Ceres reports financial results for the three months ended November 30, 2015 and provides an update on its business.
During its fiscal first quarter, Ceres continued to refocus its business on commercializing forage products with a better balance of yield, energy and nutrition. The company also significantly strengthened its balance sheet, successfully completing a $7.6 million equity offering, and further validated its technology in forage crops via a multi-year collaboration with Forage Genetics International, a leading developer, producer and marketer of alfalfa breeding lines and traits.
For the upcoming planting season, Ceres plans to increase the number of companies distributing its forage sorghum seeds, expand its product portfolio and extend field evaluations of its seed products to additional regions. The company will announce key 2015 field results in coming weeks, including summaries of commercial forage sorghum plantings and pre-commercial hybrid and trait trials.
Ceres President and CEO Richard Hamilton said that the company plans to continue to make progress across its strategic initiatives in 2016. “Following our technical and commercial achievements in 2015, we successfully raised new funds to continue to build our forage sorghum seed business, advance our traits toward commercialization and demonstrate a clear trajectory for growth,” he said.
“We look forward to continuing to deliver on our milestones, which begins with achieving our product development objectives. We expect success here to translate into additional distribution agreements and increased seed sales,” Hamilton said.
Paul Kuc, Ceres Chief Financial Officer, indicated that previously announced cuts are expected to reduce operating expenses by $8 to $10 million in fiscal year 2016, higher than management’s original forecast of $6 to $8 million in savings. “We have identified significant opportunities to reduce operating expenses and are rapidly implementing our realignment plan,” said Kuc. “On an operational basis, we have completed our shift into forages and away from bioenergy and Brazil, and we expect the reduced cash requirements of our forage and traits business model to be fully reflected in our operating expenses beginning in February.”
First Quarter Financial Results
Total revenues increased by $0.5 million to $0.9 million for the quarter ended November 30, 2015 compared to the same period last year primarily due to the recognition of revenue following the completion of work under the company’s software services agreements.
Total cost and operating expenses decreased by $1.6 million to $4.8 million for the quarter ended November 30, 2015 compared to the same period last year.
Cost of product sales increased by $0.5 million to $0.9 million for the quarter ended November 30, 2015compared to the same period last year primarily due to increased seed production costs.
Research and development expenses decreased by $0.8 million to $1.7 million for the quarter ended November 30, 2015 compared to the same period last year primarily due to reduced personnel and related expenses.
Selling, general and administrative expenses decreased by $1.3 million to $2.1 million for the quarter ended November 30, 2015 compared to the same period last year. In the U.S., expenses decreased by $0.8 millionprimarily due to reduced personal and related expenses and reduced professional fees. In Brazil, expenses decreased by $0.5 million primarily due to reduced personnel and related expenses as a result of restructuring the company’s Brazil operations.
For the quarter ended November 30, 2015, Ceres reported a net loss of $3.4 million, or $0.39 per common share, compared to a net loss of $6.0 million, or $0.96 per common share, for the quarter ended November 30, 2014.
At November 30, 2015, cash and cash equivalents totaled $3.4 million.
