Gevo Restarts Production of Isobutanol in
March 2016 Following Completion of Capital Projects
Gevo, Inc. (NASDAQ:GEVO) today announced financial results for the
three months ended December 31, 2015. Key highlights for Gevo
included:
- Gevo restarted the production of isobutanol at its production
facility in Luverne, Minnesota following the completion of capital
projects designed to decrease the cost of production for isobutanol
by bringing “in-house” parts of the process that have previously
been done by third parties. Gevo continues to target isobutanol
production levels at Luverne in the range of 750,000 to 1 million
gallons in 2016, and a decrease in the variable cost of isobutanol
production at Luverne to a range of $3.00-$3.50/gallon**, enabling
isobutanol to be produced at a positive contribution margin, based
on an expected average selling price for isobutanol of between
$3.50-$4.50/gallon.
- On March 28, 2016, Gevo announced that ASTM International
Committee D02 on Petroleum Products, Liquid Fuels, and Lubricants
and Subcommittee D02.J on Aviation Fuel passed a concurrent ballot
this week approving the revision of ASTM D7566 (Standard
Specification for Aviation Turbine Fuel Containing Synthesized
Hydrocarbons) to include alcohol to jet synthetic paraffinic
kerosene (ATJ-SPK) derived from renewable isobutanol (the “D02.J
Ballot”). The D02.J Ballot passed two levels of ASTM
technical scrutiny: subcommittee and main committee ballot and is
in the final stages of Society Review. The ASTM process is
substantially complete as it relates to the approval of the D02.J
Ballot. In order to fully complete the process, the ASTM
still needs to close the Society Review, perform a final ballot
tally, and publish the revision of ASTM D7566 (Standard
Specification for Aviation Turbine Fuel Containing Synthesized
Hydrocarbons) on its website. It is expected that these final
actions will be completed by the ASTM in early April.
- Gevo entered into a license agreement and joint development
agreement with Porta Hnos. S.A. (Porta) to construct multiple
isobutanol plants in Argentina using corn as a feedstock, the first
of which is expected to be wholly owned by Porta and is anticipated
to begin producing isobutanol in 2017. The first plant is
expected to have a production capacity of up to five million
gallons of isobutanol per year. Once the plant is operational, Gevo
expects to generate revenues from this licensing arrangement,
through royalties, sales and marketing fees, and other revenue
streams such as yeast sales. The production capacity of any
additional plants is still to be determined.
“We are very pleased to have restarted the production of
isobutanol at Luverne. The capital improvement projects came in on
time and on budget. While we expect that there will be a learning
curve associated with operating the new equipment, the production
and cost targets that we set out in September 2015 remain the same.
As we ramp up the isobutanol production levels at Luverne, we
expect to be able to announce new customer relationships across all
our core markets, namely the alcohol-to-jet fuel (ATJ), marina,
off-road, isooctane and solvents markets,” said Dr. Patrick Gruber,
Chief Executive Officer.
* - ‘non-GAAP cash EBITDA loss’ is calculated by adding back
depreciation and non-cash stock compensation to GAAP Loss From
Operations** - Assumes corn price of $3.65 per bushel and nets the
value of the isobutanol distiller’s grains (the “iDGs™”)
Financial Highlights
Revenues for the fourth quarter of 2015 were $7.3 million
compared with $9.5 million in the same period in 2014. During the
fourth quarter of 2015, revenues derived at the Luverne plant were
$6.5 million, a decrease of $2.3 million from the same period in
2014. This decrease was primarily a result of lower ethanol
production, as well as lower ethanol prices.
During the fourth quarter of 2015, hydrocarbon revenues were
$0.2 million, a decrease of $0.3 million from the same period in
2014. This decrease was primarily a result of timing of shipments
of finished products from Gevo’s hydrocarbons demonstration plant
located in Silsbee, Texas.
Gevo also generated grant revenue of $0.5 million during the
fourth quarter of 2015, an increase of $0.4 million from the same
period in 2014. Gevo’s grant revenue is primarily generated through
the work it is doing with the Northwest Advanced Renewables
Alliance to produce isobutanol from cellulosic feedstocks, such as
wood waste, which can then be converted into Gevo’s ATJ.
Cost of goods sold decreased by $1.9 million during the three
months ended December 31, 2015, compared with the same quarter in
2014, due primarily to a decrease in ethanol production, as well as
a cessation of isobutanol production while Gevo was installing new
capital equipment at Luverne, which is designed to decrease the
cost of production of isobutanol. The primary expense
decreases related to raw materials of $0.6 million, other variable
costs of production of $0.8 million and repairs and maintenance of
$0.3 million.
Gross loss was $1.7 million for the three months ended December
31, 2015.
Research and development expense decreased by $1.1 million
during the three months ended December 31, 2015, compared with the
same quarter in 2014, due primarily to a $0.3 million decrease in
employee-related and lab consumable expenses and a $0.7 million
decrease in costs related to the South Hampton facility.
