Gevo Reports Fourth Quarter 2013 Financial Results

Gevo Reports Fourth Quarter 2013 Financial Results

   Optimizing utilization and cash flows of Luverne plant by producing both
                            isobutanol and ethanol

  *Reports EPS of ($0.35)
  *Ended the fourth quarter with cash and cash equivalents of $24.6 million
  *Transitioning Luverne plant to the production of both isobutanol and
    ethanol
  *Produced isobutanol from mash using our yeast biocatalyst and GIFT®
  *Signed licensing LOI with Porta Hnos S.A. to become exclusive licensee in
    Argentina
  *Began selling bio-isooctane for high performance fuel applications

ENGLEWOOD, Colo., March 25, 2014 (GLOBE NEWSWIRE) -- Gevo, Inc. (Nasdaq:GEVO)
today announced its financial results for the three months ended December 31,
2013 and provided an update on recent corporate highlights.

Gevo also announced that it is transitioning the Luverne plant to the
production of both isobutanol and ethanol. Gevo's decision to transition to
the simultaneous production of both products is a direct result of (1) the
steady progress made in executing Gevo's flexible production technology
strategy and (2) today's high ethanol margin environment. Producing both
ethanol and isobutanol allows Gevo to fully utilize the Luverne plant and
increase cash flow as Gevo continues to commercialize its isobutanol
production capabilities.

Luverne Update

The Company has successfully demonstrated its two key technologies (its yeast
biocatalyst and its GIFT system) at commercial scale using full corn mash to
produce isobutanol, although the process is still being optimized. The
enhanced plant configuration permits the Company to scale-up the isobutanol
production process while taking advantage of high ethanol margins. The
expected benefits of this integrated production configuration include:

1.Producing ethanol improves Luverne's operating environment for the
    optimization of isobutanol production by creating a continuous, stable
    mash flow and consistent recycle of water back to the fermenters.
2.Increases available cash flow to the Company, as Gevo optimizes its
    isobutanol production technology.
3.Broadens the potential market to license, as partners increasingly see the
    benefit of co-producing isobutanol and ethanol at a single site, the
    "side-by-side" model.

"This has been a very focused quarter for the Company. Fundamentally, our
technology works at scale with corn mash as a feedstock. As we have advanced
on our isobutanol learning curve, we have demonstrated that the isobutanol
technology not only works, but can work concurrently with ethanol production,
giving our plant more earning power and flexibility. We are learning how to
optimize our procedures, processes, and equipment, effectively writing the
"owners manual" making it possible for us to confidently produce isobutanol on
a continuous basis. Our original vision was to focus our efforts on one
product; however we now are confident that we can leverage the flexibility of
our technology and more fully utilize all the operating units in the plant to
produce ethanol simultaneously with isobutanol. Needless to say, the expected
additional cash flow is a benefit as we work to maximize the learning per
dollar as we scale up our technology. Therefore, we plan to run three of our
fermenters to produce ethanol, while the fourth fermenter will remain
dedicated to isobutanol production.We are calling this configuration "side by
side", meaning both ethanol and isobutanol could be produced concurrently.

"Regarding the isobutanol production process, we've made a lot of progress on
learning how to run isobutanol at scale. In particular, we have:

  *Commissioned our proprietary system to sterilize corn mash.
  *Proven that our two key technologies, our isobutanol producing yeast and
    our GIFT system, work at commercial scale utilizing full corn mash to
    produce isobutanol.
  *Achieved up to 71% of our targeted gallons per batch goal.
  *Produced isobutanol that met quality targets.
  *Demonstrated that we can manage infections during fermentation, achieving
    over 100% of our goal, although not with the consistency or reliability
    that we need.
  *Operated all of the fermenters and GIFT systems and they performed as
    expected.
  *Begun the integration of the water recycle streams, and have achieved
    greater that 90% water recycle in fermentation.

Learning to run a 'new-to-the-world' process at the scale of our Luverne plant
with 1 million liter fermenters requires a lot of work. Working through the
issues that arise creates the crucial know-how needed for steady full scale
production, expansion, and licensing," said Dr. Gruber.

Other Recent Highlights

On March 6, 2014, Gevo announced that Porta Hnos S.A. ("Porta") has signed a
letter of intent to become the exclusive licensee of GIFT in Argentina to
produce renewable isobutanol.Porta is a 131 year old family owned company in
Argentina that produces liquor, vinegars and has a 120 m^3/day corn ethanol
plant (approximately 12mgpy).In addition, Porta has designed and built two
250 m^3/day ethanol plants for others and they are working on two more ethanol
plants for 2014.Half of all current ethanol plants in Argentina were designed
by Porta, and they have a joint venture with Alpha Laval to provide separation
and evaporation expertise.

In the fourth quarter of 2013, Gevo began selling bio-isooctane for specialty
fuel applications such as racing fuel. Gevo's renewable isobutanol from
Luverne, Minn. is being converted into bio-isooctane at its biorefinery at
South Hampton Resources. Initial volumes are being used for testing purposes
with the goal of approving its use in racing competitions, amongst other
applications.

