Thousand Oaks, California, USA
April 9, 2015
- Company continues its expansion beyond bioenergy markets
- Next evaluations scheduled for biotech forage sorghum, corn and sugarcane
Ceres, Inc. (Nasdaq: CERE), an agricultural biotechnology company, announced today financial results for the three months ended February 28, 2015.
The company reported advancements across major areas for its breeding and genetic technologies, including biotech trait development, forage sorghum and Persephone bioinformatics software, and provided an update on its business in Brazil.
"We have responded rapidly to changes in the energy market as well as the economic challenges faced by the Brazilian ethanol industry. Today, we are much more than just a bioenergy company and have expanded the number of market opportunities available for our technology and products," said Ceres President and CEO Richard Hamilton.
Ceres Chief Financial Officer Paul Kuc reported that the company has a number of upcoming milestones, including seeds sales in the U.S. forage market, the ongoing roll-out of its Persephone bioinformatics software, harvest results in Brazil and the continued advancement of traits for crops like corn and sugarcane. "We continue to keep a close eye on expenses and are evaluating our capital needs and financing options as the year progresses in light of our completed and upcoming milestones."
Business Highlights and Outlook
- Ceres has launched new forage sorghum hybrids for the U.S. market and plans to evaluate more than a dozen new hybrids that offer performance advantages such as higher yields and improved nutrition. In addition to its direct sales efforts, the company entered into a distribution agreement with Helena Chemical Company, a leading distributor of crop inputs and services, to extend its sales and marketing reach in certain geographies. The company also plans to conduct additional evaluations of its biotech traits in forage sorghum this season in the United States following successful field trials. Performance results for both its traditionally developed hybrids and biotech traits are expected by the end of the calendar year.
- The company has advanced its leading biotechnology traits and continued field evaluations in a number of food and feed crops. In March, Ceres accelerated its sugarcane trait development following positive field results in Latin America. The next stage of field trials, which will provide more definitive results, is expected to be completed next year. In China, the company has advanced its best multi-gene combinations for additional testing in corn. The company plans to expand the scope of its trials, including evaluations of its biotech traits in a more diverse set of corn breeding lines. Ceres has filed an application for a patent covering its iCODE multi-gene trait development technology and initiated discussions with potential licensees.
- The company reported that its bioinformatics software, Persephone, is being evaluated by new potential customers in plant genomics as well as in biomedical research and diagnostics, where genomics data is analyzed and viewed in a similar manner to plants. The software is currently licensed by Syngenta and Bayer CropScience.
- In March, Ceres and Brazilian energy company Raizen, a joint venture of Royal Dutch Shell and Cosan, signed a multi-year collaboration agreement to develop and produce sweet sorghum on an industrial scale. In addition to Raizen, the company has plantings with more than 50 mill and agribusiness customers this season. Ceres reported today that growing conditions to date have been generally favorable across most evaluation regions following a dry start to the season, which delayed some plantings. For its multi-hybrid field evaluations sites, Ceres reported continued improvement to date in crop management over the previous season, reduced losses to weather and, based on visual inspections of these plantings, improved product adaptation to various growing conditions in Brazil. The company expects that hectares planted under its sales incentive and promotional programs, which include offtake agreements for sorghum biomass, will provide sufficient biomass for multiple industrial evaluations. Revenue for these plantings will be based on yields of biomass per hectare rather than seed sales. Assessments are subject to change until harvests are completed
Second Quarter Financial Results
Total revenues for the quarter ended February 28, 2015 were $0.3 million compared to $0.5 million for the quarter ended February 28, 2014. The decrease in revenue was primarily due to the completion of work scheduled under various grant programs. The company expects to recognize the majority of product revenues for the 2014-2015 season in Brazil during its fiscal third and fourth quarters, when harvests are completed.
Cost of product sales increased by $1.6 million to $2.1 million for the three months ended February 28, 2015 compared to the same period last year. The increase was primarily due to a $1.4 million charge for crop management costs associated with unharvested biomass being produced under the company's sales incentive and promotional programs for the 2014-2015 growing season in Brazil.
Research and development expenses decreased by $1.1 million to $2.5 million for the three months ended February 28, 2015 compared to the same period last year primarily due to reduced personnel and related expenses in the U.S.
Selling, general and administrative expenses increased by $0.3 million to $3.9 million for the three months ended February 28, 2015 compared to the same period last year primarily due to increased personnel and related expenses in Brazil.
For the quarter ended February 28, 2015, Ceres reported a net loss of $8.1 million, or $1.34 per share, compared to a net loss of $7.2 million, or $2.29 per share, for the quarter ended February 28, 2014.
At February 28, 2015, cash and cash equivalents and marketable securities totaled $14.6 million.
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