UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 28, 2012
Gevo, Inc.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-35073 | 87-0747704 | ||
| (State or Other Jurisdiction of Incorporation) |
Commission File Number |
(I.R.S. Employer Identification Number) |
345 Inverness Drive South, Building C, Suite 310, Englewood, CO 80112
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (303) 858-8358
N/A
(Former Name, or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
On February 28, 2012, Gevo, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the fourth quarter and year ended December 31, 2011. A copy of this press release entitled “Gevo Reports Fourth Quarter and Year-End 2011 Financial Results” is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
On February 28, 2012, the Company also posted a copy of the fourth quarter and full year 2011 earnings call presentation on its website, www.gevo.com, under the section titled Investor Relations — Webcasts and Presentations. A copy of the presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 99.1 | Press release, dated February 28, 2012, entitled “Gevo Reports Fourth Quarter and Year-End 2011 Financial Results” |
| 99.2 | Presentation materials, dated February 28, 2012 |
The information contained herein and in the accompanying exhibits shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibits hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Gevo, Inc.
| By: | /s/ Mark Smith | |
| Mark Smith | ||
| Chief Financial Officer |
Date: February 28, 2012
Exhibit 99.1
Gevo Reports Fourth Quarter and Year-End 2011 Financial Results
Luverne, MN plant retrofit for commercial isobutanol production on schedule
ENGLEWOOD, Colo. — February 28, 2012 — Gevo, Inc. (NASDAQ: GEVO), an innovative renewable chemicals and advanced biofuels company, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2011 and updated its expectations for isobutanol commercialization.
“We are on the cusp of commercializing renewable isobutanol,” said Dr. Patrick Gruber, Chief Executive Officer. “The retrofit of our Luverne plant continues on track to start commercial scale production of renewable isobutanol in the first half of this year. We are incorporating our learnings from this retrofit into the ongoing detailed design of the Redfield Energy retrofit in South Dakota. The renewable isobutanol produced at these plants is primarily targeted for sale under our off-take agreement with Sasol Chemical Industries Ltd. serving the specialty chemicals market.”
“In pursuit of other markets, we plan to direct specific production volumes to seed opportunities for long-term growth in butenes, bio-PET, specialty fuel blendstocks, bio-jet and renewable hydrocarbons,” Dr. Gruber continued. “To support our initial rollout in these future growth markets, we have entered into supply and logistics agreements with Mansfield Oil and one of its subsidiaries for specialty fuel blendstocks, an agreement with The Coca-Cola Company to develop a process for producing fully renewable bottles and packaging using bio-PET and a contract to supply up to 11,000 gallons of ‘alcohol-to-jet’ (ATJ) bio-jet fuel to the U.S. Air Force.”
“Continuing to build our extensive intellectual property portfolio, we have also reported significant progress with a number of patents issued including the patent covering our GIFT® separation system which is integral to our retrofit package,” added Dr. Gruber.
Recent Highlights
| • | Gevo was awarded U.S. Patent No. 8,101,808, “Recovery of Higher Alcohols From Dilute Aqueous Solutions,” a landmark patent on its GIFT® separation system which is a central element in Gevo’s unique fermentation technology for the production of isobutanol and addresses how ethanol plants can be retrofitted to produce higher alcohols. |
| • | Gevo signed an off-take agreement with Land O’Lakes Purina Feed LLC for the sale of isobutanol distiller’s grains (iDGs™) produced at Gevo’s new production facility in Luverne, MN. Land O’Lakes Purina Feed LLC will be the exclusive marketer of Gevo’s isobutanol dried and modified wet iDGs™ for the animal feed market. Further, the companies plan to explore opportunities for special value-added applications in feed markets. |
| • | Gevo announced a groundbreaking agreement with The Coca-Cola Company (Coca-Cola) to create renewable para-xylene from plant-based isobutanol. This agreement is designed to accelerate the development of Coca-Cola’s second-generation PlantBottle™ packaging made from 100% plant-based materials. In conjunction with Coca-Cola, Gevo will work to develop an integrated commercial-scale system to produce renewable para-xylene, a key building block towards reaching Coca-Cola’s goal of leading the beverage industry away from fossil-fuel based packaging by offering an alternative made completely from renewable resources. |
