Video: KiOR Hits Milestone, Ships Fuel

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By Ron Kotrba/Biodiesel News

KiOR Inc. announced initial shipments of cellulosic diesel from its first commercial-scale facility in Columbus, Miss., where the company uses pine wood chips that previously fed a now-defunct paper mill to produce cellulosic gasoline and diesel fuels. The $213 million facility is scaled to process 500 bone dry tons of sustainably harvested woody biomass per day. It can produce more than 13 million gallons of gasoline, diesel and fuel oil blendstocks annually.

KiOR’s renewable gasoline is also the first renewable cellulosic gasoline registered by U.S. EPA for sale in the U.S.

Condoleezza Rice, former U.S. Secretary of State and a current member of KiOR’s board of directors, said, “KiOR is changing the American energy equation by innovating and commercializing an entirely new generation of hydrocarbon-based diesel and gasoline fuel. By making the promise of cellulosic fuels a reality, KiOR demonstrates that these fuels are an attractive option for lessening America’s dependence on foreign sources of energy.”

Haley Barbour, former Governor of Mississippi, who was instrumental in attracting KiOR to Mississippi, said, “The shipment of this first fuel from KiOR’s Columbus, Miss., facility is the culmination of a vision to establish Mississippi as the birthplace of the wood-to-fuels production technology. This progress highlights our highly skilled labor force, abundant natural resources and supportive government climate for innovative companies like KiOR seeking a home to expand their businesses. Mississippi has partnered with KiOR throughout this history-making project, contributing economic development support ranging from research and testing projects within our world class universities, to technical training within our superb community college system.”

“This is a major step forward for KiOR, the biofuels industry and the entire renewable fuels sector,” said Fred Cannon, KiOR’s president and CEO. “With first production at Columbus, KiOR has technology with the potential to resurrect each and every shut down paper mill in the country and to replace imported oil on a cost-effective basis while creating American jobs. This facility demonstrates the efficacy of KiOR’s proprietary catalytic biomass-to-fuel process with the potential to deliver cellulosic gasoline and diesel to the U.S. We are proud to be making history in Mississippi. The technology is simply scalable and we believe sufficient excess feedstock exists in the Southeast alone to build almost 50 KiOR commercial-scale facilities.”

The company plans to build a similar but larger facility in Natchez, Miss., scaled to process three times the woody biomass as the Columbus biorefinery.

From WIRE REPORTS

Development stage renewable fuels company KiOR, Inc. (KIOR: Quote) Monday reported a wider loss for the fourth quarter mainly on the back of higher expenses related to the start-up activities with respect to the Columbus facility, but narrower than analysts’ expected loss.

For the quarter, the firm reported net loss of $29.69 million or $0.28 per share compared with net loss of $14.94 million or $0.15 per share last year.

Eight analysts, on average, polled by Thomson Reuters estimated loss per share of $0.32 for the period. Analyst estimates typically exclude one-time items.

For the fourth quarter, the company recorded its first ever revenue since inception at $87 thousand, related to the sale of blended cellulosic diesel produced from the research and development facility and fossil diesel. Analysts, however, were expecting revenue of $1.62 million for the reporting period.

General and administrative expenses for the three months were $20.24 million versus $5.93 million a year earlier. The firm attributed the year-on-year rise to a $11.5 million higher start-up related activities from to the Columbus facility and $2.4 million higher non-cash stock based compensation.

KIOR’S STATEMENT

PASADENA, Texas, March 18, 2013 (GLOBE NEWSWIRE) — KiOR, Inc. (Nasdaq:KIOR), announced today its financial results for the fourth quarter and fiscal year ended December 31, 2012.

“KiOR hit its most significant milestone to date with the Company’s first commercial shipment of cellulosic diesel from its newly commissioned production facility in Columbus, Mississippi,” said Fred Cannon, KiOR’s President and Chief Executive Officer. “Commencement of commercial shipments from Columbus validates the efficacy of KiOR’s biomass-to-hydrocarbon-fuels technology at scale and goes a long way toward dispelling concerns about the renewable fuels industry’s ability to make a meaningful contribution to the US’s fuel supply needs,” Mr. Cannon continued. “This very positive development, along with EPA’s recent actions qualifying our cellulosic gasoline for the RFS2 market and increasing our gasoline blend rate to 25%, de-risk our business strategy and creates a market for KiOR’s hydrocarbon fuels nearly twice the size of the current ethanol market.”

Financial Results

Fourth quarter 2012 net loss was $29.7 million, or $0.28 per share, compared to a net loss of $27.0 million, or $0.26 per share, for the third quarter of 2012. Net loss for the fourth quarter of 2011 totaled $14.9 million, or $0.15 per share. Net loss for the full year 2012 was $96.4 million, or $0.92 per share, compared to a net loss of $64.1 million, or $0.87 per share in 2011.

During the fourth quarter of 2012 KiOR recorded its first revenues since inception, totaling $87 thousand which relate to the sale of blended cellulosic diesel produced from the research and development facility and fossil diesel.

Cost of product revenue recorded during the fourth quarter of 2012 totaled $68 thousand. These are related to KiOR’s first sale and include production, shipping and blending costs.

Research and development (R&D) expenses for the fourth quarter of 2012 totaled $9.5 million, essentially flat from the $9.5 million recorded in the third quarter of 2012. Fourth quarter 2012 R&D expenses increased $0.5 million from fourth quarter 2011, mainly due to higher payroll and related expenses. Full year-over-year R&D expenses increased $2.8 million to $36.6 million primarily as a result of increased payroll and related expenses, including a $1.1 million increase in non-cash stock based compensation expense.

General and administrative (G&A) expenses for the fourth quarter of 2012 were $20.2 million, an increase of $2.8 million from the third quarter of 2012, primarily due to start-up activities related to the Columbus facility. Fourth quarter 2012 G&A expenses increased $14.3 million from fourth quarter 2011, also due to $11.5 million higher start-up related activities from to the Columbus facility and $2.4 million higher non-cash stock based compensation. Full year-over-year G&A expenses increased $36.2 million from 2011, mainly driven by $28.5 million higher Columbus related expenses, $5.9 million higher non-cash stock based compensation and higher other payroll related expenses.

Capital investments during the fourth quarter were $6.0 million, primarily related to KiOR’s flagship 1,500 bone dry ton per day project in Natchez, KiOR’s initial-scale commercial production facility in Columbus, and enhancements to KiOR’s research and development facility.

KiOR had cash and cash equivalents of $40.9 million at December 31, 2012, which represents a $90.7 million decrease from the December 31, 2011 balance. This decrease was primarily driven by capital expenditures, operating uses of cash, and paying off previous business loans, partially offset by funding from the $75.0 million 4-year-term loan announced earlier this year. Net long-term debt stood at $126 million as of quarter-end. Subsequent to quarter end, the Company amended its 4-year-term loan to, among other things, extend KiOR’s ability to pay interest in kind, defer principal amortizations, and increase the facility to $125 million to provide additional operating liquidity.