Clean Energy Fuels Corp.
Nov 9, 2009

Clean Energy Fuels Increases Volumes Sold and Adjusted EBITDA in the Third Quarter of 2009

SEAL BEACH, Calif., Nov 09, 2009 (BUSINESS WIRE) -- Clean Energy Fuels Corp. (NASDAQ: CLNE) today announced its operating results for the third quarter and nine months ended September 30, 2009.

Gasoline gallon equivalents (Gallons) delivered during the third quarter of 2009 totaled 29.5 million, up 58% from 18.7 million Gallons in the same period a year ago. For the first nine months of 2009, volume increased 30% to 71.5 million Gallons, compared with 54.8 million Gallons in the first nine months of 2008. Gallons include the Company's sales of CNG, LNG, and biomethane and the Gallons associated with providing operations and maintenance services.

Adjusted EBITDA for the third quarter of 2009 was $5.4 million, compared to a loss of $1.0 million in the third quarter of 2008. Adjusted EBITDA for the first nine months of 2009 was $9.9 million, compared with a loss of $7.0 million in the first nine months of 2008. Adjusted EBITDA is described below and reconciled to the GAAP measure net income (loss) attributable to Clean Energy.

Non-GAAP earnings per share for the third quarter of 2009 was $0.01, compared to a non-GAAP loss per share of $0.08 in the third quarter of 2008. Non-GAAP loss per share for the first nine months of 2009 was $0.06, compared with $0.28 in the first nine months of 2008. Non-GAAP EPS (or Non-GAAP earnings/loss per share) is described below and reconciled to the GAAP measure net income (loss) attributable to Clean Energy.

Net loss for the third quarter of 2009 was $18.5 million, or $0.31 per share, compared with a net loss of $12.1 million, or $0.27 per share, in the third quarter of 2008. For the first nine months of 2009, net loss was $31.3 million, or $0.59 per share, compared to a net loss of $20.7 million, or $0.47 per share, in the first nine months of 2008. During the third quarter of 2009, the Company recorded a non-cash charge of $15.4 million (or $0.26 per share) related to marking to market the value of its Series I warrants, which is required this year under new accounting guidance. The primary driver of the increased amount recorded this quarter was the impact of the Company's higher stock price on the valuation model used to value the warrants.

Revenue for the quarter ended September 30, 2009 totaled $31.2 million, compared with $33.8 million in the same period in 2008. For the nine months ended September 30, 2009, revenue totaled $89.3 million, compared with $97.6 million a year ago. The reduction in revenue was primarily the result of lower natural gas commodity prices between periods, which reduced the natural gas commodity charges passed through by the Company to many of its customers. The reduced commodity prices, however, also reduce the Company's cost of sales, which enabled the Company to generate a gross margin in the third quarter of 2009 that was $0.7 million higher than the second quarter of 2009.

Andrew J. Littlefair, Clean Energy's President and Chief Executive Officer, stated, "We are pleased with our third quarter performance as we are benefiting from positive developments on several fronts in our business. We experienced strong volume growth in the quarter, reflecting solid progress on the clean truck roll-out at the ports of Los Angeles and Long Beach, as well as our growing station count and the addition of several new customers. As the economic and environmental benefits of natural gas are becoming more widely understood and well publicized, we have expanded our discussions to include a number of large fleet operators and corporations regarding the conversion of their fleets to natural gas."

Mr. Littlefair continued, "On the strategic front, we recently announced our acquisition of BAF Technologies, Inc., a leading provider of natural gas vehicle conversions, which will enable us to leverage our industry expertise and help bring natural gas vehicles to the light-duty market. The NAT GAS Act also continues to garner strong bipartisan support and we remain optimistic that this will be passed in the near future. We are very confident with our industry's momentum and our own positioning as we enter the final quarter of 2009 and look forward to 2010."

Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements, which statements are prepared and presented in accordance with GAAP, the Company uses non-GAAP financial measures called non-GAAP earnings per share (non-GAAP EPS or non-GAAP earnings/loss per share) and Adjusted EBITDA. This is the first quarter in which the Company has presented the Adjusted EBITDA financial measure described herein. The Company's management uses these non-GAAP financial measures to assess our operational performance, for financial and operational decision making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company's performance by excluding certain non-cash expenses that are not directly attributable to its core operating results. In addition, management believes these non-GAAP financial measures are useful to investors because: (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making; (2) they exclude the impact of non-cash items that are not directly attributable to the Company's core operating performance and that may obscure trends in the core operating performance of our business; and (3) they are used by institutional investors and the analyst community to help them analyze the results of Clean Energy's business. While the Company has not done so for the periods presented in this release, in future quarters, the Company may make adjustments for additional non-recurring significant expenditures or other significant non-cash charges in order to present non-GAAP financial measures that are indicative of the Company's core operating performance.

