GEVO - Earnings call transcript Q1 2018

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Operator

Welcome to the Gevo, Incorporated First Quarter 2018 Earnings Conference Call. My name is Adrian, and I'll be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note this conference is being recorded. call Geoffrey the and General turn Secretary. now over Williams, to Counsel I’ll go Please ahead.

Geoffrey Williams

press we and we for Executive topics public. Bradford simultaneous of to to Accounting like thank quarter open everyone, Pat officer; this the the afternoon, of Good webcast you and replay today www.gevo.com. our us discuss. this Cesarek, that issued press plan conference to is a introducing call participants Earlier release today's of would that to is website the I Officer. Gevo’s Company. available this by Commercial call A With XXXX Gevo's which joining media release will Chief to I A on listeners be call. would Timothy call outlines today copy remind Towne, and our is like the Chief a Gevo's start website. Gruber, on we the today, from Officer; available conference earnings providing first Gevo's at Chief Gevo's are

financial website. these financial of accordance with presented our to today, contained directly or the call non-GAAP of as certain isolation most should GAAP financial Non-GAAP substitute considered financial GAAP. hear Reconciliation measures a financial the for release non-GAAP is distributed on which posted discussions the measures press comparable in you are measures today and not from will in be On measures. in information

current to of Such are Gevo's and speak future not Gevo beyond. disclaims expectations have whether today's and operating the to, subject the Pat any information, forward-looking Gevo's will turn an We will strategy. XXXX yet will projections first also make but of review statements. remainder overview on business assumptions, are date about Tim based disclosed statements, These XXXX, XX-Q. for by forward-looking the these we Reports commercial And discuss presentation, circumstances call in to with and activities. on not risks SEC and forward-looking certain limited result such Gevo's will and place the events made any I'll the XXXX. are management's questions. statements for following otherwise. of XX, reports of activities results for forward-looking on not and a financial now forward-looking Pat. the as open development of On call Gevo, beliefs, to statements uncertainties, today's the occurred, Report or including, events Investors as that contained new call, up those about only for reliance quarter Quarterly on will including year statements subsequent update and Form Bradford Gevo's and significant filings in December ended other obligations Annual begin including cautioned Form XX-K in then over information to with undue and our

Patrick Gruber

Thank you you, today. Geoff. for joining all And us thank

While $X.X to to we our we objectives: in by compared costs million our Number the last quarter continue make reduced on first year. significantly progress one,

period. products of ago same sales by our a XX% to in increased year also compared the We

It to improve incented carbon go to the in leveraging low greenhouse years, achieve hydrocarbon crystal EU to low We of as marketplace to are world Gevo's couple ethanol profitable path within see that CI and continue around to Gevo cash to or profile in company that continuing to California. make a focus that's CI, as chemical the intermediates being this carbon we starting protein. fuels, markets, sharpen focus value, and in CI. expect marketplaces is We forward. flow particularly index, but on a gases a the is The referred that clear becoming as

The isooctane, to designed at any ethanol, fuel, benefit we we carbon We see anything other would or footprint capital. a good do down economics, isobutanol, are rail, drive in our made corn very got be good huge our Luverne, good opportunity jet Luverne. plant technology transportation, contemplating It's good at deploying product Luverne. improvements have good without making amounts logistics. of We to made from in site an

for the in plans Our designed allow are the and they of the jet path our get finalizing as and isobutanol, that large biofuel alcohol-to-jet optionality this to our advanced products. for is the to great done. it flexibility markets decrease, of Gevo develop Luverne and being technologies. dependent margins while plans preserves increase. to is the implication for on at The like. burn us expected build-outs our this And midst for time optionality to get isooctane fuel as us should We're our It's IBA, without we of probability this

we of carbohydrates, going processes important, the of of form feedstock, improvements winners, One that. is important be this talk be billion incremental in on lower a of per the XXX value and that's those a addition uses of nearly thing CI, meet in feed, the about can preserved. that is being do protein to have that often we an that's of optionality can protein. to we're produce able mostly technology are producing as value, not animal a lost agriculture, and Food's when low-cost be All all that other pounds for that biofuels market is footprint, us, Luverne, lot. lost about a can protein requirements address think like our and in the lot a protein to we of the corn Why? content plant lower The set to more currently discussion, all the going Nutrition matters it focus. year and protein

way Gevo, chemicals the then, think and That's we right are CI about the to fuels protein. us. all Now of low at