| • | Gevo was awarded U.S. Patent No. 8,097,440 “Engineered Microorganisms Capable of Producing Target Compounds Under Anaerobic Conditions.” The patent covers a foundational aspect of Gevo’s yeast technology that is designed to enable the low-cost, high-yield production of biobased isobutanol. Gevo believes the most efficient and economical way to make isobutanol through fermentation is to use yeast that is anaerobic, or doesn’t need oxygen. Gevo has been awarded a patent for an anaerobic yeast utilizing a novel enzymatic structure. This patent demonstrates Gevo’s unique approach for producing isobutanol which is distinct from the aerobic yeast utilized by its competition. |
| • | Gevo successfully completed the construction and commissioning of the world’s largest ATJ biofuel demonstration plant at South Hampton Resources’ facility near Houston, TX. The facility has begun operations and is delivering test volumes of ATJ biofuel to Gevo’s initial customers. |
| • | Gevo was awarded a contract by the Defense Logistics Agency to supply up to 11,000 gallons of ATJ based biojet fuel to the U.S. Air Force. Initial test volumes have been delivered and engine testing is expected to begin in the coming months. Additionally, ASTM certification of Gevo’s ATJ biofuel is still expected by 2013. |
| • | Gevo announced a National Marine Manufacturers Association (NMMA) report evaluating the use of isobutanol as a gasoline blendstock for the boating industry. Gevo’s 16.1% isobutanol blend was compared to standard engine testing gasolines in both emissions and product tests. The NMMA report concluded that isobutanol can be blended into gasoline at higher percentages than ethanol, and unlike ethanol-blended gasoline, isobutanol blends do not cause phase separation when water enters the fuel system. |
Financial Highlights
Revenues for the fourth quarter of 2011 were $17.2 million compared to $14.1 million in the same period in 2010 reflecting higher prices for ethanol from the Luverne, MN facility in the fourth quarter of 2011. During the ongoing isobutanol retrofit, the Luverne facility will continue to generate revenue from the production and sale of ethanol and related products. Research and development expense increased to $5.9 million in the fourth quarter of 2011 from $3.4 million for the same period in 2010. Increased investment in research and development in the fourth quarter of 2011 reflected increased headcount and other resources deployed in support of the ongoing retrofit of the Luverne facility, as well as costs to complete the hydrocarbon demonstration plant at South Hampton Resources’ facility near Houston, TX. Selling, general and administrative expense for the fourth quarter of 2011 increased to $8.9 million from $4.5 million for the same period in 2010. The increase included support of Gevo’s ongoing litigation with Butamax Advanced Biofuels LLC (Butamax) which was initiated in 2011, increased personnel and related expenses to support initial commercialization activities, increased compliance activities as a public company and incentive and related payments. The net loss for the fourth quarter of 2011 was $14.2 million compared to $6.3 million for the fourth quarter of 2010.
Revenues for fiscal year 2011 were $64.6 million compared to $16.4 million in fiscal year 2010 as a result of revenues from ethanol sales and related products from the Luverne, MN facility, which Gevo acquired in September 2010. Research and development expense increased to $19.8 million in fiscal year 2011, from $14.8 million for fiscal year 2010. Increased investment in research and development in 2011 compared to 2010 reflected increased resources deployed in support of the ongoing retrofit of the Luverne facility as well as costs to construct the hydrocarbon demonstration plant at South Hampton Resources’ facility near Houston, TX that was completed in the fourth quarter of 2011. Selling, general and administrative expense for fiscal year 2011 increased to $28.9 million from $23.6 million for the same period in 2010. The increase in selling, general and administrative expense included increased resources, including personnel and related costs, in support of initial commercialization activities in anticipation of the Luverne facility coming on line for isobutanol production in the first half of 2012, support of Gevo’s ongoing litigation with Butamax which was initiated in 2011, implementation of compliance activities as a newly public company and incentive and related payments. The net loss for fiscal year 2011 was $48.2 million compared to $40.1 million for fiscal year 2010.
Gevo reported cash and cash equivalents on hand of $94.2 million as of December 31, 2011.
