Gevo, Inc. (NASDAQ: GEVO) today announced financial results for the
first quarter of 2020 and recent corporate highlights.
Recent Corporate Highlights
- In May 2020, the two wind turbines that will supply up to 5.0
MW of fully renewable electricity to Gevo’s production facility
located in Luverne, MN (the “Luverne Facility”) were placed into
service. This new renewable source of electricity will enable
Gevo to produce its advanced renewable fuels, including
hydrocarbons, with a lower-carbon intensity in the future when Gevo
resumes production operations at the Luverne Facility.
- In April 2020, Gevo announced the engagement of Citigroup
Global Markets, Inc. to assist Gevo in executing its strategy to
finance production of its products using off-balance sheet, project
financing structures.
- In March, due to the impact that the COVID-19 virus had on the
economy and Gevo’s industry, Gevo suspended production operations
at its Luverne Facility for the foreseeable future.
- Gevo continues to produce renewable isooctane (gasoline) and
jet fuel in Silsbee, TX.
2020 First Quarter Financial Highlights
- Ended the quarter with cash and cash equivalents of $9.3
million compared to $16.3 as of the end Q4 2019
- Revenue of $3.8 million for the quarter compared to $6.4
million in Q1 2019
- Hydrocarbon revenue decreased to $0.1 million for the quarter
compared to $0.7 million in Q1 2019
- Loss from operations of ($8.0) million for the quarter compared
to ($5.6) million in Q1 2019
- Non-GAAP cash EBITDA loss1 of ($6.2) million for the quarter
compared to ($3.8) million in Q1 2019
- Net loss per share of ($0.64) for the quarter compared to
($0.60) in Q1 2019
- Non-GAAP adjusted net loss per share2 of ($0.59) for the
quarter compared to ($0.63) in Q1 2019
Commenting on the first quarter of 2020 and recent corporate
events, Dr. Patrick R. Gruber, Gevo’s Chief Executive Officer, said
“We are focused on building our business for the long run. We
continue to make and sell renewable premium gasoline and jet fuel.
We’ve cut expenses, cut the burn. We are pleased to be working with
Citigroup on our project financings. We are moving forward, and
look forward to completing them. Building these projects off
balance sheet, where we take the role of developer, licensor and
operator, seems to make sense and is expected, once running, to
provide attractive cash flows to Gevo and to project investors.
Through the pandemic, we’ve seen green value hold, which is good
for our business. We’ve seen interest increase in our fuels not
just because they lower greenhouse gas emissions, but because they
can help to lower particulate and sulfur pollution too. The air is
clearing. That is all about the lack of smog from gasoline. Our
technology delivers renewable isooctane for gasoline, not just jet
fuel.”
First Quarter 2020 Financial Results
Revenue for the three months ended March 31, 2020 was $3.8
million compared with $6.4 million in the same period in 2019.
During the three months ended March 31, 2020, hydrocarbon
revenue was $0.1 million compared with $0.7 million in the same
period in 2019. Hydrocarbon sales decreased because of lower
production volumes at the South Hampton Resources, Inc. facility in
Silsbee, Texas. Gevo’s hydrocarbon revenue is comprised of sales of
alcohol-to-jet fuel and isooctane.
During the first quarter of 2020, revenue derived at the Luverne
Facility related to ethanol sales and related products was $3.7
million, a decrease of approximately $2.0 million from the same
period in 2019. As a result of an unfavorable commodity environment
during the three months ended March 31, 2020 compared with the same
period ended March 31, 2019, we reduced our production of ethanol
and distiller grains, which resulted in lower sales for the
period.
Cost of goods sold was $8.1 million for the three months ended
March 31, 2020, compared with $9.0 million in the same period in
2019, primarily as a result of decreased production of ethanol
during the 2019 quarter. Production was decreased due to an
unfavorable commodity environment, largely the result of greater
corn costs as compared to national markets than the region has
historically experienced. Cost of goods sold included approximately
$6.5 million associated with the production of ethanol, isobutanol
and related products and approximately $1.6 million in depreciation
expense for the three months ended March 31, 2020.