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation from or as a substitute for the Company's GAAP results. In the future, the Company expects to continue reporting non-GAAP financial measures, adjusting for the items described below, and the Company expects to continue to incur expenses similar to the non-GAAP adjustments described below. Accordingly, exclusion of these and other similar items in the presentation of non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Non-GAAP EPS and Adjusted EBITDA are not recognized terms under GAAP and do not purport to be an alternative to GAAP earnings/loss per share or operating loss as an indicator of operating performance or any other GAAP measure. Moreover, because not all companies use identical measures and calculations, the presentation of non-GAAP EPS or Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. These limitations are compensated for by using non-GAAP EPS and Adjusted EBITDA in conjunction with traditional GAAP operating performance and cash flow measures.

Non-GAAP EPS

Non-GAAP EPS is defined as net income (loss), plus employee-related stock based compensation charges, net of related tax benefits, plus or minus futures contracts losses or gains included in derivative (gains) losses, plus or minus any mark-to-market losses or gains on the Company's Series I warrants, the total of which is divided by the Company's weighted average shares outstanding on a diluted basis. The Company's management believes that presenting non-GAAP EPS, excluding non-cash charges related to stock based compensation, provides useful information to investors because of varying available valuation methodologies, the volatility of the expense (which depends on market forces outside of management's control), the subjectivity of the assumptions and the variety of award types that a company can use under the accounting guidance may obscure trends in the Company's core operating performance. Similarly, the Company's management believes that excluding the non-cash, mark-to-market losses or gains on the Company's Series I warrants is useful to investors because the Company has not reported such losses or gains in past periods, the valuation of the Series I warrants is subject to a number of subjective assumptions, and the amount of the loss or gain is derived from market forces outside of management's control.

The table below shows non-GAAP EPS and also reconciles these figures to the GAAP measure net income (loss) attributable to Clean Energy:

                     
           

Three Months
Ended September 30,

     

Nine Months
Ended September 30,

            2008*     2009       2008*     2009

Net Income (Loss) Attributable to Clean Energy

          $ (12,092,146 )     $ (18,460,583 )       $ (20,722,575 )     $ (31,331,396 )
Employee Stock Based Compensation, Net of Tax Benefits            

 

2,684,207

       

 

3,551,992

         

 

7,782,538

       

 

10,572,136

 

Futures Contracts Derivative (Gains) Losses

            6,047,727         --           340,746         --  
Mark-to-Market Loss on Series I Warrants            

--

       

15,422,310

         

--

       

17,808,673

 
Adjusted Net Income (Loss)             (3,360,212 )       513,719           (12,599,291 )       (2,950,587 )
Diluted Weighted Average Common Shares Outstanding            

44,330,818

       

59,695,666

         

44,304,636

       

53,428,391

 
Non-GAAP Earnings (Loss) Per Share          

$

(0.08

)

   

$

0.01

       

$

(0.28

)

   

$

(0.06

)

                                 

* The three-month and nine-month ended September 30, 2008 loss amounts include approximately $1.1 million and $5.0 million, respectively, of losses on certain fixed-price contracts that were not hedged. We no longer enter into fixed-price customer contracts unless we hedge our natural gas commodity exposure under the contract or obtain pre-approval from our Derivative Committee not to hedge the contract.

Adjusted EBITDA

Adjusted EBITDA is defined as net income (loss) attributable to Clean Energy, plus or minus income tax expense or benefit, plus or minus interest expense or income, net, plus depreciation and amortization expense, plus employee-related stock based compensation charges, net of related tax benefits, plus or minus futures contracts losses or gains included in derivative (gains) losses, plus or minus any mark-to-market losses or gains on the Company's Series I warrants. Management internally uses Adjusted EBITDA to monitor compliance with certain financial covenants in the Company's credit agreement with PlainsCapital Bank and to determine elements of executive and employee compensation.