Selling, general and administrative expense decreased by $1.5
million during the three months ended December 31, 2015, compared
with the same quarter in 2014, due primarily to decreases in legal
costs of $2.0 million and consulting and professional fees of $0.6
million, offset by an increase in employee-related expenses of $1.0
million.
Loss from operations in the fourth quarter of 2015 was $6.6
million, compared with $8.9 million in the same quarter in
2014.
Cash EBITDA loss in the fourth quarter of 2015 was $4.2 million,
compared with $6.7 million in the same quarter in 2014.
Interest expense in the fourth quarter of 2015 was $2.1 million,
which was flat in comparison to the same quarter last year.
During the three months ended December 31, 2015, the estimated
fair value of the derivative warrant liability decreased by $2.9
million primarily associated with the decrease in the price of
Gevo’s common stock in the quarter.
Gevo also incurred a non-cash gain of $0.3 million during the
quarter due to the quarterly mark-to-market valuation of the 2017
Notes.
During the three months ended December 31, 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.
One holder exchanged $2.5 million aggregate principal amount of
outstanding 2022 Notes for 1,107,833 shares of Gevo’s common stock
during the three months ended December 31, 2015. The holder agreed
to waive any accrued but unpaid interest on the exchanged notes. No
holders of the 2022 Notes converted any notes during the
quarter.
The net loss for the fourth quarter of 2015 was $8.0 million,
compared with $11.1 million during the same period in 2014.
Webcast and Conference Call Information
Hosting today’s conference call at 5:30 p.m. EDT (3:30 p.m. MDT)
will be Dr. Patrick Gruber, Chief Executive Officer, Mike Willis,
Chief Financial Officer, and Geoff Williams, General Counsel. They
will review Gevo’s financial results and provide an update on
recent corporate highlights.
To participate in the conference call, please dial 1 (888)
771-4371 (inside the U.S.) or 1 (847) 585-4405 (outside the U.S.)
and reference the access code 42188401.
A replay of the call and webcast will be available two hours
after the conference call ends on March 29, 2016. 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 42188401.
The archived webcast will be available 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, Minnesota 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.
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 the ability of Gevo to reduce
isobutanol production costs and produce isobutanol at a positive
contribution margin following completion of the capital improvement
projects at Luverne, timing of isobutanol production at Porta’s
first isobutanol plant in Argentina and Gevo’s ability to generate
revenue from its licensing arrangement with Porta, Gevo’s ability
to secure new customer relationships across core markets, 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 SEC 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
depreciation and 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.
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 |
|
Year Ended December 31, |
December 31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Revenue and
cost of goods sold |
|
|
|
|
Ethanol sales and related products,
net |
$ |
27,125 |
|
$ |
23,549 |
|
$ |
6,521 |
|
$ |
8,830 |
|
Hydrocarbon revenue |
|
1,694 |
|
|
3,949 |
|
|
245 |
|
$ |
523 |
|
Grant and other revenue |
|
1,318 |
|
|
768 |
|
|
531 |
|
|
148 |
|
Total revenues |
|
30,137 |
|
|
28,266 |
|
|
7,297 |
|
|
9,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
38,762 |
|
|
35,582 |
|
|
9,001 |
|
|
10,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loss |
|
(8,625 |
) |
|
(7,316 |
) |
|
(1,704 |
) |
|
(1,372 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Research and development
expense |
|
6,610 |
|
|
14,120 |
|
|
1,596 |
|
|
2,706 |
|
Selling, general and administrative
