EX-99.1 2 a08-28363_1ex99d1.htm EX-99.1

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 2008 THIRD QUARTER FINANCIAL RESULTS

 

For Immediate Release

 

Seal Beach, Calif. - November 13, 2008 - Clean Energy Fuels Corp. (NASDAQ: CLNE) today announced revenue for the third quarter of 2008 rose 21% to $35.3 million, up from $29.2 million in the third quarter of the prior year.  For the nine months ended September 30, 2008, revenue grew to $99.8 million, compared with $88.0 million in the same period in 2007.

 

For the third quarter of 2008, the Company’s combined volume of CNG and LNG was 18.7 million gasoline gallon equivalents (Gallons), which compares to 18.5 million Gallons in the second quarter of 2008 and 20.0 million Gallons in the same period a year ago.  For the nine months ended September 30, 2008, the combined volume of CNG and LNG delivered was 54.8 million Gallons, which compares to 57.1 million Gallons in the same period in 2007.

 

Net loss for the third quarter of 2008 was $10.6 million, or $0.24 per share, compared with a net loss of $1.5 million, or $0.03 per share, in the third quarter of 2007.  Net loss for the nine months ended September 30, 2008 was $18.5 million, or $0.42 per share, compared with a net loss of $6.0 million, or $0.15 per share, in the same period last year.  As previously reported, during the third quarter of 2008, the Company recorded a loss of $6.0 million on certain futures contracts it liquidated in connection with the portion of a fixed price bid that it was not awarded. This loss offsets the gain the Company recorded in the second quarter of 2008 of $5.7 million related to the futures contracts.  The net impact of these futures contracts in the nine month period ended September 30, 2008 was a $0.3 million derivative loss.  Excluding these amounts, loss per share would have been $0.10 and $0.41, respectively, for the three and nine month periods ended September 30, 2008.

 

Non-GAAP loss per share for the third quarter of 2008, which excludes employee-related stock based compensation charges, was $0.18. This compares with non-GAAP earnings per share of $0.00 in the third quarter of 2007.  Year to date,

 



 

non-GAAP loss per share was $0.24, which compares to a non-GAAP loss per share of $0.02 in the first nine months of 2007.  Excluding the derivative activity described above, the non-GAAP loss per share amounts would have been $0.04 and $0.23 for the three and nine month periods ended September 30, 2008, respectively.  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.

 

Adjusted Margin was $10.3 million for the third quarter of 2008, compared with $9.3 million for the same quarter last year.  Adjusted Margin for the first nine months of 2008 was $27.6 million, compared with $26.2 million in the same period last year.  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.

 

“Overall, we sold 18.7 million Gallons during the quarter, which is up slightly from last quarter and is also noteworthy because it reflects our success in replacing unprofitable fuel contracts that expired recently with new contracts that are profitable.  As a result, our Adjusted Margin rose to $0.55 per Gallon during the third quarter of 2008, which is up from $0.48 per Gallon in the second quarter of 2008,” said Andrew J. Littlefair, Clean Energy’s President and Chief Executive Officer.  “Even with the recent drop in diesel prices, we continue to have fleet operators come to us in search of an economical and viable solution in light of anticipated future fuel price volatility and the more stringent fuel emission standards that are on the horizon in 2010.  In addition, subsequent to quarter’s end, we raised approximately $32.5 million of capital which will help us meet our future capital expenditure needs.  Our ability to raise capital in this challenging environment encourages us about the strength of our business model and the support for our long-term growth strategies.”

 

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.

 

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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 the Company’s recurring core business operating results and may help in comparing its current-period results with those of prior periods.  Management believes that they 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 results 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

 

Historically, approximately 25-30% of Clean Energy’s natural gas fuel sales have been under contracts whereby 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.

 

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.

 

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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
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

Operating Loss

 

$

(2,385,361

)

$

(10,593,534

)

$

(7,419,259

)

$

(19,339,212

)

 

 

 

 

 

 

 

 

 

 

Futures contract adjustment

 

387,960

 

1,119,314

 

2,278,253

 

4,957,938

 

Derivative losses

 

 

6,047,727

 

 

340,746

 

Selling, general, and administrative

 

9,528,605

 

11,397,913

 

26,269,201

 

35,124,764

 

Depreciation and amortization

 

1,814,176

 

2,310,527

 

5,090,396

 

6,557,967

 

Adjusted Margin

 

$

9,345,380

 

$

10,281,947

 

$

26,218,591

 

$

27,642,203

 

 

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 for the period on a diluted basis.

 

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

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

Net Loss

 

$

(1,544,970

)

$

(10,637,146

)

$

(5,978,051

)

$

(18,478,575

)

Stock based compensation, net of tax benefits

 

1,592,789

 

2,684,207

 

5,310,443

 

7,782,538

 

Adjusted net income (loss)

 

47,819

 

(7,952,939

)

(667,608

)

(10,696,037

)

Diluted weighted average common shares outstanding

 

44,195,339

 

44,330,818

 

38,919,129

 

44,304,636

 

Non-GAAP Earnings (Loss) Per Share

 

$

0.00

 

$

(0.18

)

$

(0.02

)

$

(0.24

)

 

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 Thursday, November 27, 2008, 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 300963.

