Gevo Provides Corporate Update for 2018
January 03 2018 - 8:00AM
Gevo, Inc. (NASDAQ:GEVO), announced today its key initiatives for
2018:
- Gevo reaffirms its focus on the commercial development of
renewable jet fuel, renewable isooctane, isobutanol and related
products. The goal is to aggregate enough confirmed
commercial off-take to support the capital expense of expanding
Gevo’s production facility based in Luverne, MN, (the “Luverne
Facility”). Gevo plans to expand its business development
capabilities in 2018 to achieve this goal.
- Gevo is undertaking several initiatives to improve the cash
flow profile of its business in 2018 compared to 2017. This
improvement is expected to be achieved by increasing sales of
isobutanol into the ethanol-free marketplace, increasing sales of
its alcohol-to-jet fuel (ATJ) and isooctane produced out of Gevo’s
hydrocarbon demonstration plant based in Silsbee, TX, improving the
cash flow profile at the Luverne Facility and reducing overall
corporate expenses.
- Gevo expects to sign its first commercial license in India,
through its partnership with Praj Industries.
In 2018, Gevo expects to improve the cash flow
out of the Luverne Facility by optimizing the plant’s ethanol
production processes, developing value added products for ethanol
and animal feed produced at the plant and further reducing the cost
of the plant’s carbohydrate feedstock. These initiatives are
also expected to benefit the cost of producing Gevo’s isobutanol,
once isobutanol production resumes at the Luverne Facility at its
current scale or when the isobutanol capacity is expanded at the
plant.
The reduction in corporate expense is expected
to be driven by a series of measures:
- Mike Willis, Gevo’s Chief Financial Officer, has entered into a
mutual separation agreement and is expected to leave the company in
early January 2018. Gevo does not currently plan on replacing
the Chief Financial Officer at this time.
- Certain executive officers who are remaining with the company
have volunteered to take a reduction in compensation, including Dr.
Patrick Gruber, Gevo’s Chief Executive Officer, who has agreed, at
his discretion, to a salary reduction of 30% in 2018.
- Gevo will reduce its overall headcount in Englewood, CO, by
approximately 40%, as compared to the peak employee level in
2017.
- Gevo’s employees will forego their 2017 annual cash bonus.
- A systematic review of all non-employee expenses across the
company has been undertaken, and reductions have or will be made
wherever possible.
“In 2017, we again showed that isobutanol can be
produced in full scale equipment, we were able to meet the variable
cost targets that we set out for our isobutanol production and we
continued to demonstrate that there is growing demand for our
products. That said, we have a “chicken and egg”
problem. Large scale product demand requires us to drive cost
out of our production processes, which we expect to be able to
achieve through greater production scale. However, raising the
capital necessary to expand the Luverne Facility is more easily
achieved, and at lower cost of capital, if we had large scale
offtake agreements with customers. In 2017, we did make progress in
this regard, including the contract we signed with HCS Holding
(Haltermann Carless) to supply isooctane, but we need more.
In 2018 the goal is to obtain off-take agreements for our products
that will support financing the Luverne Facility expansion.
Concurrently, we are looking extensively into ways to extend our
cash runway as far as possible to give us the time to land and
negotiate these contracts properly,” said Dr. Patrick Gruber,
Gevo’s Chief Executive Officer.
“We also see significant opportunity to improve
the performance of the Luverne Facility in the near term, which is
expected to benefit the company regardless of whether we are
producing ethanol, isobutanol, or both. Luverne is an
excellent plant site given the low cost and low environmental
footprint of its corn supply,” continued Dr. Gruber.
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 bio-based 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, MN. Gevo has also
developed technology to produce hydrocarbon products from renewable
alcohols. Gevo currently operates a biorefinery in Silsbee, TX, 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.
Learn more at our website: 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 the Gevo’s
plans for 2018, including demand for its products, 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.
Investor ContactShawn M.
SeversonEnergyTech Investor, LLC+1
415-233-7094gevo@energytechinvestor.com @ShawnEnergyTechwww.energytechinvestor.com
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