Gross loss was $4.3 million for the three months ended March 31,
2020, versus a $2.6 million gross loss in the same period in
2019.
Research and development expense decreased by $0.4 million
during the three months ended March 31, 2020 compared with the same
period in 2019, due primarily to a decrease in personnel and
consultant expenses.
Selling, general and administrative expense increased by $0.7
million during the three months ended March 31, 2020, compared with
the same period in 2019, due primarily to an increase in personnel
and consulting expenses, partially offset by a decrease in
professional fees.
We incurred $0.3 million of restructuring expenses related to
the termination of 30 employees in March 2020.
Loss from operations in the three months ended March 31, 2020
was $8.0 million, compared with a $5.6 million loss from operations
in the same period in 2019.
Non-GAAP cash EBITDA loss3 in the three months ended March 31,
2020 was $6.2 million, compared with a $3.8 million non-GAAP cash
EBITDA loss in the same period in 2019.
Interest expense in the three months ended March 31, 2020 was
$0.5 million, a decrease of $0.2 million as compared to the same
period in 2019, primarily due to a decline in deferred financing
costs and original issue discounts compared to the same period last
year.
Gevo incurred $0.7 million of legal and
professional fees related to the refinancing of our 2020 Notes
Payable during the first quarter of 2020.
In the three months ended March 31, 2020, Gevo recognized net
non-cash loss totaling $0.1 million due to changes in the fair
value of certain of our financial instruments, such as warrants and
embedded derivatives.
Gevo incurred a net loss for the three months ended March 31,
2020 of $9.3 million, compared with a net loss of $6.1 million
during the same period in 2019. Non-GAAP adjusted net loss4 for the
three months ended March 31, 2020 was $8.5 million, compared with a
non-GAAP adjusted net loss of $6.4 million during the same period
in 2019.
Cash at March 31, 2020 was $9.3 million, and the total principal
face value of outstanding debt was $14.4 million.
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 R. Gruber, Chief Executive Officer, Carolyn M.
Romero, Vice President—Controller, and Geoffrey T. Williams, Jr.,
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 (833)
729-4776 (inside the U.S.) or 1 (830) 213-7701 (outside the U.S.)
and reference the access code 9973468# or through the event weblink
https://edge.media-server.com/mmc/p/u2xy5aup.
A replay of the call and webcast will be available two hours
after the conference call ends on May 12, 2020. To access the
replay, please dial 1 (855) 859-2056 (inside the US) or 1 (404)
537-3406 (outside the US) and reference the access code 9973468#.
The archived webcast will be available in the Investor Relations
section of Gevo’s website at www.gevo.com.
About Gevo
Gevo is a growth-oriented renewable fuels company that is
commercializing the next generation of renewable low-carbon liquid
transportation fuels with the potential to achieve “net zero”
greenhouse gas (“GHG”) footprint and address global needs of
reducing GHG emissions with sustainable alternatives to petroleum
fuels. As next generation renewable fuels, Gevo’s hydrocarbon
transportation fuels have the advantage of being “drop-in”
substitutes for conventional fuels that are derived from crude oil,
working seamlessly and without modification in existing fossil-fuel
based engines, supply chains and storage infrastructure. In
addition to the potential of net zero carbon emissions across the
whole of the fuel life-cycle, Gevo’s renewable fuels eliminate
other pollutants associated with the burning of traditional fossil
fuels such as particulates and sulfur, while delivering superior
performance. Gevo believes that the world is substantially
under-supplied with low-carbon, drop-in renewable fuels that can be
immediately used in existing transportation engines and
infrastructure, and Gevo is uniquely positioned to grow in serving
that demand.
