Clean Energy Fuels Corp. (NASDAQ: CLNE) ("Clean Energy" or the
"Company") today announced its operating results for the third
quarter of 2017, including continued volume growth for the period,
as well as recent operational and strategic steps taken to
streamline operations and reduce expenses.
During the third quarter of 2017, the Company initiated the
following one-time actions, which it believes will significantly
improve its operating and financial performance:
- Closing 42 underperforming and
unprofitable stations;
- Reducing annual selling, general and
administrative expenses by approximately $15 million; and
- Positioning its compressor business to
benefit from consolidation in the natural gas compressor sector
(all of the foregoing, the "Q3 Actions").
These Q3 Actions resulted in incremental charges of $73.8
million.
Andrew Littlefair, Clean Energy’s President and Chief Executive
Officer, stated, "We continue to see great opportunity in our
business model and have taken steps we believe will strengthen our
core fueling network and our overall financial results and cash
flows. Also, as another key element of our strategic plans, we have
committed to position our compressor business to seek a strategic
partner in a sector that we believe can grow and benefit from
consolidation to address the compressor market in light of the
anti-diesel movement, particularly in Europe."
During the third quarter of 2017 the Company delivered 91.5
million gallons, an 8.3% increase from 84.5 million gallons
delivered in the same period in 2016. For the nine months ended
September 30, 2017, the Company delivered 265.0 million
gallons, an 8.2% increase from 244.9 million gallons delivered in
the same period in 2016.
Revenue for the third quarter of 2017 was $81.8 million, a 15.7%
decrease from $97.0 million of revenue for the third quarter of
2016. This decrease was primarily due to a lower effective price
per gallon, largely attributable to the effects of the Company's
sale of certain assets related to the upstream production portion
of its RNG business to BP Products North America Inc. ("BP") in the
first quarter of 2017 (the "Asset Sale"), which has resulted in
decreased revenue from the sale of certain tradable credits the
Company generates by selling CNG, LNG and its Redeem™ RNG vehicle
fuel. In addition, revenue decreased compared to the third quarter
of 2016 due to the expiration of the U.S. federal excise tax
credits for alternative fuels ("VETC") as of December 31, 2016.
Station construction revenue decreased between periods, principally
due to fewer station upgrade projects. Compressor revenue remained
comparable between periods. These decreases were partially offset
by a $4.9 million increase in revenue as a result of the increased
gallons delivered in the third quarter of 2017 compared to the same
period in 2016.
Revenue for the nine months ended September 30, 2017 was
$252.3 million, a 16.1% decrease from $300.8 million compared to
the same period in 2016, primarily due to the same factors
described above, except that station construction revenue decreased
between these periods, principally due to a decrease in large,
full-station and station upgrade projects, and compressor revenue
decreased between these periods, principally due to continued low
global demand in the compressor sector beginning in the second half
of 2016.
Andrew J. Littlefair further stated, "With a fueling station
network of over 575 stations, we are making efforts to streamline
the number of stations we operate without disrupting volumes or
customers’ ability to continue to fuel with us. We believe the
steps we have taken will streamline our operations, facilitate a
focus on what we believe are our most profitable opportunities, and
improve our overall financial performance."
On a GAAP basis, net loss for the third quarter of 2017 was
$94.1 million, or $0.62 per share, compared to net loss of $12.6
million, or $0.10 per share, for the third quarter of 2016. The
third quarter of 2017 was negatively impacted by charges resulting
from the steps taken to minimize and eliminate underperforming
assets and lower operating expenses going forward. These charges
include $73.8 million in asset impairments and other charges, which
consist of an asset impairment charge of $32.3 million related to
CECC's assets, asset impairment and other cash and non-cash charges
totaling $25.3 million related to fueling station closures, and
cash severance and non-cash stock-based compensation charges
totaling $3.0 million related to workforce reduction, as well as a
$13.2 million increase in inventory valuation provision compared to
the same period in 2016 (all such charges and inventory valuation
provision increase, collectively, the "third quarter incremental
charges"). In addition, the third quarter of 2016 included VETC
revenue of $6.7 million and a loss of $0.7 million from the
repurchase of debt (the "debt repurchases").
