GEVO - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the Gevo, Inc. Q2 2018 Earnings Conference Call. My name is Michelle, and I will be your operator for today’s conference. [Operator Instructions] Please note that today’s conference is being recorded. I will now turn the call over to Mr. Williams. Geoff begin. may you Sir,

Geoff Williams

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

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

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

Following we’ll presentation, Pat? open turn questions. the Pat. for call to the now up call over I’ll the

Pat Gruber

end all we’ve six sheet Cash in that XX, the you difference Thank held whereas the now, the months in us improvements. we cash balance thank million you made in see more our joining Geoff, at July of for on and last $XX quite million can today. from hand compare than $XX.X you December till sheet. was balance year a If the make? you What week,

cash produce low-carbon at discussed, the way, Last Luverne, for to low-carbon we jet are more change long to strategic the makes the The for have It we forward Along plans the with stage be now were doubt December move any plant shouldn’t as more that we for company it discussion isobutanol, profitable? they’re ethanol. $XX planning carbon How isooctane. removes we million. we we million, improving fuel make much expect last fuels set as liabilities productive to our than future. low see customers, to profitable. make total the us now underestimated. intend significant the low-carbon and By that with easier than Our additional $XX it company to will This be partners, and make less have around we run. site is vendors, low-carbon

detailed improve announce economics, We should We in sustainable for At pinned use Luverne, corn steps the of it’s be once to are the see more and the by for food the relatively expect we to equipment upgrading timelines plant protein soon. down use that to the improve value oil and raw our nonfood business chain. for such material. possible the and

make add are expect of to to happen, taking steps value we to the site. the upgrade We possibility which that

meaning work We’ve to offtake, it. customers, they On the make aggregate making to business we if for front, we buy continue confirmed been it, progress.

to suppliers example, of the of with it the first be facility, Corporation, work supply aggregate definitive to long-term production but financing with from for supply jet believe expect and from more agreement buildout, our the take to in securing that I’m we’re both – agreement the do that signed once demand facility. from we’ll product. it agreement product Luverne isobutanol. June, They hydrocarbons have and our buildout useful improve we first still to is renewable signed over of fuel long-term represents corporate outlets. We an is optimistic progress fuel This to X,XXX debt for get it the and we our making build alcohol-to-jet Avfuel support done. our of out Avfuel significant one in Luverne agreement to to For we largest Silsbee the we renewable aviation,

things, getting continue side is the pricing to right. volumes we the On see interest. market of challenge and isooctane The

long-term for additional signed. on outsource isooctane once to contracts agreement working as they’re offtake well, are We

provided we more fuel keep near doing the ethanol, isooctane. time and strategic progress, via making the profitable from plan on call for which to near we’re update in see become plans. will our possibility and selling in I’ll jet there’s products to our an more freedom it isobutanol to develop overall, So about short some future talk producing term probably and the markets us we low-carbon in today, detail

I’ll So it over Brad? turn to Brad.

Brad Towne

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

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

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

due the During the to incurred XXXX, due primarily XXXX common the June result XX, the of ended XXXX, change a our value notes as on shares dates XXX,XXX into notes the a of XX, we three fair were $X.X of of stock. company stock converted senior approximately months $X.X convertible a non-cash secured of million the the XXXX in loss million March price

of the the in as second we incurred XXXX, a During ended liability of derivative during the the million primarily time warrant of exercised in were increase stock non-cash months quarter XX, the value from of result XXXX. change the $X.X June at certain three warrants a price loss fair our a

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

increased previously, share, In derivatives. of million to their a non-GAAP current the $XX.XX non-cash of of in for of of a $XX.X of these warrants, million. our share, of instruments, compares sheet $XX.X weighted support exchange million resulting the our a second a providing second the a X $X.X of between in This non-GAAP loss $X.XX. compares $XX a in of net $X.X of and that, a in in of value a million. totaling based and quarter Adding $X.X adjusted reported such April stockholders net gains today, second balance $X.XX Pat of of share fair non-GAAP quarter and continued shares million For a XXXX loss or To net net back resulted weighted emphasize loss of a non-GAAP million. non-cash the loss we shares per of loss XXXX, in second improvement changes XXXX, on on quarter to million loss the embedded of quarter what average second exceeding per $X.X loss XXXX based recognized $X.X approximately thank per the $X.XX. This discussed adjusted excess our XXXX, in due current financial to debt share outstanding adjusted or average $XX.X of or to adjusted assets we outstanding to quarter raised million would net million X, or August XXXX liabilities net as of of like for per I net convertible Gevo Gevo. liquidity loss loss a of With certain

now open up will Operator? it We for questions.

Operator

sir. Thank you,

[Operator the question from with the The session. Instructions] Wainwright. will begin question-and-answer Dayal first comes in Amit now H.C. We queue

Amit Dayal

question. my Thank taking you. Thank Hi, guys. you for

ethanol, but of you low-carbon to the on Maybe ramp Pat. how maybe we early in up this meaningful low-carbon terms could there quickly get expect it's required volumes? provide on could How you That and any helpful. Firstly, color kind ethanol profitable be capital What out of cetera? would too if do to et production?

