Gevo, Inc. (NASDAQ:GEVO) today announced financial results for the
three months ended March 31, 2018.
Commenting on Gevo’s most recently completed quarter, Patrick R.
Gruber, Gevo’s Chief Executive Officer, said “In the first quarter
of 2018 we continued the drive to achieve our commercial objectives
and worked to extend our runway. We see a pathway to making Gevo
profitable by addressing low carbon fuels. We intend to do it first
with ethanol by improving our production facility in Luverne which
will also benefit isobutanol production. We can see a path to
profitability without building a large isobutanol and hydrocarbons
plant. We have not abandoned our long-term goal of building large
scale plants, but they take time to build out and generate
cash. We think that we can get to cash positive sooner rather
than later, independent of building out a large isobutanol plant.
We expect to describe in more detail what this plan looks like in
the relatively near further. Our plan to drive down cost across the
entire company has been working and the numbers in our financials
reflect our efforts.”
Dr. Gruber continued, “To be clear, we are continuing to gain
commercial traction with isobutanol, isooctane, and jet fuel. We
expect that in the relatively near future we will be able to
finalize one or more of these contracts. We recently have been
reviewing the market opportunities for our products, including the
costs to produce our ethanol, isobutanol, isooctane, and jet fuel,
and potential selling prices for these products. We are pleased
with the results and see enormous commercial potential. We are one
of the few biofuel producers that have real data and operating
experience gained from a commercial production facility. This data
and experience are competitive advantages for us as we discuss
offtake arrangements with potential customers and strategic
partners. Tim Cesarek, Gevo’s recently hired Chief Commercial
Officer, has hit the ground running and is having discussions with
several potential customers and strategic partners.”
Key highlights for the quarter and key subsequent events
included:
- Gevo continued to benefit from the results of its ongoing
efforts to reduce its overall cash burn which contributed to the
decline in loss from operations of $2.2 million in the first
quarter of 2018 compared to the same period in 2017.
- Sales for our products increased by 47% in the first quarter of
2018 compared to the same period in 2017, primarily due to
increased production of ethanol and distiller grains.
- On April 3, 2018, Gevo announced the appointment of Tim Cesarek
to the newly created position of Chief Commercial Officer. Mr.
Cesarek brings over 20 years of knowledge and experience in
strategic and commercial transactions, with 15 years in the field
of renewable resource-based fuels and chemicals. In addition to
overseeing our commercial development of our fuel and chemical
products, Mr. Cesarek is expected to develop opportunities for the
Company with strategic customers and partners.
- The Environmental Protection Agency (“EPA”) has published a
rule allowing for a 16% blend of isobutanol in gasoline for on-road
use. The comment period is now closed. The EPA is
expected to finalize the approval in the coming months. A 16%
isobutanol blend in gasoline would provide the same oxygen content
in gasoline as an E10 gasoline and provide the other value-added
benefits such as low Reid Vapor Pressure or RVP, higher energy
density, high octane, and low water solubility.
- ASTM International gave final approval for an increase of blend
rates for alcohol-to-jet fuel from 30% to 50% in mixtures with
conventional petroleum-based jet fuel.
NASDAQ Market Price Compliance
On April 12, 2018, Gevo filed a definitive proxy statement in
connection with its 2018 Annual Meeting of Stockholders (the
“Annual Meeting”) to be held on Wednesday, May 30, 2018. At the
Annual Meeting, stockholders will vote to approve, among other
things, a reverse stock split of Gevo’s common stock by a ratio of
not less than one-for-two and not more than one-for-twenty, with
the exact ratio to be set by Gevo’s Board of Directors (the
“Reverse Stock Split”).
The Reverse Stock Split is necessary for Gevo to maintain its
listing on the NASDAQ Capital Market, and to provide Gevo with
resources and flexibility, with respect to raising capital,
sufficient to execute its business plans and strategy, and improve
the marketability and liquidity of Gevo’s common stock. In
addition, the delisting of Gevo’s common stock from a national
securities exchange would constitute a “fundamental change” under
the indenture governing Gevo’s 12% convertible senior secured notes
due 2020 (the “2020 Notes”), which would give holders the right to
require Gevo to repurchase the 2020 Notes. The repurchase of the
2020 Notes as a result of a fundamental change would likely render
Gevo insolvent and result in some type of bankruptcy, insolvency,
liquidation, or reorganization event for Gevo.
Financial Highlights
Revenues for the first quarter of 2018 were $8.2 million
compared with $5.6 million in the same period in 2017. During the
first quarter of 2018, revenues derived at the Luverne Facility
related to ethanol sales and related products were $8.2 million, an
increase of approximately $2.7 million from the same period in
2017. This was primarily a result of increased ethanol production
and distiller grain prices in the first quarter of 2018 versus the
same period in 2017.
