Form: 8-K

Current report filing

November 15, 2007

Exhibit 99.1

 

                                                                                                                              

3020 Old Ranch Parkway, Suite 200

Seal Beach, California 90740 USA

562.493.2804   fax: 562.546.0097

www.cleanenergyfuels.com

 

 

CLEAN ENERGY REPORTS THIRD QUARTER 2007

FINANCIAL RESULTS

 

For Immediate Release

 

Seal Beach, Calif. — November 12, 2007 — Clean Energy Fuels Corp. (NASDAQ: CLNE) today announced financial results for the three and nine month periods ended September 30, 2007.

 

Financial Results

Revenue for the third quarter of 2007 increased to $29.2 million, up from $22.2 million in the third quarter of the prior year.  For the nine months ended September 30, 2007, revenue grew to $88.0 million, compared with $64.8 million in the same period in 2006.

 

Net loss for the third quarter of 2007 was $1.5 million, or $0.03 per share, compared with a net loss of $58.8 million, or $1.72 per share, in the third quarter of 2006.  Net loss for the nine month period ended September 30, 2007 was $6.0 million, or $0.15 per share, compared with a net loss of $62.9 million, or $2.04 per share, in the nine month period ended September 30, 2006.  Net loss amounts for the three and nine month periods ended September 30, 2006 include derivative losses from the Company’s prior hedging practices that it no longer engages in.

 

Non-GAAP earnings per share for the third quarter of 2007, which excludes employee-related stock based compensation charges, was $0.00. This compares with a non-GAAP loss per share of $1.72 in the third quarter of 2006.  Non GAAP loss per share for the nine month period ended September 30, 2007 was $0.02, compared with a non-GAAP loss per share of $2.04 in the nine month period ended September 30, 2006. The Company reports earnings (loss) per share on a GAAP and non-GAAP basis, as well as a non-GAAP measure it calls Adjusted Margin.  For more information on these non-GAAP financial measures, please see below.  The non-GAAP measures are also reconciled to their corresponding GAAP measures in the accompanying tables below.

 

For the third quarter of 2007, the Company’s combined volume of CNG and LNG delivered increased to 20.0 million gasoline gallon equivalents (Gallons), compared with 18.2 million Gallons in the same period a year ago.  For the nine month period ended September 30, 2007, the combined volume of CNG and LNG delivered rose to 57.1 million Gallons, up from 50.7 million Gallons for the same period in 2006.

 

 

1



 

 

Adjusted Margin was $9.3 million for the third quarter of 2007, compared with $4.4 million for the same quarter last year.  Adjusted Margin for the nine month period ended September 30, 2007 was $26.2 million, compared with $12.9 million in the nine month period ended September 30, 2006.  Adjusted margin is a financial measure intended to approximate the margin results that would have been reported in a particular period had the Company’s underlying futures contracts related to its fixed price and price cap contracts qualified for hedge accounting under SFAS No. 133 and been held to maturity.  Adjusted Margin is discussed in more detail below.  Adjusted Margin amounts for the three and nine periods ended September 30, 2007 include fuel tax credits which first became available on October 1, 2006.

 

“In the nearly 10 years since we founded Clean Energy, we have never seen a more positive environment for natural gas as a transportation fuel.  This environment includes record oil prices, the widening spread between the price of natural gas and oil, the significant focus on climate change and low carbon fuels, and the continuing legislative push to use alternative fuels,” said Andrew J. Littlefair, Clean Energy President and Chief Executive Officer.  “Our core business of selling CNG and LNG as a vehicle fuel to fleet operators, which accounts for approximately 95% of our revenues, performed well during the third quarter of 2007 by generating Adjusted Margins of $0.47 per Gallon.

