Gevo, Inc. (NASDAQ: GEVO), an innovative renewable chemicals and
advanced biofuels company, today announced its financial results
for the three months ended March 31, 2012 and updated its
expectations for isobutanol commercialization.
"I am pleased to reiterate that we remain on track to start
producing renewable isobutanol at our Luverne, Minn. plant by June
30 of this year," said Dr. Patrick Gruber, Chief Executive Officer.
"We are delivering on our most important milestone to date.
Consistent with prior guidance, we anticipate the majority of our
Luverne production to be shipped to Sasol Chemical Industries, Ltd.
under our multi-year off-take agreement. Additionally, our
co-produced Isobutanol Distiller's Grains (iDGsTM) will be marketed
by Land O'Lakes Purina Feed, LLC and we recently expanded our
relationship with Land O’Lakes Purina Feed under a JDA to develop
value-added feed applications. This is but one example of our focus
on deriving value from our entire business system. Our ongoing
detailed engineering of the Redfield Energy retrofit in South
Dakota is progressing well as we continue to utilize insight gained
from Luverne to optimize Redfield's design."
"On the intellectual property front, we continue to make
excellent progress," added Gruber. "Building on the foundational
patent received in the first quarter covering our GIFT® separation
system, we received three patents this quarter that cover critical
technologies that enable increased isobutanol yields from our
proprietary yeast. We have now received eight patents over the past
eight months. We believe our engineering and yeast patents and
patent applications combine to uniquely position Gevo as the leader
in producing isobutanol economically and at full commercial
scale."
Recent Corporate Highlights
- Gevo acquired technology developed by
AmbroZea, Inc. embodied in U.S. Patent No. 7,309,602 “Compositions
and Methods for Producing Fermentation Products and Residuals” and
multiple patent applications. The acquired technology is based on
modifications to yeast strains that increase the overall value of
fermentation by co-producing lucrative nutrients for the animal
food chain during fermentations. Gevo believes that, working in
conjunction with its partner Land O’Lakes Purina Feed, this
technology can be used to further enhance the value of iDGs™.
- Gevo and VP Racing Fuels, Inc. a world
leader in race fuel technology with a diverse product catalog of
high-quality specialty fuel blends, have agreed to jointly evaluate
the commercial potential for isobutanol in a wide array of markets.
The goal is to develop a product line of renewable,
high-performance, isobutanol-based fuel blends for the small engine
market while looking toward other performance applications for
isobutanol as well.
Additional First Quarter Highlights
- Gevo signed an off-take and marketing
agreement with Land O’Lakes Purina Feed for the sale of iDGs™
produced at Gevo’s production facility in Luverne. Land O’Lakes
Purina Feed will be the exclusive marketer of Gevo’s isobutanol
dried and modified wet iDGs™ produced at the Luverne facility for
the animal feed market. The companies solidified this relationship
with a Joint Development Agreement to explore opportunities for
special value-added applications in feed markets.
- Gevo was awarded three patents for the
“Reduced By-Product Accumulation for Improved Production of
Isobutanol,” including U.S. Patent No. 8,133,715, U.S. Patent No.
8,153,415 and U.S. Patent No. 8,158,404. These patents recognize
Gevo’s unique approach to streamlining isobutanol production in
yeast. The patents cover technology that eliminates
carbohydrate-hijacking pathways and improves the yield of
isobutanol production. Gevo strongly believes the modifications
covered by these patents are strictly required for achieving
commercially relevant production of isobutanol.
- Gevo was awarded U.S. Patent No.
8,101,808, “Recovery of Higher Alcohols From Dilute Aqueous
Solutions,” a landmark patent on its GIFT® separation system which
is a central element in Gevo’s unique fermentation technology for
the production of isobutanol and addresses how ethanol plants can
be retrofitted to produce higher alcohols.
- Gevo was awarded U.S. Patent No.
8,097,440, “Engineered Microorganisms Capable of Producing Target
Compounds Under Anaerobic Conditions.” The patent covers a
foundational aspect of Gevo’s yeast technology that is designed to
enable the low-cost, high-yield production of biobased isobutanol.
Gevo believes the most efficient and economical way to make
isobutanol through fermentation is to use yeast that is anaerobic,
or doesn’t need oxygen. Gevo has been awarded a patent for a novel
enzyme enabling the anaerobic production of isobutanol in
yeast.
- Gevo appointed Ruth Dreessen to its
Board of Directors. Dreessen, a managing director of Lion Chemical
Capital, LLC, has over 32 years of experience in chemicals and
related industries. Her track record in investment banking,
acquisitions and financing adds critical expertise to Gevo's Board
of Directors.