Webcast and Conference Call Information
Patrick R. Gruber, Ph.D., Chief Executive Officer, and Mark Smith, Chief Financial Officer, will host a conference call today at 4:30 p.m. EST (2:30 p.m. MST) to review the Company’s financial results for the fourth quarter and full year ended December 31, 2011 and provide an update on expected isobutanol commercialization.
To participate in the conference call, please dial 1-800-659-2032 (inside the US) or 1-617-614-2712 (outside the US) and reference the access code 10482902. The presentation will be available via a live webcast at: http://www.media-server.com/m/acs/e048ff4869b34e5c99928cc7906c7ce8.
A replay of the call will be available two hours after the conference call ends on February 28, 2012 until Midnight EST on March 28, 2012. To access the replay, please dial 1-888-286-8010 (inside the US) or 1-617-801-6888 (outside the US) and reference the access code 14857196. The archived webcast will be available for 30 days in the Investor Relations section of Gevo’s website at www.gevo.com.
About Gevo
Gevo is converting existing ethanol plants into biorefineries to make renewable building block products for the chemical and fuel industries. The company plans to convert renewable raw materials into isobutanol and renewable hydrocarbons that can be directly integrated on a “drop in” basis into existing chemical and fuel products to deliver environmental and economic benefits. Gevo is committed to a sustainable biobased economy that meets society’s needs for plentiful food and clean air and water. For more information, please visit www.gevo.com.
Forward-Looking Statements
Certain statements within this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to a variety of matters, including but not limited to: the timing and costs associated with and the availability of capital for Gevo’s scheduled retrofits of existing ethanol production facilities, its future isobutanol production capacity, the timing associated with bringing such capacity online, the availability of additional production volumes to seed additional market opportunities, the expected applications of isobutanol, including its use to produce renewable para-xylene and ATJ biojet, addressable markets, and market demand, Gevo’s ability to produce commercial quantities of isobutanol from cellulosic feedstocks, the suitability of Gevo’s iDGs™ for the animal feed market, the expected cost-competitiveness and relative performance attributes of isobutanol and the products derived from it, the strength of Gevo’s intellectual property position 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 Gevo’s management and are subject to significant risks and uncertainty. All such forward-looking statements speak only as of the date they are made, and Gevo assumes 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 discussion of the 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 the Company in general, see the risk disclosures in Gevo’s Annual Report on Form 10-K for the year ended December 31, 2010, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the Securities and Exchange Commission 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.
Consolidated Statements of Operations Information
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| REVENUES: |
||||||||||||||||
| Ethanol sales and related products, net |
$ | 16,994,000 | $ | 13,790,000 | $ | 63,742,000 | $ | 14,765,000 | ||||||||
| Licensing revenue |
— | — | — | 138,000 | ||||||||||||
| Grant and research and development program revenue |
235,000 | 318,000 | 807,000 | 1,493,000 | ||||||||||||
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|
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| Total revenues |
17,229,000 | 14,108,000 | 64,549,000 | 16,396,000 | ||||||||||||
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|
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| COST OF GOODS SOLD |
(15,526,000 | ) | (12,590,000 | ) | (60,588,000 | ) | (13,446,000 | ) | ||||||||
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|
|
|
|
|
|||||||||
| GROSS MARGIN |
1,703,000 | 1,518,000 | 3,961,000 | 2,950,000 | ||||||||||||
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|