On a GAAP basis, net loss for the nine months ended
September 30, 2017 was $50.9 million, or $0.34 per share,
compared to a net loss of $8.3 million, or $0.07 per share, for the
nine months ended September 30, 2016. The nine months ended
September 30, 2017 included a $69.9 million gain from the Asset
Sale, as well as the third quarter incremental charges. The nine
months ended September 30, 2016 included a net gain of $25.4
million from debt repurchases and VETC revenue of $19.6
million.
Non-GAAP loss per share and Adjusted EBITDA for the third
quarter of 2017 was $0.61 per share and $(74.1) million,
respectively, which included the third quarter incremental charges.
Non-GAAP loss per share and Adjusted EBITDA for the third quarter
of 2016 was $0.08 per share and $10.9 million, respectively, which
included VETC revenue and a loss from the debt repurchases.
Non-GAAP loss per share and Adjusted EBITDA for the nine months
ended September 30, 2017 was $0.29 per share and $9.9 million,
respectively, which included a gain from the Asset Sale and the
third quarter incremental charges. Non-GAAP loss per share and
Adjusted EBITDA for the nine months ended September 30, 2016 was
$0.02 per share and $67.4 million, respectively, which included net
gains from debt repurchases and VETC revenue.
Non-GAAP loss per share and Adjusted EBITDA are described below
and reconciled to GAAP net loss and loss per share attributable to
Clean Energy Fuels Corp.
Non-GAAP Financial Measures
To supplement the Company’s condensed consolidated financial
statements, which statements are prepared and presented in
accordance with accounting principles generally accepted in the
United States of America ("GAAP"), the Company uses non-GAAP
financial measures that it calls non-GAAP loss per share ("non-GAAP
EPS" or "non-GAAP loss per share"), adjusted EBITDA ("Adjusted
EBITDA"). Management presents non-GAAP EPS, Adjusted EBITDA because
it believes these measures provide meaningful supplemental
information regarding the Company’s performance, for the following
reasons: (1) these measures allow for greater transparency
with respect to key metrics used by management, as management uses
these measures to assess the Company’s operating performance, for
financial and operational decision-making; (2) these measures
exclude the impact of items that management believes are not
directly attributable to the Company’s core operating performance
and may obscure trends in the business; and (3) these measures
are used by institutional investors and the analyst community to
help analyze the Company’s business. In future quarters, the
Company may make adjustments for other expenditures, charges or
gains in order to present non-GAAP financial measures that the
Company’s management believes 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. The Company expects to
continue reporting non-GAAP financial measures, adjusting for the
items described below (and/or other items that may arise in the
future as the Company’s management deems appropriate), and the
Company expects to continue to incur expenses, charges or gains
similar to the non-GAAP adjustments described below. Accordingly,
unless expressly stated otherwise, the 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 loss or loss per share (with respect to
non-GAAP EPS and Adjusted EBITDA), or any other GAAP measure as an
indicator of operating performance (with respect to non-GAAP EPS
and Adjusted EBITDA). Moreover, because not all companies use
identical measures and calculations, the Company's presentation of
non-GAAP EPS and Adjusted EBITDA may not be comparable to other
similarly titled measures used by other companies.
Non-GAAP EPS
Non-GAAP EPS, which the Company presents as a non-GAAP measure
of its performance, is defined as net loss attributable to Clean
Energy Fuels Corp., plus stock-based compensation expense, the
total of which is divided by the Company’s weighted-average shares
outstanding on a diluted basis. The Company’s management believes
excluding non-cash expenses related to stock-based compensation
provides useful information to investors regarding the Company’s
performance because of the 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 relevant accounting guidance, which may obscure
trends in a company’s core operating performance.
