Gevo, Inc. (NASDAQ: GEVO) today announced financial results for the
first quarter of 2019 and recent corporate highlights.
2019 First Quarter Financial Highlights
- Ends the quarter with cash and cash equivalents of $35.5
million
- Reports revenue of $6.4 million for the quarter
- Reports loss from operations of ($5.6) million for the
quarter
- Reports non-GAAP cash EBITDA loss1 of ($3.8) million for the
quarter
- Reports net loss per share of ($0.60) for the quarter
- Reports non-GAAP adjusted net loss per share2 of ($0.63) for
the quarter
Commenting on first quarter of 2019, Dr. Patrick R. Gruber,
Gevo’s Chief Executive Officer, said “The licensing agreement we
recently signed with Praj is a major step forward. It shows
that Gevo can complete a definitive agreement licensing our
biobutanol biocatalyst technology on a commercial basis allowing us
to move forward and license our technology for isobutanol from
molasses and sugar. We look forward to further developing and
completing licensing deals that we expect will generate revenue
without us having to deploy capital. We also executed an
agreement with Praj to develop jet fuel and isooctane from rice
straw and other feedstocks. We believe this second generation
technology combination has great potential to address India’s rice
straw burning problem and related air pollution, while generating
low-carbon hydrocarbons for jet fuel and gasoline. Praj is a
leader in technology to convert straw and bagasse into fermentable
sugars, their technology marries up nicely with ours—saves
development cost and time, while creating new licensing
opportunities.”
Dr. Gruber continued, “In terms of operations, we continue to
make progress on our plans to ‘de-carbonize’ our advanced biofuels
production facility in Luverne, Minnesota. In April 2019, we
began the commissioning of the Shockwave dry fractionation
equipment. So far, the commissioning is on track. This
technology fractionates the corn into a starch fraction, a germ
fraction, and a fiber fraction. The germ will be pressed to
extract food-grade oil. The starch fraction will go to
fermentation as a feedstock. The fiber and germ protein are
expected to be sold for value-added feed products for beef, dairy
cows, pigs, and chickens. With this technology, we expect the
margins for our feed-related products to improve. Over the
coming weeks and months, we expect to begin sales of these new feed
and protein products while optimizing the new process.”
Recent Highlights
- As of March 31, 2019, Gevo had cash and cash
equivalents of $35.5 million, compared with $7.0 million at March
31, 2018.
- In April 2019, the City of Seattle began utilizing a blend of
Gevo’s renewable isobutanol with conventional gasoline in its pilot
program to reduce the Carbon Intensity (CI) levels of fuels used in
Seattle’s fleet vehicles. For this program, Gevo partnered with
Hughes Group LLC, a Washington-based, Certified Service-Disabled
Veteran Owned Business (SDVOB), to coordinate the blending,
logistics, and delivery of the final product to the City.
Additionally, Gevo is collaborating with the City to continue
to supply a renewable drop-in gasoline to further reduce the Carbon
Intensity of the City’s fleet.
- On April 4, 2019, Gevo executed a binding, definitive
Construction License Agreement with Praj Industries Ltd. (“Praj”)
pursuant to which Gevo and Praj will commercialize the production
of renewable isobutanol using sugary-based feedstocks, such as
juice, syrup and molasses made of sugarcane and sugar beets (the
“Construction License Agreement”). Pursuant to the Construction
License Agreement, Praj will provide engineering procurement and
construction services to certain third-party customers using a
process design package that incorporates Gevo’s proprietary
isobutanol biocatalyst and is designed for use with sugary-based
feedstocks (the “PDP”). The PDP is jointly owned by Gevo and
Praj. Gevo has granted a license to Praj that would allow
Praj to provide such services to certain third-party
customers. In connection with the Construction License
Agreement, Gevo and Praj have also entered into a new Joint
Development Agreement and a new Development License Agreement, to
continue their joint development efforts to produce isobutanol
using sugarcane juice, sugarcane syrup, sugarcane molasses, sugar
beet juice, sugar beet syrup, sugar beet molasses, sugar beet pulp,
cassava, rice, wheat, sorghum, bagasse, rice straw, wheat straw,
corn stover, cotton stalk and empty fruit bunches.
- On April 4, 2019, Gevo also executed a Memorandum of
Understanding (“MOU”) with Praj to commercialize Gevo’s renewable
hydrocarbon products in India, including Gevo’s renewable
alcohol-to-jet fuel and renewable isooctane, derived from Gevo’s
renewable isobutanol. The MOU contemplates two phases. In
phase one, Praj will implement a pilot plant in India for the
purpose of introducing Gevo’s technology to potential
customers. Following phase one, Gevo expects to enter into a
commercial license agreement for the production of renewable
hydrocarbons. Together with Praj, Gevo expects to use a combination
of their respective technologies for the conversion of sugars to
renewable hydrocarbon products.
