BioFuels Journal

Englewood, CO - May 12, 2016 - Gevo, Inc. (NASDAQ:GEVO) today announced financial results for the three months ended March 31, 2016. Key highlights for the quarter included:

• Gevo announced that Alaska Airlines is scheduled to fly the first-ever commercial airline flight using Gevo’s renewable alcohol to jet fuel (ATJ) in the first half of June 2016.

The specific flight route is still being determined, however it is anticipated that the flight will depart from Alaska Airlines’ hub in Seattle–Tacoma International Airport.

This follows the news announced in April that ASTM International had completed its process of approving a revision of ASTM D7566 (Standard Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons) to include alcohol to jet synthetic paraffinic kerosene (ATJ-SPK) derived from renewable isobutanol.

• Gevo shipped the first railcar of finished isobutanol since the restart of production of isobutanol in March, following completion of the capital improvement projects undertaken at Luverne to decrease the cost of isobutanol production.

The railcar is being sent to a terminal owned by CW Petroleum Corp. in Dayton, TX, where it is expected to be delivered to retailers throughout Texas and sold primarily for marine and off-road specialty gasoline blendstock applications.

• Following the restart of isobutanol production in March, Gevo has produced approximately 50 thousand gallons of isobutanol.

In addition, Gevo’s iDGsTM, or the distiller grains produced as part of the isobutanol process, are being blended with the distiller grains coming from the ethanol side of the plant, and being sold on par with traditional ethanol distiller grains.

“We are pleased with the progress we are making at Luverne since restarting isobutanol production in March of this year.

"Our isobutanol production guidance remains on track in terms of gallons we expect to produce this year and our targeted variable cost of production levels that we expect to achieve.

"We are excited to have more visibility into larger volumes of isobutanol coming from the Luverne plant.

"This visibility will enable us to really focus on developing some of our core markets, such as the marina and off-road markets.

"And of course, I’m very excited that Alaska Airlines has set a date for its first test flight using our ATJ.

"We believe that this will be a key milestone in establishing our jet fuel vertical as a growth driver for Gevo’s overall business,” said Dr. Patrick Gruber, Chief Executive Officer.

1Cash EBITDA loss is calculated by adding back depreciation and non-cash stock compensation to GAAP Loss From Operations; a reconciliation of cash EBITDA loss to GAAP loss from operations is provided in the financial statement tables following this release.

Financial Highlights

Revenues for the first quarter of 2016 were $6.3 million compared with $5.9 million in the same period in 2015.

During the first quarter of 2016, revenues derived at the Luverne plant were $5.8 million, an increase of approximately $0.7 million from the same period in 2015.

This was primarily a result of higher ethanol production, partially offset by lower ethanol prices, in the 1st quarter of 2016 versus the same period in 2015.

During the first quarter of 2016, hydrocarbon revenues were $0.3 million, a decrease of approximately $0.2 million from the same period in 2015.

This decrease was primarily a result of the timing of shipments of finished products from Gevo’s hydrocarbons demonstration plant located in Silsbee, Texas.

Gevo also generated grant revenue of $0.3 million during the first quarter of 2016, flat as compared to the same period in 2015.

Gevo’s grant revenue is primarily generated through the work it is doing with the Northwest Advanced Renewables Alliance to produce isobutanol from cellulosic feedstocks, such as wood waste, which can then be converted into Gevo’s ATJ.

Cost of goods sold was flat during the three months ended March 31, 2016, compared with the same quarter in 2015.

Cost of goods sold included approximately $7.8 million associated with the production of ethanol, isobutanol and related products and approximately $1.5 million in depreciation expense.

Gross loss was $2.9 million for the three months ended March 31, 2016.

Research and development expense decreased by approximately $0.7 million during the three months ended March 31, 2016, compared with the same quarter in 2015, due primarily to a $0.3 million decrease related to reduced employee related, consultant and contract staff expenses, and a $0.2 million decrease in costs related to the South Hampton facility as a result of timing of shipments of finished products from the facility.

Selling, general and administrative expense decreased by $2.6 million during the three months ended March 31, 2016, compared with the same quarter in 2015, due primarily to an aggregate decrease of $2.4 million in general, patent and litigation legal expenses.

Loss from operations in the first quarter of 2016 was $5.9 million, compared with $9.5 million in the same quarter in 2015.

Non-GAAP cash EBITDA loss in the first quarter of 2016 was $3.9 million, compared with $7.5 million in the same quarter in 2015.

Interest expense in the first quarter of 2016 was $2.2 million, which was an increase of $0.1 million over the same quarter last year.

During the three months ended December 31, 2016, the estimated fair value of the derivative warrant liability decreased by $5.2 million, resulting in a gain from change in fair value of derivative warrant liability, primarily associated with the decrease in the price of Gevo’s common stock in the quarter.

Gevo also incurred a non-cash loss of $0.8 million during the quarter due to the quarterly mark-to-market valuation of the 2017 Notes.

During the three months ended March 31, 2016, there was no change in the value of the embedded derivatives in the convertible notes issued in 2012 (the 2022 Notes), as the derivatives have had no meaningful value since the third quarter of 2014.

No holders of the 2022 Notes converted or exchanged any notes during the quarter.

The net loss for the first quarter of 2016 was $3.6 million, compared with $7.3 million during the same period in 2015.

The cash position at March 31, 2016 was $8.7 million. This balance included $1.2 million that was pre-funded to Gevo prior to the closing of the underwritten offering of common shares and warrants that closed on April 1, 2016.

For more information, please contact David Rodewald at 805-494-9508 or [email protected]

See Related Websites/Articles:

• Gevo, Inc.

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