Cereplast Reports Financial Results for the First Nine Months of 2013

SEYMOUR, Ind., Nov. 14, 2013 (GLOBE NEWSWIRE) -- Cereplast, Inc. (OTCQB:CERP) (the "Company"), a leading manufacturer of proprietary biobased, compostable and sustainable bioplastics, today announced $2.1 million in revenue during the first nine months of 2013 compared to $786,000 for the same period the prior year and a total of $911,000 for the 2012 full year.

Cereplast Chairman and Chief Executive Officer Mr. Frederic Scheer stated, "We are pleased with the year-over-year growth we have experienced for the first nine months of 2013 and we expect to continue this trend as the global market opportunity continues to increase. The most immediate growth driver is the ongoing legislation in Italy for the sanctions of traditional plastic bags. We continue to work closely with customers who are capable of placing orders much larger than they are today in the anticipation of the ruling."

Mr. Scheer continued, "Italy and subsequent European countries have created an immense opportunity for us but we are not putting all of our eggs in one basket. We foresee India and the United States as significant markets for us as well. Both markets are already enforcing sanctions in select areas. We have feet on the ground in each market and are beginning to secure contracts by first educating the marketplace about the benefits of our technology. In India we recently received a $1.4 million order and in the U.S. we are actively pursuing 30 projects with a potential value of over $10 million per year. We anticipate continued traction in both markets."

2013 Industry, Financial and Operational Highlights to Date:

• Revenue for the first nine months of 2013 totaled $2.1 million.
• In a recent document, the European Union Environmental Commission stated that they are in support of an amendment to this legislation, which is scheduled to go into effect in November and member states will have two years to comply.
• Cereplast has estimated annual revenue potential from Italy alone to exceed $50 million.
• For the past 18 months, the Company has worked closely with over 70 companies in Italy that have completed multiple successful tests with various grades of their blown film resins.
• In India, Cereplast recently received a $1.4 million purchase order, which will ship over the next 10 months.
• Additionally, Cereplast received five purchase orders in India totaling $450,000 for blown film resins which will be delivered throughout the remainder of 2013.
• In the United States, regional and federal laws are supporting growth of the bioplastics industry as seen by movements in San Francisco, Portland and New York City.
• Cereplast has valued the bioplastic industry in the United States today to be $180 million and expects to begin generating meaningful revenue in 2014.
• Cereplast is actively pursuing 30 projects in North America with potential value of $10 million per year.
• Cereplast recently launched reVive™ bioplastic resins, the first bioplastics to combine recycled polymers with biobased resins for improved sustainability, reducing the carbon footprint of this type of bioplastic by adding the environmental benefits of recycled plastic.

2013 First Nine Months Financial Results:

Net sales for the nine months ended September 30, 2013 were approximately $2.1 million, compared to $0.8 million in the same period in 2012. Sales increased from the prior year due to growing demand in European markets primarily due to anticipated legislation in Italy banning traditional plastic bags.

Cost of sales is comprised of variable costs associated with product revenues. Cost of sales for the nine months ended September 30, 2013 was approximately $1.9 million, compared to $0.9 million for the same period in 2012. The increase in cost of sales is due to an increase in sales.

Gross profit (loss) for the nine months ended September 30, 2013 was approximately $0.3 million, compared to ($0.1) million for the same period in 2012. The increase in gross profit was attributable to an increase in sales, as stated above.

Research and development expenses for the nine months ended September 30, 2013 were $0.3 million, compared to approximately $0.4 million for the same period in 2012. Research and development expenses have slightly decreased due to a cost containment effort to preserve working capital.

Selling, general and administrative expenses for the nine months ended September 30, 2013 were $3.8 million, compared to $10.5 million for the same period in 2012. The decrease in sales, general and administrative expenses was primarily due to bad debt expense of $5.1 million recorded in the third quarter of 2013. In addition, the sales, general and administrative expenses decreased due to reduced headcount and a reduction in fixed production overhead costs classified as selling, general and administrative expense due to an extended period of abnormally low production volume.

Other income and expense, net for the nine months ended September 30, 2013 was a net expense of $29.6 million, as compared to a net expense of $5.3 million in the same period in 2012. The increase in expense was primarily a result of the change in our derivative liability related to our warrants, short-term convertible debt and preferred stock agreements. In addition, we recorded $2.8 million in debt extinguishment costs related to the exchange of certain of our term loan and convertible notes.

Net loss for the nine months ended September 30, 2013 was $34 million, as compared to $16.3 million in the same period in 2012. The increase in net loss was primarily driven by an increase in Other Expense related to financing transactions. As discussed above, Other Income and Expense, net was unfavorably impacted by losses on derivative liabilities totaling $21.6 million. The increase in net loss was partially offset by a decrease in bad debt expense recorded in the first nine months of 2013 compared to the first nine months of 2012.

It is recommended that participants dial in approximately 10 minutes prior to the start of the 4:30 p.m. Eastern call. There will also be a simultaneous live webcast of the conference call which can be accessed through the following audio feed link and archived recording of the conference call available under the Investor Relations section of the company website at http://www.cereplast.com/investors/events-presentations/.

About Cereplast, Inc.

Cereplast, Inc. (OTCQB:CERP) designs and manufactures proprietary biobased, sustainable bioplastics which are used as substitutes for traditional plastics in all major converting processes - such as injection molding, thermoforming, blow molding and extrusions - at a pricing structure that is competitive with traditional plastics. On the cutting-edge of biobased 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 biobased content and compostability are advantageous, especially in the food service industry. Cereplast Sustainables® resins combine high biobased content with the durability and endurance of traditional plastic, making them ideal for applications in industries such as automotive, consumer electronics and packaging. Learn more at www.cereplast.com. You may also visit the Cereplast social networking pages at Facebook.com/Cereplast, Twitter.com/Cereplast and Youtube.com/Cereplastinc.

Safe Harbor Statement

Matters discussed in this press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.

CONTACT: Cereplast, Inc.
         Public Relations
         Nicole Robertson
         812.220.5400 X1013
         nrobertson@cereplast.com
         
         Investor Relations:
         Alliance Advisors, LLC
         Valter Pinto
         914-669-0222 x201
         valter@allianceadvisors.net
         www.AllianceAdvisors.net