- Company to Host Conference Call Today at 4:30
EST/2:30 MST -
Gevo, Inc. (NASDAQ:GEVO) today announced financial results
for the three months ended September 30, 2015. Key highlights for
the quarter included:
- Gevo settled the long-running patent dispute with Butamax,
which removed uncertainty in the business by eliminating all
lawsuits and patent office conflicts between Butamax and Gevo. Gevo
retained the right to access all markets, and the settlement is
expected to result in more than $7.5 million in SG&A savings
annually for the company. The settlement did not involve any
transfer of money.
- Based on the clarity provided by the resolution of the
lawsuits, and based on the most recent results of the isobutanol
fermentation campaigns conducted at the company's production plant
in Luverne, Minn, Gevo announced its near-term plan to deploy
capital in an effort to significantly lower the cost of production
of isobutanol at the Luverne plant. This is expected to enable Gevo
to produce isobutanol at a positive contribution margin, allowing
Gevo to boost isobutanol production without increasing Gevo’s cash
burn rate. Gevo expects to be able to produce isobutanol on a
continuous basis in 2016 at approximately a 1.5 million gallon per
year rate, while concurrently producing ethanol at a rate of over
15 million gallons per year. This capital project is anticipated to
be complete in the first or second quarter of 2016.
- The markets for isobutanol and its downstream hydrocarbon
products continue to develop. Isobutanol was
successfully launched at retail pumps for both the marine and
off-road markets in the third quarter of 2015. Yesterday,
Gevo also announced a new collaboration with ValvTect, to access
ValvTect’s network of over 700 marinas in the U.S. Gevo
expects the marina and off-road gasoline markets will be attractive
drop-in isobutanol markets as production volumes ramp up at
Luverne. Isooctane, derived from isobutanol produced at
Gevo’s plant in Silsbee, Texas, is seeing significant demand from
companies in Europe, as evidenced by Gevo’s recent sales agreement
with BCD Chemie, a subsidiary of Brenntag AG. Gevo continues
to work through the ASTM process for its alcohol-to-jet (ATJ)
product. The technical work has been completed and there
appear to be no known issues. The approval of Gevo’s ATJ has been
put to ballot at the committee level. Once this vote is
complete, the full ASTM body will vote, with a final approval now
expected in early 2016.
“In many ways this third quarter was the most significant in the
history of Gevo. We achieved a favorable settlement with
Butamax. That settlement created the clarity we needed to
accelerate moving forward with the building of our business.
The markets for our products remain attractive, and we look
forward to bringing additional gallons of isobutanol on-line,” said
Dr. Patrick Gruber, Chief Executive Officer.
Financial Highlights
Revenues for the third quarter of 2015 were $8.0 million
compared with $10.1 million in the same period in 2014. During the
third quarter of 2015, revenues derived at the Luverne plant were
$7.6 million, a decrease of $1.6 million from the same period in
2014. This decrease was primarily a result of lower ethanol
prices.
During the third quarter of 2015, hydrocarbon revenues were $0.2
million, a decrease of $0.6 million from the same period in 2014.
This decrease was primarily a result of a temporary halt in
production at Gevo’s demonstration plant located in Silsbee, Texas,
while the contract with South Hampton Resources Inc., the operator
of the plant, was being renegotiated.
Gevo also continued to generate revenue of $0.3 million during
the third quarter of 2015 associated with ongoing research
agreements.
Cost of goods sold decreased by $1.1 million during the three
months ended September 30, 2015, compared with the same quarter in
2014, due primarily to decreases in repairs and maintenance of $0.4
million, as well as a decrease in other production costs at the
Luverne plant.
Gross loss was $2.6 million for the three months ended September
30, 2015. After deducting $1.4 million of depreciation expense, the
non-GAAP cash gross loss was $1.2 million for the third quarter of
2015.
Research and development expense decreased by $2.2 million
during the three months ended September 30, 2015, compared with the
same quarter in 2014, due primarily to a $1.2 million decrease in
employee-related, consultant and contract staff expenses, a $0.6
million decrease in costs related to the South Hampton facility as
a result of a temporary halt in production at the facility, and a
$0.3 million decrease in lab consumables.
