THOUSAND OAKS, Calif.,
June 19, 2015 /PRNewswire/
-- Ceres, Inc. (Nasdaq: CERE), an agricultural biotechnology
company, today announced the continued realignment of its business
to focus on food and forage opportunities and biotechnology traits
for sugarcane and other crops. As part of the realignment, the
company will restructure its Brazilian seed operations and is
exploring discussions with additional local partners and
collaborators to support the continued development and
commercialization of its technology in Brazil.
Earlier this year, the company announced that due to the
economic challenges faced by the Brazilian ethanol industry as well
as changes in the global energy market, it had expanded the number
of market opportunities available for its technology and products
and began prioritizing its working capital in additional areas
beyond Brazil. The company's
current restructuring plan is intended to further align
expenditures toward improved forages for dairy and meat production
and biotech traits for sugarcane and other crops.
"These changes represent an important step in the transformation
of our business as we refocus on our strengths in agricultural
technology and direct our attention to markets being fueled by
global prosperity growth," said Ceres President and CEO
Richard Hamilton. He noted that
bioenergy markets have continued to face serious near-term
challenges due to low oil prices, the struggling Brazilian economy,
delays in second generation refining technology and unfavorable
government policies, among other headwinds. "If these challenges
can be surmounted then I believe the market for bioenergy
feedstocks can reemerge as a global opportunity for agricultural
technology companies like Ceres."
Brazilian Operations
Ceres indicated that its
Brazilian operations after implementation of the restructuring plan
would be focused primarily on sorghum breeding and sugarcane. In
particular, the company plans to expand its sugarcane trait
development activities for the Brazilian sugarcane market, which
Ceres expects to fund, in part, under a grant available from the
Brazilian government.
"Given the economic climate in Brazil, and the time horizon needed to bring
our top performing sorghum hybrids to market, we believe that the
best path forward is to work with a more focused group of
well-capitalized mills and collaborators," said Paul Kuc, Ceres Chief Financial Officer.
"Moreover, our advances in sugarcane biotechnology and compelling
field trial results are making Brazilian sugarcane a more
attractive use of capital."
The realignment plan, which is expected to be substantially
completed by October 31, 2015,
includes, among other actions, a workforce reduction that will
impact 14 positions in Brazil
primarily related to administration, operations and manufacturing
as well as 2 support positions in the
United States. Ceres estimates that it will incur total
charges of approximately $0.6 million
over the next five months with respect to these workforce
reductions in Brazil and the U.S.,
including $0.1 million in
continuation of salary and benefits of certain employees until
their work is completed and their positions are eliminated, and
$0.5 million of one-time severance
and other costs, all of which will be cash expenditures. The
company expects to achieve additional cost reductions as part of
the realignment, which may include additional workforce reductions.
Once fully implemented, the company's realignment plan is expected
to deliver cash savings of up to approximately $6.0 to $8.0 million in fiscal year 2016.
In addition to the realignment in Brazil, the company continues to evaluate
options available for additional funding, including public or
private debt or equity financings, collaborations, licensing
arrangements, government programs, or the sale of intellectual
property, technology or other assets.
About Ceres
Ceres, Inc. is an agricultural
biotechnology company that develops and markets seeds to produce
crops for forage, biofuels and other markets that utilize plant
biomass. The company's advanced plant breeding and biotechnology
technology platforms, which can increase crop productivity, improve
quality, reduce crop inputs and improve cultivation on marginal
land, have broad application across multiple crops, including food,
feed, fiber and fuel crops. Ceres markets its seed products under
its Blade brand. The company also licenses its biotech traits and
technology, including its Persephone genome visualization software,
to other life science companies and organizations.
Ceres Forward-Looking Statements
This press
release may contain forward-looking statements. All statements,
other than statements of historical facts, including statements
regarding Ceres' efforts to develop and commercialize its products
and technologies, anticipated yields and product performance,
status of crop plantings, short-term and long-term business
strategies, market and industry expectations, future operating
metrics, and future results of operations and financial position,
including anticipated cost savings from the company's restructuring
plan and projected cash expenditures, are forward-looking
statements. You should not place undue reliance on these
forward-looking statements because they involve known and unknown
risks, uncertainties and other factors that are, in some cases,
beyond Ceres' control. Factors that could materially affect actual
results can be found in Ceres' filings with the U.S. Securities and
Exchange Commission. Ceres undertakes no obligation to update
publicly, except to the extent required by law, any forward-looking
statements for any reason after the date the company issues this
press release to conform these statements to actual results or to
changes in the company's expectations.
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SOURCE Ceres, Inc.