On December 23, 2013, Gevo announced that the U.S. Army has successfully flown
the Sikorsky UH-60 Black Hawk helicopter on a 50/50 blend of Gevo's ATJ-8
(Alcohol-to-Jet). Alcohol-to-Jet is a renewable, drop in alternative fuel for
JP8 that addresses the Army Energy Security Strategy and Plans' mandate that
the Army certify 100% of its air platforms on alternative/renewable fuels by
2016. This flight marks the first ever Army Aircraft to fly on the isobutanol
ATJ blend. This testing is being performed as part of the previously announced
contract with Gevo to supply more than 16,000 gallons to the U.S. Army.Gevo's
patented ATJ fuel is designed to be the same as petroleum jet fuel, and to be
fully compliant with aviation fuel specifications and provide equal
performance, including fit-for-purpose properties.

On December 23, 2013, Gevo announced that Underwriter Laboratories (UL) has
approved the use of up to 16% isobutanol in UL 87A pumps, providing all of the
service stations across the country with the assurance that isobutanol blended
gasoline will work in their current gasoline pumps without the need to
purchase new equipment.Every gasoline pump across the country is required by
law to meet the UL specifications.Gevo has been working with UL for many
years to approve the use of isobutanol in UL 87A pumps.Gevo sponsored a
research study with UL to confirm the suitability of using isobutanol in UL
pumps and based on the results of that study and other resources, UL has
approved the use of up to 16% isobutanol in UL 87A pumps.

Financial Highlights

Revenues for the fourth quarter of 2013 were $1.7 million compared to $1.9
million in the same period in 2012. Revenues in the fourth quarter included
proceeds from sales of production from Gevo's hydrocarbons demonstration
facility of $0.9 million, including sales of biobased jet fuel to the U.S. Air
Force and the U.S. Army and initial sales of isooctane for specialty fuel
applications, revenue under Gevo's agreement with The Coca-Cola Company, and
revenue from ongoing research agreements. In 2012, fourth quarter revenues
benefited from the sale of excess corn inventory of $1.0 million.

Research and development expense was $3.9 million in the fourth quarter of
2013, compared to $4.4 million in the comparable period in 2012. During the
fourth 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, production of bio-jet fuel to the
USAF and production of bio-para-xylene at the Silsbee demonstration plant.
Research and development expense decreased $0.5 million in the fourth quarter
of 2013 compared with the same period in 2012, primarily resulting from lower
compensation-related expenses and consulting and license fee expenses.These
decreases partially were offset by production costs of bio-jet fuel and
bio-para-xylene.

Selling, general and administrative expense decreased to $5.8 million in the
fourth quarter of 2013 from $7.8 million for the fourth quarter of 2012. This
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 fourth quarter of 2013 was $2.0 million compared to
$2.2 million for the same period in 2012. The decrease primarily resulted from
a decline in the outstanding principal balance of our convertible notes as
holders elected 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 primarily due to scheduled payments on our principal
balance.

The company reported a non-cash loss of $2.4 million during the fourth quarter
of 2013 related to changes in the fair value of derivative warrant liability
and embedded derivatives contained in the convertible notes. We reported a
$2.0 million gain during the fourth quarter of 2012 associated with the
changes in the fair value of the 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 December 31, 2013. 

The net loss for the fourth quarter of 2013 was $17.3 million compared to
$13.2 million during the same period in 2012.

In December 2013, we raised gross proceeds of $28.8 million associated with
the issuance of 21,303,750 common stock units.During the fourth quarter of
2013, we used $7.8 million of cash to repay principal on our secured debt with
TriplePoint Capital ("TriplePoint"), including $5.1 million associated with
the restructuring of the TriplePoint facility that was done in conjunction
with the December common stock unit issuance.As part of that restructuring,
TriplePoint agreed to, among other things, waive Gevo's obligation to make
principal payments on the secured debt through December 31, 2014.

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 Gruber, Chief Executive Officer, and Mike Willis, Chief Financial
Officer. They will review the company's financial results for the three months
ended December 31, 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
36623383. The presentation will be available via a live webcast
at:http://edge.media-server.com/m/p/kwstnb72/lan/en.

A replay of the call will be available two hours after the conference call
ends on March 25, 2014 until Midnight EDT on April 24, 2014. 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 36623383#. 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 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 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 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
                              Year Ended December 31, December 31,
                              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    8,224      4,477      1,695      1,924
and corn sales
Total revenues                 8,224      24,385     1,695      1,924
                                                               
Cost of goods sold             17,913     32,410     5,048      2,811
                                                               
Gross loss                     (9,689)    (8,025)    (3,353)    (887)
                                                               
Operating expenses                                              
Research and development       20,179     19,431     3,899      4,352
Selling, general and           25,647     43,981     5,750      7,806
administrative
Total operating expenses       45,826     63,412     9,649      12,158
                                                               
Loss from operations           (55,515)   (71,437)   (13,002)   (13,045)
                                                               