Selling, general and administrative expense increased $1.6
million during the three months ended September 30, 2015, compared
with the same quarter in 2014, due primarily to increases
of $1.3 million in legal expenses incurred as a result of
preparing for a possible trial in August 2015, and $0.3 million in
employee related stock compensation expenses.
Loss from operations in the third quarter of 2015 was $9.3
million, compared with $8.9 million in the same quarter in
2014.
Interest expense in the third quarter of 2015 was $2.1 million,
compared with $2.6 million a year ago. The decrease was primarily
the result of debt issue costs associated with the convertible
notes purchased by Whitebox in June of 2014 (2017 Notes).
During the three months ended September 30, 2015 the estimated
fair value of the derivative warrant liability decreased by $4.7
million primarily associated with the decrease in the price of
Gevo’s common stock in the quarter.
The Company also incurred a non-cash gain of $0.2 million during
the quarter due to the quarterly mark-to-market valuation of the
2017 Notes.
During the three months ended September 30, 2015, there was no
change in the value to the embedded derivatives in the convertible
notes issued in 2012 (2022 Notes), as the derivatives have had no
meaningful value since the third quarter of 2014.
No holders of 2022 Notes converted any notes during the three
months ended September 30, 2015.
The net loss for the third quarter of 2015 was $6.5 million,
compared with a net loss of $0.9 million during the same period in
2014.
Webcast and Conference Call Information
Hosting today’s conference call at 4:30 p.m. EST (2:30 p.m. MST)
will be Dr. Patrick Gruber, Chief Executive Officer, and Mike
Willis, Chief Financial Officer. They will review the company’s
financial results and provide an update on recent corporate
highlights.
To participate in the conference call, please dial 1 (800)
708-4540 (inside the U.S.) or 1 (847) 619-6397 (outside the U.S.)
and reference the access code 41000558. A replay of the call and
webcast will be available two hours after the conference call
concludes on November 5. To access the replay, please dial 1(888)
843-7419 (inside the US) or 1 (630) 652-3042 (outside the US) and
reference the access code 41000558. The archived webcast will be
available until Midnight EST on December 4, 2015, in the Investor
Relations section of Gevo's website at www.gevo.com.
About Gevo
Gevo is a leading renewable technology, chemical products, and
next generation biofuels company. Gevo has developed proprietary
technology that uses a combination of synthetic biology, metabolic
engineering, chemistry and chemical engineering to focus primarily
on the production of isobutanol, as well as related products from
renewable feedstocks. Gevo’s strategy is to commercialize biobased
alternatives to petroleum-based products to allow for the
optimization of fermentation facilities’ assets, with the ultimate
goal of maximizing cash flows from the operation of those assets.
Gevo produces isobutanol, ethanol and high-value animal feed at its
fermentation plant in Luverne, Minn. Gevo has also developed
technology to produce hydrocarbon products from renewable alcohols.
Gevo currently operates a biorefinery in Silsbee, Texas, in
collaboration with South Hampton Resources Inc., to produce
renewable jet fuel, octane, and ingredients for plastics like
polyester. Gevo has a marquee list of partners including The
Coca-Cola Company, Toray Industries Inc. and Total SA, among
others. Gevo is committed to a sustainable bio-based 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 in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements relate to a variety of matters, including, without
limitation, statements related to expected future cost savings
resulting from the Butamax settlement, the timing and results of
the planned capital deployment at the Luverne plant, future
isobutanol and ethanol production rates, the future market for
isobutanol, ethanol and their derivatives, including hydrocarbon
products, the future demand for the licensing of Gevo’s isobutanol
technology, the receipt and timing of ASTM certification 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 the management of
Gevo and are subject to significant risks and uncertainty.
