-
Reports EPS of ($0.34) including $2 million
non-cash gain from the change in fair value of embedded derivatives
contained in Gevo's convertible notes
-
Ended the year with cash and cash equivalents of
$67 million
-
Reiterates expectation to produce isobutanol in
2013
-
Luverne, Minn. plant remains temporarily idle
while being readied to restart after completion of process
technology optimization
-
U.S. Court of Appeals for the Federal Circuit
affirmed District Court's favorable decision
-
Received four recent patents including two patents
related to the production of biojet fuels
ENGLEWOOD, Colo. - March 5, 2013 - Gevo, Inc.
(NASDAQ: GEVO) today announced its financial results for the three
months ended December 31, 2012.
"We are pleased with the progress we've made
optimizing our technology over the past three months and remain
on-track to restart isobutanol production at Luverne this year,"
said Patrick Gruber Ph.D., Chief Executive Officer of Gevo. "After
assuming the additional role of Chief Technology Officer, Chris
Ryan has done an exceptional job orienting our technology team
towards achieving our goals of producing isobutanol consistently
and at commercially viable rates. Our market development work
with strategic customers such as Coca-Cola, Toray, the United
States Air Force, and Sasol is moving forward and we look forward
to turning this work into revenues as soon as possible."
Recent
Highlights
Subsequent to the end of the year, the U.S. Patent
and Trademark Office (USPTO) awarded Gevo U.S. Patent No. 8,373,012
and U.S. Patent No. 8,378,160. Both patents are related to methods
of making renewable hydrocarbons and/or jet blendstock from
biomass-derived isobutanol, which is subsequently converted into
hydrocarbons that meet or exceed the requirements of ASTM for
diesel fuels, gasoline, and various aviation fuels.
In November, the USPTO awarded Gevo U.S. Patent
No. 8,304,588, which covers methods for the production of
isobutanol in retrofit ethanol production plants. The claimed
technology addresses the full scope of isobutanol production in
modified, retrofit ethanol plants, from pretreatment and
fermentation to separation and purification.
These patents are in addition to U.S. Patent No.
8,273,565 and U.S. Patent No. 8,283,505, awarded in September and
October and discussed in Gevo's third quarter 2012 press
release.
In November, the U.S. Court of Appeals for the
Federal Circuit (Appeals Court) upheld the U.S. District Court for
the District of Delaware's decision in which the lower court denied
a motion for a preliminary injunction sought by Butamax Advanced
Biofuels LLC (Butamax). The Appeals Court affirmed the lower
court's ruling which stated that, "Gevo, Inc. raised a substantial
question of validity concerning [Butamax's] asserted patent (the
'889 Patent). and plaintiff (Butamax) does not hold a valid patent,
nor would defendant (Gevo) infringe if it did".
In January 2013, Gevo announced a stock repurchase
program that authorizes the company to repurchase up to $15,000,000
of its common stock over a one-year period.
Financial
Highlights
Revenues for the fourth quarter of 2012 were $1.9
million compared to $17.2 million in the same period in 2011. The
decrease in revenues resulted from the company suspending ethanol
production at its Luverne, Minn. facility in May 2012. During the
fourth quarter of 2012, the company concluded initial startup
operations for the production of isobutanol at its Luverne
facility. As previously announced, following completion of startup
operations, production was temporarily paused to allow the company
to focus on optimizing specific parts of its technology to further
enhance isobutanol production rates. Production from startup
operations will be directed to initial sales, customer testing, and
future conversion into jet fuel for the U.S. Air Force (USAF).
Following the decision to pause isobutanol
production, the company considered reverting to ethanol production
during the fourth quarter of 2012 but determined that the economics
of producing and marketing ethanol at that time would have
generated greater negative cash flows compared to maintaining the
facility at idle. Consequently, the company made the decision to
idle the facility and not to revert to ethanol production during
the quarter. Revenue reported in the fourth quarter of 2012
included sales from reduction of Gevo's corn inventory, revenue
under its agreement with The Coca-Cola Company, sales of biobased
jet fuel to the USAF, and from ongoing research agreements. Revenue
in the fourth quarter of 2011 primarily related to the sale of
ethanol and related products.
