- Reports EPS of ($0.88) for the first quarter
- Ended the first quarter with cash and cash equivalents of $4.4
million
- The exercise of warrants since the beginning of April 2015
expected to result in net proceeds of $6.2 million
- Revenue in first quarter 2015 was $5.9 million, as compared to
$0.9 million for the same quarter in 2014
- Alaska Airlines to be Gevo's commercial launch partner for
renewable alcohol-based jet fuel
- Gevo notified by NASDAQ that it has regained listing
compliance
Gevo, Inc. (Nasdaq:GEVO) today announced its financial results for
the three months ended March 31, 2015, and provided an update on
recent corporate highlights.
Luverne Update
Gevo's plant in Luverne, Minn., continued to operate under the
Side-by-Side (SBS) operating mode, providing the capability of
producing both isobutanol and ethanol simultaneously. Isobutanol
batches were successfully run in the quarter, in order to prove out
several process improvements, as well as to support due diligence
efforts by potential licensees. The projected economics of
full-scale isobutanol production have been validated by third
parties, with isobutanol EBITDA margins on an optimized basis
estimated to be $0.50 to $1.00 per gallon.
Overall revenues at the plant were down for the first quarter of
2015, as compared to the fourth quarter of 2014, due to a
combination of 1) lower ethanol prices and 2) lower overall ethanol
and isobutanol production. Gevo took advantage of weaker ethanol
margins in the quarter to take the plant down for various
maintenance initiatives, which resulted in an overall decrease in
alcohol gallons produced in the quarter.
Licensing Update
In the first quarter of 2015, Gevo continued to progress its
commercial licensing business with multiple partners. Gevo has been
working with Praj Industries Limited (Praj), a global leader in
process engineering and equipment manufacturing for the ethanol and
brewing industries, on numerous fronts to license and commercialize
Gevo's isobutanol technology worldwide.
While Gevo has seen strong demand globally for the licensing of
its isobutanol technology, there appears to be growing interest in
South America using both sugar cane and corn as feedstocks. Praj's
global footprint and strong presence in South America make them an
ideal partner to help develop licensing opportunities in this
region, and elsewhere.
Gevo continues to target signing a binding agreement with at
least one licensee for its isobutanol technology in 2015.
Alcohol-to-Hydrocarbons Update
In May, Gevo signed a strategic alliance agreement with Alaska
Airlines, whereby Alaska Airlines will purchase Gevo's renewable
jet fuel and fly the first-ever commercial flight on alcohol-to-jet
fuel (ATJ). Gevo expects to receive ASTM International
certification for its jet fuel in mid-to-late 2015 and the flight
is expected to occur shortly thereafter. Gevo's jet fuel has
undergone extensive engine testing and data analysis by the
original equipment manufacturers over the last six years while Gevo
has been going through the rigorous ASTM approval process.
Following ASTM approval, Gevo's ATJ will be certified to be dropped
into the existing distribution infrastructure and used to power
commercial aircrafts.
Gevo continues to see strong interest in its
alcohol-to-hydrocarbons technologies, both using isobutanol and
ethanol as feedstocks to produce end products such as jet fuel,
isooctane, para-xylene, propylene and hydrogen. Besides its new
relationship with Alaska Airlines, Gevo still anticipates
establishing and announcing multiple new strategic partnerships in
2015 to accelerate the development of its hydrocarbons business.
These new partnerships are expected to lead to potential
investments, R&D collaborations, product sales and/or licensing
opportunities.
"We continue to receive strong interest in licensing our
isobutanol technology both domestically and internationally. We are
making good progress in solidifying our relationship with Praj,
which we expect will be very important in accelerating our
licensing and development efforts," said Dr. Patrick Gruber, Gevo's
Chief Executive Officer.
"The interest we are seeing from potential strategic partners in
our downstream technologies to convert alcohols into hydrocarbon
products is highly encouraging. We are very pleased to be working
with Alaska Airlines as our commercial launch partner for Gevo's
renewable jet fuel. Our jet fuel is truly a drop-in solution that
could help insulate commercial airlines from spikes in fuel costs
while also achieving their sustainability goals. By the end of
2015, Gevo expects to be in an excellent position to meaningfully
grow its jet fuel business, both for commercial airlines and
military applications. By achieving our goal of establishing
multiple new strategic partnerships in 2015, we expect to be in a
very good position to accelerate other hydrocarbon platforms, such
as renewable propylene and renewable hydrogen," added Gruber.
Financial Highlights
Revenues for the first quarter of 2015 were $5.9 million
compared to $0.9 million in the same period in 2014. The increase
in revenue during 2015 is primarily a result of the production and
sale of approximately $5.1 million of ethanol and distiller's
grains following the transition of the Luverne plant to the SBS
configuration.
