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Gevo Reports Second Quarter 2020 Financial Results

 

ENGLEWOOD, Colo., Aug. 10, 2020 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ: GEVO) (“Gevo”) today announced financial results for the second quarter of 2020 and recent corporate highlights.

Recent Corporate Highlights

2020 Second Quarter Financial Highlights

Commenting on the second quarter of 2020 and recent corporate events, Dr. Patrick R. Gruber, Gevo’s Chief Executive Officer, said, “The process with Citigroup, whereby we are working to raise the money needed to build plants “off balance sheet” is progressing nicely and Gevo is advancing discussions with several potential equity partners and lenders. We expect to announce at least two new significant commercial agreements in the near future. Overall, we continue to make good progress developing our business, even in spite of COVID-19.”

Second Quarter 2020 Financial Results

Revenue for the three months ended June 30, 2020 was $1.0 million compared with $5.1 million in the same period in 2019.

During the three months ended June 30, 2020, hydrocarbon revenue was $0.9 million compared with $0.1 million in the same period in 2019 as a result of increased shipments of finished products from our demonstration plant at the South Hampton Resources, Inc. facility in Silsbee, Texas. Gevo’s hydrocarbon revenue is comprised of sales of alcohol-to-jet fuel, isooctane and isooctene.

During the second quarter of 2020, revenue derived at the Luverne Facility related to ethanol sales and related products was $0.1 million, a decrease of approximately $5.0 million from the same period in 2019. As a result of COVID-19 and in response to an unfavorable commodity environment, we terminated our production of ethanol and distiller grains in March 2020, which resulted in lower sales for the period.

Cost of goods sold was $2.6 million for the three months ended June 30, 2020, compared with $8.5 million in the same period in 2019, primarily as a result of terminating ethanol production as a result of COVID-19 and in response to an unfavorable commodity environment. Cost of goods sold included approximately $1.0 million associated with the production of isobutanol and related products and maintenance of the Luverne Facility and approximately $1.6 million in depreciation expense for the three months ended June 30, 2020.

Gross loss was $1.7 million for the three months ended June 30, 2020, versus a $3.4 million gross loss in the same period in 2019.

Research and development expense decreased by $0.3 million during the three months ended June 30, 2020 compared with the same period in 2019, due primarily to a decrease in personnel and consultant expenses.

Selling, general and administrative expense increased by $0.7 million during the three months ended June 30, 2020, compared with the same period in 2019, due primarily to an increase in personnel, consulting and insurance expenses and professional fees.

Loss from operations in the three months ended June 30, 2020 was $5.3 million, compared with a $6.5 million loss from operations in the same period in 2019.

Non-GAAP cash EBITDA loss3 in the three months ended June 30, 2020 was $3.1 million, compared with a $4.8 million non-GAAP cash EBITDA loss in the same period in 2019.

Interest expense in the three months ended June 30, 2020 was $0.5 million, a decrease of $0.2 million as compared to the same period in 2019, primarily due to a decline in amortization of original issue discounts and debt issuance costs compared to the same period last year.

In the three months ended June 30, 2020, Gevo recognized net non-cash loss totaling $0.2 million due to changes in the fair value of certain of our financial instruments, such as warrants and embedded derivatives.

Gevo incurred a net loss for the three months ended June 30, 2020 of $6.0 million, compared with a net loss of $7.1 million during the same period in 2019. Non-GAAP adjusted net loss4 for the three months ended June 30, 2020 was $5.8 million, compared with a non-GAAP adjusted net loss of $7.2 million during the same period in 2019.

Cash at June 30, 2020 was $6.3 million, and the total principal face value of outstanding secured debt was $14.5 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, Lynn Smull, Chief Financial Officer, Carolyn M. Romero, Vice President—Controller, and Geoffrey T. Williams, Jr., General Counsel & Secretary. They will review Gevo’s financial results and provide an update on recent corporate highlights.

To participate in the conference call, please dial 1 (833) 729-4776 (inside the U.S.) or 1 (830) 213-7701 (outside the U.S.) and reference the access code 3083616# or through the event weblink https://edge.media-server.com/mmc/p/923ams87.

A replay of the call and webcast will be available two hours after the conference call ends on August 10, 2020. To access the replay, please dial 1 (855) 859-2056 (inside the US) or 1 (404) 537-3406 (outside the US) and reference the access code 3083616#. The archived webcast will be available in the Investor Relations section of Gevo’s website at www.gevo.com.