Financial Highlights
Revenues for the first quarter of 2012 were $14.9 million
compared to $15.3 million in the same period in 2011 reflecting an
increase in grant and research and development program revenue and
a decrease in ethanol sales, primarily resulting from a lower
market price of ethanol during the first quarter of 2012. During
the ongoing isobutanol retrofit, the Luverne facility has continued
to generate revenue from the production and sale of ethanol and
related products.
Research and development expense increased to $5.0 million in
the first quarter of 2012 from $3.3 million for the same period in
2011. Increased investment in research and development in the first
quarter of 2012 reflected increased headcount and stock-based
compensation cost as well as other resources deployed in support of
the ongoing retrofit of the Luverne facility.
Selling, general and administrative expense for the first
quarter of 2012 increased to $13.1 million from $5.2 million for
the same period in 2011. Contributing to this increase was $3.0
million in stock-based compensation expense due in part to a
one-time $2.6 million non-cash expense resulting from the
accelerated vesting of warrants upon the departure of two executive
vice presidents. The increase also included legal-related costs
including expenses in support of Gevo’s ongoing litigation with
Butamax™ Advanced Biofuels, LLC, increased personnel and related
expenses to support initial commercialization activities, one-time
severance expense related to the departure of the two executive
vice presidents and increased compliance activities as a public
company.
The net loss for the first quarter of 2012 was $19.3 million
compared to $9.3 million for the first quarter of 2011.
During the three months ended March 31, 2012, Gevo continued to
make strides towards completing the retrofit of its Luverne plant.
The Company incurred $13.3 million in retrofit related capital
expenditures during the first quarter of 2012.
Gevo reported cash and cash equivalents on hand of $73.6 million
as of March 31, 2012.
Webcast and Conference Call Information
Patrick R. Gruber, Ph.D., Chief Executive Officer, and Mark
Smith, Chief Financial Officer, will host a conference call today
at 4:30 p.m. EDT (2:30 p.m. MDT) to review the company’s financial
results for the three months ended March 31, 2012 and provide an
update on expected isobutanol commercialization.
To participate in the conference call, please dial
1-1-866-788-0539 (inside the US) or 1-857-350-1677 (outside the US)
and reference the access code 98957540. The presentation will be
available via a live webcast at:
http://www.media-server.com/m/acs/73e2014f48d0c44feac6ea2f1ce64bf2.
A replay of the call will be available two hours after the
conference call ends on May 1, 2012 until midnight EDT on June 1,
2012. To access the replay, please dial 1-888-286-8010 (inside the
US) or 1-617-801-6888 (outside the US) and reference the access
code 85619628. The archived webcast will be available for 30 days
in the Investor Relations section of Gevo’s Website at
www.gevo.com.
About Gevo
Gevo is converting existing ethanol plants into biorefineries to
make renewable building block products for the chemical and fuel
industries. The company plans to convert renewable raw materials
into isobutanol and renewable hydrocarbons that can be directly
integrated on a “drop in” basis into existing chemical and fuel
products to deliver environmental and economic benefits. Gevo is
committed to a sustainable biobased economy that meets society’s
needs for plentiful food and clean air and water. For more
information, please visit www.gevo.com.
Forward-Looking Statements
Certain statements within this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements relate to
a variety of matters, including but not limited to: the timing and
costs associated with and the availability of capital for Gevo’s
scheduled retrofits of existing ethanol production facilities, its
future isobutanol production capacity, the timing associated with
bringing such capacity online, the availability of additional
production volumes to seed additional market opportunities, the
expected applications of isobutanol, including its use to produce
renewable paraxylene, PET, isobutanol-based fuel blends for use in
small engines, and ATJ bio-jet, addressable markets, and market
demand, Gevo’s ability to produce commercial quantities of
isobutanol from cellulosic feedstocks, the suitability of Gevo’s
iDGs™ for the animal feed market, the expected cost-competitiveness
and relative performance attributes of isobutanol and the products
derived from it, the strength of Gevo’s intellectual property
position and other statements that are not purely statements of
historical fact. These forward-looking statements are made on the
basis of the current beliefs, expectations and assumptions of
Gevo’s management and are subject to significant risks and
uncertainty. All such forward-looking statements speak only as of
the date they are made, and Gevo assumes no obligation to update or
revise these statements, whether as a result of new information,
future events or otherwise. Although Gevo believes that the
expectations reflected in these forward-looking statements are
reasonable, these statements involve many risks and uncertainties
that may cause actual results to differ materially from what may be
expressed or implied in these forward-looking statements. For a
discussion of the risks and uncertainties that could cause actual
results to differ from those expressed in these forward-looking
statements, as well as risks relating to the business of the
company in general, see the risk disclosures in Gevo’s Annual
Report on Form 10-K for the year ended December 31, 2011, as
amended, and in subsequent reports on Forms 10-Q and 8-K and other
filings made with the Securities and Exchange Commission by
Gevo.
