- Reports EPS of ($0.45) including $1.3 million non-cash loss
from the change in fair value of embedded derivatives contained in
Gevo's convertible notes
- Ended the quarter with cash and cash equivalents of $54
million
- Net cash used of $12.6 million in first quarter of 2013
compared to net cash used of $25.3 million in fourth quarter of
2012
- Maintains expectation to begin to produce isobutanol in 2013 at
Luverne, Minn. plant
- U.S. District Court for the District of Delaware entered a
final judgment in favor of Gevo and against Butamax Advanced
Biofuels, LLC, (Butamax, a 50/50 joint venture between E.I. DuPont
de Nemours and Co. and and BP p.l.c.) ending the trial court
proceedings on Butamax's Patent Nos. 7,851,188 and 7,993,889
- Filed S-3 Registration Statement as part of long-term financing
strategy
- Signed contract with Defense Logistics Agency to supply the
U.S. Army renewable jet fuel
- Added Dr. Stephen Toon to executive team as executive
responsible for Luverne facility
Gevo, Inc. (Nasdaq:GEVO) today announced its financial results for
the three months ended March 31, 2013.
"We continue to make progress optimizing our technology and
remain on-track to restart isobutanol production at Luverne this
year and begin to introduce isobutanol on a commercial basis," said
Patrick Gruber Ph.D., chief executive officer of Gevo. "Our plant
modifications have gone well. Our work on reducing and eliminating
contaminating bacteria is on track. Our work on the fermentation
optimization has made great progress. I look forward to starting up
our plant and proving out our GIFT® system. In this past quarter,
our team has managed to maintain focus on the plant re-start, even
in the face of the litigation. We are very pleased with the outcome
of the litigation regarding U.S. Patent Nos. 7,851,188 ( '188
Patent) and 7,993,889 ( '889 Patent). Our legal team, consultants,
and Gevo employees have delivered a clear victory. Even better,
this victory in defending our freedom to operate was done in an
efficient manner: we received a judgment of non-infringement while
avoiding the necessity and cost of a trial in the U.S. District
Court for the District of Delaware. We have always maintained that
we don't infringe these patents. It is gratifying to see that
Butamax and the Court agreed that we don't infringe."
Recent Highlights
On March 21, 2013 the company announced that a judgment of
non-infringement would be entered in favor of Gevo following the
acknowledgment by Butamax that Gevo does not infringe Butamax's
asserted patents under the Court's construction of a key claim in
Butamax's '188 and '889 Patents. As a result of this victory, on
April 10, 2013 the United States District Court for the District of
Delaware entered a final judgment in favor of Gevo and against
Butamax. This ended the district court trial proceedings on
Butamax's '188 and '889 Patents.
During the first quarter of 2013, the U.S. Patent and Trademark
Office (USPTO) awarded Gevo U.S. Patent Nos. 8,373,012 and
8,378,160. Both patents are related to methods of making renewable
hydrocarbons and/or jet fuel blendstock from biomass-derived
isobutanol, which is subsequently converted into hydrocarbons that
meet the requirements of ASTM for diesel fuels, gasoline, and
various aviation fuels.
In March, Gevo entered into a contract with the Defense
Logistics Agency to supply the U.S. Army with 3,650 gallons of
renewable jet fuel to be delivered by the second quarter of 2013.
This initial order may be increased by 12,500 gallons. All
shipments will be at a fixed price of $59 per gallon during the
initial testing phase. These shipments are in addition to the
renewable jet fuel supplied to the U.S. Air Force (USAF) and the
U.S. Navy (USN).
In March, the company announced the addition of Dr. Stephen P.
Toon to its executive team as its executive vice president of
operations and process development. In his new role at Gevo, Dr.
Toon will have overall responsibility for Gevo's Luverne, Minn.
facility from startup through commercial operation.
Financial Highlights
Revenues for the first quarter of 2013 were $3.5 million
compared to $14.9 million in the same period in 2012. The decrease
in revenues resulted from the company ceasing ethanol production at
its Luverne, Minn. facility in May 2012. During the first quarter
of 2013, the company focused on activities in support of resuming
startup isobutanol production, which is projected in 2013. Revenue
reported in the first quarter of 2013 included proceeds of $2.4
million from further reduction of Gevo's corn inventory, sales of
biobased jet fuel to the USAF of $0.4 million, revenue under its
agreement with The Coca-Cola Company, and from ongoing research
agreements. Revenue in the first quarter of 2012 primarily related
to the sale of ethanol and related products.
