Gevo, Inc. (Nasdaq:GEVO), the world's only commercial producer of
renewable isobutanol, today provided a corporate update, including
announcing certain cost savings initiatives to improve the
Company's overall cash flow.
- Gevo's average monthly corporate-wide EBITDA burn rate
(excluding stock-based compensation) is expected to decrease by
almost 40% to approximately $1.50-1.75 million in 2015, versus a
comparable estimated average monthly rate of $2.50-2.75 million in
2014.
- Gevo reduces headcount at Gevo's headquarters in Englewood
from 56 to 33.
- Dr. Patrick Gruber, Gevo's Chief Executive Officer,
volunteers to take 25% of his base salary in the form of Gevo
stock, through a deferred compensation program.
- Gevo has developed potentially disruptive new
technologies that use ethanol as a feedstock for the production of
hydrocarbons, renewable hydrogen, and other chemical intermediates,
to augment its use of isobutanol as a feedstock for the
alcohol-to-hydrocarbons business.
- In 2015, Gevo is targeting:
- Signing a binding agreement with at least one licensee for its
isobutanol technology; and
- Establishing multiple new strategic partnerships to accelerate
the development of its hydrocarbons business, inclusive of Gevo's
new ethanol-to-hydrocarbons technologies.
Key corporate updates include:
Corporate
- As part of Gevo's ongoing expense management strategy
designed to extend the Company's operating runway, Gevo decreased
its corporate headcount by 23 employees, or 41% of the
Englewood-based staff. These reductions come mainly from the
technology group and are effective immediately. While this decision
translates into meaningful costs savings for the Company, it has
also been driven by the advanced stage of Gevo's isobutanol
technology and thus fewer resources are needed at this time. Gevo
has determined this to be an opportune time to scale down the team
to focus primarily on technology optimizations, as well as to
support the commercial operations at Luverne and isobutanol
licensing.
- Dr. Patrick Gruber has volunteered to take 25% of his
base salary (or $125 thousand per annum) in the form of Gevo stock,
through a deferred compensation program to be implemented by the
compensation committee of Gevo's board of directors.
Luverne
- Gevo expects to operate the Luverne plant to maximize the
cash flow from the facility, while continuing the optimization of
its isobutanol technology at a commercial scale. Over certain
periods of time, this may include operating the plant for the sole
production of ethanol across all four fermenters. Gevo does
anticipate continuing some level of isobutanol production going
forward to ensure that it has sufficient isobutanol volumes to meet
ongoing demand from customers such as the recently announced
relationships with Brenntag Canada and Gulf Racing Fuels, and for
use as a feedstock for the production of hydrocarbons at Gevo's
alcohol-to-hydrocarbons demo facility in Silsbee, TX, as well as to
continue to prove out aspects of its isobutanol technology at a
commercial scale.
- On January 8, 2015, Gevo announced that it had met its
2014 year-end target of producing over 50 thousand gallons of
isobutanol over a single month at Luverne. Based on data from its
most recent isobutanol production batches, Gevo estimates that
current monthly isobutanol production capability is approaching
75-100 thousand gallons per month. Given the progress made to date
at a commercial scale at Luverne, Gevo is looking to accelerate its
licensing program with existing partners, as well as establishing
new relationships with new potential licensees.
Alcohol-to-Hydrocarbons
- Gevo has developed new technologies using ethanol as a
feedstock for the production of hydrocarbons, renewable hydrogen,
and other chemical intermediates, and has filed a series of patent
applications related to these technologies. This is a potentially
disruptive technology that could provide the estimated 25 billion
gallon global ethanol industry a much broader set of end-product
market and margin opportunities. The process produces tailored
mixes of isobutylene, propylene, hydrogen and acetone, which are
valuable as standalone molecules, or as feedstocks to produce other
chemical products and longer chain alcohols. This new technology
has the potential to address additional markets in the chemicals
and plastics fields, such as renewable polypropylene for
automobiles and packaging and renewable hydrogen for use in
chemical and fuel cell markets. Through the use of feedstocks such
as ethanol and isobutanol Gevo anticipates continuing to produce
and sell its current suite of products (jet, isooctane, paraxylene)
to established partners such as The Coca-Cola Company, Total SA,
the U.S. military, Lufthansa and Toray Industries Inc., as well as
to develop new products and partnerships.
- Gevo is seeing enhanced interest in its
alcohol-to-hydrocarbons business from potential strategic partners
and is looking at multiple ways of monetizing this aspect of the
business.
Litigation
- Gevo expects to maintain its litigation spend so as to
continue to support the value of Gevo's most important asset, its
intellectual property. Gevo believes it is of even greater
importance to defend its intellectual property position at the
present time, considering the significant progress the Company has
made in commercializing its isobutanol technology at Luverne,
having proved out the process at scale, and using its advanced
second generation yeast biocatalysts. These legal efforts continue
to bear fruit, including the U.S. Patent and Trademark Office's
recent decision to uphold all of the claims in Gevo's ALD6 &
TMA29 Deletion Patent ('415 Patent) without any
modification. ALD6 & TMA29 are two major pathways that
hijack carbohydrates from the isobutanol pathway and they must be
deleted in order to get to commercial levels of isobutanol
production in yeast.
"We have made tremendous progress, particularly in the last
year. The side-by-side operation whereby we co-produce isobutanol
and ethanol at Luverne, with one fermenter dedicated to isobutanol
production and three fermenters dedicated to ethanol production,
has worked very well and met our expectations for our technology.
We've been able to produce isobutanol at good rates and yields. As
a result, we are at a point where we can reduce our expenses in
areas that are more than sufficiently resourced due to advances in
technology, and focus on optimizing our isobutanol technology and
maximizing cash flow at the plant. The technology is also at a
point where we can accelerate and start generating revenue from our
licensing business," said Dr. Gruber, Gevo's CEO.
"Additionally, we have received a great deal of interest in our
alcohols-to-hydrocarbon technologies and products. The process to
convert these low-cost alcohols into standard chemicals, fuels and
plastics works well. With a small but talented team, we have made
great achievements, producing renewable isooctane, jet fuel,
paraxylene and other products. We have shown the efficacy of
low-cost conversion of alcohols, including at a production rate of
approximately 5-10 thousand gallons per month at our demonstration
plant in Silsbee, TX. These processes are much simpler and cleaner
as compared to petroleum-based processes, yet are still economical.
There is no biology or fermentation involved; instead we leverage
low cost renewable alcohols like ethanol and isobutanol, converting
them into useful products using chemical catalysis. It is exciting
that we have developed innovative proprietary technologies that
produce relatively inexpensive hydrocarbon fuels and chemical
intermediates, like propylene, butylene, acetone, paraxylene, as
well as renewable hydrogen. It is no wonder we have generated such
strong interest from potential strategic partners. We have
accomplished a lot already and have formed a strong foundation from
which to build," Gruber said.
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, 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.
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 Gevo's
Annual Report on Form 10-K for the year ended December 31, 2013, as
amended, and in subsequent reports on Forms 10-Q and 8-K and other
filings made with the SEC by Gevo.
CONTACT: Investor and Media Contact:
Mike Willis
Gevo, Inc.
T: (720) 267-8636
mwillis@gevo.com
Gevo (NASDAQ:GEVO)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Gevo (NASDAQ:GEVO)
Historical Stock Chart
Von Jul 2023 bis Jul 2024