Research and development expense decreased to $4.3
million in the fourth quarter of 2012 from $5.9 million for the
same period in 2011. In the fourth quarter of 2012, the focus of
Gevo's development efforts were startup operations for the
production of isobutanol at its Luverne facility and optimization
of specific parts of its isobutanol production technology to
further enhance isobutanol production rates. The decrease in
research and development spending in the fourth quarter of 2012
compared to the fourth quarter of 2011 was due primarily to work
performed at the South Hampton Resources, Inc. facility near
Houston, Texas developing a hydrocarbon pilot plant facility which
was completed in the fourth quarter of 2011. There was no
comparable expense in the fourth quarter of 2012.
Selling, general and administrative and other
expense decreased to $7.8 million in the fourth quarter of 2012
from $8.9 million for the fourth quarter of 2011. The decrease in
selling, general and administrative and other expense in the fourth
quarter of 2012 primarily reflected lower compensation expenses,
including the decision of Gevo's executive officers to waive their
2012 bonus payments. The decrease in compensation expenses was
partially offset by increased legal-related expenses, including
expenses in support of Gevo's ongoing litigation with Butamax.
Interest expense for the fourth quarter of 2012
was $2.2 million compared to $1.0 million in the fourth quarter of
2011. The increase resulted from interest incurred on the company's
$45 million of 7.5% convertible notes due 2022 which were issued in
July 2012. The company also reported a non-cash gain of $2 million
related to changes in the fair value of embedded derivatives
contained in the convertible notes. These derivatives result from
the rights that holders of the convertible notes have upon
conversion, and under certain circumstances, will result in
non-cash amounts being recorded in the company's statement of
operations in each reporting period while the convertible notes
remain outstanding.
The net loss for the fourth quarter of 2012 was
$13.2 million compared to $14.2 million for the fourth quarter of
2011.
Gevo reported cash and cash equivalents on hand of
$66.7 million as of December 31, 2012.
Subsequent to the end of the year, certain holders
of the company's convertible notes elected to convert approximately
$4.2 million of those convertible notes into common shares of the
company, in accordance with the terms of the convertible notes,
thereby reducing the principal amount of convertible debt
outstanding at March 4, 2013 to $40.8 million. In total, through
March 4, 2013, Gevo has issued 1,453,698 shares of common stock at
an effective issue price of $3.68 per share in settlement of the
conversions of the convertible notes and related coupon make-whole
payments.
Webcast and Conference Call
Information
Hosting today's conference call at 4:30 p.m. EST
(2:30 p.m. MST) will be Dr. Gruber, Chief Executive Officer, and
Mark Smith, Chief Financial Officer. They will review the company's
financial results for the three months ended December 31, 2012 and
provide an update on recent corporate highlights.
To participate in the conference call, please dial
1-800-265-0241 (inside the U.S.) or 1-617-847-8704 (outside the
U.S.) and reference the access code 53437085. The presentation will
be available via a live webcast at:
http://www.media-server.com/m/acs/c6c4c9f5cd1aa21f964665ca48e98b4f
A replay of the call will be available two hours
after the conference call ends on March 5, 2013 until Midnight EDT
on April 5, 2013. To access the replay, please dial 1-888-286-8010
(inside the U.S.) or 1-617-801-6888 (outside the US) and reference
the access code 31702414. The archived webcast will be available
for 30 days in the Investor Relations section of Gevo's website at
www.gevo.com.
About Gevo
Gevo is a leading renewable chemicals and
next-generation biofuels company. Gevo's patent-protected,
capital-light business model converts existing ethanol plants into
biorefineries to make isobutanol. This versatile chemical can be
directly integrated into existing chemical and fuel products to
deliver environmental and economic benefits. Gevo started up its
first commercial isobutanol facility in Luverne, Minn. and has a
marquee list of partners including Coca-Cola, Sasol, and LANXESS,
among others. Gevo is committed to a sustainable biobased economy
that meets society's needs for plentiful food and clean air and
water. For more information, 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 include statements that are not purely
statements of historical fact, and can sometimes be identified by
our use of terms such as "intend," "expect," "plan," "estimate,"
"future," "strive" and similar words. 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 the company undertakes no obligation to
update or revise these statements, whether as a result of new
information, future events or otherwise. Although the company
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, 2011, as amended, and in subsequent
reports on Forms 10-Q and 8-K and other filings made with the
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.
# # #
Gevo,
Inc.