 

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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 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.  Clean Energy del Peru, Clean Energy’s Peruvian joint venture, operates the world’s largest natural gas vehicle fueling station in Lima, Peru.  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 the Company’s products and services, primarily being the sale of CNG and LNG, their ability to fund future capital expenditures, and the ability to continue to grow their 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, relaxation or waiver of fuel emission standards, the inability of fleets to access capital to purchase natural gas vehicles, the Company’s ability to raise capital through debt or equity offerings, 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 Form 10-K filed on March 19, 2008 and Prospectus Supplement filed on October 29, 2008 with the SEC (www.sec.gov) contain risk factors which should be considered before investing.

 

Contact:

 

ICR, Inc.

Ina McGuinness

310.954.1100

 

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Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Balance Sheets

December 31, 2007 and September 30, 2008 (Unaudited)

 

 

 

December 31,
2007

 

September 30,
2008

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

67,937,602

 

$

30,392,856

 

Restricted cash

 

 

2,502,032

 

Short-term investments

 

12,479,684

 

 

Accounts receivable, net of allowance for doubtful accounts of $501,751 and $878,358 as of December 31, 2007 and September 30, 2008, respectively

 

11,026,890

 

12,943,373

 

Other receivables

 

23,153,904

 

11,793,587

 

Inventory, net

 

2,403,890

 

2,460,328

 

Deposits on LNG trucks

 

15,515,927

 

10,160,721

 

Prepaid expenses and other current assets

 

3,633,318

 

4,946,082

 

Total current assets

 

136,151,215

 

75,198,979

 

 

 

 

 

 

 

Land, property and equipment, net

 

88,676,318

 

142,169,616

 

Capital lease receivables

 

763,500

 

464,250

 

Notes receivable and other long-term assets

 

2,126,007

 

5,266,654

 

Investments in other entities

 

385,806

 

3,549,723

 

Goodwill and other intangible assets

 

20,922,098

 

42,042,604

 

Total assets

 

$

249,024,944

 

$

268,691,826

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current portion of long-term debt and capital lease obligation

 

$

63,520

 

$

3,737,052

 

Accounts payable

 

10,547,451

 

9,291,037

 

Accrued liabilities

 

5,381,541

 

7,251,794

 

Deferred revenue

 

677,826

 

717,169

 

Total current liabilities

 

16,670,338

 

20,997,052

 

 

 

 

 

 

 

Long-term debt and capital lease obligation, less current portion

 

161,377

 

18,536,733

 

Other long-term liabilities

 

1,260,755

 

1,240,665

 

Total liabilities

 

18,092,470

 

40,774,450

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Minority interests in subsidiary

 

 

3,744,671

 

 

 

 

 

 

 

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 44,274,375 shares and 44,641,520 shares at December 31, 2007 and September 30, 2008, respectively

 

4,428

 

4,463

 

Additional paid-in capital

 

297,866,745

 

310,899,518

 

Accumulated deficit

 

(69,086,583

)

(87,565,158

)

Accumulated other comprehensive income

 

2,147,884

 

833,882

 

Total stockholders’ equity

 

230,932,474

 

224,172,705

 

Total liabilities and stockholders’ equity

 

$

249,024,944

 

$

268,691,826

 

 

6



 

Clean Energy Fuels Corp. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three Months and Nine Months Ended

September 30, 2007 and 2008

(Unaudited)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

Revenue

 

$

29,210,164

 

$

35,273,687

 

$

88,040,804

 

$

99,823,025

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of sales

 

20,252,744

 

26,111,054

 

64,100,466

 

77,138,760

 

Derivative losses

 

 

6,047,727

 

 

340,746

 

Selling, general and administrative

 

9,528,605

 

11,397,913

 

26,269,201

 

35,124,764

 

Depreciation and amortization

 

1,814,176

 

2,310,527

 

5,090,396

 

6,557,967

 

Total operating expenses

 

31,595,525

 

45,867,221

 

95,460,063

 

119,162,237

 

Operating loss

 

(2,385,361

)

(10,593,534

)

(7,419,259

)

(19,339,212

)

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

1,414,120

 

78,399

 

2,253,083

 

1,182,962

 

Other income (expense), net

 

(50,000

)

(28,801

)

(229,177

)

11,177

 

Equity in gains (losses) of equity method investee

 

 

19,881

 

 

(120,441

)

Loss before income taxes

 

(1,021,241

)

(10,524,055

)

(5,395,353

)

(18,265,514

)

Income tax expense

 

(523,729

)

(99,171

)

(582,698

)

(199,141

)

Minority interest in net income

 

 

(13,920

)

 

(13,920

)

Net loss

 

$

(1,544,970

)

$

(10,637,146

)

$

(5,978,051

)

$

(18,478,575

)

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.03

)

$

(0.24

)

$

(0.15

)

$

(0.42

)

Diluted

 

$

(0.03

)

$

(0.24

)

$

(0.15

)

$

(0.42

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

Basic

 

44,195,339

 

44,330,818

 

38,919,129

 

44,304,636

 

Diluted

 

44,195,339

 

44,330,818

 

38,919,129

 

44,304,636

 

 

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

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2007

 

2008

 

2007

 

2008

 

Construction Revenues

 

0.1

 

0.2

 

3.3

 

0.6

 

Construction Cost of Sales

 

 

(0.2

)

(2.8

)

(0.4

)

Fuel Tax Credits

 

4.5

 

5.6

 

12.8

 

15.5

 

Stock Option Expense, Net of Tax Benefits

 

(1.6

)

(2.7

)

(5.4

)

(7.8

)

 

7