The table below shows Adjusted EBITDA and also reconciles these figures to the GAAP measure net income (loss) attributable to Clean Energy:

                     
           

Three Months
Ended September 30,

     

Nine Months
Ended September 30,

            2008*     2009       2008*     2009
Net Income (Loss) Attributable to Clean Energy           $ (12,092,146 )     $ (18,460,583 )       $ (20,722,575 )     $ (31,331,396 )
Income Tax Expense             99,171         68,352           199,141         209,202  

Interest Income (Expense), Net

            (78,399 )       276,110           (1,182,962 )       368,186  
Depreciation and Amortization             2,310,527         4,516,513           6,557,967         12,256,603  
Employee Stock Based Compensation, Net of Tax Benefits            

 

2,684,207

       

 

3,551,992

         

 

7,782,538

       

 

10,572,136

 

Futures Contracts Derivative (Gains) Losses

            6,047,727         --           340,746         --  
Mark-to-Market Loss on Series I Warrants            

--

       

15,422,310

         

--

       

17,808,673

 
Adjusted EBITDA           $ (1,028,913 )     $ 5,374,694         $ (7,025,145 )     $ 9,883,404  
                                 

* The three-month and nine-month ended September 30, 2008 loss amounts include approximately $1.1 million and $5.0 million, respectively, of losses on certain fixed-price contracts that were not hedged. We no longer enter into fixed-price customer contracts unless we hedge our natural gas commodity exposure under the contract or obtain pre-approval from our Derivative Committee not to hedge the contract.

Conference Call

The Company will host an investor conference call today at 4:30 p.m. Eastern (1:30 p.m. Pacific). The live call can be accessed from the U.S. by dialing (877) 407-4018, or by dialing (201) 689-8471 from outside the U.S. A telephone replay will be available approximately two hours after the call concludes and will be available through Monday, November 23, 2009 by dialing (877) 660-6853 from the U.S., or (201) 612-7415 from international locations and entering account number 3055 and conference ID number 334409.

There also will be a simultaneous webcast available on the Investor Relations section of the Company's web site at www.cleanenergyfuels.com, which will be archived on the Company's web site for 30 days.

About Clean Energy Fuels

Clean Energy Fuels is the leading provider of natural gas (CNG and LNG) for transportation in North America. It has a broad customer base in the refuse, transit, ports, shuttle, taxi, trucking, airport and municipal fleet markets, fueling more than 17,500 vehicles at 195 strategic locations across the U.S. and Canada. Clean Energy owns and operates two LNG production plants, one in Willis, Texas and one in Boron, California, with combined capacity of 260,000 LNG gallons per day and designed to expand to 340,000 LNG gallons per day as demand increases. It also owns and operates a landfill gas processing facility in Dallas that produces renewable biomethane gas for delivery in the nation's gas pipeline network. On October 1, 2009, Clean Energy acquired 100% of BAF Technologies, Inc., a leading provider of natural gas vehicle systems and conversions for taxis, limousines, vans, pickup trucks and shuttle busses.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks, uncertainties and assumptions, such as statements regarding the demand for products and services from new and existing customers, our ability to manage the operations of our recently-acquired subsidiary, BAF Technologies, Inc., the potential passage of the NAT GAS Act, and the Company's ability to continue to grow its business. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors including, but not limited to, changes in the prices of natural gas relative to gasoline and diesel, the acceptance of natural gas vehicles in fleet markets, the availability of natural gas vehicles, the progress of the clean air plans at the Ports of Los Angeles and Long Beach, relaxation or waiver of fuel emission standards, the inability of fleets to access capital to purchase natural gas vehicles, the Company's success in obtaining government grants or subsidies for alternative fuel providers, the unpredictability of the legislative process, construction and permitting delays at station construction projects and the development of competing technologies that are perceived to be cleaner and more cost-effective than natural gas. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no obligation to update publicly such forward-looking statements to reflect subsequent events or circumstances, except as otherwise required by law. Additionally, the Company's Form 10-K filed on March 16, 2009 and its Form 10-Q for the quarter ended September 30, 2009 filed on November 9, 2009 with the SEC (www.sec.gov) contain risk factors which may cause actual results to differ materially from the forward-looking statements contained in this press release.

                 

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

December 31, 2008 and September 30, 2009

Unaudited

                 
       

December 31,
2008

      September 30,
2009
Assets                
Current assets:                
Cash and cash equivalents       $ 36,284,431         $ 92,293,929  
Restricted cash         2,500,000           2,500,000  

Accounts receivable, net of allowance for doubtful accounts of $657,734 and $642,454 as of December 31, 2008 and September 30, 2009, respectively

        10,530,638           13,516,384  
Other receivables         12,995,507           10,442,675  
Inventory, net         3,110,731           3,838,772  
Deposits on LNG trucks         6,197,746           525,372  
Prepaid expenses and other current assets         3,542,387           6,122,871  
Total current assets         75,161,440           129,240,003  
Land, property and equipment, net         160,593,665           169,743,066  
Capital lease receivables         364,500           1,378,038  
Notes receivable and other long-term assets         7,176,755           9,731,626  
Investments in other entities         4,879,604           8,991,757  
Goodwill         20,797,878           20,797,878  
Intangible assets, net of accumulated amortization         21,400,558           25,269,707  
Total assets       $ 290,374,400         $ 365,152,075  
Liabilities and Stockholders' Equity                
Current liabilities:                
Current portion of long-term debt and capital lease obligations       $ 2,232,875         $ 3,378,595  
Accounts payable         14,276,591           13,001,111  
Accrued liabilities         10,253,454           9,388,388  
Deferred revenue         1,060,582           1,201,485  
Total current liabilities         27,823,502           26,969,579  
Long-term debt and capital lease obligations, less current portion         22,850,927           26,140,520  
Other long-term liabilities         2,297,446           33,053,058  
Total liabilities         52,971,875           86,163,157  
Commitments and contingencies                
Stockholders' equity:                