scale, to months, these we we breaks drive capacity advisers a to getting production economies There's to we're But terms know where goes Company isooctane. In only several gasoline. into of to renewable the scale. however, as what have of down mainstream have we multiple produce products; in isooctane alcohol-to-jet can IBA addition have renewable It's pretty different egg of fuels, at potential. make, of use have scale we Remember, them. in value of We We world great and the need be so a cost look We're and jet other than for already as how products confident Currently, that fuel. real block, that in we solid a had at future index into when technology, one We the ethanol and based fuels jet It's that a in performance little as the than production of gasoline. building or and have and data, for valuable has the look jet and at quantities such what to content capabilities, our That's here way the other ethanol we a hydrocarbon Both we get need putting potential of advantage isooctane the paradigms, on meaningful that. jet plants mainstream we can last is economics The real validate our ability low-carbon out that them a dilemma. We the and to chicken advanced have we make completed isooctane. large demand that hydrocarbon we've technology routes. getting gasoline. body models. its bit see work of as like. to the right. low-carbon greater economic our of would consultant hydrocarbon

the a rule. use. retail. quarter across Now in Previously, quickly to challenges but to is on-road another flexibility There great more larger is through has gasoline retail a highlight EPA forward, for geography. that on-road it at hope logistical XX% Having and blends use other this XX% is they like isobutanol to a I that the make for big should still finalize overcome, for deal only this easier it to good This easier the to is move channels a used could blend distribution our it expected is published potentially XX% to reach pumps occurred make that be rule much use. the EPA. use step enabling off-road the get the for blend

highlight final from that's that's Another that ASTM fuel the XX%, ATJ jet to a the was Glenlivet our of rule. moved XX%

to XX%. opportunity to good properties the more the density. energy it take advantage special the such of is our This creates So performance fuel because to now up blended as, of be our ATJ,

low And dirty restricted. geographies and these density that, going low in certain means, Our a help areas out well in are as could potential is And energy particulates there's sulfur, across of we you that's the and in particulate, longer in a have push fly theory; get They out higher, world. benefit of to fuels. the banned sulfur big be fuel. can world to a load some

He Tim? renewable fuels companies. and an and Tim and XX from have of over greenhouse chemicals. He XX that's good I commercial deals low the team glad to He's years addition his in us. at competitive finally, knows a opinion technologies transactions We're his excellent to our I'm join him Cesarek in all quarter with a to want fuels and him to brings we emissions. record He's development to with got lot. our him years is lot targeted the EVP. activities. track saw done, here. and on added the glad this that I'm this across thoughts share informed business Gevo. Chief resource-based getting of field as Tim him the chemicals. have course, what fortunate Of renewable in knowledge in of He Commercial Officer gas led markets. And asked strategic our seen experience is familiar I've recently

Timothy Cesarek

chemicals, biojet. the many that said. comparative Thanks, renewables advantage mix as combination almost production Gevo's bio-hydrocarbons valuable the obviously world my to This pleased South Pat. produced isobutanol, operational I'm of low-carbon low-carbon done foundational product come as I've Gevo the a and to while industry and intermediate Those maintaining believe isobutanol chemical. at produces seen feed Luverne technologies proteins Pat a I Gevo in excited that and The sustainable been are have and the production renewable diligence, the years, isobutanol team. I've XX kind has and proven leads plant for isooctane process commercial many I've to words. Resources fuels Hampton of a joined leads in commercial go. at using produced and in leading options.

focus objective that the the value-in-use a and prioritizing pull to degree will focus my of customer demonstrated on to the our these and highest market In the that will supply chain of the of options, develop months, we to Given market the on set narrow and the products execute and coming value priorities be profitability. that maximizes markets. have and following breadth segments ultimate

density; energy ethanol-free one expand water continue such higher advantages, isobutanol to and to – than a optionality. and gasoline. not valued RVP quality as; adding low-value, in is logistical high-vapor markets, isobutanol pressure a miscible being or develop fuel one, allowing vapor upgrade Reid ethanol to into We pressure much components not unique its where for And that blending will ethanol; lower

demand performance fuels from for will the to and We for and lubes. endeavor isoctine and use our expand isobutanol specialty made in isooctane

We built out. have have strategic to and these a number in of this customers get interest leverage a strong We need who business relationships product to and market. partners our

production to to advantage to biojet large contracts the long-term economical have and Gevo compared partnerships aviation. seen, and comparative scalable I potential biojet look will learned business and other or commercial be We even I've secure to biojet. what strong, believe, scale advantage Based appears for fuel that It's and a routes. on in both has

We cosmetics, will flavors used assets specialty and capability the products further for of in fragrances. our development leverage and

referred and Finally, developing planning a the need value contractual our expanding where on fund licensing know-how. out I'm offtake, new ones investment of through existing the to and product earlier. relationships capabilities chicken that egg and Pat problem we attributes our to partners solve are such to and of technology growth, project strategic to

we're solid, product, out It's selling build is need we the time. to business technology Our platform.

through Now, I take will who the turn Brad? Bradford, to the financials. over will call us

