First Commercial Airline Flight with
Alaska Airlines Scheduled to be Flown in June 2016 - Gevo
to Host Conference Call Today at 4:30 p.m. EDT/2:30 MDT -
Gevo, Inc. (NASDAQ:GEVO) today announced financial results for the
three months ended March 31, 2016. Key highlights for the quarter
included:
- Gevo announced that Alaska Airlines is scheduled to fly the
first-ever commercial airline flight using Gevo’s renewable alcohol
to jet fuel (ATJ) in the first half of June 2016. The
specific flight route is still being determined, however it is
anticipated that the flight will depart from Alaska Airlines’ hub
in Seattle–Tacoma International Airport. This follows the news
announced in April that ASTM International had completed its
process of approving a 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.
- Gevo shipped the first railcar of finished isobutanol since the
restart of production of isobutanol in March, following completion
of the capital improvement projects undertaken at Luverne to
decrease the cost of isobutanol production. The railcar is being
sent to a terminal owned by CW Petroleum Corp. in Dayton, TX, where
it is expected to be delivered to retailers throughout Texas and
sold primarily for marine and off-road specialty gasoline
blendstock applications.
- Following the restart of isobutanol production in March, Gevo
has produced approximately 50 thousand gallons of isobutanol. In
addition, Gevo’s iDGsTM, or the distiller grains produced as part
of the isobutanol process, are being blended with the distiller
grains coming from the ethanol side of the plant, and being sold on
par with traditional ethanol distiller grains.
“We are pleased with the progress we are making at Luverne since
restarting isobutanol production in March of this year. Our
isobutanol production guidance remains on track in terms of gallons
we expect to produce this year and our targeted variable cost of
production levels that we expect to achieve. We are excited to have
more visibility into larger volumes of isobutanol coming from the
Luverne plant. This visibility will enable us to really focus on
developing some of our core markets, such as the marina and
off-road markets. And of course, I’m very excited that Alaska
Airlines has set a date for its first test flight using our ATJ. We
believe that this will be a key milestone in establishing our jet
fuel vertical as a growth driver for Gevo’s overall business,” said
Dr. Patrick Gruber, Chief Executive Officer.
1Cash EBITDA loss is calculated by adding back depreciation and
non-cash stock compensation to GAAP Loss From Operations; a
reconciliation of cash EBITDA loss to GAAP loss from operations is
provided in the financial statement tables following this
release.
Financial Highlights
Revenues for the first quarter of 2016 were $6.3 million
compared with $5.9 million in the same period in 2015. During the
first quarter of 2016, revenues derived at the Luverne plant were
$5.8 million, an increase of approximately $0.7 million from the
same period in 2015. This was primarily a result of higher ethanol
production, partially offset by lower ethanol prices, in the 1st
quarter of 2016 versus the same period in 2015.
During the first quarter of 2016, hydrocarbon revenues were $0.3
million, a decrease of approximately $0.2 million from the same
period in 2015. This decrease was primarily a result of the timing
of shipments of finished products from Gevo’s hydrocarbons
demonstration plant located in Silsbee, Texas.
Gevo also generated grant revenue of $0.3 million during the
first quarter of 2016, flat as compared to the same period in 2015.
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 was flat during the three months ended March
31, 2016, compared with the same quarter in 2015. Cost of goods
sold included approximately $7.8 million associated with the
production of ethanol, isobutanol and related products
and approximately $1.5 million in depreciation expense.
Gross loss was $2.9 million for the three months ended March 31,
2016.
Research and development expense decreased by approximately $0.7
million during the three months ended March 31, 2016, compared with
the same quarter in 2015, due primarily to a $0.3 million decrease
related to reduced employee related, consultant and contract staff
expenses, and a $0.2 million decrease in costs related to the South
Hampton facility as a result of timing of shipments of finished
products from the facility.
Selling, general and administrative expense decreased by $2.6
million during the three months ended March 31, 2016, compared with
the same quarter in 2015, due primarily to an aggregate decrease
of $2.4 million in general, patent and litigation legal
expenses.
Loss from operations in the first quarter of 2016 was $5.9
million, compared with $9.5 million in the same quarter in
2015.
Non-GAAP cash EBITDA loss in the first quarter of 2016 was $3.9
million, compared with $7.5 million in the same quarter in
2015.
Interest expense in the first quarter of 2016 was $2.2 million,
which was an increase of $0.1 million over the same quarter last
year.
During the three months ended December 31, 2016, the estimated
fair value of the derivative warrant liability decreased by $5.2
million, resulting in a gain from change in fair value of
derivative warrant liability, primarily associated with the
decrease in the price of Gevo’s common stock in the quarter.
Gevo also incurred a non-cash loss of $0.8 million during the
quarter due to the quarterly mark-to-market valuation of the 2017
Notes.
During the three months ended March 31, 2016, there was no
change in the value of the embedded derivatives in the convertible
notes issued in 2012 (the 2022 Notes), as the derivatives have had
no meaningful value since the third quarter of 2014. No
holders of the 2022 Notes converted or exchanged any notes during
the quarter.