Research and development expense was $5.0 million in the first
quarter of 2013, essentially unchanged from first quarter 2012 when
research and development expense was also $5.0 million. In the
first quarter of 2013, the significant 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 company also incurred costs related to its
investment in a bio-para-xylene processing facility and expansion
of biojet pilot plant capacity at the South Hampton Resources, Inc.
facility near Houston, Texas, as well as for delivery of biojet
product to the USAF. The biojet delivered to the USAF was produced
at the South Hampton Resources facility.
Selling, general and administrative and other expense decreased
to $7.0 million in the first quarter of 2013 from $13.1 million for
the first quarter of 2012. The decrease in selling, general and
administrative and other expense in the first quarter of 2013
reflected lower compensation expenses, including the cost saving
benefits resulting from actions taken during 2012 to focus Gevo's
operations. The first quarter of 2012 included one-time payments
and accelerated non-cash warrant expense of $1.4 million and $2.6
million, respectively, related to the departure of two executive
vice presidents. First quarter of 2013 results also included the
cost saving benefits resulting from actions taken in the second
half of 2012 to reduce ongoing litigation and outside services
expenses. These expenses were approximately $1.0 million lower in
the first quarter of 2013 compared to the first quarter of
2012.
Interest expense for the first quarter of 2013 was $3.3 million
compared to $1.1 million in the first quarter of 2012. The increase
resulted from interest incurred on the company's 7.5% convertible
notes due 2022 which were issued in July 2012, including $1.6
million for non-cash charges for amortization of debt discounts
recorded at the time of entering into the convertible notes.
The company reported a non-cash loss of $1.3 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. Also related
to the convertible debt, the company reported a loss of $0.9
million for the early extinguishment of convertible debt. During
the first quarter of 2013, holders of $9.2 million of convertible
notes opted to convert their note holdings into shares of Gevo
common stock. Upon conversion, these holders received a total of
3,158,361 shares of common stock, including 1,617,910 shares of
common stock issued upon conversion of the convertible notes and
1,540,451 shares of common stock issued in satisfaction of
aggregate make-whole payments of $2.7 million. The effective issue
price in full settlement of the convertible notes converted during
the three months ended March 31, 2013 was $3.76 per share.
The net loss for the first quarter of 2013 was $18.4 million
compared to $19.3 million for the first quarter of 2012.
Gevo reported cash and cash equivalents on hand of $54.1 million
as of March 31, 2013.
On April 12, 2013, the company filed an S-3 Registration
Statement. This filing, which is a universal shelf registration
statement, is part of the company's long-term financing strategy to
position Gevo to access capital in support of its longer term
growth objectives.
Webcast and Conference Call Information
Hosting today's conference call at 4:30 p.m. EDT (2:30 p.m. MDT)
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 March 31, 2013 and provide an update on
recent corporate highlights.
To participate in the conference call, please dial
1-877-280-4956 (inside the US) or 1-857-244-7313 (outside the US)
and reference the access code 47611875. The presentation will be
available via a live webcast at:
http://edge.media-server.com/m/p/ktmv5qfv/lan/en.
A replay of the call will be available two hours after the
conference call ends on April 30, 2013 until Midnight EDT on May
30, 2013. To access the replay, please dial 1-888-286-8010 (inside
the US) or 1-617-801-6888 (outside the US) and reference the access
code 17887728. 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 has executed initial commercial-scale
production runs at its isobutanol facility in Luverne, Minn. and
has a marquee list of future 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, 2012,
as amended, and in subsequent reports on Form 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
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 |
|
March
31, |
|
2013 |
2012 |
Revenue and cost of goods
sold |
|
|
Ethanol sales and related
products, net |
$ -- |
$ 14,258 |
Grant revenue, research and
development program revenue and corn sales |
3,543 |
614 |
Total revenues |
3,543 |
14,872 |
|
|
|
Cost of goods sold |
4,503 |
15,010 |
|
|
|
Gross loss |
(960) |
(138) |
|
|
|
Operating expenses |
|
|
Research and development |
4,976 |
4,955 |
Selling, general and
administrative |
6,950 |
13,127 |
Total operating expenses |
11,926 |
18,082 |
|
|
|
Loss from operations |
(12,886) |
(18,220) |
|
|
|
Other income (expense) |
|
|
Interest expense |
(3,276) |
(1,087) |
Loss from change in fair value
of embedded derivative |
(1,330) |
-- |
Loss on extinguishment of
debt |
(926) |
-- |
Other income |
48 |
-- |
Total other expense |
(5,484) |
(1,087) |
|
|
|
Net loss |
$ (18,370) |
$ (19,307) |
|
|
|
Net loss per share attributable to Gevo, Inc.
