Tale of two bioplastics balance sheets: Exponential growth at Cereplast, the end of the road for Telles

Bioplastics manufacturer Cereplast has announced a strong set of financial results showing robust growth in 2011. Its annual shareholder review detailed strong growth, fueled in part by the signing of several large distribution agreements, establishment of operations in Europe, and knock-on benefits from the worldwide green legislation movement toward the ban of plastic bags.

The year was also fruitful in terms of technology, with several new bioplastic resin grades introduced. In addition, the company announced in December the Din-Certco certification of three new resins for applications in blown film bags to better answer the demand of the European market for trash and shopping bags. In 2011, the US Patent Office granted also the Company an additional patent on nano-materials in bioplastics.

Revenue, which increased from $2.7 million in 2009 to $6.3 million in 2010, maintained an upward course:  by the end of the third quarter of 2011, Cereplast had generated more than $20 million in revenue while improving its gross profit margin. With the support of Lazard Capital, Cereplast strengthened its balance sheet, raising $17.3 million in equity and $12.5 million in debt under favorable terms, which allowed the company to grow its core customer base from two to 12.

"It was a great year for Cereplast with exponential growth", said Cereplast Chairman and CEO Frederic Scheer.  "Our success was driven by the worldwide green movement in which several pieces of legislation were passed to reduce the usage of traditional plastic bags in numerous countries, fueling demand for Cereplast Compostables resins. As a result, bioplastics are in high demand, a trend we believe will continue as the macro environment favors green initiatives and countries seek areas to become environmentally sound while also making them more economically competitive."

The year 2012 seems set to continue the trend: last week, the company introduced the next generation of Cereplast Hybrid Resins, an expansion of the Biopropylene PP-based resin product offering through two new bioplastic resin grades, Hybrid 102D and 105D. Cereplast anticipates going to market with the new resin grades during the first half of 2012 in the United States and Europe.

For Telles, a different tale

Those results stand in contrast to bioplastic competitor Telles, a joint venture between Metabolix and Archer Daniels Midland (ADM) created to commercialize the Mirel brand of polyhydroxyalkanoate (PHA). That business was folded on Jan. 12.

Metabolix's initial public offering (IPO) took place on Nov. 10, 2006, when it raised $95.2 million by selling 6.8 million shares at $14/each, according to the Boston Business Journal. Cereplast's IPO took place in April 2010, initially reaching a high of $5.74/share a few days after trading on the NASDAQ began, according to Green Stocks Central. Over the last 52 weeks, the stock has traded in a range from $0.79 to $6/share, currently hovering around $0.90/share.

Metabolix CEO Richard Eno discussed the dissolution of the Telles JV on Jan. 12, saying his company was disappointed by ADM's decision to withdraw from Telles. "While this is a setback," Eno said in a release, "we remain committed to successfully commercializing PHA bioplastics. Over the past few years, we now have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model."

In its last statement before the Telles announcement, Metabolix reported that revenue for the nine months ended Sept. 30, 2011 was $1.0 million compared to $0.3 million in the same period of 2010. For the three months ended Sept. 30, 2011, total operating expenses were $10.0 million as compared to $10.1 million for the comparable quarter in 2010, including $6.2 million for R&D, with an additional $300,000 spent on contracted research related to development of Mirel. For the quarter, Metabolix reported a net loss of $9.6 million, down from a net loss of $10.0 million for the third quarter of 2010.