The net loss for the first quarter of 2016 was $3.6 million,
compared with $7.3 million during the same period in 2015.
The cash position at March 31, 2016 was $8.7 million. This
balance included $1.2 million that was pre-funded to Gevo prior to
the closing of the underwritten offering of common shares and
warrants that closed on April 1, 2016.
Webcast and Conference Call Information
Hosting today’s conference call at 4:30 p.m. EDT (2:30 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(847)
585-4405 (inside the U.S.) or 1 (888) 771-4371 (outside the U.S.)
and reference the access code 42493910. A replay of the call and
webcast will be available two hours after the conference call ends
on May 12, 2016. To access the replay, please dial 1(630) 652-3042
(inside the US) or 1(888) 843-7419 (outside the US) and reference
the access code 42493910. 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 Gevo’s Luverne, Minnesota production facility, the
timing of the commercial airline flight by Alaska Airlines, Gevo’s
ability to achieve its production and cost guidance, Gevo’s ability
to secure new customer relationships across core markets, 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, 2015, 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
This press release contains a financial measure that does not
comply with U.S. generally accepted accounting principles (GAAP),
non-GAAP cash EBITDA. On a non-GAAP basis, non-GAAP cash EBITDA
excludes 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. This non-GAAP
financial measure also facilitates management's internal
comparisons to Gevo’s historical performance as well as comparisons
to the operating results of other companies. In addition, Gevo
believes this non-GAAP financial measure is useful to investors
because it allows 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 March 31, |
|
|
2016 |
|
|
|
2015 |
|
Revenue and
cost of goods sold |
|
|
|
Ethanol
sales and related products, net |
$ |
5,757 |
|
|
$ |
5,098 |
|
Hydrocarbon revenue |
|
298 |
|
|
|
517 |
|
Grant and
other revenue |
|
265 |
|
|
|
284 |
|
Total revenues |
|
6,320 |
|
|
|
5,899 |
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
9,223 |
|
|
|
9,234 |
|
|
|
|
|
|
|
|
|
Gross
loss |
|
(2,903 |
) |
|
|
(3,335 |
) |
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
Research
and development expense |
|
1,044 |
|
|
|
1,722 |
|
Selling,
general and administrative expense |
|
1,919 |
|
|
|
4,479 |
|
Total operating expenses |
|
2,963 |
|
|
|
6,201 |
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
(5,866 |
) |
|
|
(9,536 |
) |
|
|
|
|
|
|
|
|
Other (expense)
income |
|
|
|
Interest
expense |
|
(2,151 |
) |
|
|
(2,035 |
) |
Gain on
conversion of debt |
|
- |
|
|
|
285 |
|
(Loss)/Gain from change in fair value of the 2017 Notes |
|
(836 |
) |
|
|
3,765 |
|
Gain from
change in fair value of derivative warrant liability |
|
5,248 |
|
|
|
167 |
|
Other
income |
|
- |
|
|
|
11 |
|
Total other income, net |
|
2,261 |
|
|
|
2,193 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(3,605 |
) |
|
$ |
(7,343 |
) |
|
|
|
|
|
|
|
|
Net loss per share
attributable to Gevo, Inc. |
|
|
|
common stockholders - basic and
diluted |
$ |
(0.16 |
) |
|
$ |
(0.88 |
) |
Weighted-average number
of common shares |
|
|
|
|
|
|
|
outstanding - basic and
diluted |
|
23,016,329 |
|
|
|
8,312,398 |
|
|
|
|
|
|
|
|
|
Gevo, Inc. Condensed Consolidated
Balance Sheet Information(Unaudited, in
thousands)
|
March 31, |
|
December 31, |
|
|
2016 |
|
|
|
2015 |
|
Assets |
|
|
|
Current
assets: |
|
|
|
Cash and
cash equivalents |
$ |
8,672 |
|
|
$ |
17,031 |
|
Accounts
receivable |
|
869 |
|
|
|
1,391 |
|
Inventories |
|
2,987 |
|
|
|
3,487 |
|
Prepaid
expenses and other current assets |
|
1,008 |
|
|
|
731 |
|
Total
current assets |
|
13,536 |
|
|
|
22,640 |
|
|
|
|
|
Property,
plant and equipment, net |
|
78,562 |
|
|
|
76,777 |
|
Deposits
and other assets |
|
3,414 |
|
|
|
3,414 |
|
Total
assets |
$ |
95,512 |
|
|
$ |