Investors are cautioned not to place undue reliance on any such
forward-looking statements. All such forward-looking statements
speak only as of the date they are made, and Gevo undertakes 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 further discussion of 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 Gevo in general, see the risk
disclosures in the Annual Report on Form 10-K of Gevo for the year
ended December 31, 2014, as amended, and in subsequent reports on
Forms 10-Q and 8-K and other filings made with the U.S. 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 as well as comparisons
to the operating results of other companies. 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 U.S.
GAAP when understanding Gevo’s operating performance. A
reconciliation between GAAP and non-GAAP financial information is
provided in the financial statement tables below. Investors and
potential investors are cautioned that there are material
limitations associated with the use of non-GAAP financial measures
as an analytical tool. Limitations in relying on non-GAAP financial
measures include, but are not limited to, the fact that other
companies, including other companies in our industry, may calculate
non-GAAP financial measures differently than we do, limiting their
usefulness as a comparative tool.
Reverse Stock Split
On April 15, 2015, our Board of Directors approved a reverse
split of our common stock, par value $0.01, at a ratio of
one-for-fifteen. This reverse stock split became
effective on April 20, 2015 and, unless otherwise indicated, all
share amounts, per share data, share prices, exercise prices and
conversion rates set forth in this press release and the
accompanying consolidated financial statements have, where
applicable, been adjusted to reflect this reverse stock split.
Gevo, Inc. |
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations
Information |
|
|
|
|
|
|
|
(Unaudited, in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
Revenue and cost of goods
sold |
|
|
|
|
|
|
|
Ethanol sales and related products,
net |
$ |
7,551 |
|
|
$ |
9,197 |
|
|
$ |
20,604 |
|
|
$ |
14,719 |
|
Hydrocarbon revenue |
|
192 |
|
|
|
778 |
|
|
|
1,449 |
|
|
|
3,426 |
|
Grant and other revenue |
|
274 |
|
|
|
166 |
|
|
|
787 |
|
|
|
620 |
|
Total revenues |
|
8,017 |
|
|
|
10,141 |
|
|
|
22,840 |
|
|
|
18,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
10,629 |
|
|
|
11,760 |
|
|
|
29,761 |
|
|
|
24,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loss |
|
(2,612 |
) |
|
|
(1,619 |
) |
|
|
(6,921 |
) |
|
|
(5,944 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
Research and development |
|
1,527 |
|
|
|
3,723 |
|
|
|
5,014 |
|
|
|
11,414 |
|
Selling, general and
administrative |
|
5,135 |
|
|
|
3,570 |
|
|
|
13,406 |
|
|
|
13,508 |
|
Total operating
expenses |
|
6,662 |
|
|
|
7,293 |
|
|
|
18,420 |
|
|
|
24,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(9,274 |
) |
|
|
(8,912 |
) |
|
|
(25,341 |
) |
|
|
(30,866 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
Interest expense |
|
(2,121 |
) |
|
|
(2,017 |
) |
|
|
(6,186 |
) |
|
|
(6,227 |
) |
Interest expense - debt issue
costs |
|
- |
|
|
|
(581 |
) |
|
|
- |
|
|
|
(3,766 |
) |
Gain on conversion of debt |
|
- |
|
|
|
- |
|
|
|
285 |
|
|
|
- |
|
Gain on extinguishment of warrant