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| OPERATING EXPENSES: |
||||||||||||||||
| Research and development |
(5,938,000 | ) | (3,388,000 | ) | (19,753,000 | ) | (14,820,000 | ) | ||||||||
| Selling, general and administrative |
(8,889,000 | ) | (4,529,000 | ) | (28,890,000 | ) | (23,643,000 | ) | ||||||||
| Loss on abandonment or disposal of assets |
— | — | (11,000 | ) | — | |||||||||||
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|
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|
|||||||||
| Total operating expenses |
(14,827,000 | ) | (7,917,000 | ) | (48,654,000 | ) | (38,463,000 | ) | ||||||||
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|
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|
|
|
|||||||||
| LOSS FROM OPERATIONS |
(13,124,000 | ) | (6,399,000 | ) | (44,693,000 | ) | (35,513,000 | ) | ||||||||
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| OTHER (EXPENSE) INCOME: |
||||||||||||||||
| Interest and other expense |
(1,036,000 | ) | (926,000 | ) | (3,577,000 | ) | (2,374,000 | ) | ||||||||
| Interest and other income |
— | 12,000 | 85,000 | 108,000 | ||||||||||||
| Gain (Loss) from change in fair value of warrant liabilities |
— | 969,000 | (29,000 | ) | (2,333,000 | ) | ||||||||||
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| Other income (expense)—net |
(1,036,000 | ) | 55,000 | (3,521,000 | ) | (4,599,000 | ) | |||||||||
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| NET LOSS |
(14,160,000 | ) | (6,344,000 | ) | (48,214,000 | ) | (40,112,000 | ) | ||||||||
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| Deemed dividend—amortization of beneficial conversion feature on Series D-1 preferred stock |
— | (989,000 | ) | (1,094,000 | ) | (2,778,000 | ) | |||||||||
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| NET LOSS ATTRIBUTABLE TO GEVO, INC. COMMON STOCKHOLDERS |
$ | (14,160,000 | ) | $ | (7,333,000 | ) | $ | (49,308,000 | ) | $ | (42,890,000 | ) | ||||
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| Net loss per share attributable to Gevo, Inc. common stockholders—basic and diluted |
$ | (0.54 | ) | $ | (6.35 | ) | $ | (2.15 | ) | $ | (37.44 | ) | ||||
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| Weighted-average number of common shares outstanding—basic and diluted |
26,005,744 | 1,154,407 | 22,909,916 | 1,145,500 | ||||||||||||
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Non-GAAP Financial Information
(Unaudited)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Gevo Development, LLC / Agri-Energy, LLC |
||||||||||||||||
| Income (Loss) from operations |
$ | 1,181,000 | $ | 900,000 | $ | 1,462,000 | ($ | 1,704,000 | ) | |||||||
| Depreciation and amortization |
518,000 | 511,000 | 2,061,000 | 549,000 | ||||||||||||
| Non-cash stock-based compensation |
45,000 | — | 85,000 | — | ||||||||||||
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| Non-GAAP income (loss) from operations |
$ | 1,744,000 | $ | 1,411,000 | $ | 3,608,000 | ($ | 1,155,000 | ) | |||||||
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| Gevo, Inc. |
||||||||||||||||
| Loss from operations |
($ | 14,305,000 | ) | ($ | 7,299,000 | ) | ($ | 46,155,000 | ) | ($ | 33,809,000 | ) | ||||
| Depreciation and amortization |
710,000 | 504,000 | 2,539,000 | 2,639,000 | ||||||||||||
| Non-cash stock-based compensation |
1,884,000 | 1,261,000 | 6,741,000 | 10,511,000 | ||||||||||||
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| Non-GAAP loss from operations |
($ | 11,711,000 | ) | ($ | 5,534,000 | ) | ($ | 36,875,000 | ) | ($ | 20,659,000 | ) | ||||
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| Gevo Consolidated |
||||||||||||||||
| Loss from operations |
($ | 13,124,000 | ) | ($ | 6,399,000 | ) | ($ | 44,693,000 | ) | ($ | 35,513,000 | ) | ||||
| Depreciation and amortization |
1,228,000 | 1,015,000 | 4,600,000 | 3,188,000 | ||||||||||||
| Non-cash stock-based compensation |
1,929,000 | 1,261,000 | 6,826,000 | 10,511,000 | ||||||||||||
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| Non-GAAP loss from operations |
($ | 9,967,000 | ) | ($ | 4,123,000 | ) | ($ | 33,267,000 | ) | ($ | 21,814,000 | ) | ||||
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Gevo, Inc.