expense |
|
16,692 |
|
|
18,341 |
|
|
3,286 |
|
|
4,833 |
|
Total operating expenses |
|
23,302 |
|
|
32,461 |
|
|
4,882 |
|
|
7,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(31,927 |
) |
|
(39,777 |
) |
|
(6,586 |
) |
|
(8,911 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
Interest expense |
|
(8,243 |
) |
|
(8,255 |
) |
|
(2,057 |
) |
|
(2,028 |
) |
Interest expense - debt issuance
costs |
|
- |
|
|
(3,769 |
) |
|
- |
|
|
(3 |
) |
Gain (loss) on extinguishment of
debt |
|
232 |
|
|
- |
|
|
(53 |
) |
|
- |
|
Gain on extinguishment of warrant
liability |
|
1,775 |
|
|
- |
|
|
- |
|
|
Gain from change in fair value of
embedded derivative of the 2022 Notes |
|
- |
|
|
3,470 |
|
|
- |
|
|
- |
|
Gain (loss) from change in fair
value of derivative warrant liability |
|
577 |
|
|
6,530 |
|
|
2,938 |
|
|
(242 |
) |
Gain from change in fair value of
2017 Notes |
|
3,895 |
|
|
648 |
|
|
313 |
|
|
104 |
|
Loss on issuance of equity |
|
(2,523 |
) |
|
- |
|
|
(2,523 |
) |
|
Other income |
|
20 |
|
|
8 |
|
|
6 |
|
|
1 |
|
Total other expense |
|
(4,267 |
) |
|
(1,368 |
) |
|
(1,376 |
) |
|
(2,168 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(36,194 |
) |
$ |
(41,145 |
) |
$ |
(7,962 |
) |
$ |
(11,079 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic
and diluted |
$ |
(2.58 |
) |
$ |
(7.67 |
) |
$ |
(0.44 |
) |
$ |
(1.68 |
) |
Weighted-average number of
common shares |
|
|
|
|
|
|
|
|
|
|
|
|
outstanding - basic and
diluted |
|
14,025,048 |
|
|
5,366,162 |
|
|
17,954,451 |
|
|
6,577,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo, Inc. Condensed Consolidated
Balance Sheet Information (Unaudited, in
thousands)
|
December 31, |
|
|
2015 |
|
|
2014 |
|
Assets |
|
|
Current assets: |
|
|
Cash and
cash equivalents |
$ |
17,031 |
|
$ |
6,359 |
|
Accounts
receivable |
|
1,391 |
|
|
2,361 |
|
Inventories |
|
3,487 |
|
|
4,292 |
|
Prepaid
expenses and other current assets |
|
731 |
|
|
732 |
|
Total
current assets |
|
22,640 |
|
|
13,744 |
|
|
|
|
Property, plant and
equipment, net |
|
76,777 |
|
|
81,240 |
|
Deposits and other
assets |
|
3,711 |
|
|
3,944 |
|
Total
assets |
$ |
103,128 |
|
$ |
98,928 |
|
|
|
|
Liabilities |
|
|
Current
liabilities: |
|
|
Accounts
payable, accrued liabilities and other current liabilities |
$ |
7,476 |
|
$ |
8,623 |
|
Derivative warrant liability |
|
10,493 |
|
|
3,114 |
|
Current
portion of secured debt, net |
|
332 |
|
|
288 |
|
Total
current liabilities |
|
18,301 |
|
|
12,025 |
|
Long-term portion
secured debt, net |
|
153 |
|
|
485 |
|
2017 notes recorded at
fair value |
|
21,565 |
|
|
25,460 |
|
2022 notes, net |
|
14,636 |
|
|
13,679 |
|
Other long-term
liabilities |
|
147 |
|
|
315 |
|
Total
liabilities |
|
54,802 |
|
|
51,964 |
|
|
|
|
|
|
|
|
Total
stockholders’ equity |
|
48,326 |
|
|
46,964 |
|
Total
liabilities and stockholders' equity |
$ |
103,128 |
|
$ |
98,928 |
|
|
|
|
|
|
|
|
Gevo, Inc. Condensed Consolidated
Cash Flow Information (Unaudited, in
thousands)
|
|
|
Three Months
Ended |
|
Year Ended December 31, |
December 31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Operating
Activities |
|
|
|
|
Net loss |
$ |
(36,194 |
) |
$ |
(41,145 |
) |
$ |
(7,962 |
) |
$ |
(11,079 |
) |
Adjustments to
reconcile net loss to net cash used in operating activities: |
|
|
|
|
(Gain)
loss from change in fair value of derivative warrant liability |
|
(577 |
) |
|
(6,530 |
) |
$ |
(2,938 |
) |
|
242 |
|
Gain from
change in fair value of embedded derivative of the 2022 Notes |
|
- |
|
|
(3,470 |
) |
|
- |
|
|
- |
|
Gain from
change in fair value of 2017 Notes |
|
(3,895 |
) |
|
(648 |
) |
|
(313 |
) |
|
(104 |
) |
Stock-based compensation |
|
2,647 |
|
|
2,860 |
|
|
694 |
|
|
498 |
|
Depreciation and amortization |
|
6,573 |
|
|
4,880 |
|
|
1,676 |
|
|
1,666 |
|
Non-cash
interest expense |
|
3,772 |
|
|
7,860 |
|
|
1,032 |
|
|
1,486 |
|
(Gain)
loss on extinguishment of debt |
|
(232 |
) |
|
- |
|
|
53 |
|
|
- |
|
Gain on