The table below shows GAAP and non-GAAP EPS and also reconciles
GAAP net loss attributable to Clean Energy Fuels Corp. to an
adjusted net loss figure used in the calculation of non-GAAP
EPS:
Three Months Ended Nine Months
Ended September 30, September 30, (in 000s,
except share and per-share amounts) 2016
2017 2016
2017 Net Loss Attributable to Clean Energy
Fuels Corp. $ (12,628 ) $ (94,141 ) $ (8,270 ) $ (50,890 )
Stock-Based Compensation 2,077
2,216 6,533
6,904 Adjusted Net Loss $ (10,551 ) $ (91,925 ) $ (1,737 ) $
(43,986 ) Diluted Weighted-Average Common Shares Outstanding
130,436,038 150,927,825 112,819,041 150,128,204
GAAP Loss Per
Share $ (0.10 ) $ (0.62 ) $ (0.07 ) $ (0.34 )
Non-GAAP Loss
Per Share $ (0.08 ) $ (0.61 ) $ (0.02 ) $ (0.29 )
Adjusted EBITDA
Adjusted EBITDA, which the Company presents as a non-GAAP
measure of its performance, is defined as net loss attributable to
Clean Energy Fuels Corp., plus (minus) income tax expense
(benefit), plus interest expense, minus interest income, plus
depreciation and amortization expense, and plus stock-based
compensation expense. The Company’s management believes Adjusted
EBITDA provides useful information to investors regarding the
Company’s performance for the same reasons discussed above with
respect to non-GAAP EPS. In addition, management internally uses
Adjusted EBITDA to determine elements of executive and employee
compensation.
The table below shows Adjusted EBITDA and also reconciles this
figure to GAAP net loss attributable to Clean Energy Fuels
Corp.:
Three Months Ended Nine Months
Ended September 30, September 30, (in
000s) 2016 2017
2016 2017
Net Loss Attributable to Clean Energy Fuels Corp. $ (12,628
) $ (94,141 ) $ (8,270 ) $ (50,890 ) Income Tax Expense (Benefit)
416 (44 ) 1,229 (2,183 ) Interest Expense 6,406 4,270 23,843 13,466
Interest Income (123 ) (465 ) (579 ) (1,156 ) Depreciation and
Amortization 14,801 14,104 44,682 43,757 Stock-Based Compensation
2,077
2,216 6,533
6,904
Adjusted EBITDA $ 10,949 $ (74,060 ) $ 67,438 $
9,898
Definition of "Gallons Delivered"
The Company defines “gallons delivered” as its gallons of
renewable natural gas ("RNG"), compressed natural gas ("CNG") and
liquefied natural gas ("LNG"), along with its gallons associated
with providing operations and maintenance services, in each case
delivered to its customers in the applicable period, plus the
Company's proportionate share of gallons delivered by joint
ventures in the applicable period.
The table below shows gallons delivered for the three and nine
months ended September 30, 2016 and 2017:
Three Months Ended Nine Months
Ended September 30, September 30, Gallons
Delivered (in millions) 2016 2017
2016 2017 CNG 66.7 73.5 191.7 213.1 RNG(1) 0.7
0.7 2.3 1.9 LNG 17.1 17.3 50.9 50.0
Total 84.5 91.5 244.9
265.0
(1) Represents RNG sold as
non-vehicle fuel. RNG sold as vehicle fuel, also known as Redeem™,
is included in CNG and LNG, as applicable.
Sources of Revenue
The following table represents our sources of revenue for the
three and nine months ended September 30, 2016 and 2017:
Three Months Ended Nine Months
Ended September 30, September 30,
Revenue (in Millions) 2016
2017 2016 2017 Volume -Related $ 71.3 $
63.1
$
210.8
$
200.0
Compressor Sales 5.3 5.9 22.4 17.6 Station Construction Sales 13.7
12.5 48.0 34.1 VETC 6.7 — 19.6 — Other — 0.3 —
0.6 Total $ 97.0 $ 81.8 $ 300.8 $ 252.3
Today’s Conference Call
The Company will host an investor conference call today at 4:30
p.m. Eastern time (1:30 p.m. Pacific). Investors
interested in participating in the live call can dial
1.877.407.4018 from the U.S. and international callers can dial
1.201.689.8471. A telephone replay will be available approximately
two hours after the call concludes through Sunday, December
3, by dialing 1.844.512.2921 from the U.S., or 1.412.317.6671
from international locations, and entering Replay Pin Number
13666012. There also will be a simultaneous live webcast available
on the Investor Relations section of the Company’s web site at
www.cleanenergyfuels.com, which will be available for replay for 30
days.
