Cereplast Reports Fiscal 2008 Financial Results, Provides Business Update and Outlook

HAWTHORNE, Calif.--(Business Wire)--
Cereplast, Inc. (OTCBB: CERP), manufacturer of proprietary bio-based sustainable
plastics, today reported financial results for the fiscal year ended December
31, 2008.

For the year ended December 31, 2008, Cereplast reported gross sales of $4.6
million, compared with gross sales of $2.3 million in fiscal year 2007,
representing a 96% year-over-year increase. The increase in sales is a result of
volume growth in the Company`s bioplastic resins from both existing customers
and new customers launching commercial applications with its resins.

Operating expenses increased by 10.5% to $13.3 million for the year ended
December 31, 2008 compared to $12.0 million for the year ended December 31,
2007. The increase is attributable to higher spending to support the technical
development and commercial expansion of the Company`s two resin families;
upgrading of business processes and strengthening functional management across
all departments; expansion of production, logistics and testing facilities; and
support costs related to intellectual property, branding/communications and
third party testing/accreditation needs.

The Company reported a net loss of $12.7 million, or $0.05, per share, for the
year ended December 31, 2008 compared with a net loss of $11.7 million, or $0.05
per share, for fiscal year 2007. The increase in net loss was a result of higher
operating and development expenses associated with the growth of the Company`s
resin operations.

The weighted average number of shares used in the calculation of earnings per
share was 265.8 million for the year ended December 31, 2008 compared to 238.4
million for fiscal year 2007. The increase in the weighted average number of
shares primarily reflects the shares issued by the Company in private placement
transactions and as part of employee compensation. Members of the management
team continue to take a significant component of their personal compensation in
the form of Cereplast stock in lieu of cash. In addition, all senior staff
members of Cereplast have agreed to defer an additional portion of their cash
compensation as part of the Company`s cash conservation programs.

During the year ended December 31, 2008, the Company used $8.3 million of cash
for operating activities, compared to net cash used in operating activities of
$4.8 million for the year ended December 31, 2007. The increase in the use of
cash for operating activities was a result of increased manufacturing, technical
development and operating expenses, additional company staff resources and
expansion of finished goods/raw materials stocks to support business growth.
Cash totaled $501,699 at December 31, 2008.

"The nearly 100% growth in 2008 sales versus 2007 was very encouraging. But I am
more excited by our outlook for 2009," said Frederic Scheer, Cereplast`s
Chairman and CEO. "Despite the challenges of the current business environment,
we are confident that our revenues for this year can exceed $10 million - based
upon new contracts and the imminent launch of several new products into new
markets.

"And looking at the active customer projects in our commercialization pipeline,
2010 could easily more than double our 2009 results," continued Scheer.
"Cereplast, like many early stage growth companies, faces liquidity challenges
in the current environment. But our results and projections reaffirm the great
potential for Cereplast and our products, and this gives us confidence we will
be able to attract additional investment funds. Sustainability and a greener
future for plastics can weather the current economic crisis."

"2008 was a year of positive transformation for Cereplast, with impressive
progress across all aspects of the Company`s operations, business processes and
performance measures," said Randy Woelfel, President and COO. "Our success rate
in commercialization and speed to market has been enhanced - because we have
focused our `pipeline process` and invested in testing and application
development capability. Our manufacturing productivity, costs and quality
results have reached new levels due to strengthened leadership, enhanced quality
systems/tools and improved processes. Sophisticated financial planning and
decision support tools are now in place, giving us real-time insight into our
business performance and improvement options. And most critically, our sales
team is delivering higher sales at better profitability thanks to rigorous
market and customer selection, better customer support and product information
and a demonstrated model of collaborative development at key growth accounts.
Our goal remains clear - to reach cash positive operations as quickly as
possible."

Operating Highlights

Financing - During the third quarter 2008, Cereplast completed a $2.6 million
private placement of unregistered common stock with a group of existing
investors. The Company also secured a $20 million equity line of credit in
December 2008 with an existing shareholder of the Company.