During the first quarter of 2018, hydrocarbon revenues were $0.0
million, $0.1 million lower than the same period in 2017 as a
result of timing differences in shipping. Gevo’s hydrocarbon
revenues are comprised of sales of ATJ, isooctane and
isooctene.
Grant and other revenue was less than $0.1 million for first
quarter of 2018, consistent with the same period in 2017.
Cost of goods sold was $10.6 million for the three months ended
March 31, 2018, compared with $9.4 million in the same period in
2017, primarily as a result of increased ethanol production. Cost
of goods sold included approximately $9.0 million associated with
the production of ethanol, isobutanol and related products
and approximately $1.6 million in depreciation expense.
Gross loss was $2.3 million for the three months ended March 31,
2018, versus a $3.8 million gross loss in the same quarter in
2017.
Research and development expense decreased by $0.4 million
during the three months ended March 31, 2018, compared with the
same period in 2017, due primarily to a reduction in
employee-related expenses.
Selling, general and administrative expense decreased by $0.3
million during the three months ended March 31, 2018, compared with
the same period in 2017, due primarily to a decline in
employee-related expenses.
Loss from operations in the three months ended March 31, 2018
was $5.0 million, compared with a $7.2 million loss from operations
in the same period in 2017.
Non-GAAP cash EBITDA loss in the three months ended March 31,
2018 was $3.3 million, compared with a $5.4 million non-GAAP cash
EBIDA loss in the same period in 2017.
Interest expense in the three months ended March 31, 2017 was
$0.8 million, an increase of $0.1 million as compared to the same
period in 2017, due to higher interest rates on the outstanding
debt.
During the three months ended March 31, 2018, Gevo incurred a
non-cash loss of less than $0.1 million due to the exchange of the
remaining $0.5 million of outstanding 2022 Notes. As a result, the
2022 Notes have been fully satisfied.
During the three months ended March 31, 2018, Gevo also incurred
a non-cash gain of $2.9 million during the quarter due to the
quarterly mark-to-market valuation of the 2020 Notes embedded
derivative.
During the three months ended March 31, 2018, the estimated fair
value of the derivative warrant liability decreased by $0.5
million, resulting in a non-cash gain from a change in the fair
value of derivative warrant liability.
The net loss for the three months ended March 31, 2018 was $2.5
million, compared with a net loss of $5.9 million during the same
period in 2017.
The non-GAAP adjusted net loss for the three months ended March
31, 2018 was $5.8 million, compared with a non-GAAP adjusted net
loss of $7.9 million during the same period in 2017.
The cash position at March 31, 2018 was $7.0 million and the
total principal face value of the outstanding debt was $16.7
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 Gruber, Chief Executive Officer, Tim Cesarek,
Chief Commercial Officer, Bradford Towne, Chief Accounting Officer,
and Geoff Williams, 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(888)
771-4371 (inside the U.S.) or 1 (847) 585-4405 (outside the U.S.)
and reference the access code 46800588. A replay of the call and
webcast will be available two hours after the conference call ends
on May 10, 2018. 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 46800588#. The archived webcast will be available
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, Minnesota. Gevo has also developed
technology to produce hydrocarbon products from renewable alcohols.
Gevo currently operates a biorefinery in Silsbee, Texas, in
collaboration with South Hampton Resources Inc., to produce
renewable jet fuel, octane, and ingredients for plastics like
polyester. 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 the ability of Gevo to develop
markets for its products, the ability of Gevo to become profitable,
the ability of Gevo to enter into binding offtake, sales or supply
agreements for its products, the ability of Gevo to produce
isobutanol or related hydrocarbon products at its Luverne,
Minnesota production facility, the ability of Gevo to finance the
Luverne Facility Expansion, the ability of Gevo to achieve its 2018
operational and financial targets and milestones, the ability of
Gevo to secure new customer relationships across core markets, 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, 2017, 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 and non-GAAP adjusted net loss
per share. On a non-GAAP basis, non-GAAP cash EBITDA excludes
non-cash items such as depreciation and stock-based compensation.
On a non-GAAP basis, non-GAAP 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
supplements to 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 Adjusted Net Loss Per Share is 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; a
reconciliation of Adjusted Net Loss Per Share to GAAP net loss per
share is provided in the financial statement tables following this
release.
2 Cash EBITDA loss is 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.
Investor and Media ContactShawn M.