Condensed Consolidated Balance Sheet Information
(Unaudited)
| December 31. | ||||||||
| 2011 | 2010 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 94,225,000 | $ | 15,274,000 | ||||
| Accounts receivable |
2,938,000 | 2,830,000 | ||||||
| Inventories |
3,814,000 | 3,765,000 | ||||||
| Prepaid expenses and other current assets |
1,757,000 | 2,025,000 | ||||||
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| Total current assets |
102,734,000 | 23,894,000 | ||||||
| Property, plant and equipment—net |
28,777,000 | 23,465,000 | ||||||
| Deferred offering costs |
— | 3,152,000 | ||||||
| Debt issue costs |
1,017,000 | 929,000 | ||||||
| Deposits and other assets |
502,000 | 169,000 | ||||||
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| Total assets |
$ | 133,030,000 | $ | 51,609,000 | ||||
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| Liabilities and Stockholders’ Equity |
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| Current liabilities: |
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| Accounts payable and accrued expenses |
$ | 12,440,000 | $ | 7,903,000 | ||||
| Current portion of secured long-term debt |
3,491,000 | 1,785,000 | ||||||
| Derivative liability |
186,000 | 405,000 | ||||||
| Fair value of warrant liabilities |
— | 2,034,000 | ||||||
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|||||
| Total current liabilities |
16,117,000 | 12,127,000 | ||||||
| Secured long-term debt, less current portion |
24,752,000 | 18,647,000 | ||||||
| Other liabilities |
24,000 | 876,000 | ||||||
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|||||
| Total liabilities |
40,893,000 | 31,650,000 | ||||||
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| Stockholders’ equity |
||||||||
| Convertible preferred stock |
— | 146,000 | ||||||
| Common stock |
264,000 | 12,000 | ||||||
| Additional paid-in capital |
226,508,000 | 105,128,000 | ||||||
| Deficit accumulated during development stage |
(134,635,000 | ) | (85,327,000 | ) | ||||
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|||||
| Total stockholders’ equity |
92,137,000 | 19,959,000 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 133,030,000 | $ | 51,609,000 | ||||
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# # #
Jackie Kolek, Peppercom (media)
212-931-6166
jkolek@peppercom.com
Sarah McCabe, Stern Investor Relations, Inc. (investors)
212-362-1200
sarah@sternir.com
Exhibit 99.2
Fourth Quarter and Full Year 2011
Earnings Call
February 28, 2012
Safe Harbor Statement
Certain statements in this presentation may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements relate to a variety of matters, including but not limited to: our ability to acquire access to and retrofit existing ethanol production facilities; the timing and costs associated with and the availability of capital for our scheduled retrofits of existing ethanol production facilities; our future isobutanol production capacity and the timing associated with bringing such capacity online; the timing associated with our first commercial shipments of isobutanol; the expected cost-competitiveness and relative performance attributes of isobutanol and the products derived from it; the expected applications of isobutanol, including its use to produce renewable para-xylene and alcohol to jet biofuel, addressable markets, including the size and expected future growth of such markets, potential customers and market demand; the availability of suitable and cost-competitive feedstocks; our ability to utilize agricultural residues and other cellulosic feedstocks in the future; our ability to produce and sell co-products of isobutanol production as a fertilizer or animal feedstock; the future price and volatility of corn and other renewable feedstocks; the future price and volatility of petroleum; the strength of our intellectual property position; 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 our management 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 we assume no obligation to update or revise these statements, whether as a result of new information, future
events or otherwise.
Although we believe that the expectations reflected in our forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause our actual results to differ from what may be expressed or implied in our forward-looking statements. For a discussion of the 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 the Company in general, see the risk disclosures in the Annual Report on Form 10-K of the Company for the year ended December 31, 2010, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the Securities and Exchange Commission by the
Company.
This presentation is based on information that is generally available to the public and does not contain any material, nonpublic information. This presentation has been prepared solely for informational purposes and is neither an offer to purchase nor a solicitation of an offer to sell securities.