Learn more at 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, Gevo’s wind projects, Gevo’s ability to successfully
finance its operations and growth projects, Gevo’s ability to
achieve cash flow from its planned projects, the ability of Gevo’s
products to contribute to lower greenhouse gas emissions,
particulate and sulfur pollution and other statements that are not
purely statements of historical fact. These forward-looking
statements are made based on 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, 2019 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 financial measures that do not
comply with U.S. generally accepted accounting principles (GAAP),
including non-GAAP cash EBITDA loss, non-GAAP adjusted net loss and
non-GAAP adjusted net loss per share. Non-GAAP cash EBITDA excludes
depreciation and non-cash stock-based compensation. Non-GAAP
adjusted net loss and adjusted net loss per share excludes non-cash
gains and/or losses recognized in the quarter due to the changes in
the fair value of certain of Gevo’s financial instruments, such as
warrants, convertible debt and embedded derivatives. Management
believes these measures are 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.
______________________________
1 Cash EBITDA loss is a non-GAAP measure 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.2 Adjusted net loss per share is a non-GAAP measure
calculated by adding back non-cash gains and/or losses recognized
in the quarter due to the changes in the fair value of certain of
our financial instruments, such as warrants, convertible debt and
embedded derivatives, to GAAP net loss per share. A reconciliation
of adjusted net loss per share to GAAP net loss per share is
provided in the financial statement tables following this release.3
Cash EBITDA loss is a non-GAAP measure 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.4 Adjusted net loss is a non-GAAP measure calculated
by adding back non-cash gains and/or losses recognized in the
quarter due to the changes in the fair value of certain of our
financial instruments, such as warrants, convertible debt and
embedded derivatives, to GAAP net loss. A reconciliation of
adjusted net loss to GAAP net loss is provided in the financial
statement tables following this release.
Gevo, Inc.Condensed Consolidated
Balance Sheets Information(Unaudited, in
thousands, except share and per share amounts)
|
March 31, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
9,289 |
|
|
$ |
16,302 |
|
Accounts receivable |
|
152 |
|
|
|
1,135 |
|
Inventories |
|
2,680 |
|
|
|
3,201 |
|
Prepaid expenses and other
current assets |
|
3,838 |
|
|
|
3,590 |
|
Total current assets |
|
15,959 |
|
|
|
24,228 |
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
65,855 |
|
|
|
66,696 |
|
Investment in Juhl |
|
1,500 |
|
|
|
1,500 |
|
Deposits and other assets |
|
848 |
|
|
|
935 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
84,162 |
|
|
$ |
93,359 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable and accrued
liabilities |
$ |
4,477 |
|
|
$ |
5,678 |
|
2020/21 Notes (current),
net |
|
14,050 |
|
|
|
― |
|
2020 Notes (current), net |
|
― |
|
|
|
13,900 |
|
2020/21 Notes embedded
derivative liability |
|
100 |
|
|
|
― |
|
Loans payable – other
(current) |
|
375 |
|
|
|
516 |
|
Total current liabilities |
|
19,002 |
|
|
|
20,094 |
|
|
|
|
|
|
|
Loans payable – other
(long-term) |
|
232 |
|
|
|
233 |
|
Other long-term
