Gevo Reports Fourth Quarter 2016 Financial Results
GlobeNewswire•March 29, 2017
- Gevo to Host Conference Call Today at 4:30 p.m. EST/2:30 MST -
Reports net loss per share of ($0.33) for the quarter
Reports non-GAAP adjusted net loss per share1 of ($1.14) for the quarter
Ended the quarter with cash and cash equivalents of $27.9 million
Reports revenue of $5.8 million for the quarter
Reports loss from operations of $6.5 million for the quarter
Reports non-GAAP cash EBITDA loss2 of $4.7 million for the quarter
ENGLEWOOD, Colo., March 29, 2017 (GLOBE NEWSWIRE) -- Gevo, Inc. (GEVO) today announced financial results for the three months ended December 31, 2016. Key highlights for the fourth quarter of 2016 and key subsequent events included:
Gevo produced approximately 190,000 gallons of isobutanol during the quarter at Gevo’s isobutanol production facility located in Luverne, Minnesota (the “Agri-Energy Facility”).
Cash and Cash Equivalents at February 28, 2017 were $22.6 million and the total principal face value of the debt outstanding was $17.7 million3.
On February 13, 2017, Gevo signed a letter of intent with HCS Holding GmbH (HCS) to supply isooctane under an offtake agreement. HCS is a manufacturer of specialty products and solutions in the hydrocarbons sector, operating under such brands as Haltermann Carless. In the first phase of the contemplated binding offtake agreement, HCS is expected to purchase isooctane produced at Gevo’s demonstration hydrocarbons plant located in Silsbee, Texas, commencing in 2017. During the first phase, expected revenue would be in the range of $2-3 million per year and would continue until completion of Gevo’s future, large-scale commercial hydrocarbon plant. In the second phase, HCS is expected to purchase approximately 300,000 to 400,000 gallons of isooctane per year under the contemplated binding offtake agreement for a period of five years. Gevo expects to supply this isooctane from its first large-scale commercial hydrocarbons facility, which is likely to be built at the Agri-Energy Facility.
On February 13, 2017, the holder of Gevo’s 10% Convertible Senior Notes, due 2017 (the “2017 Notes”), agreed to extend the maturity date of the 2017 Notes from March 15, 2017 to June 23, 2017 (the “2017 Notes Extension Transaction”). The terms of the 2017 Notes Extension Transaction included, among other things, the following: (i) an increase in the coupon on the 2017 Notes by two percent (2%) to twelve percent (12%); and (ii) the requirement that Gevo pay down $8 million of principal on the 2017 Notes as follows: $2 million on each of March 13, 2017, April 13, 2017, May 12, 2017 and June 13, 2017, with an option for Gevo to prepay all $8 million at any time in our sole discretion. In addition, as part of the 2017 Notes Extension Transaction, Gevo agreed to pay the holder fifteen percent (15%) of the net proceeds from its next underwritten public offering, completed prior to June 23, 2017, to be used to reduce the then-outstanding principal of the 2017 Notes.
On February 17, 2017, in an underwritten offering Gevo sold 5,680,000 Series G units, with each Series G unit consisting of one share of common stock, a Series K warrant to purchase one share of common stock and a Series M warrant to purchase one share of common stock. Gevo also sold 570,000 Series H units, with each Series H unit consisting of a pre-funded Series L warrant to purchase one share of common stock, a Series K warrant to purchase one share of common stock and a Series M warrant to purchase one share of common stock. The gross proceeds from this offering were approximately $11.9 million, not including any future proceeds from the exercise of the warrants.
On February 23, 2017, Gevo paid down the principal balance on the 2017 Notes with 15% of the net proceeds from the offering referred to above, along with the $8.0 million in prepayments under the supplemental indenture, for an aggregate total payment of $9.6 million, which reduced the principal balance on the 2017 Notes to approximately $16.5 million.
In December 2016 and January 2017, Gevo entered into private exchange agreements with holders of its 7.5% convertible senior notes due 2022 (the “ 2022 Notes”) to exchange an aggregate of $9.8 million of principal amount of 2022 Notes for an aggregate of 2,407,214 shares of common stock. These exchanges reduced the outstanding principal amount of the 2022 Notes to $1.175 million.
Outlook for 2017
Gevo has established the following specific operational and financial targets and milestones for 2017:
Restructure Gevo’s balance sheet in a manner that addresses the $17.7 million of debt represented by its outstanding convertible notes and that allows Gevo to execute on its long-term strategy and business development plan.
Obtain binding supply contracts for a combination of isobutanol and related hydrocarbon products equal to at least fifty percent (50%) of the capacity of the expanded Agri-Energy Facility that Gevo plans to construct (the “Agri-Energy Facility Expansion”).
Gevo estimates that its maximum annual isobutanol production capacity at the Agri-Energy Facility to be currently over 1 million gallons per year. As described below, however, Gevo expects to produce isobutanol at levels that better match market development sales in 2017. As such, Gevo expects to produce approximately 500,000 gallons of isobutanol during 2017.
Achieve a cash EBITDA loss of between $18.0-$20.0 million for the fiscal year ending December 31, 2017.4