Call Agenda
Corporate Overview (Dr. Patrick Gruber, CEO)
??Review of progress in strategic verticals
??Other corporate developments
¡±? Review of Financial Highlights (Mark Smith, CFO)
¡±? Summary and 2012 Objectives (Dr. Patrick Gruber, CEO)
¡±? Q&A
Gevo Commercialization Strategy
Remain on track to deliver first commercially produced
isobutanol in the first half of this year
Gevo Commercialization Strategy
Gevo is focused on six primary market opportunities or
strategic verticals:
1. Specialty Chemicals
2. C4s – or Butenes
3. Bio-PET
4. Specialty fuel blendstocks
5. Bio-JET
6. Renewable hydrocarbons
Specialty Chemicals Overview
First commercial market addressed by Gevo
¡±? ~$7B total addressable market and currently growing at a
rate greater than 35 million gallons per year
¡±? High purity isobutanol for paint, solvents and coatings
¡±? Also includes other specialty applications
¡±? We estimate ~half the global market opportunity is in Asia
Specialty Chemicals Target Customers
Sasol, a $32 billion global chemicals company, is our
lead customer for specialty chemicals
??In August 2011, announced the industry’s first take-or-pay agreement
??Once fully lined out, plant level EBITDA margin expected to exceed
$0.80/gallon and indexed to corn
??True drop-in/exact replacement chemical
??Currently on track for anticipated first commercial shipments by July of
this year
¡±? Ongoing discussions with other specialty chemical
producers
??For lighter fluid, isobutyl acetate and multiple chemical intermediaries
C4s – Butenes Overview
Made from renewable isobutanol
??~$8B total addressable market currently growing by approximately
100 million gallons per year
??We estimate ~ half the global market is in Asia
¡±? Very diverse number of applications
¡±? Market opportunities include isobutylene, lubricants,
MMA, synthetic rubber, and other butene-based
Intermediates
C4s – Butenes: LANXESS Relationship
Lead customer is LANXESS, the world’s largest synthetic rubber manufacturer, with sales of EUR 7.1 billion in 2010 and currently around 16,100 employees in 30 countries
??10-year supply agreement in place
??Recently expanded relationship to include Southeast Asia
??Off-take agreements contemplate a feedstock-based formula to balance
risk/reward for both parties
??True drop-in/exact replacement chemical
Bio-PET Overview
Enabling technology is bio-based para-xylene (PX)
??Estimated $100B total addressable market
??Very diverse number of applications from plastic bottles and food
packaging to carpet and apparel fibers
¡±? Driver is brand owners desire to “green” their supply
Chains
Bio-PET Target Customers and Strategic Relationships
Coca-Cola is our lead partner
??Landmark agreement with one of the world’s leading brand
owners
??Estimated 1.7 billion servings per day and expected to double
by 2020
??Goal of all plastic packaging to be fully renewable-based by
2020
??One of two companies selected from 20+/- candidates
??The first phase of development already underway
??True drop-in/exact replacement chemical
¡±? Toray, a world leader in films and fibers, is
critical in developing this vertical as well
??2011 demonstrated successful production of renewable-based
PET films and fibers
Specialty Fuel Blendstocks Overview
Estimated $80B total addressable market for fuel
blendstocks
??Need for a better oxygenate with lower emissions
??Energy security
¡±? Upside opportunity to go to “advanced”
??There are many obligated parties in need of Advanced RINs
??Refiners are obligated to meet RFS2 mandates
??”Buy vs. produce” decision
??Analyzing opportunity to balance risk/reward and capture value without
simply speculating on the future value of Advanced RINs
??Gevo has submitted a pathway to the EPA to obtain “advanced” status
¡±? Would be first and only cornstarch-based pathway to achieve
“advanced” status
??Considerable upside given Advanced RINs are currently trading above
$1 per gallon of renewable isobutanol
Lead Specialty Fuel Blendstocks Target Customers
Mansfield Oil
??Fuel distribution company delivering a disciplined approach
to fuel services nationwide from over 900 supply terminals
??In August 2011, announced a 5 year agreement expected to
initially focus on niche markets which may include marine
fuel
¡±? Total
??Fourth largest oil company worldwide
??Continues to be an important shareholder in Gevo
??Focused on blending isobutanol to meet stringent Texas
Reformulated Gasoline fuel specifications
Specialty Fuel Blendstock Validation
Fuel opportunity supported by recent independent tests
??National Marine Manufacturers Association & the American Boat and