First Quarter 2019 Financial Results
Revenues for the three months ended March 31, 2019 were $6.4
million compared with $8.2 million in the same period in 2018.
During the first quarter of 2019, revenues derived at our advanced
biofuels production facility in Luverne, Minnesota related to
ethanol sales and related products were $5.7 million, a decrease of
approximately $2.5 million from the same period in 2018. This was
primarily the result of reduced ethanol and co-product revenues due
to planned lower production volumes in response to a decline in
ethanol sales prices.
During the three months ended March 31, 2019, hydrocarbon
revenues were $0.7 million compared with $0.0 million in the same
period in 2018. Gevo’s hydrocarbon revenues are comprised of
sales of alcohol-to-jet fuel, isooctane and isooctene.
Cost of goods sold was $9.0 million for the three months ended
March 31, 2019, compared with $10.6 million in the same period in
2018, primarily as a result of decreased production of ethanol
during the quarter. Cost of goods sold included approximately $7.4
million associated with the production of ethanol, isobutanol and
related products and approximately $1.6 million in
depreciation expense for the three months ended March 31, 2019.
Gross loss was $2.6 million for the three months ended March 31,
2019, versus a $2.3 million gross loss in the same period in
2018.
Research and development expense increased by $0.2 million
during the three months ended March 31, 2019, compared with the
same period in 2018, due primarily to an increase in consulting
expenses.
Selling, general and administrative expense increased by $0.2
million during the three months ended March 31, 2019, compared with
the same period in 2018, due primarily to an increase in stock
compensation expenses.
Loss from operations in the three months ended March 31, 2019
was $5.6 million, compared with a $5.0 million loss from operations
in the same period in 2018.
Non-GAAP cash EBITDA loss3 in the three months ended March 31,
2019 was $3.8 million, compared with a $3.3 million non-GAAP cash
EBITDA loss in the same period in 2018.
Interest expense in the three months ended March 31, 2019 was
$0.8 million, a decrease of $0.1 million as compared to the same
period in 2018, primarily due to a decline in outstanding debt as a
result of the conversion of an aggregate of $3.7 million of our
convertible notes during the year ended December 31, 2018.
During the three months ended March 31, 2019, Gevo also
recognized a net non-cash gain of $0.2 million associated with the
quarterly mark-to-market valuation of the embedded derivative of
our convertible notes at March 31, 2019.
Gevo incurred a net loss for the three months ended March 31,
2019 of $6.1 million, compared with a net loss of $2.5 million
during the same period in 2018. Approximately $0.2 million of the
$6.1 million net loss was comprised of the above non-cash gain
during the three months ended March 31, 2019. Accordingly,
non-GAAP adjusted net loss4 for the three months ended March 31,
2019 was $6.4 million, compared with a non-GAAP adjusted net loss
of $5.8 million during the same period in 2018.
Cash at March 31, 2019 was $35.5 million, and the total
principal face value of outstanding debt was $13.8 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 R. Gruber, Chief Executive Officer, Bradford K.
Towne, Chief Accounting Officer, and Geoffrey T. Williams, Jr.,
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 48509998#.
A replay of the call and webcast will be available two hours
after the conference call ends on May 8, 2019. 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 48509998#.
The archived webcast will be available in the Investor Relations
section of Gevo's website at www.gevo.com.
About Gevo
Gevo is a next generation “low-carbon” fuel company focused on
the development and commercialization of renewable alternatives to
petroleum-based products. Low-carbon fuels reduce the carbon
intensity, or the level of greenhouse gas emissions, compared to
standard fossil-based fuels across their lifecycle. The most common
low-carbon fuels are renewable fuels. Gevo is focused on the
development and production of mainstream fuels like gasoline and
jet fuel using renewable feedstocks that have the potential to
lower greenhouse gas emissions at a meaningful scale and enhance
agricultural production, including food and other related products.
