Gevo Reports Third Quarter 2013 Financial Results

Gevo Reports Third Quarter 2013 Financial Results

  *Reports EPS of ($0.34) including $1.6 million non-cash gain from the
    change in fair value of embedded derivatives contained in Gevo's
    convertible notes
  *Ended the quarter with cash and cash equivalents of $25.7 million
  *Net cash used of $14.9 million in third quarter of 2013
  *Commissioning Luverne on corn mash for fully integrated production
  *Producing isobutanol as we work through commissioning in Q4 2013 and plan
    to start steady production in Q1 2014
  *Signed supply agreement with U.S. Navy for bio-jet fuel
  *Began commercial licensing business; signed licensing LOI with IGPC
  *Opened biorefinery for fully renewable paraxylene and started production

ENGLEWOOD, Colo., Nov. 5, 2013 (GLOBE NEWSWIRE) -- Gevo, Inc. (Nasdaq:GEVO)
today announced its financial results for the three months ended September 30,
2013 and provided an update on recent corporate highlights.

"After successfully running our Luverne plant using dextrose feedstock in
single and dual train modes, in October we moved to our ultimate goal of using
corn mash, our commercial feedstock," said Patrick Gruber, Gevo's chief
executive officer. "We are encouraged by what we have accomplished in the
third quarter, as we achieved several key technology milestones. We have:

  *Proven that our yeast grows and produces isobutanol using corn mash
    feedstock at commercial scale;
  *Made clean corn mash, the essential foundation for the commercial
    production of isobutanol;
  *Run our GIFT® systems on full corn mash and produced isobutanol; and
  *Begun the commissioning of new equipment to aid in the control of
    infections which will permit us to bring Luverne up to full operation."

"It's a completely different game compared to last year. We've made great
progress in controlling infections in the plant. My team is doing an excellent
job of safely working through the mechanical and operational issues as we
commission the new equipment and operate and integrate the entire plant using
the corn mash feedstock. It is exciting to see the Gevo proprietary yeast
biocatalyst and GIFT® systems perform in line with our expectations, and based
on this performance, we can begin licensing discussions in earnest."

Recent Highlights

On July 24, 2013 Gevo announced that it had signed a supply agreement to
supply the U.S. Coast Guard with up to 18,600 gallons of finished 16 percent
renewable isobutanol-blended gasoline.The U.S. Coast Guard is using the
Gevo-blended fuel as part of a 12-month, long-term durability study on marine
engines that began in June. The testing is being performed under a Cooperative
Research and Development Agreement between the U.S. Coast Guard, Honda, and
Mercury and will focus on the Coast Guard's two platform boats – the 38-foot
Metal Shark with twin 300 horse-power Mercury Verado outboard engines, and the
25-foot SAFE vessel with twin 225 horse-power Honda outboard engines.Testing
will take place at the U.S. Coast Guard Training Center in Yorktown, Va. Gevo
provided the first shipment of 750 gallons of renewable isobutanol-blended
gasoline to the U.S. Coast Guard in mid-June.

On August 1, 2013, Gevo announced that it had increased commercial production
of isobutanol at its Luverne facility by bringing online a second production
train utilizing its proprietary GIFT^® system.By bringing online a second
million-liter fermenter and GIFT^® system at its facility in Luverne, Gevo has
significantly increased its current isobutanol production capacity following
the initial resumption of production in June 2013.

In August, isobutanol was certified by ASTM International for use with spark
ignition fuel for all automobile engines, creating a global framework for the
use of isobutanol as a gasoline blendstock.The Butanol Task Force, chaired by
Gevo's Glenn Johnston, was made up of representatives from the Petroleum
Refining Industry, Ethanol Industry, Major Automobile OEMs, and other industry
experts from around the world. The specification request went through the very
robust ASTM consensus process. Gevo also worked with the Analytical
Subcommittee of D02 to establish testing methods for isobutanol to be used in
validating the specification.