SeversonIntegra Investor Relations+1
415-226-7747gevo@integra-ir.com
Gevo, Inc.Condensed Consolidated
Statements of Operations Information(Unaudited, in
thousands, except share and per share amounts)
|
|
Three Months Ended March 31, |
|
|
|
2018 |
|
|
2017 |
|
Revenue |
|
|
|
|
|
|
|
|
Ethanol
sales and related products, net |
|
$ |
8,218 |
|
|
$ |
5,494 |
|
Hydrocarbon revenue |
|
|
- |
|
|
|
90 |
|
Grant and
other revenue |
|
|
25 |
|
|
|
32 |
|
Total
revenues |
|
|
8,243 |
|
|
|
5,616 |
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
|
10,583 |
|
|
|
9,408 |
|
|
|
|
|
|
|
|
|
|
Gross
loss |
|
|
(2,340 |
) |
|
|
(3,792 |
) |
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Research
and development expense |
|
|
789 |
|
|
|
1,217 |
|
Selling,
general and administrative expense |
|
|
1,870 |
|
|
|
2,173 |
|
Total
operating expenses |
|
|
2,659 |
|
|
|
3,390 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(4,999 |
) |
|
|
(7,182 |
) |
|
|
|
|
|
|
|
|
|
Other (expense)
income |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(825 |
) |
|
|
(714 |
) |
(Loss) on
exchange of debt |
|
|
(21 |
) |
|
|
(964 |
) |
(Loss)
from change in fair value of the 2017 Notes |
|
|
- |
|
|
|
(339 |
) |
Gain from
change in fair value of derivative warrant liability |
|
|
477 |
|
|
|
3,259 |
|
Gain from
change in fair value of 2020 Notes embedded derivative |
|
|
2,858 |
|
|
|
- |
|
Other
income |
|
|
8 |
|
|
|
6 |
|
Total
other expense, net |
|
|
2,497 |
|
|
|
1,248 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,502 |
) |
|
$ |
(5,934 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share -
basic and diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.51 |
) |
Weighted-average number
of common shares outstanding - basic and diluted |
|
|
22,534,727 |
|
|
|
11,584,595 |
|
Gevo, Inc.Condensed Consolidated
Balance Sheet Information(in
thousands)
|
|
(unaudited) |
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
7,029 |
|
|
$ |
11,553 |
|
Accounts
receivable |
|
|
1,288 |
|
|
|
1,054 |
|
Inventories |
|
|
4,356 |
|
|
|
4,362 |
|
Prepaid
expenses and other current assets |
|
|
633 |
|
|
|
712 |
|
Total
current assets |
|
|
13,306 |
|
|
|
17,681 |
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net |
|
|
68,764 |
|
|
|
70,369 |
|
Deposits and other
assets |
|
|
803 |
|
|
|
803 |
|
Total
assets |
|
$ |
82,873 |
|
|
$ |
88,853 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities |
|
$ |
3,467 |
|
|
$ |
4,011 |
|
2020
Notes embedded derivative liability |
|
|
2,366 |
|
|
|
5,224 |
|
Derivative warrant liability |
|
|
1,474 |
|
|
|
1,951 |
|
Total
current liabilities |
|
|
7,307 |
|
|
|
11,186 |
|
|
|
|
|
|
|
|
|
|
2020
Notes, net |
|
|
13,893 |
|
|
|
13,491 |
|
2022
Notes, net |
|
|
- |
|
|
|
515 |
|
Other
long-term liabilities |
|
|
117 |
|
|
|
130 |
|
Total
liabilities |
|
|
21,317 |
|
|
|
25,322 |
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies (see Note 11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
|
|
|
|
Common
Stock, $0.01 par value per share; 250,000,000 authorized,
22,696,112 and 21,811,059 shares issued and outstanding at March
31, 2018 and December 31, 2017, respectively. |
|
|
227 |
|
|
|
218 |
|
Additional paid-in capital |
|
|
465,181 |
|
|
|
464,663 |
|
Accumulated deficit |
|
|
(403,852 |
) |
|
|
(401,350 |
) |
Total
stockholders' equity |
|
|
61,556 |
|
|
|
63,531 |
|
Total
liabilities and stockholders' equity |
|
$ |
82,873 |
|
|
$ |
88,853 |
|
Gevo, Inc.Condensed Consolidated Cash
Flow Information(Unaudited, in
thousands)
|
|
Three Months Ended March 31, |
|
|
|
2018 |
|
|
2017 |
|
Operating
Activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,502 |
) |
|
$ |
(5,934 |
) |
Adjustments to
reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
(Gain)
from change in fair value of derivative warrant liability |
|
|
(477 |
) |
|
|
(3,226 |
) |
(Gain)
from change in fair value of 2020 Notes embedded derivative |
|
|
(2,858 |
) |
|
|
- |
|
Loss from
the change in fair value of the 2017 Notes |
|
|
— |
|
|
|
339 |
|
Loss on
exchange of debt |
|
|
21 |
|
|
|
964 |
|
(Gain) on
extinguishment of warrant liability |
|
|
— |
|
|
|
(33 |
) |
Stock-based compensation |
|
|
98 |
|
|
|
128 |
|
Depreciation and amortization |
|
|
1,646 |
|
|
|
1,676 |
|
Non-cash
interest expense |
|
|
402 |
|
|
|
80 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(234 |
) |
|
|
(82 |
) |
Inventories |
|
|
7 |
|
|
|
(720 |
) |
Prepaid
expenses and other current assets |
|
|
78 |
|
|
|
(11 |
) |
Accounts
payable, accrued expenses, and long-term liabilities |
|
|
(531 |
) |
|
|
(1,228 |
) |
Net cash
used in operating activities |
|
|
(4,530 |
) |
|
|
(8,047 |
) |
|
|
|
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
|
|
|
Acquisitions of property, plant and equipment |
|
|
(67 |
) |
|
|
(673 |
) |
Net cash
used in investing activities |
|
|
(67 |
) |
|
|
(673 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
|
|
|
Payments
on secured debt |
|
|
— |
|
|
|
(9,616 |
) |
Debt and
equity offering costs |
|
|
(164 |
) |
|
|
(205 |
) |
Proceeds
from issuance of common stock and common stock warrants |
|
|
57 |
|
|
|
11,044 |
|
Proceeds
from the exercise of warrants |
|
|
— |
|
|
|
2 |
|
Net cash
(used in)/provided by financing activities |
|
|
(107 |
) |
|
|
1,225 |
|
|
|
|
|
|
|
|
|
|
Net (decrease) in cash
and cash equivalents |
|
|
(4,524 |
) |
|
|
(7,495 |
) |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents,
and restricted cash |
|
|
|
|
|
|
|
|
Beginning
of period |
|
|
11,553 |
|
|
|
30,499 |
|
End of
period |
|
$ |
7,029 |
|
|
$ |
23,004 |
|
Gevo, Inc.Reconciliation of GAAP to
Non-GAAP Financial Information(Unaudited, in
thousands)
|
Three Months Ended March 31, |
Non-GAAP Cash
EBITDA: |
|
2018 |
|
|
|
2017 |
|
|
|
|
|
Gevo Development, LLC /
Agri-Energy, LLC |
|
|
|
Loss from
operations |
$ |
(2,523 |
) |
|
$ |
(4,117 |
) |
Depreciation and amortization |
|
1,562 |
|
|
|
1,539 |
|
Non-cash
stock-based compensation |
|
3 |
|
|
|
3 |
|
Non-GAAP cash
EBITDA |
$ |
(958 |
) |
|
$ |
(2,575 |
) |
|
|
|
|
Gevo, Inc. |
|
|
|
Loss from
operations |
$ |
(2,474 |
) |
|
$ |
(3,065 |
) |
Depreciation and amortization |
|
83 |
|
|
|
137 |
|
Non-cash
stock-based compensation |
|
95 |
|
|
|
125 |
|
Non-GAAP cash
EBITDA |
$ |
(2,296 |
) |
|
$ |
(2,803 |
) |
|
|
|
|
Gevo Consolidated |
|
|
|
Loss from
operations |
$ |
(4,999 |
) |
|
$ |
(7,182 |
) |
Depreciation and amortization |
|
1,645 |
|
|
|
1,676 |
|
Non-cash
stock-based compensation |
|
98 |
|
|
|
128 |
|
Non-GAAP cash
EBITDA |
$ |
(3,256 |
) |
|
$ |
(5,378 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Adjusted Net Loss: |
|
|
|
Gevo Consolidated |
|
|
|
Net
Loss |
$ |
(2,502 |
) |
|
$ |
(5,934 |
) |
(Loss) on
exchange of debt |
|
(21 |
) |
|
|
(964 |
) |
(Loss)
from change in fair value of the 2017 Notes |
|
- |
|
|
|
(339 |
) |
Gain from
change in fair value of derivative warrant liability |
|
477 |
|
|
|
3,259 |
|
Gain from
change in fair value of 2020 Notes embedded derivative |
|
2,858 |
|
|
|
- |
|
Non-GAAP
Net Loss |
$ |
(5,816 |
) |
|
$ |
(7,890 |
) |
Weighted-average number
of common shares outstanding - basic and diluted |
|
22,534,727 |
|
|
|
11,584,595 |
|
Non-GAAP Adjusted Net
loss per share - basic and diluted |
$ |
(0.26 |
) |
|
$ |
(0.68 |
) |
Gevo (NASDAQ:GEVO)
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Gevo (NASDAQ:GEVO)
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Von Jul 2023 bis Jul 2024