During the first quarter of 2009, the Company commenced a $5.0 million
unregistered private placement. The private placement has a rolling closing
under which the Company has already received $717,340 in gross proceeds. In
addition, the Company is exploring other financing alternatives, including bank
debt and convertible debt instruments.

When completed, the proceeds of the various funding efforts will be used for:
the start-up of the new Seymour manufacturing facilities; a major project to
upgrade the productivity and cost competitiveness of the Compostables®
manufacturing lines; and funding the growth in working capital needed to support
the significant business expansion in the upcoming quarters.

However, due to the current global financial turmoil, the Company is unable to
provide assurance that we will be able to obtain additional financing on
commercially reasonable terms when needed.

Product Development and Intellectual Property - Cereplast made significant
progress in 2008 in the development, extension and enhancement of both product
lines. Two new standard Hybrid resin formulations were developed for injection
molding and sheet extrusion applications, and products based upon these
formulations are now launching in the marketplace. Development work targeted
towards a compostable extrusion coating resin for coated paper applications is
now in the final phase of customer trials, and is expected to launch
commercially in the second quarter 2009. Technical development of a compostable
foam resin is well advanced and pilot scale trials with several customers are
underway; commercial product launch is anticipated by year-end. Additional
technical projects are focused on: lowering the cost of Cereplast formulations;
broadening the Hybrid resin product line with "natural" based fibers and blends
in addition to starches; improving processing economics and yields; and
improving the economics and performance of compostable products.

Customer Development and Joint Development Agreements - As of December 31, 2008,
over 165 companies have requested and been provided with samples of our
bioplastic resin and 95 customers have purchased resin for trials and testing.
Of these, 65 customers have advanced to prototype testing and qualification of
more than 110 different product applications. Twenty customers, including WNA,
Alcoa, Genpak, Innoware, Penley, Solo, Cadaco, Jatco, Dentek, CSI-Cosmolab and
Pace Industries, have commercialized and introduced over 85 different bioplastic
products using our resin. The commercialization "pipeline" today represents over
$20 million of annual sales potential realizable within the next twelve months.

Cereplast made several new customer announcements during the fourth quarter of
2008 and in early 2009, representing significant market opportunities. A few
highlights included:

* An agreement with A. Schulman to distribute Cereplast Compostables® and
Hybrids Resins® to converters and manufacturers in France, Benelux and Spain.
The agreement will enable A. Schulman to launch a new offering of bio-based
materials to its customers interested in more environmentally-friendly
solutions. A. Schulman is a leading international supplier of high-performance
plastic compounds and resins used as raw materials in a variety of markets.
* A supply agreement with DenTek®, a leading oral care company, whereby
Cereplast will provide bioplastic resin for DenTek`s® new Natural Floss Picks,
the first biodegradable/compostable floss pick on the market.
* An agreement to supply Absorbent Specialty Products with bioplastic resin for
its new "Bio-Bones" Bone Replacement Prosthetics.

Production - Among the achievements in the operations area were: successful
completion of ISO 9001 quality systems surveillance auditing; major progress in
manufacturing safety and health performance and systems; implementation of new
procedures/equipment/processes/plant layout to improve productivity and costs
across all manufacturing and logistics operations; and internal programs to
reduce waste and enhance recycling of process materials.

Corporate Management and Infrastructure - Implementation of MAS500 ERP software
has been successfully completed, providing a step change in the integration of
business applications and information, the quality/level of detail and real time
reporting across all functional areas, improved analysis of pricing and costs
and enhanced control of all business processes.

About Cereplast, Inc.

Cereplast, Inc. (OTCBB:CERP) designs and manufactures proprietary bio-based,
sustainable plastics that are used as substitutes for petroleum-based plastics
in all major converting processes - such as injection molding, thermoforming,
blow molding and extrusions - at a pricing structure that aims to be competitive
with petroleum-based plastics. On the cutting-edge of bio-based 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 bio-based content and compostability are advantageous, especially in
the food service industry. Cereplast Hybrid Resins® combine high bio-based
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.

Forward Looking Statements

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.

For Cereplast, Inc.
310-676-5000
investor.relations@cereplast.com

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