Other income (expense)                                          
Interest expense               (9,301)    (6,338)    (1,980)    (2,177)
(Loss) gain from change in     (81)       17,000     (2,361)    2,000
fair value of derivatives
Loss on conversion of debt     (2,038)    --         --         --
Other income                   129        63         14         45
Total other expense            (11,291)   10,725     (4,327)    (132)
                                                               
Net loss                       $(66,806) $(60,712) $(17,329) $(13,177)
                                                               
Net loss per share
attributable to Gevo, Inc.     $(1.48)   $(1.86)   $(0.35)   $(0.34)
common stockholders - basic
and diluted
Weighted-average number of
common shares outstanding -    45,071,618 32,619,091 49,758,100 39,300,054
basic and diluted


Gevo, Inc.
Condensed Consolidated Balance Sheet Information
(Unaudited, in thousands)
                                                                  
                                                        December 31,
                                                        2013       2012
Assets                                                             
Current assets:                                                    
Cash and cash equivalents                                $24,625  $66,744
Accounts receivable                                      1,358     698
Inventories                                              3,581     6,659
Prepaid expenses and other current assets                1,163     1,779
Total current assets                                     30,727    75,880
                                                                  
Property, plant and equipment, net                       83,475    77,093
Deposits and other assets                                2,153     3,138
Total assets                                             $116,355 $156,111
                                                                  
Liabilities                                                        
Current liabilities:                                               
Accounts payable, accrued liabilities and other current  $13,030  $8,256
liabilities
Derivative warrant liability                             7,243     --
Current portion of secured debt, net                     788       8,513
Total current liabilities                                21,061    16,769
Long-term portion secured debt, net                      9,339     15,445
Convertible notes, net                                   14,501    25,554
Other long-term liabilities                              479       512
Total liabilities                                        45,380    58,280
                                                                  
Total stockholders' equity                               70,975    97,831
Total liabilities and stockholders' equity               $116,355 $156,111


Gevo, Inc.
Condensed Consolidated Cash Flow Information
(Unaudited, in thousands)
                                                              
                                                    Three Months Ended
                              Year Ended December 31, December 31,
                              2013        2012        2013        2012
Operating Activities                                            
Net loss                       $(66,806) $(60,712) $(17,329) $(13,177)
Adjustments to reconcile net
loss to net cash used in                                        
operating activities:
Non-cash expenses              13,273     13,554     3,061      2,734
Loss (gain) from change in     81         (17,000)   2,361      (2,000)
fair value of derivatives
Loss on conversion of debt     2,038      --         --         --
Changes from working capital   4,366      (3,900)    (3,421)    (8,303)
Net cash used in operating     (47,048)   (68,058)   (15,328)   (20,746)
activities
                                                               
Investing Activities                                            
Acquisitions of property,      (7,800)    (52,432)   (5,172)    (1,496)
plant and equipment, net
Other                          125        (607)      125        --
Net cash used in investing     (7,675)    (53,039)   (5,047)    (1,496)
activities
                                                               
Financing Activities                                            
Proceeds from issuance of      28,761     61,875     28,761     --
common stock
Payments on secured debt       (14,529)   (10,406)   (7,814)    (3,139)
Proceeds from issuance of      --         42,300     --         --
convertible debt
Proceeds from issuance of      --         5,000      --         --
secured debt
Other financing activities     (1,628)    (5,153)    (1,608)    128
Net cash provided by (used in) 12,604     93,616     19,339     (3,011)
financing activities
                                                               
Net decrease in cash and cash  (42,119)   (27,481)   (1,036)    (25,253)
equivalents
                                                               
Cash and cash equivalents                                       
Beginning of period            66,744     94,225     25,661     91,997
End of period                  $24,625   $66,744   $24,625   $66,744


Gevo, Inc.
Non-GAAP Financial Information
(Unaudited, in thousands)
                                                               
                              Year Ended              Three Months Ended
                              December 31,            December 31,
                              2013        2012        2013        2012
Gevo Development, LLC /                                         
Agri-Energy, LLC
Loss from operations           $(15,770) $(12,600) $(5,485)  $(2,056)
Depreciation and amortization  2,233      2,113      582        532
Non-cash stock-based           160        216        30         52
compensation
Non-GAAP loss from operations  $(13,377) $(10,271) $(4,873)  $(1,472)
                                                               
Gevo, Inc.                                                      
Loss from operations           $(39,745) $(58,837) $(7,517)  $(10,989)
Depreciation and amortization  1,160      1,200      253        244
Non-cash stock-based           3,751      7,763      798        937
compensation
Non-GAAP loss from operations  $(34,834) $(49,874) $(6,466)  $(9,808)
                                                               
Gevo Consolidated                                               
Loss from operations           $(55,515) $(71,437) $(13,002) $(13,045)
Depreciation and amortization  3,393      3,313      835        776
Non-cash stock-based           3,911      7,979      828        989
compensation
Non-GAAP loss from operations  $(48,211) $(60,145) $(11,339) $(11,280)

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

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