 

“Additionally, we continued to make progress on the development of our fueling stations at the Ports of Los Angeles and Long Beach whose combined Clean Air Plans envision adding 5,300 heavy duty LNG trucks.  We are finishing the construction on our first station and are in the design phase on two more stations that will service fleets at the Ports.  Construction is also underway on our California LNG plant, which will be the first, large-scale LNG plant in California and will service the LNG fuel needs of the Ports as well as other heavy-duty trucking operations in the Southwest.  On the international front, we are about to open our first fueling station in Lima, Peru, which will serve the burgeoning demand for natural gas there.”

 

Strengthened Balance Sheet

At September 30, 2007, total cash and cash equivalents were $74.8 million, up from $0.9 million on December 31, 2006.  In May 2007, the Company completed an initial public offering of 10 million shares of its common stock at $12 per share and received net proceeds, after deducting underwriting discounts and offering costs, of $108.5 million.

 

Capital Expenditures

Total capital expenditures for the first nine months of 2007 were $30.3 million, and primarily related to construction of the Company’s LNG plant in California, construction of additional CNG and LNG stations, and the purchase of additional LNG tanker trailers.

 

2



 

 

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 the following non-GAAP financial measures: Adjusted Margin and non-GAAP earnings per share (Non-GAAP EPS).  The presentation of this financial information is not intended to be considered in isolation from, or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance by excluding certain expenses that may not be indicative of our recurring core business operating results and may help in comparing our current-period results with those of prior periods.  Management believes that they benefit and investors benefit from referring to these non-GAAP financial measures in assessing Company performance and when planning, forecasting and analyzing future periods. 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 and (2) they are used by institutional investors and the analyst community to help them analyze the health of Clean Energy’s business.

The material limitations of Adjusted Margin and Non-GAAP EPS are as follows:  Adjusted Margin and Non-GAAP EPS are not recognized terms under GAAP and do not purport to be an alternative to gross margin or earnings per share as an indicator of operating performance or any other GAAP measure.  Moreover, because not all companies use identical measures and calculations, the presentation of Adjusted Margin and Non-GAAP EPS may not be comparable to other similarly-titled measures of other companies.  These limitations are compensated for by using Adjusted Margin and Non-GAAP EPS in conjunction with traditional GAAP operating performance and cash flow measures, and therefore, management does not recommend placing undue reliance on these measures.

 

Adjusted Margin

Approximately 25-30% of Clean Energy’s current natural gas fuel sales are covered by contracts under which the Company is obligated to sell fuel to customers at a fixed price or a variable price subject to a cap.  The Company’s policy is to purchase natural gas futures contracts to cover its estimated fuel sales under these sales contracts to mitigate the risk that natural gas prices may rise above the natural gas component of the price at which the Company is obligated to sell gas to its customers.  From time to time in the past, Clean Energy has sold these underlying futures contracts when it believed natural gas prices were going to fall.  At December 31, 2006, the Company had sold all such futures contracts associated with fixed-price and price cap sales contracts and did not purchase any futures contracts during the first nine months of 2007.

 

3



 

 

Management uses a measure called Adjusted Margin to measure operating performance and manage its business.  Adjusted Margin is defined as operating income (loss), plus (1) depreciation and amortization, (2) selling, general and administrative expenses, and (3) derivative (gains) losses, the sum of which is adjusted by a non-GAAP measure which management calls “futures contract adjustment,” which is described below.  Management believes Adjusted Margin provides helpful information for investors about the underlying profitability of the Company’s fuel sales activities.  Adjusted Margin attempts to approximate the results that would have been reported if the underlying futures contracts related to its fixed price and price cap contracts would have qualified for hedge accounting under SFAS No. 133 and were held until they matured.

 

Futures contract adjustment reflects the gain or loss that would have been experienced in a respective period on the underlying futures contracts associated with the Company’s fixed price and price cap contracts had those underlying futures contracts been held and allowed to mature according to their contract terms.

