Q2 net loss mounts at Gevo from hike in interest costs

14 Aug '14

3 min read

Although revenue shot up at NASDAQ-listed, Gevo, a producer of renewable technology, chemical products, and next generation biofuels, net loss mounted in the second quarter of 2014, from a year earlier, mainly from interest expense increasing to $5.8 million.

Interest expense increased to $5.8 million during the three months ended June 30, 2014 primarily due to one-time debt issuance costs of $3.2 million associated with the Whitebox financing in May.

The net loss for the second quarter of 2014 at Gevo was $17.2 million compared to $15.2 million during the same period in 2013. During the same periods, revenues skyrocketed to $7.7 million against $1.9 million.

Gevo said the increase in revenue during 2014, is primarily a result of the production and sale of ethanol and distiller's grains of $5.5 million following the transition of the Luverne plant to the SBS.

It also said that, during the second quarter of 2014, hydrocarbon revenues increased by $1.4 million, primarily due to the shipment of bio-PX to Toray in May and also continued to generate revenue during the second quarter of 2014 associated with our ongoing research agreements.

Its cost of goods sold increased by $4.7 million during the three months ended June 30, 2014, as compared to the same quarter in 2013, due to the increased production activity at the Luverne plant under the SBS.

Research and development expense decreased by $2.2 million during the three months ended June 30, 2014, as compared to the same quarter in 2013, due mainly to a $1.2 million decrease in expenses at the Hydrocarbons Plant.

In the second quarter of 2013, Gevo incurred expenses associated with the building of the bio-PX reactor at the Hydrocarbons Plant under its agreement with Toray, which was substantially completed in the third quarter of 2013. Research and development expense also decreased in as a result of a $0.8 million decrease in salaries and consultant expenses.

Selling, general and administrative expense fell $1.4 million during the three months ended June 30, 2014, as compared to the same quarter in 2013, due primarily to a reduction in compensation-related expenses.

The company reported a non-cash gain of $2.8 million during the second quarter of 2014 related to changes in the fair value of derivative warrant liability and embedded derivatives contained in the convertible notes issued in 2012 (2012 Notes).

Gevo reported a $2.0 million gain during the second quarter of 2013 associated with changes in the fair value of the embedded derivatives contained in the 2012 Notes and it did not have any holders of 2012 Notes who opted to convert their note holdings into shares of Gevo common stock during the three months ended June 30, 2014.

It also reported a non-cash loss of $5.1 million during the second quarter of 2014 related to a change in the fair value ofthe convertible notes issued in the second quarter of 2014 to Whitebox Notes.

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