liability |
|
- |
|
|
|
- |
|
|
|
1,775 |
|
|
|
- |
|
Gain from change in fair value of
embedded derivatives of the 2022 Notes |
|
- |
|
|
|
726 |
|
|
|
- |
|
|
|
3,470 |
|
Gain from change in fair value of
the 2017 Notes |
|
157 |
|
|
|
5,673 |
|
|
|
3,582 |
|
|
|
544 |
|
Gain (loss) from change in fair
value of derivative warrant liability |
|
4,719 |
|
|
|
4,173 |
|
|
|
(2,361 |
) |
|
|
6,772 |
|
Other income |
|
- |
|
|
|
- |
|
|
|
14 |
|
|
|
7 |
|
Total other income (expense) |
|
2,755 |
|
|
|
7,974 |
|
|
|
(2,891 |
) |
|
|
800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(6,519 |
) |
|
$ |
(938 |
) |
|
$ |
(28,232 |
) |
|
$ |
(30,066 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to
Gevo, Inc. |
|
|
|
|
|
|
|
common stockholders - basic and
diluted |
$ |
(0.39 |
) |
|
$ |
(0.01 |
) |
|
$ |
(2.22 |
) |
|
$ |
(0.40 |
) |
Weighted-average number of common
shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding - basic and
diluted |
|
16,688,632 |
|
|
|
5,808,079 |
|
|
|
12,700,844 |
|
|
|
4,956,994 |
|
|
|
|
|
|
|
|
|
Gevo, Inc. |
|
|
|
|
Condensed Consolidated Balance Sheet
Information |
|
|
|
|
(Unaudited, in thousands) |
|
|
|
|
|
|
|
|
|
|
September
30, |
|
December
31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
16,203 |
|
|
$ |
6,359 |
|
|
Accounts receivable |
|
1,134 |
|
|
|
2,361 |
|
|
Inventories |
|
2,703 |
|
|
|
4,292 |
|
|
Prepaid expenses and other current
assets |
|
618 |
|
|
|
732 |
|
|
Total current assets |
|
20,658 |
|
|
|
13,744 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
76,505 |
|
|
|
81,240 |
|
|
Deposits and other assets |
|
3,790 |
|
|
|
3,944 |
|
|
Total assets |
$ |
100,953 |
|
|
$ |
98,928 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable, accrued
liabilities and other current liabilities |
$ |
6,811 |
|
|
$ |
8,623 |
|
|
Derivative warrant liability |
|
3,395 |
|
|
|
3,114 |
|
|
Current portion of secured debt,
net |
|
320 |
|
|
|
288 |
|
|
Total current liabilities |
|
10,526 |
|
|
|
12,025 |
|
|
Long-term portion secured debt,
net |
|
22,120 |
|
|
|
25,945 |
|
|
Convertible notes, net |
|
15,242 |
|
|
|
13,679 |
|
|
Other long-term liabilities |
|
147 |
|
|
|
315 |
|
|
Total liabilities |
|
48,035 |
|
|
|
51,964 |
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’
equity |
|
52,918 |
|
|
|
46,964 |
|
|
Total liabilities and stockholders'
equity |
$ |
100,953 |
|
|
$ |
98,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo, Inc. |
|
|
|
Condensed Consolidated Cash Flow
Information |
|
|
|
(Unaudited, in thousands) |
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2015 |
|
|
|
2014 |
|
Operating
Activities |
|
|
|
Net loss |
$ |
(28,232 |
) |
|
$ |
(30,066 |
) |
Adjustments to reconcile net loss to
net cash used in operating activities: |
|
|
|
(Gain) loss from change in fair
value of derivative warrant liability |
|
2,361 |
|
|
|
(6,772 |
) |
Gain from change in fair value of
embedded derivative of the 2022 Notes |
|
- |
|
|
|
(3,470 |
) |
Gain from change in fair value of
the 2017 Notes |
|
(3,582 |
) |
|
|
(544 |
) |
Gain on conversion of debt |
|
(285 |
) |
|
|
- |
|
Gain on extinguishment of warrant
liability |
|
(1,775 |
) |
|
|
- |
|
Stock-based compensation |
|
1,953 |
|
|
|
2,362 |
|
Depreciation and amortization |
|
4,897 |
|
|
|
3,214 |
|
Non-cash interest
expense |
|
2,740 |