extinguishment of warrant liability |
|
(1,775 |
) |
|
- |
|
|
- |
|
|
- |
|
Loss from
change in fair value of derivatives |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Loss on
issuance of equity |
|
2,523 |
|
|
- |
|
|
2,523 |
|
|
- |
|
Other
non-cash expenses |
|
(7 |
) |
|
66 |
|
|
(7 |
) |
|
66 |
|
Changes in operating
assets and liabilities: |
|
|
|
- |
|
|
- |
|
Accounts
receivable |
|
970 |
|
|
-1003 |
|
|
(257 |
) |
|
(318 |
) |
Inventories |
|
805 |
|
|
(711 |
) |
|
(784 |
) |
|
(265 |
) |
Prepaid
expenses and other current assets |
|
1 |
|
|
431 |
|
|
(113 |
) |
|
129 |
|
Accounts
payable, accrued expenses, and long-term liabilities |
|
(2,771 |
) |
|
(1,580 |
) |
|
(752 |
) |
|
1,295 |
|
Net cash
used in operating activities |
$ |
(28,160 |
) |
$ |
(38,990 |
) |
|
(7,148 |
) |
|
(6,384 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
Acquisitions of property, plant and equipment |
|
(1,464 |
) |
|
(4,894 |
) |
|
(1,193 |
) |
|
(341 |
) |
Restricted certificate of deposit |
|
- |
|
|
(2,611 |
) |
|
- |
|
|
- |
|
Proceeds
from sales tax refund for property, plant and equipment |
|
144 |
|
|
- |
|
|
- |
|
|
- |
|
Net cash
used in investing activities |
|
(1,320 |
) |
|
(7,505 |
) |
|
(1,193 |
) |
|
(341 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
Payments
on secured debt |
|
(318 |
) |
|
(9,824 |
) |
|
(82 |
) |
|
(104 |
) |
Debt and
equity offering costs |
|
(3,519 |
) |
|
(5,873 |
) |
|
(734 |
) |
|
(822 |
) |
Proceeds
from issuance of common stock upon exercise of stock options and
employee stock purchase plan |
|
3 |
|
|
19 |
|
|
- |
|
|
- |
|
Proceeds
from issuance of common stock and common stock warrants |
|
33,820 |
|
|
18,000 |
|
|
9,970 |
|
|
- |
|
Proceeds
from the exercise of warrants |
|
10,166 |
|
|
- |
|
|
15 |
|
|
- |
|
Proceeds
from issuance of convertible debt, net |
|
- |
|
|
25,907 |
|
|
- |
|
|
- |
|
Net cash
provided by financing activities |
|
40,152 |
|
|
28,229 |
|
|
9,169 |
|
|
(926 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents |
|
10,672 |
|
|
(18,266 |
) |
|
828 |
|
|
(7,651 |
) |
|
|
|
|
|
Cash and cash
equivalents |
|
|
|
|
Beginning
of period |
|
6,359 |
|
|
24,625 |
|
|
16,203 |
|
|
14,010 |
|
Ending of
period |
|
17,031 |
|
|
6,359 |
|
|
17,031 |
|
|
6,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo, Inc. Non-GAAP Financial
Information(Unaudited, in thousands)
|
Year
Ended |
Three Months
Ended |
|
December 31, |
December 31, |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Gevo Development, LLC /
Agri-Energy, LLC |
|
|
|
|
Loss from
operations |
$ |
(12,204 |
) |
$ |
(13,210 |
) |
$ |
(2,636 |
) |
$ |
(2,310 |
) |
Depreciation and amortization |
|
5,717 |
|
|
3,943 |
|
|
1,429 |
|
|
1,445 |
|
Non-cash
stock-based compensation |
|
43 |
|
|
79 |
|
|
14 |
|
|
5 |
|
Non-GAAP cash EBITDA
loss |
$ |
(6,444 |
) |
$ |
(9,188 |
) |
$ |
(1,193 |
) |
$ |
(860 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo, Inc. |
|
|
|
|
Loss from
operations |
$ |
(19,723 |
) |
$ |
(26,567 |
) |
$ |
(3,950 |
) |
$ |
(6,601 |
) |
Depreciation and amortization |
|
856 |
|
|
937 |
|
|
247 |
|
|
221 |
|
Non-cash
stock-based compensation |
|
2,604 |
|
|
2,781 |
|
|
680 |
|
|
493 |
|
Non-GAAP cash EBITDA
loss |
$ |
(16,263 |
) |
$ |
(22,849 |
) |
$ |
(3,023 |
) |
$ |
(5,887 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo Consolidated |
|
|
|
|
Loss from
operations |
$ |
(31,927 |
) |
$ |
(39,777 |
) |
$ |
(6,586 |
) |
$ |
(8,911 |
) |
Depreciation and amortization |
|
6,573 |
|
|
4,880 |
|
|
1,676 |
|
|
1,666 |
|
Non-cash
stock-based compensation |
|
2,647 |
|
|
2,860 |
|
|
694 |
|
|
498 |
|
Non-GAAP cash EBITDA
loss |
$ |
(22,707 |
) |
$ |
(32,037 |
) |
$ |
(4,216 |
) |
$ |
(6,747 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Contact
David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Shawn M. Severson
The Blueshirt Group
+1 415-489-2918
shawn@blueshirtgroup.com
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