Bradford Towne

of during a $X.X prices XXXX isobutanol the due Thank approximately The in result at XXXX XXXX $X.X million production the XXXX. in in and quarter first was and as you, revenue is compared revenue increase production and of higher of Tim. Luverne the XXXX. mainly versus Gevo million of period of to distiller $X.X to sale quarter distillers’ increased period as in This of same grain primarily the plant, first in ethanol XXXX. million the ethanol, compared reported $X.X revenue million in of first same to increase grains quarter the in the in

of of included same reported $X.X a isobutanol During result in for of first in $XX.X revenues stock-based the approximately shipments the quarter of million to the we goods first XXXX million to products first loss in the with the $X.X decrease and expense. in of XXXX. compared less non-cash million for expense related quarter as first of quarter. quarter hydrocarbon compared were of for depreciation the in $X.X first million of associated $X.X of sold quarter due million quarter period million, in approximately XXXX than a million the approximately Within SG&A in of also employee XXXX XXXX, operating isooctane quarter $X.X timing of Cost the related the comparable principally million comparable Cost ethanol, differences expenses. expenses same for XXXX XXXX, to million R&D $X.X the in the XXXX, goods to for was million expense decreased period compensation. $X.X first quarter million versus to expenses. of related to $X.X $X.X in the production for Gross the for quarter due versus of $X.X in the primarily decreased $X.X sold first employee and XXXX, was for during quarter primarily in a million XXXX, decrease XXXX. total

adding the of cash operations of from quarter in stock-based from non-cash of notes. the In from for same first first last million on compared a the $X.X expense operations loss quarter XXXX, non-GAAP measure, to loss of which $X.X was This to $X.X the calculated XXXX increased operations rates compensation $X.X we was XXXX, to year. financial XXXX. million first increase of million $X.X reported a and from first loss, the depreciation million quarter is million, quarter $X.X which down For loss EBITDA of was quarter a back XXXX. XXXX the same in by GAAP higher Interest interest of quarter as primarily to our million compared to due million, $X.X

liability. we months gain change incurred a March ended warrant million value in XXXX, the of XX, three of the from During a a fair $X.X derivative non-cash

we notes of of liability. mark-to-market first the quarterly During million the quarter gain the also embedded of XXXX, due valuation derivative a incurred to $X.X non-cash XXXX

stock of incurred non-cash loss XXXX due During result notes This remaining $XX,XXX fully in January we the of a shares common XXXX. remaining obligations quarter, action first the also of our on of satisfied principal, as the notes. XXXX exchanging $XXX,XXX for the a of all under

adjusted compares net first For weighted-average or non-GAAP totaling the derivatives, quarter in million as a in compares the or debt. loss a changes loss share gains quarter non-GAAP recognized $X.X of XX,XXX,XXX. shares outstanding This million of first the net of instruments, loss first loss quarter share. or non-cash the loss million $X.XX. million million net of first XXXX, the convertible loss net embedded in exchange reported net non-cash $X.XX of $X.X of quarter or first gains certain our these a a adjusted per the we a per resulted This share warrants, a of $X.X back of XXXX the based to of per on XXXX, non-GAAP In in loss of $X.XX Adding adjusted Gevo a quarter fair per loss XXXX $X.X such to to the net adjusted financial of of a value due or of $X.X Pat? of net of share non-GAAP the in of XXXX $X.XX. of

Patrick Gruber

wanted Thanks reiterate thanks I Thanks. a Tim. couple Geoff, of things. Thanks Brad. and just to

have get to contracts. but the about is can plans quantify team done. of our the because means we got on and clear wrong, their we're some way call is as to where when of here down I expect him this out you we happen, and will talk focused things didn't going, about the is I they're system, him in tell I out than big I completely rather progress, predict the the this – large profitability things brass contracts. is to octane it cost them idea Tim tacks these work, he a a we driving and low that they're can as focus that very fuels coming value the start to see And later of dependent out having hate we're jet, today, CI the it's making but like upon I forth. like always to of sooner we One like and for like be them and without having plant. I to – the deal, get getting that to of build isobutanol, going these

could products, that and such, hydrocarbons, that exciting. low and demand We protein in plant location to looks talking it ability our pretty we'll incremental And its where its and pretty ethanol, have CI the enough products that's and the get the its attractive about and with be be coupled to for more future.

stockholders like up that, would with thank so We'll it I for open Operator? of And all for questions. continued support Gevo. to now of their our

Operator

you. Thank

the question-and-answer period. will begin We [Operator Instructions] now

Patrick Gruber

joining on appreciate good All everybody Thanks a it, right. a us call today. have lot for I and afternoon. the

Operator

ladies Thank and may disconnect. gentlemen. concludes our And you This Thank for now question-and-answer you, session. participation. you

Gevo (GEVO) 10 May 182018 Q1 Earnings call transcript