On August 26, 2013 Gevo announced the opening of its biorefinery for fully
renewable paraxylene at South Hampton Resources. Gevo is working with The
Coca-Cola Company and Toray Industries to deliver a new production technology
for renewable paraxylene, a key building block for producing fully renewable
PET for beverage bottles, fibers, textiles and films. Research and development
support for this plant was provided by The Coca-Cola Company under a Joint
Development Agreement.Toray has provided capital for the construction of the
Silsbee facility and has signed an offtake agreement for paraxylene produced
at that facility.

In September, Gevo signed a supply agreement with the U.S. Navy to supply them
with 20,000 gallons of Gevo's renewable alcohol-to-jet-5 (ATJ-5) jet fuel and
an option to increase the order to 90,000 gallons.Gevo has the largest
isobutanol ATJ production facility in the world and has produced and sold more
isobutanol ATJ jet fuel than anyone else.Gevo has previously supplied ATJ-8
jet fuel under its contracts with the U.S. Air Force for 56,000 gallons and
the U.S. Army for 16,150 gallons.

In October, Gevo signed its first letter of intent to commercially license its
GIFT® technology to IGPC Ethanol (IGPC). IGPC is a farmer owned co-op that
owns a 150 million liter plant in Ontario, Canada and has been producing
ethanol since 2008. IGPC is interested in licensing Gevo's GIFT® technology
to incorporate isobutanol production at its ethanol facility.

In October, Gevo began commissioning Luverne on corn mash for isobutanol
production on an integrated basis.Current production of isobutanol is
intended to be sold into the specialty chemicals market with Sasol, specialty
fuels market and converted into bio-jet fuel for the U.S. military.

Financial Highlights

Revenues for the third quarter of 2013 were $1.1 million compared to $0.6
million in the same period in 2012. Revenues in the third quarter included
proceeds from sales of biobased jet fuel to the U.S. Air Force (USAF) of $0.4
million, revenue under Gevo's agreement with The Coca-Cola Company, and
revenue from ongoing research agreements.

Research and development expense was $5.5 million in the third quarter of
2013, compared to $5.4 million in the comparable period in 2012. During the
third quarter of 2013, Gevo's development efforts were focused on startup
operations for the production of isobutanol at its Luverne facility,
optimization of specific parts of its isobutanol production technology to
further enhance isobutanol production rates, investment in bio-para-xylene
processing equipment at the Silsbee demonstration plant and delivery of
bio-jet fuel to the USAF. Research and development expense increased $1.3
million in the third quarter of 2013, when compared to the comparable quarter
in 2012, as a result of the Company's investment in bio-para-xylene processing
equipment, and delivery of bio-jet fuel to the USAF. This increase was
partially offset by decreases in compensation-related costs, consulting and
lab supply costs. Funding used in the development of the bio-para-xylene
facility was received from Toray Industries, Inc. under a definitive agreement
previously announced in 2012. The bio-jet fuel delivered to the USAF in the
third quarter of 2013 was produced at the Silsbee facility.

Selling, general and administrative expense decreased to $6.7 million in the
third quarter of 2013 from $13.5 million for the third quarter of 2012. The
decrease in selling, general and administrative expense in the third quarter
of 2013 reflected lower compensation and operating expenses, including cost
saving benefits resulting from actions taken during 2012 to focus Gevo's
operations as well as lower litigation-related costs.

Interest expense for the third quarter of 2013 was $1.7 million compared to
$2.6 million in the third quarter of 2012. The decrease is primarily due to a
decline in the outstanding principal balance of our convertible notes
resulting from holders electing to convert their note holdings into shares of
Gevo common stock and a decline in the outstanding principal balance of our
debt with TriplePoint Capital LLC due primarily to scheduled payments on our
principal balance.

The company reported a non-cash gain of $1.6 million related to changes in the
fair value of embedded derivatives contained in the convertible notes. These
derivatives result from the rights that holders of the convertible notes have
upon conversion, and under certain circumstances, will result in non-cash
amounts being recorded in the company's statement of operations in each
reporting period while the convertible notes remain outstanding. The company
did not have any holders of convertible debt opt to convert their note
holdings into shares of Gevo common stock during the three months ended
September 30, 2013. Since the beginning of 2013, holders of $18.1 million of
convertible notes have opted to convert their note holdings into shares of
Gevo common stock receiving an aggregate of 6,137,383 shares upon conversion
and in settlement of make-whole payments. The effective issue price in full
settlement of the convertible notes converted during the nine months ended
September 30, 2013 was $3.75 per share.