Consolidated Statements of Operations
Information
(Unaudited, in thousands)
| |
|
|
Three
Months Ended |
| |
Year Ended
December 31, |
December
31, |
| |
2012 |
2011 |
2012 |
2011 |
| Revenue and
cost of goods sold |
|
|
|
|
| Ethanol sales and related products, net |
$ 19,908 |
$ 63,742 |
$
- |
$ 16,994 |
| Grant revenue, research and development |
|
|
|
|
| program revenue and other revenue |
4,477 |
807 |
1,924 |
235 |
|
Total
revenues |
24,385 |
64,549 |
1,924 |
17,229 |
| |
|
|
|
|
| Cost of goods sold |
32,410 |
60,588 |
2,811 |
15,526 |
| |
|
|
|
|
| Gross (loss) margin |
(8,025) |
3,961 |
(887) |
1,703 |
| |
|
|
|
|
| Operating
expenses |
|
|
|
|
| Research and development |
19,431 |
19,753 |
4,352 |
5,938 |
| Selling, general and administrative and other |
43,981 |
28,901 |
7,806 |
8,889 |
|
Total
operating expenses |
63,412 |
48,654 |
12,158 |
14,827 |
| |
|
|
|
|
| Loss from operations |
(71,437) |
(44,693) |
(13,045) |
(13,124) |
| |
|
|
|
|
| Other
income (expense) |
|
|
|
|
| Interest expense |
(6,338) |
(3,577) |
(2,177) |
(1,036) |
| Gain from change in fair value of embedded derivatives |
17,000 |
- |
2,000 |
- |
| Other income |
63 |
56 |
45 |
- |
| Total other income (expense) |
10,725 |
(3,521) |
(132) |
(1,036) |
| |
|
|
|
|
| Net loss |
(60,712) |
(48,214) |
(13,177) |
(14,160) |
| |
|
|
|
|
| Deemed dividend - amortization of
beneficial |
|
|
|
|
| conversion feature on Series D-1 |
|
|
|
|
| preferred stock |
- |
(1,094) |
- |
- |
| |
|
|
|
|
| Net loss attributable to Gevo, Inc. |
|
|
|
|
| common stockholders |
$ (60,712) |
$ (49,308) |
$ (13,177) |
$ (14,160) |
| |
|
|
|
|
| Net loss per share attributable
to Gevo, Inc. |
|
|
|
|
| common stockholders - basic and diluted |
$ (1.86) |
$ (2.15) |
$ (0.34) |
$ (0.54) |
| Weighted-average number of common
shares |
|
|
|
|
| outstanding - basic and diluted |
32,619,091 |
22,909,916 |
39,300,054 |
26,005,744 |
Gevo,
Inc.
Condensed Consolidated Balance Sheet
Information
(Unaudited, in thousands)
| |
|
December 31, |
| |
|
2012 |
2011 |
| Assets |
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
|
$
66,744 |
$
94,225 |
| Accounts receivable |
|
698 |
2,938 |
| Inventories |
|
6,659 |
3,814 |
| Prepaid expenses and other current assets |
|
1,779 |
1,757 |
| Total current assets |
|
75,880 |
102,734 |
| |
|
|
|
| Property, plant and equipment,
net |
|
77,093 |
28,777 |
| Deposits and other assets |
|
3,138 |
1,519 |
| Total assets |
|
$
156,111 |
$
133,030 |
| |
|
|
|
| Liabilities |
|
|
|
| Current liabilities: |
|
|
|
| Accounts payable, accrued
liabilities and other current liabilities |
$
8,256 |
$
12,626 |
| Current portion of secured debt, net |
|
8,513 |
3,491 |
| Total current liabilities |
|
16,769 |
16,117 |
| Long-term portion secured debt,
net |
|
15,445 |
24,752 |
| Convertible notes, net |
|
25,554 |
- |
| Other long-term liabilities |
|
512 |
24 |
| Total liabilities |
|
58,280 |
40,893 |
| |
|
|
|
| Total stockholders'
equity |
|
97,831 |
92,137 |
| Total liabilities and stockholders' equity |
|
$
156,111 |
$
133,030 |
Gevo,
Inc.