During the first quarter of 2015, hydrocarbon revenues were $0.5
million, primarily related to the shipment of bio-jet fuel to the
U.S. military during the quarter. Gevo also continued to generate
revenue of $0.3 million during the first quarter of 2015 associated
with ongoing research agreements.
Cost of goods sold increased by $4.6 million during the three
months ended March 31, 2015, as compared to the same quarter in
2014, due primarily to the increased production activity at the
Luverne plant under the SBS configuration. Gross loss was $3.3
million for the three months ended March 31, 2015. After deducting
$1.5 million of depreciation expense, the non-GAAP cash gross
margin was a negative $1.9 million for the first quarter of 2015,
as compared to a negative $3.2 million in the same quarter in
2014.
Research and development expense decreased by $2.4 million
during the three months ended March 31, 2015, as compared to the
same quarter in 2014, due primarily to a $1.4 million reduction in
employee-related expenses, a $0.4 million decrease in consultant
and lab-related expenses and a $0.5 million decrease in expenses
incurred at the hydrocarbons demo facility located in Silsbee.
Selling, general and administrative expense decreased $0.6
million during the three months ended March 31, 2015, as compared
to the same quarter in 2014, due primarily to a decrease of $0.4
million in miscellaneous SG&A expense items.
Interest expense in the first quarter of 2015 was $2.0 million,
as compared to interest expense of $1.6 million during the same
quarter of 2014. The increase was due primarily to the issuance of
the convertible notes to Whitebox in June of 2014 (2017 Notes).
The company reported a non-cash gain of $0.2 million during the
first quarter of 2015, as compared to a non-cash gain of $2.5
million during the same period in 2014, related to changes in the
fair value of its derivative warrant liabilities and embedded
derivatives contained in the convertible notes issued in 2012 (2022
Notes).
There were $2.0 million of 2022 Notes that were converted into
170,041 shares of Gevo common stock (shares expressed on a
post-reverse split basis) during the three months ended March 31,
2015. As a result, the company recognized a $0.3 million gain upon
the conversion of the debt.
The company also reported a non-cash gain of $3.8 million during
the first quarter of 2015 related to a change in the fair value of
the 2017 Notes.
The net loss for the first quarter of 2015 was $7.3 million
compared to $12.0 million during the same period in 2014.
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 Gruber, Chief Executive Officer, Mike Willis,
Chief Financial Officer, and Brett Lund, Chief Legal Officer. They
will review the company's financial results for the three months
ended March 31, 2015 and provide an update on recent corporate
highlights.
To participate in the conference call, please dial 1 (800)
708-4540 (inside the U.S.) or 1 (847) 619-6397 (outside the U.S.)
and reference the access code 39634877. A replay of the call and
webcast will be available two hours after the conference call ends
on March 12, 2015. To access the replay, please dial 1-888-843-7419
(inside the US) or 1-630-652-3042 (outside the US) and reference
the access code 39634877. The archived webcast will be available
until Midnight EDT on June 11, 2015 in the Investor Relations
section of Gevo's website at www.gevo.com.
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, Minn. 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 relate to a variety of matters, including, without
limitation, statements related to optimized isobutanol margins,
future demand for the licensing of Gevo's isobutanol technology,
the future market for isobutanol, ethanol and their derivatives,
the receipt and timing of ASTM approval and the use of Gevo's AJT
by commercial airlines, future opportunities related to Gevo's
alcohol-to-hydrocarbons technologies 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 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. |
|
|
Condensed
Consolidated Statements of Operations Information |
|
(Unaudited,
in thousands, except share and per share amounts) |
|
|
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Revenue and cost of goods
sold |
|
|
Ethanol sales and related products,
net |
$ 5,098 |
$ -- |
Hydrocarbon revenue |
517 |
630 |
Grant and other revenue and corn
sales |
284 |
273 |
Total revenues |
5,899 |
903 |
|
|
|
Cost of goods sold |
9,234 |
4,680 |
|
|
|
Gross loss |
(3,335) |
(3,777) |
|
|
|
Operating expenses |
|
|
Research and development |
1,722 |
4,105 |
Selling, general and administrative and
other |
4,479 |
5,040 |
Total operating expenses |
6,201 |
9,145 |
|
|
|
Loss from operations |
(9,536) |
(12,922) |
|
|
|
Other income (expense) |
|
|
Interest expense |
(2,035) |
(1,601) |
Gain on conversion of debt |
285 |
-- |
Gain from change in fair value of
embedded derivative of the 2022 Notes |
-- |
1,264 |
Gain from change in fair value of
derivative warrant liability |
167 |
1,278 |
Gain from change in fair value of the
2017 Notes |
3,765 |
-- |
Other income |
11 |
9 |
Total other income (expense) |
2,193 |
950 |
|
|
|
Net loss |
$ (7,343) |
$ (11,972) |
|
|
|
Net loss per share attributable to Gevo, Inc.