 

The table below shows Adjusted Margin and also reconciles these figures to the GAAP measure operating income (loss):

 

 

 

Three Months Ended Sept. 30,

 

Nine Months Ended Sept. 30,

 

 

 

2006

 

2007

 

2006

 

2007

 

Operating Income (Loss)

 

$

(68,210,698

)

$

(2,385,361

)

$

(74,499,711

)

$

(7,419,259

)

Futures contract adjustment

 

405,330

 

387,960

 

3,026,921

 

2,278,253

 

Derivative (gains) losses

 

64,999,238

 

—

 

65,281,586

 

—

 

Selling, general, and administrative

 

5,599,136

 

9,528,605

 

14,864,820

 

26,269,201

 

Depreciation and amortization

 

1,620,387

 

1,814,176

 

4,221,116

 

5,090,396

 

Adjusted Margin

 

$

4,413,393

 

$

9,345,380

 

$

12,894,732

 

$

26,218,591

 

 

Non-GAAP EPS

Non-GAAP EPS is defined as net income (loss) plus employee-related stock based compensation, net of related tax benefits, divided by the Company’s weighted average shares outstanding on a diluted basis.

 

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

 

 

 

Three Months Ended Sept. 30,

 

Nine Months Ended Sept. 30,

 

 

 

2006

 

2007

 

2006

 

2007

 

Net Income (Loss)

 

$

(58,815,257

)

$

(1,544,970

)

$

(62,918,068

)

$

(5,978,051

)

Employee Stock Based Compensation, Net of Tax Benefits

 

—

 

1,570,289

 

—

 

5,357,943

 

Adjusted Net Income (Loss)

 

(58,815,257

)

25,319

 

(62,918,068

)

(620,108

)

Diluted Weighted Average Common Shares Outstanding

 

34,179,961

 

44,195,339

 

30,829,470

 

38,919,129

 

Non-GAAP Earnings (Loss) Per Share

 

$

(1.72

)

$

0.00

 

$

(2.04

)

$

(0.02

)

 

 

4



 

Conference Call

The Company will host an investor conference call today at 5:00 p.m. Eastern (2:00 p.m. Pacific).  The live call can be accessed from the US by dialing (888) 263-2958, or by dialing (913) 312-6666 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 26, 2007, by dialing (888) 203-1112 from the U.S., or (719) 457-0820 from international locations, and entering confirmation code 4788764.

 

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

Clean Energy, based in Seal Beach, Calif., is the leading provider of natural gas for transportation in North America.  It has a broad customer base in the refuse, transit, shuttle, taxi, intrastate and interstate trucking, airport and municipal fleet markets, fueling more than 14,000 vehicles daily at strategic locations across the United States and Canada. Additional information about the Company can be found at: www.cleanenergyfuels.com.

 

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 our products and services, primarily being the sale of CNG and LNG, and our ability to continue to grow our 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, difficulties expanding operations outside the United States and Canada, the progress of the clean air plans at the Ports of Los Angeles and Long Beach, 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.  Additionally, the Company’s initial public offering prospectus filed with the SEC (www.sec.gov) on May 25, 2007, and the Company’s Form 10-Q filed with the SEC on August 14, 2007, both contain risk factors which you should consider before investing.

 

Contact:

Clean Energy Fuels Corp.

Rick Wheeler, Chief Financial Officer

562.493.2804

 

ICR, Inc.

Ina McGuinness / John Mills

310.954.1100

 

5



 

Clean Energy Fuels Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 2006 and September 30, 2007 (Unaudited)

 

 

December 31,
2006

 

September 30,
2007

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

937,445

 

$

74,769,017

 

Short-term investments

 

—

 

14,809,636

 

Accounts receivable, net of allowance for doubtful accounts of $352,050 and $470,607 as of December 31, 2006 and September 30, 2007, respectively

 

10,997,328

 

10,579,361

 

Other receivables

 

37,818,905

 

16,715,379

 

Inventories, net

 

2,558,689

 

3,780,465

 

Prepaid expenses and other current assets

 

4,862,335

 

12,102,458

 

Total current assets

 

57,174,702

 

132,756,316

 

 

 

 

 

 

 

