30, 2013, Ceres was awarded a U.S. patent related to a sorghum-derived gene promoter useful for regulating the expression of genes developed through biotechnology in various crops.
FIRST QUARTER FINANCIAL RESULTS
Total revenues for the quarter ended November 30, 2013 were $0.8 million compared to $2.0 million for the same period last year primarily due to lower collaborative research revenue and government grants. Product sales remained relatively unchanged compared to the first quarter of 2012.
Cost of product sales was $1.3 million for the quarter ended November 30, 2013 compared to $0.7 million for the same period last year. The increase was primarily due to costs related to the company's previously reported workforce reductions and expenses for obsolete seed inventory related to the company's sweet sorghum products.
Research and development expenses were $4.4 million for the three months ended November 30, 2013 compared to $4.3 million for the same period last year. In the U.S., research and development expenses decreased by $0.6 million primarily due to reduced external research and development expenses. In Brazil, research and development expenses increased by $0.7 million primarily as a result of increased personnel and related expenses.
Selling, general and administrative expenses decreased by $0.6 million to $3.3 million for the three months ended November 30, 2013 compared to the same period last year. In the U.S., expenses decreased by $0.7 million primarily due to reduced personnel and related expenses and lower professional fees. In Brazil, expenses increased by $0.1 million primarily as a result of increased personnel and related expenses.
For the quarter ended November 30, 2013, Ceres reported a net loss of $8.2 million, or $0.33 per share, compared to a net loss of $6.9 million, or $0.28 per share, for the quarter ended November 30, 2012.
At November 30, 2013, cash and cash equivalents and marketable securities totaled $24.4 million.