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Cereplast, Inc. (NASDAQ: CERP) $45.43M (MarketCap)

|Includes: Cereplast, Inc. (CERPQ)

Today, Cereplast has released its first quarter 2010 results. One key fact to note is that although their gross profit decreased by 6.4% compared to the three months ended March 31, 2009, the gross profit margin, as a percentage of sales, increased to 31.6% from 17.4% for the same period. This increase in gross margin is attributable to lower cost of sales tied to decreases in raw material costs, improvements in manufacturing operations and cost savings at the company’s new state-of-the art facility in Seymour, Indiana. Frederic Scheer, Founder, Chairman, and CEO of Cereplast Inc., states that this facility “can produce roughly $100 million of resins per year and was built with potential upgrades in mind to cost effectively increase output to $500million of resins per year.” He believes this positions them to take advantage of the continued tremendous growth seen in the global bioplastics industry.

 

Cereplast, Inc. estimates that its 2010 revenues will increase by a minimum of 190% to between $8 million to $10 million. This estimate is based on new contracts and commitments for its bioplastic resins from clients in the U.S., Europe, and Asia. Cereplast has both extended its agreement with A. Schulman Inc. in Europe and made an agreement with CRS Technologies to be the sole supplier of bioplastic resins in Malaysia. Furthermore, it has entered into a distribution agreement with ATSA CHILE SA to supply resins in Chile and Peru. The company anticipates that its margins will improve due to its cost cutting strategies and the move to its manufacturing operations to Indiana, resulting in the reduction of losses and an increased efficiency in operations.



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