About Clean Energy Fuels
Clean Energy Fuels Corp. is the leading provider of natural gas
fuel for transportation in North America. We build and operate CNG
and LNG vehicle fueling stations; manufacture CNG and LNG equipment
and technologies; and deliver more CNG and LNG vehicle fuel than
any other company in the United States. Clean Energy also sells
Redeem™ RNG fuel and believes it is the cleanest transportation
fuel commercially available, reducing greenhouse gas emissions by
up to 70%. For more information,
visit 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 Company’s strategic plans and steps recently taken to
implement certain of these plans, including, among other things:
the strength of the Company’s smaller fueling station network
following certain station closures and the continued ability of
this station network to satisfy customer demand and achieve growing
volumes of natural gas vehicle fuel sales; the Company’s plans to
seek a strategic partner for its natural gas fueling compressor
business; the impact on the Company’s performance and financial
condition of its streamlining efforts, including its workforce
reduction; the market’s perception of these steps taken to
implement the Company’s strategic plans; and the effects of these
steps on the Company’s performance, liquidity and financial
condition, including the Company’s estimates of certain liquidity
and expense measures after taking these steps. Actual results and
the timing of events could differ materially from those anticipated
in or implied by these forward-looking statements as a result of
many factors including, among others: future supply, demand, use
and prices of crude oil, gasoline, diesel, natural gas and other
alternative fuels, as well as heavy-duty trucks and other vehicles
and engines powered by these fuels; the willingness of fleets and
other consumers to adopt natural gas as a vehicle fuel; the
Company’s ability to capture a substantial share of the market for
alternative vehicle fuels and otherwise compete successfully in
this market, including in the event of advances or improvements in
non-natural gas vehicle fuels or engines powered by these fuels or
other competitive developments; the Company’s ability to accurately
predict natural gas vehicle fuel demand in the geographic and
customer markets in which it operates and effectively calibrate its
investments and strategies to be consistent with this demand; the
Company’s ability to recognize the anticipated benefits of its CNG
and LNG station network; future availability of capital, including
equity or debt financing, as needed to fund the growth of the
Company’s business and repayment of its debt obligations (whether
at or prior to maturity); the availability of tax credits and other
government programs or incentives that promote natural gas or other
alternatives as a vehicle fuel, including long-standing support for
gasoline and diesel-powered vehicles and growing support for
electric and hydrogen-powered vehicles that could result in
programs or incentives in favor of these vehicle fuels rather than
natural gas; changes to federal, state or local fuel emission
standards or other environmental regulations applicable to natural
gas production, transportation or use; compliance with other
applicable government regulations; the Company’s ability to manage
and grow its RNG business after the sale of the upstream production
portion of this business, including its ability to continue to
receive revenue from sales of certain tradable credits it generates
from sales of RNG, CNG and LNG as a vehicle fuel; construction,
permitting and other factors that could cause delays or other
problems at station construction projects; the Company’s ability to
sustain or grow its compressor business and manage risks and
uncertainties related to the global scope of this business; the
Company’s ability to realize the intended benefits of any mergers,
acquisitions, divestitures, investments or other strategic
measures, transactions or relationships, including in connection
with its compressor business; and general political, regulatory,
economic and market conditions.