Land, property and equipment, net

 

54,888,739

 

80,471,904

 

Capital lease receivables

 

1,412,500

 

863,250

 

Notes receivable and other long term assets

 

2,499,106

 

13,741,968

 

Goodwill and other intangible assets

 

20,957,589

 

20,930,971

 

Total assets

 

$

136,932,636

 

$

248,764,409

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of long term debt and capital lease obligations

 

$

57,499

 

$

61,958

 

Accounts payable

 

6,697,363

 

7,875,906

 

Accrued liabilities

 

5,023,051

 

7,101,027

 

Deferred revenue

 

585,505

 

557,763

 

Total current liabilities

 

12,363,418

 

15,596,654

 

 

 

 

 

 

 

Long term debt and capital lease obligations, less current portion

 

224,897

 

177,855

 

Other long term liabilities

 

1,428,464

 

1,361,912

 

Total liabilities

 

14,016,779

 

17,136,421

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

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

 

—

 

—

 

Common stock, par value $0.0001 per share. 99,000,000 shares authorized; issued and outstanding 34,192,161 shares and 44,210,245 shares at December 31, 2006 and September 30, 2007, respectively

 

3,419

 

4,421

 

Additional paid-in capital

 

181,678,861

 

295,704,376

 

Accumulated deficit

 

(60,192,221

)

(66,170,272

)

Accumulated other comprehensive income

 

1,425,798

 

2,089,463

 

Total stockholders’ equity

 

122,915,857

 

231,627,988

 

Total liabilities and stockholders’ equity

 

$

136,932,636

 

$

248,764,409

 

 

6



 

Clean Energy Fuels Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three and Nine Months Ended
September 30, 2006 and 2007
(Unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2006

 

2007

 

2006

 

2007

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

22,245,867

 

$

29,210,164

 

$

64,800,859

 

$

88,040,804

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of sales

 

18,237,804

 

20,252,744

 

54,933,048

 

64,100,466

 

Derivative losses

 

64,999,238

 

—

 

65,281,586

 

—

 

Selling, general and administrative

 

5,599,136

 

9,528,605

 

14,864,820

 

26,269,201

 

Depreciation and amortization

 

1,620,387

 

1,814,176

 

4,221,116

 

5,090,396

 

Total operating expenses

 

90,456,565

 

31,595,525

 

139,300,570

 

95,460,063

 

Operating loss

 

(68,210,698

)

(2,385,361

)

(74,499,711

)

(7,419,259

)

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

(408,143

)

(1,414,120

)

(818,943

)

(2,253,083

)

Other expense, net

 

53,141

 

50,000

 

11,075

 

229,177

 

Loss before income taxes

 

(67,855,696

)

(1,021,241

)

(73,691,843

)

(5,395,353

)

Income tax expense (benefit)

 

(9,040,439

)

523,729

 

(10,773,775

)

582,698

 

Net loss

 

$

(58,815,257

)

$

(1,544,970

)

$

(62,918,068

)

$

(5,978,051

)

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

 

 

 

 

Basic

 

$

(1.72

)

$

(0.03

)

$

(2.04

)

$

(0.15

)

Diluted

 

$

(1.72

)

$

(0.03

)

$

(2.04

)

$

(0.15

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

34,179,961

 

44,195,339

 

30,829,470

 

38,919,129

 

Diluted

 

34,179,961

 

44,195,339

 

30,829,470

 

38,919,129

 

 

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

 

 

 

Three Months Ended
September 30,

 

Nine Months
Ended September 30,

 

 

 

2006

 

2007

 

2006

 

2007

 

Construction Revenues

 

0.1

 

0.1

 

0.2

 

3.3

 

Construction Cost of Sales

 

—

 

—

 

—

 

(2.8

)

Fuel Tax Credits

 

—

 

4.5

 

—

 

12.8

 

Employee Stock Option Expense, Net of Tax Benefits

 

—

 

(1.6

)

—

 

(5.4

)

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