The net loss for the third quarter of 2013 was $15.9 million compared to $12.1
million for the third quarter of 2012.

Gevo reported cash and cash equivalents on hand of $25.7 million as of
September 30, 2013.

Webcast and Conference Call Information

Hosting today's conference call at 4:30 p.m. EST (2:30 p.m. MST) will be Dr.
Gruber, Chief Executive Officer, and Mike Willis, Chief Financial Officer.
They will review the company's financial results for the three months ended
September 30, 2013 and provide an update on recent corporate highlights.

To participate in the conference call, please dial 1 (800) 708-4540 (inside
the U.S.) or 1 (847) 619-6397 (outside the U.S.) and reference the access code
35948602. The presentation will be available via a live webcast at:

A replay of the call will be available two hours after the conference call
ends on November 5, 2013 until Midnight EST on December 4, 2013. To access the
replay, please dial 1-888-843-7419 (inside the U.S.) or 1-630-652-3042
(outside the U.S) and reference the access code 35948602#. The archived
webcast will be available for 30 days in the Investor Relations section of
Gevo's website at

About Gevo

Gevo is a leading renewable chemicals and next-generation biofuels company.
Gevo's patent-protected, capital-light business model converts existing
ethanol plants into bio-refineries to make isobutanol. This versatile chemical
can be directly integrated into existing chemical and fuel products to deliver
environmental and economic benefits. Gevo has executed initial
commercial-scale production runs at its isobutanol facility in Luverne, Minn.,
constructed in conjunction with ICM, a leading provider of proprietary ethanol
process technology, and has a marquee list of partners including The Coca-Cola
Company, Sasol Chemical Industries, and LANXESS, Inc., an affiliate of LANXESS
Corporation, among others. Gevo is committed to a sustainable bio-based
economy that meets society's needs for plentiful food and clean air and water.
For more information, visit

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 include statements that are not
purely statements of historical fact, and can sometimes be identified by our
use of terms such as "intend," "expect," "plan," "estimate," "future,"
"strive" and similar words. These forward-looking statements are made on the
basis of 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 the company undertakes no obligation to update or revise these statements,
whether as a result of new information, future events or otherwise. Although
the company 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, 2012,
as amended, and in subsequent reports on Form 8-K and other filings made with
the SEC 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.
Condensed Consolidated Statements of Operations Information
(Unaudited, in thousands, except share and per share amounts)
                              Three Months Ended     Nine Months Ended
                              September30,            September30,
                              2013        2012        2013        2012
Revenue and cost of goods sold                                  
Ethanol sales and related      $--      $--      $--      $19,908
products, net
Grant revenue, research and
development program revenue,   1,127      562        6,529      2,553
corn sales and other revenue
Total revenues                1,127      562        6,529      22,461
Cost of goods sold             4,746      6,079      12,865     29,599
Gross loss                     (3,619)    (5,517)    (6,336)    (7,138)
Operating expenses                                              
Research and development       5,476      5,401      16,280     15,079
Selling, general and           6,668      13,508     19,897     36,175
Total operating expenses      12,144     18,909     36,177     51,254
Loss from operations           (15,763)   (24,426)   (42,513)   (58,392)
Other (expense) income                                          
Interest expense              (1,733)    (2,624)    (7,321)    (4,161)
Gain from change in fair value 1,587      15,000     2,280      15,000
of embedded derivative
Loss on extinguishment of debt --         --         (2,038)    --
Other income (expense)         24         (1)        115        18
Total other (expense) income   (122)      12,375     (6,964)    10,857
Net loss                       $(15,885) $(12,051) $(49,477) $(47,535)
Net loss per share
attributable to Gevo, Inc.     $(0.34)   $(0.31)   $(1.14)   $(1.56)
common stockholders - basic
and diluted
Weighted-average number of
common shares outstanding -    46,052,867 38,547,441 43,492,291 30,374,378
basic and diluted