common stockholders - basic and diluted |
$ (0.45) |
$ (0.74) |
Weighted-average number of common shares
outstanding - basic and diluted |
40,996,922 |
26,186,133 |
|
Gevo, Inc. |
Non-GAAP Financial
Information |
(in
thousands) |
|
|
|
|
Three Months
Ended |
|
March
31, |
|
2013 |
2012 |
Gevo Development, LLC / Agri-Energy, LLC |
|
|
Loss from operations |
$ (2,473) |
$ (1,009) |
Depreciation and
amortization |
533 |
522 |
Non-cash stock-based
compensation |
50 |
51 |
Non-GAAP loss from operations |
$ (1,890) |
$ (436) |
|
|
|
Gevo, Inc. |
|
|
Loss from operations |
$ (10,413) |
$ (17,211) |
Depreciation and
amortization |
316 |
266 |
Non-cash stock-based
compensation |
1,037 |
4,068 |
Non-GAAP loss from operations |
$ (9,060) |
$ (12,877) |
|
|
|
Gevo Consolidated |
|
|
Loss from operations |
$ (12,886) |
$ (18,220) |
Depreciation and
amortization |
849 |
788 |
Non-cash stock-based
compensation |
1,087 |
4,119 |
Non-GAAP loss from operations |
$ (10,950) |
$ (13,313) |
|
Gevo, Inc. |
Condensed Consolidated
Balance Sheet Information |
(Unaudited, in
thousands) |
|
|
|
|
March 31, 2013 |
December 31,
2012 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 54,102 |
$ 66,744 |
Accounts receivable |
1,036 |
698 |
Inventories |
4,432 |
6,659 |
Prepaid expenses and other
current assets |
1,713 |
1,779 |
Total current assets |
61,283 |
75,880 |
|
|
|
Property, plant and equipment, net |
78,132 |
77,093 |
Deposits and other assets |
2,805 |
3,138 |
Total assets |
$ 142,220 |
$ 156,111 |
|
|
|
Liabilities |
|
|
Current liabilities: |
|
|
Accounts payable, accrued
liabilities and other current liabilities |
$ 8,983 |
$ 8,256 |
Current portion of secured
debt, net |
9,678 |
8,513 |
Total current liabilities |
18,661 |
16,769 |
Long-term portion secured debt, net |
12,882 |
15,445 |
Convertible notes, net |
22,469 |
25,554 |
Other long-term liabilities |
512 |
512 |
Total liabilities |
54,524 |
58,280 |
|
|
|
Total stockholders'
equity |
87,696 |
97,831 |
Total liabilities and
stockholders' equity |
$ 142,220 |
$ 156,111 |
|
Gevo,
Inc. |
Condensed Consolidated
Balance Sheet Information |
(Unaudited, in
thousands) |
|
|
|
|
Three Months
Ended |
|
March
31, |
|
2013 |
2012 |
Operating Activities |
|
|
Net loss |
$ (18,370) |
$ (19,307) |
Adjustments to reconcile net loss to net cash
used in operating activities: |
|
|
Non-cash expenses |
4,091 |
5,099 |
Gain from change in fair value
of embedded derivative |
1,330 |
-- |
Loss on extinguishment of
debt |
926 |
-- |
Changes from working
capital |
3,017 |
(2,689) |
Net cash used in operating
activities |
(9,006) |
(16,897) |
|
|
|
Investing Activities |
|
|
Acquisitions of property, plant
and equipment, net |
(1,997) |
(8,045) |
Other |
-- |
(49) |
Net cash used in investing
activities |
(1,997) |
(8,094) |
|
|
|
Financing Activities |
|
|
Proceeds from issuance of
secured debt, net |
-- |
5,000 |
Proceeds from issuance of
common stock, net |
-- |
139 |
Payments on secured debt |
(1,639) |
(511) |
Other financing activates |
-- |
(240) |
Net cash provided by (used in)
financing activities |
(1,639) |
4,388 |
|
|
|
Net decrease in cash and and cash
equivalents |
(12,642) |
(20,603) |
|
|
|
Cash and cash equivalents |
|
|
Beginning of period |
66,744 |
94,225 |
Ending of period |
$ 54,102 |
$ 73,622 |
CONTACT: 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
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