About Gevo

Gevo is commercializing the next generation of renewable premium gasoline, jet fuel and diesel fuel with the potential to achieve zero carbon emissions, addressing the market need of reducing greenhouse gas emissions with sustainable alternatives. Gevo uses low-carbon renewable resource-based carbohydrates as raw materials, and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity (the level of greenhouse gas emissions compared to standard petroleum fossil-based fuels across their lifecycle). Gevo’s products perform as well or better than traditional fossil-based fuels in infrastructure and engines, but with substantially reduced greenhouse gas emissions. In addition to addressing the problems of fuels, Gevo’s technology also enables certain plastics, such as polyester, to be made with more sustainable ingredients. Gevo’s ability to penetrate the growing low-carbon fuels market depends on the price of oil and the value of abating carbon emissions that would otherwise increase greenhouse gas emissions. Gevo believes that its proven, patented, technology enabling the use of a variety of low-carbon sustainable feedstocks to produce price-competitive low carbon products such as gasoline components, jet fuel, and diesel fuel yields the potential to generate project and corporate returns that justify the build-out of a multi-billion dollar business. 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, the process with Citigroup, Gevo’s ability to successfully finance its operations and growth projects, Gevo’s ability to successfully negotiate and complete additional commercial agreements, Gevo’s progress of it business and strategies, 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, 2019 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 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.

1Cash 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.

2Adjusted 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.

3Cash 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.

4Adjusted 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.

Gevo, Inc.

Condensed Consolidated Balance Sheets Information

(Unaudited, in thousands, except share and per share amounts)

  June 30, 2020   December 31, 2019  
Assets        
Current assets:        
Cash and cash equivalents $   6,337     $   16,302    
Accounts receivable     746         1,135    
Inventories     2,480         3,201    
Prepaid expenses and other current assets     3,793         3,590    
Total current assets     13,356         24,228    
         
Property, plant and equipment, net     64,689         66,696    
Investment in Juhl     1,500         1,500    
Deposits and other assets     556         935    
Total assets $   80,101     $   93,359    
         
Liabilities        
Current liabilities:        
Accounts payable and accrued liabilities $   3,999     $   5,678    
2020/21 Notes Payable (current), net     14,293         -     
2020 Notes (current), net     -          13,900    
2020 Notes Payable embedded derivative liability     276         -     
Loans payable - other (current)     603         516    
Total current liabilities     19,171         20,094    
         
Loans payable - other (long-term)     774         233    
Other long-term liabilities     269         528    
Total liabilities     20,214         20,855    
         
Commitments and Contingencies        
         
Stockholders' Equity        
Common Stock, $0.01 par value per share; 250,000,000 authorized, 15,514,098 and 14,083,232 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively.     154         141    
Additional paid-in capital     533,015         530,349    
Accumulated deficit     (473,282 )       (457,986 )  
Total stockholders' equity     59,887         72,504    
Total liabilities and stockholders' equity $   80,101     $   93,359    
         
         

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,
    2020       2019       2020       2019  
Revenue and cost of goods sold              
Ethanol sales and related products, net $   83     $   4,966     $   3,783     $   10,630  
Hydrocarbon revenue     859         92         984         831  
Other revenue     46         28         46         28  
Total revenues     988         5,086         4,813         11,489  
               
Cost of goods sold     2,644         8,452         10,783         17,413  
               
Gross loss     (1,656 )       (3,366 )       (5,970 )       (5,924 )
               
Operating expenses              
Research and development expense     677         945         1,257         1,923  
Selling, general and administrative expense     2,919         2,182         5,702         4,274  
Restructuring expenses     5         -         304         -   
Total operating expenses     3,601         3,127         7,263         6,197  
               
Loss from operations     (5,257 )       (6,493 )       (13,233 )       (12,121 )
               
Other income (expense)              
Interest expense     (541 )       (767 )       (1,086 )       (1,522 )
Loss on modification of 2020 Notes     (57 )       -         (726 )       -   
Gain from change in fair value of derivative warrant liability     1         2         8         3  
(Loss) gain from change in fair value of 2020/21 Notes and  2020 Notes embedded derivative liability   (176 )     148       (276 )     394  
Other income (expense)     (13 )       20         17         20  
Total other income (expense), net     (786 )       (597 )       (2,063 )       (1,105 )
               
Net loss $   (6,043 )   $   (7,090 )   $   (15,296 )   $   (13,226 )
               
Net loss per share - basic and diluted $   (0.40 )   $   (0.60 )   $   (1.04 )   $   (1.20 )
Weighted-average number of common shares outstanding – basic and diluted   15,071,105       11,885,524       14,771,952        11,024,482  
               
               

Gevo, Inc.

Condensed Consolidated Statements of Stockholders’ Equity Information

(Unaudited, in thousands, except share amounts)

 
   

Common Stock
Paid-In

Capital
Accumulated

Deficit
Stockholders'

Equity
  Shares   Amount            
                   
Balance, December 31, 2019   14,083,232     $   141   $   530,349     $   (457,986 )   $    72,504  
                   
Issuance of common stock, net of issue costs   425,776         4        902         -          906  
Non-cash stock-based compensation   -          -       336         -         336  
Issuance of common stock under stock plans, net of taxes 105,882           -        -          -          -  
Net loss   -          -       -         (9,253 )       (9,253 )
                   
Balance, March 31, 2020   14,614,890         145       531,587         (467,239 )       64,493  
                   
Issuance of common stock, net of issue costs   917,345         9       1,238         -         1,247  
Non-cash stock-based compensation   -          -       497         -         497  
Issuance of common stock under stock plans, net of taxes (18,137 )           -      (307 )                       -                   (307 )
Net loss   -          -       -         (6,043 )       (6,043 )
                   