liabilities |
|
435 |
|
|
|
528 |
|
Total liabilities |
|
19,669 |
|
|
|
20,855 |
|
|
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
Common Stock, $0.01 par value
per share; 250,000,000 authorized, 14,614,890 and 14,083,232 shares
issued and outstanding at March 31, 2020 and December 31, 2019,
respectively. |
|
145 |
|
|
|
141 |
|
Additional paid-in
capital |
|
531,587 |
|
|
|
530,349 |
|
Accumulated deficit |
|
(467,239 |
) |
|
|
(457,986 |
) |
Total stockholders'
equity |
|
64,493 |
|
|
|
72,504 |
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity |
$ |
84,162 |
|
|
$ |
93,359 |
|
|
|
|
|
|
|
Gevo, Inc.Condensed Consolidated
Statements of Operations Information(Unaudited, in
thousands, except share and per share amounts)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Revenue |
|
|
|
|
|
Ethanol sales and related products, net |
$ |
3,700 |
|
|
$ |
5,664 |
|
Hydrocarbon revenue |
|
125 |
|
|
|
739 |
|
Total revenues |
|
3,825 |
|
|
|
6,403 |
|
|
|
|
|
|
|
Cost of goods sold |
|
8,139 |
|
|
|
8,961 |
|
|
|
|
|
|
|
Gross loss |
|
(4,314 |
) |
|
|
(2,558 |
) |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
Research and development
expense |
|
580 |
|
|
|
978 |
|
Selling, general and
administrative expense |
|
2,783 |
|
|
|
2,092 |
|
Restructuring expenses |
|
299 |
|
|
|
― |
|
Total operating expenses |
|
3,662 |
|
|
|
3,070 |
|
|
|
|
|
|
|
Loss from operations |
|
(7,976 |
) |
|
|
(5,628 |
) |
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
Interest expense |
|
(545 |
) |
|
|
(755 |
) |
(Loss) on modification of 2020
Notes |
|
(669 |
) |
|
|
― |
|
Gain from change in fair value of
derivative warrant liability |
|
7 |
|
|
|
1 |
|
Gain from change in
fair value of 2020/21 Notes and 2020 Notes embedded derivative
liability |
(100 |
) |
|
|
246 |
|
Other income (expense) |
|
30 |
|
|
|
― |
|
Total other income (expense),
net |
|
(1,277 |
) |
|
|
(508 |
) |
|
|
|
|
|
|
Net loss |
$ |
(9,253 |
) |
|
$ |
(6,136 |
) |
|
|
|
|
|
|
Net loss per share - basic and
diluted |
$ |
(0.64 |
) |
|
$ |
(0.60 |
) |
|
|
|
|
|
|
|
|
Weighted-average number of common
shares outstanding - basic and diluted |
|
14,472,798 |
|
|
|
10,153,873 |
|
|
|
|
|
|
|
Gevo, Inc.Condensed Consolidated
Statements of Stockholders’ Equity
Information(Unaudited, in thousands, except share
amounts)
|
Common Stock |
|
Paid-InCapital |
|
AccumulatedDeficit |
|
Stockholders' Equity |
|
Shares |
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019 |
14,083,232 |
|
$ |
141 |
|
$ |
530,349 |
|
$ |
(457,986 |
) |
|
$ |
72,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock, net
of issuance costs |
425,776 |
|
|
4 |
|
|
902 |
|
|
― |
|
|
|
906 |
|
Non-cash stock-based
compensation |
― |
|
|
― |
|
|
336 |
|
|
― |
|
|
|
336 |
|
Issuance of common stock under
stock plans, net of taxes |
105,882 |
|
|
― |
|
|
― |
|
|
― |
|
|
|
― |
|
Net loss |
― |
|
|
― |
|
|
― |
|
|
(9,253 |
) |
|
|
(9,253 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2020 |
14,614,890 |
|
$ |
145 |
|
$ |
531,587 |
|
$ |
(467,239 |
) |
|
$ |
64,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31,
2018 |
8,640,583 |
|
$ |
86 |
|
$ |
518,027 |
|
$ |
(429,326 |
) |
|
$ |
88,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock, net
of issue costs |
3,224,941 |
|
|
33 |
|
|
9,611 |
|
|
― |
|
|
|
9,644 |
|
Non-cash stock-based
compensation |
― |
|
|
― |
|
|
234 |
|
|
― |
|
|
|
234 |
|
Net loss |
― |
|
|
― |
|
|
― |
|