Non-GAAP Financial Information
Consolidated financial information has been presented in
accordance with GAAP as well as on a non-GAAP basis. On a non-GAAP
basis, financial measures exclude non-cash items such as
stock-based compensation. Management believes that it is useful to
supplement its GAAP financial statements with this non-GAAP
information because management uses such information internally for
its operating, budgeting and financial planning purposes. These
non-GAAP financial measures also facilitate management's internal
comparisons to Gevo’s historical performance. In addition, Gevo
believes these non-GAAP financial measures are useful to investors
because they allow for greater transparency into the indicators
used by management as a basis for its financial and operational
decision making. Non-GAAP information is not prepared under a
comprehensive set of accounting rules and therefore, should only be
read in conjunction with financial information reported under GAAP
when understanding Gevo’s operating performance. A reconciliation
between GAAP and non-GAAP financial information is provided in the
financial statement tables below.
Gevo, Inc.
Condensed Consolidated Statement of
Operations
(in thousands except share and per
share amounts)
Unaudited
Three Months Ended March 31,
2012 2011
Revenue and cost of goods sold Ethanol sales and
related products, net $ 14,258 $ 15,109
Grant revenue and research and
developmentprogram revenue
614 172 Licensing revenue
-
- Total revenues
14,872
15,281 Cost of goods sold
15,010 15,193
Gross (loss) margin
(138 )
88 Operating expenses
Research and development 4,955 3,266 Selling, general and
administrative 13,127 5,234 Other operating expenses
- - Total operating
expenses
18,082
8,500 Loss from operations
(18,220 ) (8,412
) Other (expense) income Interest and
other expense (1,087 ) (892 ) Interest and other income - 50 Loss
from change in fair value of warrant liabilities
- (29 ) Total
other expense
(1,087 )
(871 ) Net loss (19,307 ) (9,283 )
Deemed dividend - amortization of
beneficial conversionfeature on Series D-1 convertible preferred
stock
- (1,094
) Net loss attributable to Gevo, Inc. common
stockholders
$ (19,307 )
$ (10,377 )
Net loss per share attributable to Gevo,
Inc. commonstockholders - basic and diluted
$ (0.74 ) $
(0.76 )
Weighted-average number of common shares
outstanding- basic and diluted
26,186,133 13,744,337
Gevo, Inc.
Non-GAAP Financial Information
(in thousands)
Unaudited
Three Months Ended March 31,
2012 2011 Gevo
Development, LLC / Agri-Energy, LLC Loss from operations $ (1,009 )
$ (413 ) Depreciation and amortization 522 512 Non-cash stock-based
compensation
51 -
Non-GAAP (loss) income from operations
$
(436 ) $ 99
Gevo, Inc. Loss from operations $ (17,211 ) $ (7,999
) Depreciation and amortization 266 501 Non-cash stock-based
compensation
4,068
1,321 Non-GAAP loss from operations
$ (12,877 ) $
(6,177 ) Gevo Consolidated Loss
from operations $ (18,220 ) $ (8,412 ) Depreciation and
amortization 788 1,013 Non-cash stock-based compensation
4,119 1,321 Non-GAAP
loss from operations
$ (13,313
) $ (6,078 )
Gevo, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
Unaudited
March 31, 2012 December
31, 2011 Assets Current assets: Cash and cash
equivalents $ 73,622 $ 94,225 Accounts receivable 3,030 2,938
Inventories 5,454 3,814 Prepaid expenses and other current assets
2,089 1,757
Total current assets
84,195 102,734 Property, plant and equipment, net 42,139
28,777 Deposits and other assets
1,641
1,519 Total assets
$ 127,975
$ 133,030 Liabilities
Current liabilities: Accounts payable, accrued liabilities and
other current liabilities $ 17,868 $ 12,626 Current portion of
secured debt
6,371 3,491
Total current liabilities 24,239 16,117 Long-term portion secured
debt 26,510 24,752 Other long-term liabilities
18 24 Total liabilities
50,767 40,893 Total
stockholders’ equity 77,208
92,137 Total liabilities and stockholders' equity
$ 127,975 $
133,030
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