Gevo narrows net loss to US$12.3M in Q3 from last year's loss of US$17.3M as revenues increase nearly over eleven-fold to US$17.5M boosted by ethanol facility acquisition from September 2010
November 1, 2011
– Gevo, Inc. (NASDAQ:GEVO - News), a renewable chemicals and advanced biofuels company, today announced its financial results for the third quarter ended September 30, 2011 and updated its expectations about isobutanol commercialization progress.
“Gevo continues to move toward full scale commercialization of renewable isobutanol. The retrofit of our facility in Luverne, Minnesota is underway and we remain on schedule to start production in the first half of 2012,” said Dr. Patrick Gruber, Chief Executive Officer. “Isobutanol is a platform molecule with a wide variety of applications. The specialty applications of isobutanol in chemicals and fuels are well underway, with off-take agreements in place with Sasol and Mansfield. We are focusing more attention on larger addressable markets. We recently signed an agreement with the U.S. Air Force to supply ‘alcohol-to-jet’ based jet fuel. This jet fuel will be produced at our hydrocarbon demonstration plant located at South Hampton Resources’ site near Houston, Texas. This plant, which is nearing completion, will facilitate the development of a variety of hydrocarbon products produced from our isobutanol, including bio-jet, bio-gasoline, alkylates, bio-based diesel, para-xylene, and lubricants. We are also working with the Northwest Advanced Renewables Alliance and USDA to develop bio-jet derived from isobutanol using a cellulosic feedstock.”
Recent Corporate Highlights
* Gevo announced that in side-by-side performance, durability and emission testing of small engines conducted by the Outdoor Power Equipment Institute and Briggs & Stratton, gasoline blended with isobutanol performed better than blends using ethanol. These third-party results support isobutanol as a biofuel blend stock that can be used effectively in small engines.
* Gevo amended its loan agreement with TriplePoint Capital LLC (TriplePoint) to secure retrofit debt capital for its Agri-Energy facility. Under the agreement, Gevo may initially borrow up to $15 million. Upon request from Gevo and approval from TriplePoint, the amount borrowed may be increased to $20 million.
Additional Third Quarter Highlights
* Gevo was awarded two patents from the United States Patent and Trademark Office (USPTO) on technologies designed to enable the low-cost, high-yield production of bio-based isobutanol. These patents are further evidence of Gevo’s unique pathways to produce isobutanol.
* Gevo entered into a five-year off-take agreement with Mansfield Oil Company (Mansfield) permitting Mansfield to blend Gevo’s isobutanol for its own use and to be a distributer of Gevo’s isobutanol into the petroleum market. In combination with its previously announced off-take agreement with Sasol Chemicals Industries Limited, Gevo has in place off-take agreements that substantially account for projected production for the initial two years of commercial isobutanol operations. In addition to the off-take agreement, a Mansfield subsidiary will provide supply chain services that include logistics management, customer service support, invoicing and billing services.
* Gevo was awarded a contract by the Defense Logistics Agency (DLA) to supply up to 11,000 gallons of ‘alcohol-to-jet’ (ATJ) based jet fuel to the U.S. Air Force. The U.S. Air Force will then fully fund and conduct engine testing and complete a feasibility flight demonstration using Gevo’s fuel and has agreed to purchase more upon successful completion of the testing.
* Gevo received a USDA grant as part of the Northwest Advanced Renewables Alliance (NARA) for the development of bio-jet fuel from woody biomass and forest product residues, to be produced using Gevo’s isobutanol. The alliance members include: Washington State University, Gevo, Weyerhaeuser, Catchlight Energy (a joint venture between Chevron & Weyerhaeuser), Oregon State University, Pennsylvania State University and the University of Minnesota.
* Gevo appointed Gary W. Mize, partner and owner at MR & Associates, as a director. Mr. Mize has over 35 years of experience in agribusiness and adds critical expertise in commodities and trading to Gevo’s Board of Directors.
Revenues for the third quarter of 2011 were $17.5 million compared to $1.5 million in the same period in 2010 as a result of revenues from ethanol sales from its Luverne facility, which the Company acquired in September 2010. 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 $5.2 million in the third quarter of 2011, from $3.6 million for the same period in 2010. Selling, general and administrative expense for the third quarter of 2011 decreased to $7.6 million from $11.6 million for the same period in 2010. During the third quarter of 2010, the Company incurred $7.8 million related to the purchase of a minority interest in Gevo Development, LLC, a subsidiary of Gevo, Inc. Other selling, general and administrative expense related to personnel costs, including non-cash compensation, to support commercialization objectives and compliance activities as a public company, as well as legal, accounting and other outside services costs increased in the third quarter of 2011 compared to the 2010 quarter. The net loss for the third quarter of 2011 was $12.3 million compared to $17.3 million for the third quarter of 2010.
Gevo reported cash and cash equivalents on hand of $97.6 million as of September 30, 2011.
Consolidated Statements of Operations Information
Three Months Ended
Three Months Ended
September 30, 2011
September 30, 2010
Cost of Goods Sold
Research and development
Selling, general and administrative
Total operating expenses
Loss from operations
Other (Expense) Income:
Interest and other income
Loss from change in fair value of warrant liabilities
Deemed dividend—amortization of beneficial conversion feature
Net loss attributable to Gevo, Inc. common stockholders
Net loss per share attributable to Gevo, Inc. common stockholders—basic and diluted
Weighted-average number of common shares outstanding—basic and diluted
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.
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