Yacht Council
¡±? Two independent tests demonstrating the superior characteristics of
isobutanol vs. ethanol for the boating industry
??Outdoor Power Equipment Institute conducted independent tests using
isobutanol blends in small engines
¡±? Tests were conducted on Briggs & Stratton small engines and
results demonstrated the valuable characteristics of isobutanol as a
blend stock
Bio-JET Fuel Overview
We believe this vertical has enormous commercial
potential
??Reduce dependence on oil and its associated price volatility
??Large military market: jet fuel accounts for more than half the
Department of Defense’s energy bill
??Desire to lower emissions (e.g. European carbon tax scheme) for
airlines
??Energy security
¡±? Gevo completed construction and successfully
commissioned our Silsbee, TX alcohol-to-jet facility
??Producing demonstration quantities which are being delivered to the
Air Force
¡±? ASTM certification is ongoing and remains on track for
2013
World’s Largest ATJ Facility
Bio-JET Target Customers
U.S. Air Force is our lead customer
??Initial purchase order received late 2011
??Delivering initial quantities
??Look forward to flight testing this year
¡±? United Air Lines LOI
??Exchanging terms
??Anticipate utilizing cellulosic feedstock longer term
¡±? In discussions with multiple air carriers for additional offtakes
Renewable Hydrocarbons Overview
Applications:
??Renewable gasoline
??Renewable diesel
??Other renewable fuels including bunker fuel
¡±? Currently analyzing this opportunity
??Known pathway from isobutanol to fully renewable fuels
??Not blends, but actual replacements of petroleum-based products
¡±? Have engaged key stakeholders including refiners and
oil industry consultants
¡±? Ultimately, our objective is to replace the entire barrel
of oil
Other Important Corporate Developments
Animal Feed
??Primary processor
??Expect to capture 100% of nutritional value of corn – protein
??Enhanced value = lower net carbohydrate cost
¡±? In January 2012, we announced a definitive off-take and
marketing agreement with Land O’Lakes Purina Feed LLC
??Covers our iDGs™ produced at our Luverne, MN commercial plant
??Purina will be exclusive marketer
??Will work together to enhance the value
¡±? Slaney & Black – “job well done”
¡±? Signed non-binding MOU to access capacity that
potentially covers ~70% of our expected 2015 volumes
Several Accomplishments on IP Front
September 2011
??U.S. Patent No. 8,017,375, “Yeast Organism Producing Isobutanol at a
High Yield” (PDC Patent)
??U.S. Patent No. 8,017,376, “Methods of Increasing Dihydroxy Acid
Dehydratase Activity to Improve Production of Fuels, Chemicals, and
Amino Acids” (AFT Patent)
December 2011
??U.S. Patent No. 8,071,358, covering additional “Methods of Increasing
Dihydroxy Acid Dehydratase Activity to Improve Production of Fuels,
Chemicals, and Amino Acids” (DHAD Patent)
January 2012
??U.S. Patent No. 8,101,808, “Recovery of Higher Alcohols From Dilute
Aqueous Solutions”
¡±? GIFTTM separation system Patent
¡±? Covers propanols, butanols, pentanols and hexanols – C3 through C6 alcohols
Recently
??U.S. Patent No. 8,097,440 “Engineered Microorganisms Capable of
Producing Target Compounds Under Anaerobic Conditions.” (NKR
Patent)
¡±? Foundational aspect of Gevo’s yeast technology
¡±? New, man-made enzyme that is designed to enable anaerobic fermentation
4Q11 Financial Results
For the three months ended
For the year ended 12/31/11
12/31/11
(unaudited)
(unaudited)
Cash and cash equivalents
$
94,225,000
Income Statement Total
Revenues
$ 17,229,000
$ 64,549,000
Gross
margin
1,703,000
3,961,000
R&D
(5,938,000)
(19,753,000)
SG&A
(8,889,000)
(28,890,000
)
COGS
(15,526,000)
(60,588,000
)
Net loss
$ (14,160,000)
$ (48,214,000)
Net loss per share
–
basic and diluted
$ (0.54)
$ (2.15)
Shares used in computaOon of net loss per share
–
basic
and
diluted
26,005,744
22,909,916
2012 Goals for Commercial Plants
Luverne
??Start-up on track
??Anticipate delivering renewable isobutanol to Sasol under our take-or-pay
contract in July
??By year end, we expect a 1 million gallon per month production run rate
??Will give more specific startup guidance with milestones on 1Q12 call
¡±? Redfield
??Detailed engineering work is ongoing
??Anticipate we can get more capacity than originally expected
??Anticipate construction to commence in 2H12 and the plant to be operational
in 2013
??Optimize Redfield based on lessons learned at Luverne, construction still
expected to take ~ 12 months
¡±? Based on current cost projections, once fully operational,
these two plants are expected to produce enough
Q&A