Gevo highlights corporate developments during investor call

By Erin Voegele | August 04, 2015

Gevo Inc. has released second quarter financial results, reporting revenue of $8.9 million, up from $7.7 million during the same period of 2014. The company primarily attributed the increase to the production and sale of ethanol, isobutanol and distillers grains at its Luverne, Minnesota, plant.

Hydrocarbon revenues during the second quarter reached $800,000 million, primarily related to the shipment of biobased jet fuel and isooctane during the quarter. Gevo also benefited from the recognition of $1.5 million of revenue following a shipment of para-xylene to Toray Industries Inc., $1 million of which was paid to the company in 2013 and was used for the design and construction of the para-xylene demonstration plant in Silsbee, Texas. In addition, Gevo reported $200,000 of revenue during the second quarter associated with ongoing research agreements.

The net loss for the quarter was $17.8 million, compared to $17.2 million during the same period of the prior year. Earnings per share for the quarter were $1.36, and the company ended the quarter with cash and cash equivalents of $22.5 million.

“Our balance sheet is in its strongest position since the end of 2013 and this will support us in meeting the important milestones that we established earlier in the year, namely signing our first binding license agreement, securing ASTM certification for our alcohol-to-jet fuel and developing further strategic partnerships to propel our alcohol-to-hydrocarbons business,” said Patrick Gruber, CEO of Gevo. “These are all targets that we still expect to achieve in 2015.”

During an investor call, Gruber elaborated on the status of the company’s licensing agreements, noting Gevo expects to sign at least one binding licensing agreement before the end of the year. Regarding the pending agreement with Praj Industries Ltd., Gruber said negotiations are taking longer because the companies are now looking at ways to potentially partner here in the U.S. He also indicated that Praj believes it can roll out 250 million gallons of isobutanol capacity for sugar-based ethanol plants over a 10-year period. In addition, Gruber briefly addressed the status of possible licensing agreement with Porta Hnos S.A., noting progress is being made.

Regarding jet fuel, Gruber said the process for ASTM certification remains on track and is expected to be complete before the end of the year. MIL-SPEC certification, which would allow the company to compete for government supply contracts, is expected to be in place next year.

During the call, Gruber also addressed the National Marine Manufacturers recent endorsement of isobutanol blends for use in boats. He added that the first retail pump sales of isobutanol-blended gasoline were recently announced at a station in Texas. “This is anticipated to be the first of many retail locations to offer Gevo’s product as the company rolls out its isobutanol to the marina and off-road gasoline markets,” Gruber continued.

In addition, Gruber briefly address the company’s technology to convert ethanol into chemicals, diesel fuel and hydrogen. “We have lots of interest and expect to establish formal projects and businesses to move this technology forward,” he said.

Gruber also provided an update of the ongoing patent dispute with Butamax Advanced Biofuels, noting a trial is set for Aug. 24 regarding one of the ongoing patent litigations with the company.