In addition to serving the low-carbon fuel markets, through Gevo’s
technology, Gevo can also serve markets for the production of
chemical intermediate products for solvents, plastics, and building
block chemicals. Learn more at our website: 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 relate to a variety of matters, including, without
limitation, expectations and benefits of Gevo’s agreements with
Praj, Gevo’s commissioning of the Shockwave dry fractionation
technology, Gevo’s plans to “de-carbonize” its production facility,
and other statements that are not purely statements of historical
fact. These forward-looking statements are made based on 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, 2018, 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, non-GAAP adjusted net loss and
non-GAAP adjusted net loss per share. Non-GAAP cash EBITDA excludes
depreciation and non-cash stock-based compensation. Non-GAAP
adjusted net loss and 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 Cash EBITDA loss is a non-GAAP measure 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.2 Adjusted net loss per share is a non-GAAP measure
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, to GAAP net loss per share. A reconciliation
of adjusted net loss per share to GAAP net loss per share is
provided in the financial statement tables following this release.3
Cash EBITDA loss is a non-GAAP measure 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.4 Adjusted net loss is a non-GAAP measure 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, to GAAP net loss. A reconciliation of
adjusted net loss to GAAP net loss is provided in the financial
statement tables following this release.
|
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Gevo,
Inc. |
|
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|
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|
Condensed Consolidated
Statements of Operations Information |
|
|
|
|
|
(Unaudited, in
thousands, except share and per share amounts) |
|
|
|
|
|
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|
|
|
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|
Three Months Ended March 31, |
|
2019 |
|
2018 |
|
|
|
|
Revenue |
|
|
|
|
|
Ethanol sales and related products, net |
$ |
5,664 |
|
|
$ |
8,218 |
|
Hydrocarbon revenue |
|
739 |
|
|
|
0 |
|
Grant and other revenue |
|
- |
|
|
|
25 |
|
Total revenues |
|
6,403 |
|
|
|
8,243 |
|
|
|
|
|
|
|
Cost of goods sold |
|
8,961 |
|
|
|
10,583 |
|
|
|
|
|
|
|
Gross loss |
|
(2,558 |
) |
|
|
(2,340 |
) |
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
Research and development
expense |
|
978 |
|
|
|
789 |
|
Selling, general and
administrative expense |
|
2,092 |
|
|
|
1,870 |
|
Total operating expenses |
|
3,070 |
|
|
|
2,659 |
|
|
|
|
|
|
|
Loss from operations |
|
(5,628 |
) |
|
|
(4,999 |
) |
|
|
|
|
|
|
Other (expense)
income |
|
|
|
|
|
Interest expense |
|
(755 |
) |
|
|
(825 |
) |
(Loss) on exchange of
debt |
|
- |
|
|
|
(21 |
) |
(Loss)/Gain from change in
fair value of derivative warrant liability |
|
1 |
|
|
|
477 |
|
(Loss)/Gain from change in
fair value of 2020 Notes embedded derivative |
|
246 |
|
|
|
2,858 |
|
Other income |
|
- |
|
|
|
8 |
|
Total other expense, net |
|
(508 |
) |
|
|
2,497 |
|
|
|
|
|
|
|
Net loss |
$ |
(6,136 |
) |
|
$ |
(2,502 |
) |
|
|
|
|
|
|
Net loss per share - basic and
diluted |
$ |
(0.60 |
) |
|
$ |
(2.22 |
) |
Weighted-average number of
common shares outstanding - basic and diluted |
|
10,153,873 |
|
|
|
1,126,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo,
Inc. |
|
|
|
|
|
|
Condensed Consolidated
Balance Sheet Information |
|
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|
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|
(unaudited) |
|
|
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|
March 31, |
|
|
December 31, |
|
2019 |
|
|
2017 |
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
35,466 |
|
|
|
$ |
33,734 |
|
Accounts receivable |
|
1,125 |
|
|
|
|
526 |
|
Inventories |
|
3,187 |
|
|
|
|
3,166 |
|
Prepaid expenses and other current assets |
|
1,902 |
|
|
|
|
1,284 |
|
Total current assets |
|
41,680 |
|
|
|
|
38,710 |
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