common stockholders - basic and diluted |
$ (0.88) |
$ (2.65) |
|
|
|
Weighted-average number of common shares
outstanding - basic and diluted |
8,312,398 |
4,517,381 |
|
|
|
Gevo,
Inc. |
|
|
Condensed
Consolidated Balance Sheet Information |
|
|
(Unaudited,
in thousands) |
|
|
|
|
|
|
March 31, 2015 |
December 31,
2014 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 4,353 |
$ 6,359 |
Accounts receivable |
2,148 |
2,361 |
Inventories |
4,499 |
4,292 |
Prepaid expenses and other
current assets |
553 |
732 |
Total current assets |
11,553 |
13,744 |
|
|
|
Property, plant and equipment, net |
79,597 |
81,240 |
Deposits and other assets |
3,867 |
3,944 |
Total assets |
$ 95,017 |
$ 98,928 |
|
|
|
Liabilities |
|
|
Current liabilities: |
|
|
Accounts payable, accrued
liabilities and other current liabilities |
$ 7,505 |
$ 8,623 |
Derivative warrant
liability |
5,899 |
3,114 |
Current portion of secured
debt, net |
298 |
288 |
Total current liabilities |
13,702 |
12,025 |
|
|
|
Long-term portion secured debt, net |
22,102 |
25,945 |
Convertible notes, net |
13,465 |
13,679 |
Other long-term liabilities |
305 |
315 |
Total liabilities |
49,574 |
51,964 |
|
|
|
Total stockholders'
equity |
45,443 |
46,964 |
Total liabilities and
stockholders' equity |
$ 95,017 |
$ 98,928 |
|
|
|
Gevo,
Inc. |
|
|
Condensed
Consolidated Cash Flow Information |
|
|
(Unaudited,
in thousands) |
|
|
|
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Operating Activities |
|
|
Net loss |
$ (7,343) |
$ (11,972) |
Adjustments to reconcile net loss to net cash
used in operating activities: |
|
|
Non-cash expenses |
2,934 |
2,468 |
Loss (gain) from change in fair
value of derivatives |
(167) |
(1,278) |
Loss (gain) from change in
Embedded Derivatives of 2022 Notes |
-- |
(1,264) |
Loss (gain) from change in fair
value of 2017 Notes |
(3,765) |
-- |
Loss on extinguishment of
debt |
(285) |
-- |
Changes from working
capital |
(863) |
(940) |
Net cash used in operating
activities |
(9,489) |
(12,986) |
|
|
|
Investing Activities |
|
|
Acquisitions of property, plant
and equipment, net |
(126) |
(2,869) |
Net cash used in investing
activities |
(126) |
(2,869) |
|
|
|
Financing Activities |
|
|
Payments on secured debt |
(51) |
(250) |
Debt and equity offering
costs |
(1,165) |
(100) |
Proceeds from issuance of
common stock upon exercise of stock options and employee stock
purchase plan |
-- |
2 |
Proceeds from issuance of
common stock and common stock units |
6,650 |
-- |
Proceeds from the exercise of
warrants |
2,175 |
-- |
Net cash used in financing
activities |
7,609 |
(348) |
|
|
|
Net decrease in cash and cash
equivalents |
(2,006) |
(16,203) |
|
|
|
Cash and cash equivalents |
|
|
Beginning of period |
6,359 |
24,625 |
Ending of period |
$ 4,353 |
$ 8,422 |
|
|
|
Gevo,
Inc. |
|
|
Non-GAAP
Financial Information |
|
|
(Unaudited,
in thousands) |
|
|
|
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Gevo Development, LLC / Agri-Energy, LLC |
|
|
Loss from operations |
$ (4,312) |
$ (5,068) |
Depreciation and
amortization |
1,451 |
585 |
Non-cash stock-based
compensation |
(2) |
46 |
Non-GAAP loss from operations |
$ (2,863) |
$ (4,437) |
|
|
|
Gevo, Inc. |
|
|
Loss from operations |
$ (5,224) |
$ (7,854) |
Depreciation and
amortization |
211 |
241 |
Non-cash stock-based
compensation |
404 |
993 |
Non-GAAP loss from operations |
$ (4,609) |
$ (6,620) |
|
|
|
Gevo Consolidated |
|
|
Loss from operations |
$ (9,536) |
$ (12,922) |
Depreciation and
amortization |
1,662 |
826 |
Non-cash stock-based
compensation |
402 |
1,039 |
Non-GAAP loss from operations |
$ (7,472) |
$ (11,057) |
CONTACT: Media & Investor Contact:
Mike Willis
Gevo, Inc.
T: (720) 267-8636
mwillis@gevo.com
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