Condensed Consolidated Cash Flow
Information
(Unaudited, in thousands)
| |
|
|
Three
Months Ended |
| |
Year Ended
December 31, |
December
31, |
| |
2012 |
2011 |
2012 |
2011 |
| Operating
Activities |
|
|
|
|
| Net loss |
$ (60,712) |
$ (48,214) |
$ (13,177) |
$ (14,160) |
| Adjustments to reconcile net loss
to net cash |
|
|
|
|
| used in operating activities: |
|
|
|
|
| Non-cash expenses |
13,554 |
12,536 |
2,734 |
5,016 |
| Gain from change in fair value of |
|
|
|
|
| embedded derivatives |
(17,000) |
- |
(2,000) |
- |
| Changes from working capital |
(3,900) |
2,067 |
(8,303) |
1,293 |
| Net cash used in operating activities |
(68,058) |
(33,611) |
(20,746) |
(7,851) |
| |
|
|
|
|
| Investing
Activities |
|
|
|
|
| Acquisitions of property, plant |
|
|
|
|
| and equipment |
(52,432) |
(8,015) |
(1,496) |
(4,435) |
| Other |
(607) |
(18) |
- |
(58) |
| Net cash used in investing activities |
(53,039) |
(8,033) |
(1,496) |
(4,493) |
| |
|
|
|
|
| Financing
Activities |
|
|
|
|
| Proceeds from issuance of secured debt |
5,000 |
10,000 |
- |
10,000 |
| Proceeds from issuance of convertible debt, |
|
|
|
|
| net of discounts |
42,300 |
- |
- |
- |
| Proceeds from issuance of common stock |
61,875 |
114,704 |
- |
- |
| Payments on secured debt |
(10,406) |
(1,897) |
(3,139) |
(495) |
| Other financing activates |
(5,153) |
(2,212) |
128 |
(541) |
| Net cash provided by (used in) |
93,616 |
120,595 |
(3,011) |
8,964 |
| financing activities |
|
|
|
|
| |
|
|
|
|
| Net (decrease) increase in cash
and |
|
|
|
|
| and cash equivalents |
(27,481) |
78,951 |
(25,253) |
(3,380) |
| |
|
|
|
|
| Cash and cash equivalents |
|
|
|
|
| Beginning of period |
94,225 |
15,274 |
91,997 |
97,605 |
| Ending of period |
$ 66,744 |
$ 94,225 |
$ 66,744 |
$ 94,225 |
Gevo,
Inc.
Non-GAAP Financial
Information
(Unaudited, in thousands)
| |
|
|
Three
Months Ended |
| |
Year Ended
December 31, |
December
31, |
| |
2012 |
2011 |
2012 |
2011 |
| Gevo
Development, LLC / Agri-Energy, LLC |
|
|
|
|
| (Loss) income from operations |
$ (12,600) |
$ 1,462 |
$
(2,056) |
$
1,181 |
| Depreciation and amortization |
2,113 |
2,061 |
532 |
518 |
| Non-cash stock-based compensation |
216 |
85 |
52 |
45 |
| Non-GAAP (loss) income from
operations |
$ (10,271) |
$ 3,608 |
$
(1,472) |
$
1,744 |
| |
|
|
|
|
| Gevo,
Inc. |
|
|
|
|
| Loss from operations |
$ (58,837) |
$ (46,155) |
$
(10,989) |
$
(14,305) |
| Depreciation and amortization |
1,200 |
2,539 |
244 |
710 |
| Non-cash stock-based compensation |
7,763 |
6,741 |
937 |
1,884 |
| Non-GAAP loss from
operations |
$ (49,874) |
$ (36,875) |
$
(9,808) |
$
(11,711) |
| |
|
|
|
|
| Gevo
Consolidated |
|
|
|
|
| Loss from operations |
$ (71,437) |
$ (44,693) |
$
(13,045) |
$
(13,124) |
| Depreciation and amortization |
3,313 |
4,600 |
776 |
1,228 |
| Non-cash stock-based compensation |
7,979 |
6,826 |
989 |
1,929 |
| Non-GAAP loss from
operations |
$ (60,145) |
$ (33,267) |
$
(11,280) |
$
(9,967) |
###
Media Contact:
Steve Halsey
Gibbs & Soell for Gevo
T: (212) 697-2600
shalsey@gibbs-soell.com
Investor Contact:
Chelsea DeLong
PR & Marketing Coordinator
T: (303) 858-8358
cdelong@gevo.com
This
announcement is distributed by Thomson Reuters on behalf of Thomson
Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the
information contained therein.
Source: Gevo, Inc. via Thomson Reuters ONE
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