Gevo Reports Second Quarter 2016 Financial Results
First Railcar of Isobutanol Shipped to
-
- Reports net loss per share of
($0.44) for the second quarter - Reports non-GAAP adjusted net loss per share[1] of
($0.15) for the second quarter - Ended the second quarter with cash and cash equivalents of
$22.6 million - Reports revenue of
$8.1 million for the quarter - Loss from operations of
$5.5 million - Reports non-GAAP cash EBITDA loss[2] of
$3.6 million for the quarter
Gevo produced approximately 80,000 gallons of isobutanol during the quarter.Gevo entered into an agreement withMusket Corporation to supply isobutanol as a “non-ethanol” oxygenate, which has been identified as an unmet need in the market, for blending with gasoline. Musket is a major, national fuel distributor under the umbrella of the Love’s Family of Companies, one of the largest fuel retailers in the U.S. Initial target markets are expected to include the marine and off-road markets inArizona ,Nevada , andUtah . Musket has taken delivery of its first railcar of isobutanol and is moving it through their distribution system.- The first two commercial flights using Gevo’s renewable alcohol to jet fuel (ATJ) took place on
June 7, 2016 . The flights originated inSeattle and flew toSan Francisco International Airport andRonald Reagan Washington National Airport , respectively. The twoAlaska Airlines flights utilized a 20 percent ATJ fuel blend. Gevo entered into an agreement withClariant Corp. , one of the world’s leading specialty chemical companies, to develop catalysts to enable Gevo’s Ethanol-To-Olefins (ETO) technology. Gevo’s ETO technology, which uses ethanol as a feedstock, produces tailored mixes of propylene, isobutylene and hydrogen, which are valuable as standalone molecules, or as feedstocks to produce downstream derivative products such as diesel fuel, chemical intermediates, and polymers that would be drop-in replacements for their fossil-based equivalents.Clariant is committed to the development and scale-up of the catalyst.- On
June 15, 2016 ,Gevo closed a best efforts public offering of 21,080,456 shares of common stock at a public offering price of$0.45 per share. The gross proceeds toGevo from this offering were approximately$9.5 million . - During the quarter,
Gevo received proceeds of approximately$10.8 million through the exercise of warrants. Approximately 36.3 million shares were issued as result of these exercises. - On
April 1, 2016 ,Gevo completed the sale of 3,721,429 Series C units and 6,571,429 Series D units pursuant to an underwritten public offering.Gevo received gross proceeds of approximately$3.5 million , not including future proceeds from the exercise of any of the warrants associated with the units.
Outlook for 2016
As previously disclosed,
It has, however, taken
For the reasons discussed above,
Gevo now expects isobutanol production at its production facility inLuverne to be in a range of 500,000 to 650,000 gallons in 2016.
At this time, based upon the results at
- Decrease the variable cost of producing isobutanol at its
Luverne production facility to a range of$3.00-$3.50 /gallon (assumes corn price of$3.65 per bushel and nets the value of the isobutanol distiller's grains (the "iDGs™"), enabling isobutanol to be produced at a positive contribution margin, based on an expected average selling price for isobutanol of between$3.50-$4.50 /gallon. - Increase sales of isobutanol into core markets such as the renewable ATJ fuel, marina, off-road, isooctane and solvents markets.
- Achieve an average quarterly corporate-wide EBITDA burn rate (excluding stock-based compensation) of
$3.5-$4.5 million . Corporate-wide EBITDA burn rate is calculated by adding back depreciation and non-cash stock compensation to GAAP Loss From Operations.