Balance, June 30, 2020   15,514,098     $   154   $   533,015     $   (473,282 )   $   59,887  
                   
                   
Balance, December 31, 2018   8,640,583     $   86   $   518,027     $   (429,326 )   $    88,787  
                   
Issuance of common stock, net of issue costs   3,244,941         33       9,611         -          9,644  
Non-cash stock-based compensation   -          -       234         -         234  
Net loss   -          -       -         (6,136 )       (6,136 )
                   
Balance, March 31, 2019   11,885,524         119       527,872         (435,462 )       92,529  
                   
Issuance of common stock, net of issue costs   -          -       (14 )       -         (14 )
Non-cash stock-based compensation   -          -        172         -          172  
Net loss   -          -       -         (7,090 )       (7,090 )
                   
Balance, June 30, 2019   11,885,524     $   119   $   528,030     $   (442,552 )   $   85,597  
                   
                   

Gevo, Inc.

Condensed Consolidated Cash Flow Information

(Unaudited, in thousands)

 
    Three Months Ended June 30, Six Months Ended June 30,
      2020       2019       2020       2019  
Operating Activities                
Net loss   $   (6,043 )   $    (7,090 )   $   (15,296 )   $   (13,226 )
Adjustments to reconcile net loss to net cash used in operating activities:                
  (Gain) from change in fair value of derivative warrant liability        (1 )        (2 )       (8 )     (3 )
  Loss (gain) from change in fair value of 2020/21 Notes and 2020 Notes embedded derivative liability       176               (148 )              276                 (394 )
  Loss on retirement of property, plant and equipment       38         -         38         -   
  Stock-based compensation       501         107         673         370  
  Depreciation and amortization       1,629         1,609          3,278         3,221  
  Non-cash lease expense       14         13         29         25  
  Non-cash interest expense       243         422         393         832  
  Other non-cash expense       -          1         -          1  
  Changes in operating assets and liabilities:                
  Accounts receivable       (594 )       959         389         360  
  Inventories       201         (142 )       721         (163 )
  Prepaid expenses and other current assets, deposits and other assets           331             (770 )           164               (613 )
  Accounts payable, accrued expenses and long-term liabilities          (312 )        1,096            (1,462 )              (63 )
  Net cash used in operating activities       (3,817 )       (3,945 )       (10,805 )       (9,653 )
                 
Investing Activities                
Acquisitions of property, plant and equipment       (843 )       (2,352 )       (1,620 )       (4,556 )
  Net cash used in investing activities       (843 )       (2,352 )       (1,620 )       (4,556 )
                 
Financing Activities                
Proceeds from SBA loans       1,006         -          1,006         -   
Debt and equity offering costs        (63 )       (14 )       (115 )       (248 )
Proceeds from issuance of common stock     1,313         -          2,271         9,878  
Net settlement of common stock under stock plans       (310 )       -          (310 )       -   
Payments of loans payable - other       (238 )       -          (392 )       -   
  Net cash provided by financing activities       1,708         (14 )       2,460         9,630  
                 
Net (decrease) increase in cash and cash equivalents       (2,952 )       (6,311 )       (9,965 )       (4,579 )
                 
Cash and cash equivalents                
  Beginning of period       9,289         35,466         16,302         33,734  
                 
  End of period   $   6,337     $   29,155     $   6,337     $   29,155  
                 
         

Gevo, Inc.

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited, in thousands, except share and per share amounts)

 
  Three Months Ended June 30,   Six Months Ended June 30,
Non-GAAP Cash EBITDA   2020       2019       2020       2019  
               
Loss from operations $   (5,257 )   $   (6,493 )   $   (13,233 )   $   (12,121 )
Depreciation and amortization      1,629         1,609         3,278         3,221  
Non-cash stock-based compensation     501         107         673         370  
 



Non-GAAP cash EBITDA




$
 



  (3,127




)
 



$
 



  (4,777




)
 



$
 



   (9,282




)
 



$
 



  (8,530




)
               
Non-GAAP Adjusted Net Loss              
               
Net Loss $   (6,043 )   $   (7,090 )   $   (15,296 )   $   (13,226 )
Adjustments:              
(Loss) on modification of 2020 Notes     (57 )       -         (726 )       -  
Gain from change in fair value of derivative warrant liability              1                    2                 8            3  
Gain from change in fair value of 2020/21 Notes and 2020 Notes embedded derivative liability         (176 )              148                 (276 )               394  
Total adjustments     (232 )        150          (994 )        397  
 



Non-GAAP Net Income (Loss)




$
 



  (5,811




)
 



$
 



  (7,240




)
 



$
 



  (14,302




)
 



$
 



  (13,623




)
Non-GAAP adjusted net loss per share - basic and diluted $   (0.39 )   $   (0.61 )   $    (0.97 )   $       (1.24 )
Weighted-average number of common shares outstanding - basic and diluted        15,071,105           11,885,524            14,771,952       11,024,482  
               

Investor and Media Contact

+1 720-647-9605

IR@gevo.com

 

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