Pat Gruber

Sure.

expect relatively losses generate it's So of taken pocket in fact, because on and me sorry, be And you'll path plant would that can a of you other small and more It's in we'll – make but along you of taking say the we've and I'm – one noticed I already it'd steps near – now. asked something see that And that progress profitability operating that and the is approving forgot with out thing, then then not our relative plant less due timing, to way. reverse continue we volumes on better ready track. the our yet, order. in the and I'm the term. I capital that certainty the along notice

Amit Dayal

you're here? $X from of scale revenues terms In this I $XX mean, ramp the million now doing and up. million to how volume does in around up

Pat Gruber

million a the hard predict we're of will it's per scale how XX work. million the But of operating to about up doing the year XX to right around revenue rate ethanol – at talking if now. gallons capacity It's plant, and it,

prices those basis corn of good And are happen quite a And lot. a very now commodity so basis. to a have would that helps on whatever with go we us Luverne out

would call. of I'll able profitability we As start would the go clear up. make schedule I up, When to the then the to revenues that we add in be value a more things, low-carbon – know go

Amit Dayal

And are Understood. And ATJ next are on in I the end regards of to the offtake the what this the here? deliveries agreement year agreement? before the in steps guess, any works

Pat Gruber

that say garbled. that Sorry, was Could again? you

Amit Dayal

actually steps what the to this On terms delivering ATJ product here customer? of in side, the are next from

Pat Gruber

Avfuel, our already course, down of much for make and definite – they at mean our contract expanded agreement, have it, would remember we they Well, the in with then, committed to begun. plant, capacity kind and of if a we these pretty sales plant, you it, for out Avfuel – all of have buy offtake a thing. buy volume of

it already – that’s lots of there's it's well. begun there seem to going going and So interest be pretty and –

Amit Dayal

well, Europe was just got a et Okay, it. shipping Or that were some is pilot, you as continuing? still sort over there? customers product some And short-term with cetera, to that of

Pat Gruber

names I'd publish the No, to Europe. product. working have going Haltermann many, able from from interest still say is and future. And We've all companies one it primarily of of in had about of it's for gallon tell you finally isooctane, be is of so low-carbon interest ways and the some and gasoline won't once interesting to you remember, to that content on ones many the list, some that it recognize isooctane you recognize in we're be at Carless because past gasoline. out comes there'll a the into from I'll the putting all other

up, value that way carbon the as more comes it interesting. So makes

competitive – it Europe, if burn in what the that built like. be was of looks anyway it out isooctane, we our petrochemical-based our Now that's isooctane would project with

make because of makes isooctane gasoline little that in sense, it upside. extra it pencils premium really which then interesting, plus a all value, is interesting. takes for makes looks still we're combination in order it make with it carbon value so but it value, provides In carbon on But value, it And but U.S., bit working the a its to market. that like properties, and the big of

anticipate, and the on be going that sure on that and offtake year. they in that you these agreements to project should should companies for have fuel jet attractive what mix we're a we we're customer last out case BioAmber other And it we're agreements, we make bailed plans critical a the too make put going so we saw Luverne, forward working building where what to real people as seen our of you've isooctane, is – hook a nice it a moment, offtake for like many at just out had

to for our So up we buy of need we're not product. sort that people a game,

it a – we our underlying is an Now monetize we it make jet agreements. well and remember, right? we when because fuel takes we projects basis, to attribute have get is a but it And our haven't that financed, those we gasoline, can isooctane or products sell when we're on always low-carbon value offtake out spot of our had also, that as

Amit Dayal

Right.

the you before that will So do, that might this third you potentially call? quarter call indicated happen this

Pat Gruber

it Shawn Yes. have I'll Investors probably in do I next it to EnergyTech – talk we'll to Severson and get the here from shortly. scheduled

in it hope two. I the or do next to would So week

Amit Dayal

how cetera? things an investors on update And just give progressing, of are the to is this agenda for more et

Pat Gruber

– what some – primarily Luverne about Because is question now but got balance and us of we'll more remember it about debt, we're it'd be funds what people. we'd focused on have we taken and as well, be for $XX – address well. as down really million the It'd low-carbon that our ethanol, it July, sheet we doing talking be make general at low on Yes. clear

for low-carbon ethanol benefit it Luverne And fuel isobutanol, plans relatively execute low-carbon can we well. do so jet benefit we low as us but can doing And capital. already, and with that isooctane

to super they're focused you've generate that to So back now seen still over just what mentality burn doing. our year, you be last we're we're That's we when and our down be going go gotten rate things know to rate base profit. add is careful down, these one going of so that has projects, interesting burn that on the the the things

pretty so to us, makes game interesting in that available of And in funded. we're very it what's longer take for we're it no to having the well

Amit Dayal

the I right. much. all have That’s now. for I Thank appreciate so things, these color Pat. All you on

Pat Gruber

wish, see Okay. in. All a Bye-bye. Appreciate any taking we right, time great dial I with that, the don't you're everyone, to questions. other evening.

Operator

you, and for concludes gentlemen. Thank participating. Thank today's teleconference. ladies This you

disconnect. now may You

Gevo (GEVO) 8 Aug 182018 Q2 Earnings call transcript