Through the balance of 2016 and into 2017,
Despite the production ramp-up delays described above,
“The first half of 2016 has been a significant inflection point for
“I am pleased that all operations, including the distillation system, at our plant in
“On the market and sales front we have made good progress. Conducting commercial airline flights using our ATJ was a tremendous milestone. While all the testing had previously been completed during the six years of work with
Financial Highlights
Revenues for the second quarter of 2016 were
During the second quarter of 2016, hydrocarbon revenues were
Cost of goods sold was flat during the three months ended
Gross loss was
Research and development expense decreased by approximately
Selling, general and administrative expense decreased by
Loss from operations in the second quarter of 2016 was
Non-GAAP cash EBITDA loss in the second quarter of 2016 was
Interest expense in the second quarter of 2016 was
During the three months ended
During the three months ended
During the three months ended
During the three months ended
The net loss for the second quarter of 2016 was
The non-GAAP adjusted net loss for the second quarter of 2016 was
The cash position at
Webcast and Conference Call Information
Hosting today’s conference call at
To participate in the conference call, please dial 1(847) 585-4405 (inside the U.S.) or 1(888) 771-4371 (outside the U.S.) and reference the access code 43066415. A replay of the call and webcast will be available two hours after the conference call ends on
About
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
Non-GAAP Financial Information
This press release contains financial measures that do not comply with U.S. generally accepted accounting principles (GAAP), non-GAAP cash EBITDA and adjusted 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 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 our 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,
Reverse Stock Split
On
Gevo, Inc. | |||||||||||||||
Condensed Consolidated Statements of Operations Information | |||||||||||||||
(Unaudited, in thousands, except share and per share amounts) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue and cost of goods sold | |||||||||||||||
Ethanol sales and related products, net | $ | 7,168 | $ | 7,955 | $ | 12,925 | $ | 13,053 | |||||||
Hydrocarbon revenue | 713 | 740 | 1,011 | 1,257 | |||||||||||
Grant and other revenue | 232 | 229 | 497 | 513 | |||||||||||
Total revenues | 8,113 | 8,924 | 14,433 | 14,823 | |||||||||||
Cost of goods sold | 9,989 | 9,898 | 19,212 | 19,132 | |||||||||||
Gross loss | (1,876 | ) | (974 | ) | (4,779 | ) | (4,309 | ) | |||||||
Operating expenses | |||||||||||||||
Research and development expense | 1,469 | 1,765 | 2,513 | 3,487 | |||||||||||
Selling, general and administrative expense | 2,147 | 3,792 | 4,066 | 8,271 | |||||||||||
Total operating expenses | 3,616 | 5,557 | 6,579 | 11,758 | |||||||||||
Loss from operations | (5,492 | ) | (6,531 | ) | (11,358 | ) | (16,067 | ) | |||||||
Other (expense) income | |||||||||||||||
Interest expense | (2,246 | ) | (2,029 | ) | (4,396 | ) | (4,064 | ) | |||||||
Gain on conversion of debt | - | - | - | 285 | |||||||||||
(Loss)/Gain on extinguishment of warrant liability | (923 | ) | 1,775 | (923 | ) | 1,775 | |||||||||
(Loss)/Gain from change in fair value of the 2017 Notes | (940 | ) | (340 | ) | (1,775 | ) | 3,425 | ||||||||
(Loss)/Gain from change in fair value of derivative warrant liability |
(10,573 | ) | (7,247 | ) | (5,325 | ) | (7,080 | ) | |||||||
Loss on issuance of equity | (1,519 | ) | - | (1,519 | ) | - | |||||||||
Other income | 206 | 2 | 206 | 13 | |||||||||||
Total other expense, net | (15,995 | ) | (7,839 | ) | (13,732 | ) | (5,646 | ) | |||||||
Net loss | $ | (21,487 | ) | $ | (14,370 | ) | $ | (25,090 | ) | $ | (21,713 | ) | |||
Net loss per share - basic and diluted | $ | (0.44 | ) | $ | (1.10 | ) | $ | (0.70 | ) | $ | (2.03 | ) | |||
Weighted-average number of common shares | |||||||||||||||
outstanding - basic and diluted | 49,085,638 | 13,009,434 | 36,050,983 | 10,673,891 |
Gevo, Inc. | |||||||
Condensed Consolidated Balance Sheet Information | |||||||
(Unaudited, in thousands) | |||||||
June 30, | December 31, | ||||||
2016 | 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 22,617 | $ | 17,031 | |||
Accounts receivable | 1,674 | 1,391 | |||||
Inventories | 2,885 | 3,487 | |||||
Prepaid expenses and other current assets | 884 | 731 | |||||
Total current assets | 28,060 | 22,640 | |||||
Property, plant and equipment, net | 77,773 | 76,777 | |||||
Deposits and other assets | 3,414 | 3,414 | |||||
Total assets | $ | 109,247 | $ | 102,831 | |||
Liabilities | |||||||
Current liabilities: | |||||||
Accounts payable, accrued liabilities and other current liabilities | $ | 4,703 | $ | 7,476 | |||
Derivative warrant liability | 6,150 | 10,493 | |||||
Current portion of secured debt, net | 324 | 330 | |||||
Current portion 2017 Notes recorded at fair value | 23,340 | - | |||||
Total current liabilities | 34,517 | 18,299 | |||||