Gevo, Inc.
Condensed Consolidated Balance Sheet Information
(Unaudited, in thousands)
                                         September 30, 2013 December 31, 2012
Current assets:                                             
Cash and cash equivalents                 $25,661          $66,744
Accounts receivable                       867               698
Inventories                               4,196             6,659
Prepaid expenses and other current assets 1,364             1,779
Total current assets                      32,088            75,880
Property, plant and equipment, net        82,697            77,093
Deposits and other assets                 2,344             3,138
Total assets                              $117,129         $156,111
Current liabilities:                                        
Accounts payable, accrued liabilities and $19,229          $8,256
other current liabilities
Current portion of secured debt, net      10,477            8,513
Total current liabilities                 29,706            16,769
Long-term portion of secured debt, net    7,432             15,445
Convertible notes, net                    14,815            25,554
Other long-term liabilities               413               512
Total liabilities                         52,366            58,280
Total stockholders' equity                64,763            97,831
Total liabilities and stockholders'       $117,129         $156,111

Gevo, Inc.
Condensed Consolidated Cash Flow Information
(Unaudited, in thousands)
                              Three Months Ended     Nine Months Ended
                              September30,            September30,
                              2013        2012        2013        2012
Operating Activities                                            
Net loss                       $(15,885) $(12,051) $(49,477) $(47,535)
Adjustments to reconcile net
loss to net cash used in                                        
operating activities:
Non-cash expenses              3,209      2,679      10,212     10,820
Gain from change in fair value (1,587)    (15,000)   (2,280)    (15,000)
of embedded derivative
Loss on extinguishment of debt --         --         2,038      --
Changes from working capital   1,730      1,487      7,787      4,403
Net cash used in operating     (12,533)   (22,885)   (31,720)   (47,312)
Investing Activities                                            
Acquisitions of property,      130        (16,434)   (2,628)    (50,936)
plant and equipment, net
Other                         --         40         --         (607)
Net cash provided by (used in) 130        (16,394)   (2,628)    (51,543)
investing activities
Financing Activities                                            
Payments on secured debt       (2,574)    (6,026)    (6,715)    (7,267)
Proceeds from issuance of      50         57,705     59         57,442
common stock, net
Proceeds from issuance of      --         40,922     --         40,922
convertible debt, net
Proceeds from issuance of      --         --         --         4,947
secured debt, net
Other financing activates      --         73         (79)       583
Net cash (used in) provided by (2,524)    92,674     (6,735)    96,627
financing activities
Net (decrease) increase in     (14,927)   53,395     (41,083)   (2,228)
cash and and cash equivalents
Cash and cash equivalents                                       
Beginning of period            40,588     38,602     66,744     94,225
End of period                  $25,661   $91,997   $25,661   $91,997

Gevo, Inc.
Non-GAAP Financial Information
(Unaudited, in thousands)
                              Three Months Ended     Nine Months Ended
                              September30,            September30,
                              2013        2012        2013        2012
Gevo Development, LLC /                                         
Agri-Energy, LLC
Loss from operations           $(4,852)  $(6,401)  $(10,285) $(10,544)
Depreciation and amortization  584        531        1,651      1,581
Non-cash stock-based           80         62         130        164
Non-GAAP loss from operations  $(4,188)  $(5,808)  $(8,504)  $(8,799)
Gevo, Inc.                                                      
Loss from operations           $(10,911) $(18,025) $(32,228) $(47,848)
Depreciation and amortization  280        367        907        956
Non-cash stock-based           877        1,468      2,953      6,826
Non-GAAP loss from operations  $(9,754)  $(16,190) $(28,368) $(40,066)
Gevo Consolidated                                               
Loss from operations           $(15,763) $(24,426) $(42,513) $(58,392)
Depreciation and amortization  864        898        2,558      2,537
Non-cash stock-based           957        1,530      3,083      6,990
Non-GAAP loss from operations  $(13,942) $(21,998) $(36,872) $(48,865)

CONTACT: Media Contact:
         Robin Peak
         Gevo, Inc.
         T: (720) 267-8632
         Investor Contact:
         Mike Willis
         Gevo, Inc.
         T: (720) 267-8636

Gevo, Inc. Logo
Press spacebar to pause and continue. Press esc to stop.