|
(6,136 |
) |
|
|
(6,136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2019 |
11,865,524 |
|
$ |
119 |
|
$ |
527,872 |
|
$ |
(435,462 |
) |
|
$ |
92,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo, Inc.Condensed Consolidated Cash
Flow Information(Unaudited, in
thousands)
|
Three Months Ended March 31, |
|
|
2020 |
|
|
|
2019 |
|
Operating
Activities |
|
|
|
Net loss |
$ |
(9,253 |
) |
|
$ |
(6,136 |
) |
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
(Gain) from change in fair value of derivative warrant
liability |
|
(7 |
) |
|
|
(1 |
) |
Loss (gain) from change in fair value of 2020/21 Notes and 2020
Notes embedded derivative liability |
|
100 |
|
|
|
(246 |
) |
Stock-based compensation |
|
172 |
|
|
|
263 |
|
Depreciation and amortization |
|
1,649 |
|
|
|
1,612 |
|
Non-cash lease expense |
|
15 |
|
|
|
12 |
|
Non-cash interest expense |
|
150 |
|
|
|
410 |
|
Changes in operating assets and
liabilities: |
|
|
|
Accounts receivable |
|
983 |
|
|
|
(599 |
) |
Inventories |
|
520 |
|
|
|
(21 |
) |
Prepaid expenses and other current assets, deposits and other
assets |
|
(167 |
) |
|
|
157 |
|
Accounts payable, accrued expenses and long-term liabilities |
|
(1,150 |
) |
|
|
(1,159 |
) |
Net cash used in operating activities |
|
(6,988 |
) |
|
|
(5,708 |
) |
|
|
|
|
Investing
Activities |
|
|
|
Acquisitions of property, plant and equipment |
|
(777 |
) |
|
|
(2,204 |
) |
Net cash used in investing activities |
|
(777 |
) |
|
|
(2,204 |
) |
|
|
|
|
Financing
Activities |
|
|
|
Debt and equity offering costs |
|
(52 |
) |
|
|
(234 |
) |
Proceeds from issuance of common stock, net of commissions |
|
958 |
|
|
|
9,878 |
|
Payments of loans payable - other |
|
(154 |
) |
|
|
― |
|
Net cash provided by financing activities |
|
752 |
|
|
|
9,644 |
|
|
|
|
|
Net (decrease) increase in cash
and cash equivalents |
|
(7,013 |
) |
|
|
1,732 |
|
|
|
|
|
Cash, cash equivalents, and
restricted cash |
|
|
|
Beginning of period |
|
16,302 |
|
|
|
33,734 |
|
|
|
|
|
End of period |
$ |
9,289 |
|
|
$ |
35,466 |
|
|
|
|
|
Gevo, Inc.Reconciliation of GAAP to
Non-GAAP Financial Information(Unaudited, in
thousands, except share and per share amounts)
|
Three Months Ended March 31, |
Non-GAAP Cash EBITDA: |
|
2020 |
|
|
|
2019 |
|
|
|
|
|
Loss from operations |
$ |
(7,976 |
) |
|
$ |
(5,628 |
) |
Depreciation and
amortization |
|
1,649 |
|
|
|
1,612 |
|
Non-cash stock-based
compensation |
|
172 |
|
|
|
263 |
|
|
|
|
|
|
|
|
|
Non-GAAP cash EBITDA |
$ |
(6,155 |
) |
|
$ |
(3,753 |
) |
|
|
|
|
Non-GAAP Adjusted Net
Loss: |
|
|
|
|
|
|
|
Net Loss |
$ |
(9,253 |
) |
|
$ |
(6,136 |
) |
Adjustments: |
|
|
|
(Loss) on modification of 2020
Notes |
|
(669 |
) |
|
|
― |
|
Gain from change in fair value of
derivative warrant liability |
|
7 |
|
|
|
1 |
|
(Loss) gain from change in fair
value of 2020/21 and 2020 Notes embedded derivative liability |
|
(100 |
) |
|
|
246 |
|
Total adjustments |
|
(762 |
) |
|
|
247 |
|
|
|
|
|
Non-GAAP Net Income (Loss) |
$ |
(8,491 |
) |
|
$ |
(6,383 |
) |
|
|
|
|
|
|
|
|
Weighted-average number of common
shares outstanding - basic and diluted |
|
14,472,798 |
|
|
|
10,153,873 |
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net loss per
share - basic and diluted |
$ |
(0.59 |
) |
|
$ |
(0.63 |
) |
|
|
|
|
Investor and Media ContactShawn M.
SeversonIntegra Investor Relations+1
415-226-7747gevo@integra-ir.com
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