Preferred stock, $0.0001 par value. Authorized 1,000,000 shares; issued and outstanding no shares

        --           --  
Common stock, $0.0001 par value. Authorized 99,000,000 shares; issued and outstanding 50,238,212 shares and 59,715,445 shares at December 31, 2008 and September 30, 2009, respectively         5,024           5,969  
Additional paid-in capital         346,466,999           420,646,256  
Accumulated deficit         (113,549,257 )         (147,492,806 )
Accumulated other comprehensive income         853,837           2,634,549  
Total stockholders' equity of Clean Energy Fuels Corp.         233,776,603           275,793,968  
Noncontrolling interest in subsidiary         3,625,922           3,194,950  
Total equity         237,402,525           278,988,918  
Total liabilities and equity       $ 290,374,400         $ 365,152,075  
                 
                 
                   

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three Months and Nine Months Ended

September 30, 2008 and 2009

Unaudited

                   
       

Three Months Ended
September 30,

      Nine Months Ended
September 30,
 
        2008     2009       2008     2009  
                               
Revenue:                              
Product revenues       $ 31,935,485     $ 26,290,638       $ 93,621,805     $ 79,500,495  
Service revenues       1,883,202     4,891,188       3,957,220     9,799,506  

Total revenues

      33,818,687     31,181,826       97,579,025     89,300,001  
Operating expenses:                              
Cost of sales:                              
Product cost of sales       25,558,150     16,369,247       76,036,367     52,785,705  
Service cost of sales       552,904     2,388,458       1,102,393     3,820,740  
Derivative (gains) losses:                              
Futures contracts       6,047,727     --       340,746     --  
Series I warrant valuation       --     15,422,310       --     17,808,673  
Selling, general and administrative       11,397,913     10,491,987       35,124,764     33,649,427  
Depreciation and amortization       2,310,527     4,516,513       6,557,967     12,256,603  
Total operating expenses       45,867,221     49,188,515       119,162,237     120,321,148  
Operating loss       (12,048,534 )   (18,006,689 )     (21,583,212 )   (31,021,147 )
Interest income (expense), net       78,399     (276,110 )     1,182,962     (368,186 )
Other income (expense), net       (28,801 )   (107,468 )     11,177     (293,995 )
Income (loss) from equity method

investments

      19,881     77,744       (120,441 )   130,162  
Loss before income taxes       (11,979,055 )   (18,312,523 )     (20,509,514 )   (31,553,166 )
Income tax expense       (99,171 )   (68,352 )     (199,141 )   (209,202 )
Net loss       (12,078,226 )   (18,380,875 )     (20,708,655 )   (31,762,368 )
Loss (income) of noncontrolling interest       (13,920 )   (79,708 )     (13,920 )   430,972  
Net loss attributable to Clean Energy Fuels Corp.       $ (12,092,146 )   $ (18,460,583 )     $ (20,722,575 )   $ (31,331,396 )
                               
Loss per share attributable to Clean Energy Fuels Corp.                              
Basic       $ (0.27 )   $ (0.31 )     $ (0.47 )   $ (0.59 )
Diluted       $ (0.27 )   $ (0.31 )     $ (0.47 )   $ (0.59 )
                               
Weighted average common shares outstanding                              
Basic       44,330,818     59,695,666       44,304,636     53,428,391  
Diluted       44,330,818     59,695,666       44,304,636     53,428,391  
                               
                               

Included in net loss are the following amounts (in millions):

                     
           

Three Months Ended
September 30,

     

Nine Months Ended
September 30,

           

2008

   

2009

     

2008

   

2009

Construction Revenues           0.2       0.1         0.6       5.2  
Construction Cost of Sales           (0.2 )     --         (0.4 )     (4.6 )
Fuel Tax Credits           4.1       3.7         13.2       11.8  
Stock Option Expense, Net of Tax Benefits           (2.7 )     (3.6 )       (7.8 )     (10.6 )

SOURCE: Clean Energy Fuels Corp.


Ina McGuinness, 805.427.1372

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