102,831 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable, accrued liabilities and other current liabilities |
$ |
6,779 |
|
|
$ |
7,476 |
|
Derivative warrant liability |
|
2,946 |
|
|
|
10,493 |
|
Current
portion of secured debt, net |
|
342 |
|
|
|
330 |
|
Current
portion 2017 Notes recorded at fair value |
|
22,401 |
|
|
|
- |
|
Total
current liabilities |
|
32,468 |
|
|
|
18,299 |
|
Long-term
portion of secured debt, net |
|
63 |
|
|
|
153 |
|
Long term
portion 2017 Notes recorded at fair value |
|
- |
|
|
|
21,565 |
|
2022
Notes, net |
|
15,392 |
|
|
|
14,341 |
|
Other
long-term liabilities |
|
146 |
|
|
|
147 |
|
Total
liabilities |
|
48,069 |
|
|
|
54,505 |
|
|
|
|
|
|
|
|
|
Total
stockholders’ equity |
|
47,443 |
|
|
|
48,326 |
|
Total
liabilities and stockholders' equity |
$ |
95,512 |
|
|
$ |
102,831 |
|
|
|
|
|
|
|
|
|
Gevo, Inc. Condensed Consolidated
Cash Flow Information(Unaudited, in
thousands)
|
Three Months Ended March 31, |
|
|
2016 |
|
|
|
2015 |
|
Operating
Activities |
|
|
|
Net loss |
$ |
(3,605 |
) |
|
$ |
(7,343 |
) |
Adjustments to
reconcile net loss to net cash used in operating activities: |
|
|
|
Gain from change in fair value of
derivative warrant liability |
|
(5,248 |
) |
|
|
(167 |
) |
Loss/(Gain) from change in fair
value of the 2017 Notes |
|
836 |
|
|
|
(3,765 |
) |
Gain on conversion of debt |
|
- |
|
|
|
(285 |
) |
Stock-based compensation |
|
358 |
|
|
|
402 |
|
Depreciation and amortization |
|
1,621 |
|
|
|
1,662 |
|
Non-cash interest expense |
|
1,057 |
|
|
|
845 |
|
Other non-cash expenses |
|
- |
|
|
|
25 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
523 |
|
|
|
214 |
|
Inventories |
|
500 |
|
|
|
(207 |
) |
Prepaid expenses and other current
assets |
|
(278 |
) |
|
|
178 |
|
Accounts payable, accrued expenses,
and long-term liabilities |
|
(1,268 |
) |
|
|
(1,048 |
) |
Net cash
used in operating activities |
|
(5,504 |
) |
|
|
(9,489 |
) |
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
Acquisitions of
property, plant and equipment |
|
(2,247 |
) |
|
|
(126 |
) |
Net cash
used in investing activities |
|
(2,247 |
) |
|
|
(126 |
) |
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
Payments on secured debt |
|
(84 |
) |
|
|
(51 |
) |
Debt and equity offering costs |
|
(589 |
) |
|
|
(1,165 |
) |
Proceeds from issuance of common
stock and common stock units |
|
- |
|
|
|
6,650 |
|
Proceeds from the exercise of
warrants |
|
65 |
|
|
|
2,175 |
|
Net cash
(used in) provided by financing activities |
|
(608 |
) |
|
|
7,609 |
|
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents |
|
(8,359 |
) |
|
|
(2,006 |
) |
|
|
|
|
Cash and cash
equivalents |
|
|
|
Beginning of period |
|
17,031 |
|
|
|
6,359 |
|
End of period |
$ |
8,672 |
|
|
$ |
4,353 |
|
|
|
|
|
|
|
|
|
Gevo, Inc. Reconciliation of GAAP
to Non-GAAP Financial Information(Unaudited, in
thousands)
|
Three Months Ended March 31, |
|
|
2016 |
|
|
|
2015 |
|
Gevo Development, LLC /
Agri-Energy, LLC |
|
|
|
Loss from
operations |
$ |
(3,559 |
) |
|
$ |
(4,312 |
) |
Depreciation and amortization |
|
1,453 |
|
|
|
1,451 |
|
Non-cash
stock-based compensation |
|
5 |
|
|
|
(2 |
) |
Non-GAAP cash
EBITDA |
$ |
(2,101 |
) |
|
$ |
(2,863 |
) |
|
|
|
|
|
|
|
|
Gevo, Inc. |
|
|
|
Loss from
operations |
$ |
(2,307 |
) |
|
$ |
(5,224 |
) |
Depreciation and amortization |
|
168 |
|
|
|
211 |
|
Non-cash
stock-based compensation |
|
353 |
|
|
|
404 |
|
Non-GAAP cash
EBITDA |
$ |
(1,786 |
) |
|
$ |
(4,609 |
) |
|
|
|
|
|
|
|
|
Gevo Consolidated |
|
|
|
Loss from
operations |
$ |
(5,866 |
) |
|
$ |
(9,536 |
) |
Depreciation and amortization |
|
1,621 |
|
|
|
1,662 |
|
Non-cash
stock-based compensation |
|
358 |
|
|
|
402 |
|
Non-GAAP cash
EBITDA |
$ |
(3,887 |
) |
|
$ |
(7,472 |
) |
Media Contact
David Rodewald
The David James Agency, LLC
+1 805-494-9508
gevo@davidjamesagency.com
Investor Contact
Shawn M. Severson
EnergyTech Investor, LLC
+1 415-233-7094
shawn@energytechinvestor.com
@ShawnEnergyTech
www.energytechinvestor.com
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