|
|
|
6,374 |
|
Changes in operating assets and
liabilities: |
|
|
|
Accounts receivable |
|
1,227 |
|
|
|
(685 |
) |
Inventories |
|
1,589 |
|
|
|
(446 |
) |
Prepaid expenses and other current
assets |
|
114 |
|
|
|
302 |
|
Accounts payable, accrued expenses,
and long-term liabilities |
|
(2,019 |
) |
|
|
(2,875 |
) |
Net cash used in operating
activities |
|
(21,012 |
) |
|
|
(32,606 |
) |
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
Acquisitions of property, plant and
equipment |
|
(271 |
) |
|
|
(4,553 |
) |
Proceeds from sales tax refund for
property, plant and equipment |
|
144 |
|
|
|
- |
|
Restricted certificate of
deposit |
|
- |
|
|
|
(2,611 |
) |
Net cash used in investing
activities |
|
(127 |
) |
|
|
(7,164 |
) |
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
Payments on secured debt |
|
(236 |
) |
|
|
(9,720 |
) |
Debt and equity offering costs |
|
(2,785 |
) |
|
|
(5,051 |
) |
Proceeds from issuance of common
stock upon exercise of stock options and employee purchase
plan |
|
3 |
|
|
|
19 |
|
Proceeds from issuance of common
stock and common stock units |
|
23,850 |
|
|
|
18,000 |
|
Proceeds from exercise of
warrants |
|
10,151 |
|
|
|
- |
|
Proceeds from issuance of
convertible debt |
|
- |
|
|
|
25,907 |
|
Net cash provided by financing
activities |
|
30,983 |
|
|
|
29,155 |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents |
|
9,844 |
|
|
|
(10,615 |
) |
|
|
|
|
Cash and cash equivalents |
|
|
|
Beginning of period |
|
6,359 |
|
|
|
24,625 |
|
Ending of period |
$ |
16,203 |
|
|
$ |
14,010 |
|
|
|
|
|
|
|
|
|
Gevo,
Inc. |
|
|
|
|
|
|
|
Non-GAAP
Financial Information |
|
|
|
|
|
|
|
(Unaudited, in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2015 |
|
|
|
2014 |
|
|
|
2015 |
|
|
|
2014 |
|
Gevo Development, LLC / Agri-Energy,
LLC |
|
|
|
|
|
|
|
Loss from operations |
$ |
(3,165 |
) |
|
$ |
(2,779 |
) |
|
$ |
(9,568 |
) |
|
$ |
(10,900 |
) |
Depreciation and amortization |
|
1,420 |
|
|
|
1,374 |
|
|
|
4,288 |
|
|
|
2,498 |
|
Non-cash stock-based
compensation |
|
31 |
|
|
|
5 |
|
|
|
29 |
|
|
|
74 |
|
Non-GAAP loss from operations |
$ |
(1,714 |
) |
|
$ |
(1,400 |
) |
|
$ |
(5,251 |
) |
|
$ |
(8,328 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo, Inc. |
|
|
|
|
|
|
|
Loss from operations |
$ |
(6,109 |
) |
|
$ |
(6,133 |
) |
|
$ |
(15,773 |
) |
|
$ |
(19,966 |
) |
Depreciation and amortization |
|
196 |
|
|
|
236 |
|
|
|
609 |
|
|
|
716 |
|
Non-cash stock-based
compensation |
|
1,224 |
|
|
|
854 |
|
|
|
1,924 |
|
|
|
2,288 |
|
Non-GAAP loss from operations |
$ |
(4,689 |
) |
|
$ |
(5,043 |
) |
|
$ |
(13,240 |
) |
|
$ |
(16,962 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo Consolidated |
|
|
|
|
|
|
|
Loss from operations |
$ |
(9,274 |
) |
|
$ |
(8,912 |
) |
|
$ |
(25,341 |
) |
|
$ |
(30,866 |
) |
Depreciation and amortization |
|
1,616 |
|
|
|
1,610 |
|
|
|
4,897 |
|
|
|
3,214 |
|
Non-cash stock-based
compensation |
|
1,255 |
|
|
|
859 |
|
|
|
1,953 |
|
|
|
2,362 |
|
Non-GAAP loss from operations |
$ |
(6,403 |
) |
|
$ |
(6,443 |
) |
|
$ |
(18,491 |
) |
|
$ |
(25,290 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Contact
Karen Freedman / David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Mike Willis
Gevo, Inc.
+1 720-267-8636
mwillis@gevo.com
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