Long-term portion of secured debt, net | - | 153 | |||||
Long term portion 2017 Notes recorded at fair value | - | 21,565 | |||||
2022 Notes, net | 16,545 | 14,341 | |||||
Other long-term liabilities | - | 147 | |||||
Total liabilities | 51,062 | 54,505 | |||||
Total stockholders’ equity | 58,185 | 48,326 | |||||
Total liabilities and stockholders' equity | $ | 109,247 | $ | 102,831 |
Gevo, Inc. | |||||||
Condensed Consolidated Cash Flow Information | |||||||
(Unaudited, in thousands) | |||||||
Six Months Ended June 30, | |||||||
2016 | 2015 | ||||||
Operating Activities | |||||||
Net loss | $ | (25,090 | ) | $ | (21,713 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
|||||||
Loss/(Gain) from change in fair value of derivative warrant liability |
5,325 | 7,080 | |||||
Loss/(Gain) from change in fair value of the 2017 Notes | 1,775 | (3,425 | ) | ||||
Loss/(Gain) on conversion of debt | - | (285 | ) | ||||
Gain on extinguishment of warrant liability | 923 | (1,775 | ) | ||||
Loss on equity issuance | 1,519 | - | |||||
Stock-based compensation | 542 | 698 | |||||
Depreciation and amortization | 3,282 | 3,281 | |||||
Non-cash interest expense | 2,130 | 1,767 | |||||
Other non-cash expenses | - | - | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (283 | ) | 42 | ||||
Inventories | 602 | 1,389 | |||||
Prepaid expenses and other current assets | (153 | ) | 160 | ||||
Accounts payable, accrued expenses, and long-term liabilities |
(1,937 | ) | (2,104 | ) | |||
Net cash used in operating activities | (11,365 | ) | (14,885 | ) | |||
Investing Activities | |||||||
Acquisitions of property, plant and equipment | (4,847 | ) | (175 | ) | |||
Proceeds from sales tax refund for property, plant and equipment | - | 144 | |||||
Net cash used in investing activities | (4,847 | ) | (31 | ) | |||
Financing Activities | |||||||
Payments on secured debt | (84 | ) | (131 | ) | |||
Debt and equity offering costs | (1,997 | ) | (2,785 | ) | |||
Proceeds from issuance of common stock and common stock units | 13,023 | 23,850 | |||||
Proceeds from the exercise of warrants | 10,856 | 10,151 | |||||
Net cash provided by financing activities | 21,798 | 31,085 | |||||
Net increase (decrease) in cash and cash equivalents | 5,586 | 16,169 | |||||
Cash and cash equivalents | |||||||
Beginning of period | 17,031 | 6,359 | |||||
End of period | $ | 22,617 | $ | 22,528 |
Gevo, Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Information | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Non-GAAP Cash EBITDA: | 2016 | 2015 | 2016 | 2015 | |||||||||||
Gevo Development, LLC / Agri-Energy, LLC | |||||||||||||||
Loss from operations | $ | (2,936 | ) | $ | (2,091 | ) | $ | (6,494 | ) | $ | (6,403 | ) | |||
Depreciation and amortization | 1,497 | 1,417 | 2,949 | 2,868 | |||||||||||
Non-cash stock-based compensation | 3 | - | 8 | (2 | ) | ||||||||||
Non-GAAP cash EBITDA | $ | (1,436 | ) | $ | (674 | ) | $ | (3,537 | ) | $ | (3,537 | ) | |||
Gevo, Inc. | |||||||||||||||
Loss from operations | $ | (2,556 | ) | $ | (4,440 | ) | $ | (4,864 | ) | $ | (9,664 | ) | |||
Depreciation and amortization | 164 | 202 | 332 | 413 | |||||||||||
Non-cash stock-based compensation | 181 | 296 | 534 | 700 | |||||||||||
Non-GAAP cash EBITDA | $ | (2,211 | ) | $ | (3,942 | ) | $ | (3,998 | ) | $ | (8,551 | ) | |||
Gevo Consolidated | |||||||||||||||
Loss from operations | $ | (5,492 | ) | $ | (6,531 | ) | $ | (11,358 | ) | $ | (16,067 | ) | |||
Depreciation and amortization | 1,661 | 1,619 | 3,281 | 3,281 | |||||||||||
Non-cash stock-based compensation | 184 | 296 | 542 | 698 | |||||||||||
Non-GAAP cash EBITDA | $ | (3,647 | ) | $ | (4,616 | ) | $ | (7,535 | ) | $ | (12,088 | ) | |||
Non-GAAP Adjusted Net Loss: | |||||||||||||||
Gevo Consolidated | |||||||||||||||
Net Loss | (21,487 | ) | (14,370 | ) | (25,090 | ) | (21,713 | ) | |||||||
Gain on conversion of debt | - | - | - | 285 | |||||||||||
(Loss)/Gain on extinguishment of warrant liability | (923 | ) | 1,775 | (923 | ) | 1,775 | |||||||||
(Loss)/Gain from change in fair value of the 2017 Notes | (940 | ) | (340 | ) | (1,775 | ) | 3,425 | ||||||||
(Loss)/Gain from change in fair value of derivative warrant liability | (10,573 | ) | (7,247 | ) | (5,325 | ) | (7,080 | ) | |||||||
Loss on issuance of equity | (1,519 | ) | - | (1,519 | ) | - | |||||||||
Non-GAAP Net Loss | $ | (7,532 | ) | $ | (8,558 | ) | $ | (15,548 | ) | $ | (20,118 | ) | |||
Weighted-average number of common shares outstanding - basic and diluted |
49,085,638 | 13,009,434 | 36,050,983 | 10,673,891 | |||||||||||
Non-GAAP Adjusted Net loss per share - basic and diluted | $ | (0.15 | ) | $ | (0.66 | ) | $ | (0.43 | ) | $ | (1.88 | ) | |||
[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 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.
Media ContactDavid Rodewald The David James Agency, LLC +1 805-494-9508 gevo@davidjamesagency.com Investor ContactShawn M. Severson EnergyTech Investor, LLC +1 415-233-7094 shawn@energytechinvestor.com @ShawnEnergyTech www.energytechinvestor.com