68,045 |
|
|
|
|
67,036 |
|
Deposits and other assets |
|
1,738 |
|
|
|
|
1,289 |
|
Total assets |
$ |
111,463 |
|
|
|
$ |
107,035 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
5,147 |
|
|
|
$ |
4,874 |
|
2020 Notes, net |
|
12,964 |
|
|
|
|
12,554 |
|
2020 Notes embedded derivative liability |
|
148 |
|
|
|
|
394 |
|
Derivative warrant liability |
|
21 |
|
|
|
|
22 |
|
Total current liabilities |
|
18,280 |
|
|
|
|
17,844 |
|
|
|
|
|
|
|
|
Other long-term liabilities |
|
654 |
|
|
|
|
404 |
|
Total liabilities |
|
18,934 |
|
|
|
|
18,248 |
|
|
|
|
|
|
|
|
Commitments and
Contingencies |
|
|
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|
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Stockholders'
Equity |
|
|
|
|
|
|
Common Stock, $0.01 par value per share; 250,000,000
authorized,11,885,524 and 8,640,583 shares issued and outstanding
at March 31, 2019 and December 31, 2018, respectively. |
|
119 |
|
|
|
|
86 |
|
Additional paid-in capital |
|
527,872 |
|
|
|
|
518,027 |
|
Accumulated deficit |
|
(435,462 |
) |
|
|
|
(429,326 |
) |
Total stockholders' equity |
|
92,529 |
|
|
|
|
88,787 |
|
Total liabilities and stockholders' equity |
$ |
111,463 |
|
|
|
$ |
107,035 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gevo,
Inc. |
|
|
|
|
|
|
Condensed Consolidated
Cash Flow Information |
|
|
|
|
|
|
(Unaudited, in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March
31, |
|
2019 |
|
2018 |
Operating
Activities |
|
|
|
|
|
Net loss |
$ |
(6,136 |
) |
|
$ |
(2,502 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
Loss/(Gain) from change in fair value of derivative warrant
liability |
|
(1 |
) |
|
|
(477 |
) |
(Gain) from change in fair value of 2020 Notes embedded
derivative |
|
(246 |
) |
|
|
(2,858 |
) |
Loss from the exchange or conversion of notes |
|
- |
|
|
|
21 |
|
Stock-based compensation |
|
234 |
|
|
|
98 |
|
Depreciation and amortization |
|
1,612 |
|
|
|
1,646 |
|
Non-cash interest expense |
|
410 |
|
|
|
402 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(599 |
) |
|
|
(234 |
) |
Inventories |
|
(21 |
) |
|
|
7 |
|
Prepaid expenses and other current assets |
|
157 |
|
|
|
78 |
|
Accounts payable, accrued expenses, and long-term liabilities |
|
(1,118 |
) |
|
|
(531 |
) |
Net cash used in operating activities |
|
(5,708 |
) |
|
|
(4,350 |
) |
|
|
|
|
|
|
Investing
Activities |
|
|
|
|
|
Acquisitions of property,
plant and equipment |
|
(2,204 |
) |
|
|
(67 |
) |
Net cash used in investing activities |
|
(2,204 |
) |
|
|
(67 |
) |
|
|
|
|
|
|
Financing
Activities |
|
|
|
|
|
Proceeds from issuance of
common stock and common stock warrants |
|
9,644 |
|
|
|
(107 |
) |
Net cash (used in)/provided by financing activities |
|
9,644 |
|
|
|
(107 |
) |
|
|
|
|
|
|
Net increase (decrease) in
cash and cash equivalents |
|
1,732 |
|
|
|
(4,524 |
) |
|
|
|
|
|
|
Cash, cash equivalents, and
restricted cash |
|
|
|
|
|
Beginning of period |
|
33,734 |
|
|
|
11,553 |
|
End of period |
$ |
35,466 |
|
|
|
7,029 |
|
|
|
|
|
|
|
|
|
|
|
Gevo,
Inc. |
|
|
|
Reconciliation of GAAP
to Non-GAAP Financial Information |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Non-GAAP Cash
EBITDA: |
2019 |
|
2018 |
Loss from operations |
$ |
(5,628 |
) |
|
$ |
(4,999 |
) |
Depreciation and amortization |
|
1,612 |
|
|
|
1,645 |
|
Non-cash stock-based compensation |
|
234 |
|
|
|
98 |
|
Non-GAAP cash EBITDA |
$ |
(3,782 |
) |
|
$ |
(3,256 |
) |
|
|
|
|
|
|
|
|
Non-GAAP Adjusted Net
Loss: |
|
|
|
Net Loss |
$ |
(6,136 |
) |
|
$ |
(2,502 |
) |
(Loss) on exchange of debt |
|
- |
|
|
|
(21 |
) |
Gain from change in fair value of derivative warrant liability |
|
1 |
|
|
|
477 |
|
(Loss)/Gain from change in fair value of 2020 Notes embedded
derivative |
|
246 |
|
|
|
2,858 |
|
Non-GAAP Net Income / (Loss) |
$ |
(6,383 |
) |
|
$ |
(5,816 |
) |
Weighted-average number of common
shares outstanding - basic and diluted |
|
10,153,873 |
|
|
|
1,126,737 |
|
Non-GAAP Adjusted Net loss per
share - basic and diluted |
$ |
(0.63 |
) |
|
$ |
(5.16 |
) |
|
|
|
|
Investor and Media ContactShawn M.
SeversonIntegra Investor Relations+1
415-226-7747gevo@integra-ir.com
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