The forward-looking statements made in this press release 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. The Company’s Quarterly Report on
Form 10-Q, filed on November 2, 2017 with the Securities and
Exchange Commission (www.sec.gov), contains additional information
on these and other risk factors that 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 (In
thousands, except share data, Unaudited)
December 31, September 30, 2016
2017 Assets Current assets: Cash
and cash equivalents $ 36,119 $ 45,312 Restricted cash 6,996 1,463
Short-term investments 73,718 151,521 Accounts receivable, net of
allowance for doubtful accounts of $1,063 and $2,336 as of December
31, 2016 and September 30, 2017, respectively 79,432 61,001 Other
receivables 21,934 16,253 Inventory 29,544 44,624 Prepaid expenses
and other current assets 14,021 10,838
Total current assets 261,764 331,012 Land, property and equipment,
net 483,923 363,773 Notes receivable and other long-term assets,
net 16,377 25,619 Investments in other entities 3,475 2,542
Goodwill 93,018 68,082 Intangible assets, net 38,700
7,491 Total assets $ 897,257 $ 798,519
Liabilities and Stockholders’ Equity Current liabilities:
Current portion of debt and capital lease obligations $ 5,943 $
29,247 Accounts payable 23,637 16,215 Accrued liabilities 52,601
41,990 Deferred revenue 7,041 6,487
Total current liabilities 89,222 93,939 Long-term portion of debt
and capital lease obligations 241,433 185,597 Long-term debt,
related party 65,000 40,000 Other long-term liabilities
7,915 13,416 Total liabilities 403,570 332,952
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 224,000,000 shares; issued and outstanding 145,538,063
shares and 151,009,700 shares at December 31, 2016 and September
30, 2017, respectively 15 15 Additional paid-in capital 1,090,361
1,110,158 Accumulated deficit (603,836 ) (655,223 ) Accumulated
other comprehensive loss (17,675 ) (12,392 ) Total
Clean Energy Fuels Corp. stockholders’ equity 468,865 442,558
Noncontrolling interest in subsidiary 24,822
23,009 Total stockholders’ equity 493,687
465,567 Total liabilities and stockholders’ equity $
897,257 $ 798,519
Clean Energy Fuels
Corp. and Subsidiaries Condensed Consolidated
Statements of Operations (In thousands, except share
and per share data, Unaudited) Three Months
Ended Nine Months Ended September 30,
September 30, 2016
2017 2016
2017 Revenue: Product revenue $ 84,456 $ 67,669 $
263,179 $ 211,747 Service revenue 12,561
14,123 37,645 40,552 Total
revenue 97,017 81,792 300,824 252,299 Operating expenses: Cost of
sales (exclusive of depreciation and amortization shown separately
below): Product cost of sales 55,481 52,884 170,746 158,306 Service
cost of sales 6,377 7,283 19,095 20,066 Inventory valuation
provision — 13,158 — 13,158 Selling, general and administrative
25,888 24,798 76,744 71,875 Depreciation and amortization 14,801
14,104 44,682 43,757 Asset impairments and other charges —
60,666 — 60,666
Total operating expenses 102,547 172,893
311,267 367,828 Operating loss
(5,530 ) (91,101 ) (10,443 ) (115,529 ) Interest expense (6,406 )
(4,270 ) (23,843 ) (13,466 ) Interest income 123 465 579 1,156
Other income (expense), net (109 ) 4 (6 ) (28 ) Loss from equity
method investments (13 ) (30 ) (20 ) (100 ) Gain (loss) from
extinguishment of debt (668 ) — 25,375 3,195 Gain from sale of
certain assets of subsidiary — —
— 69,886 Loss before income taxes (12,603 )
(94,932 ) (8,358 ) (54,886 ) Income tax benefit (expense)
(416 ) 44 (1,229 ) 2,183 Net
loss (13,019 ) (94,888 ) (9,587 ) (52,703 ) Loss attributable to
noncontrolling interest 391 747
1,317 1,813 Net loss attributable to Clean
Energy Fuels Corp. $ (12,628 ) $ (94,141 ) $ (8,270 ) $ (50,890 )
Loss per share: Basic $ (0.10 ) $ (0.62 ) $ (0.07 ) $ (0.34 )
Diluted $ (0.10 ) $ (0.62 ) $ (0.07 ) $ (0.34 ) Weighted-average
common shares outstanding: Basic 130,436,038
150,927,825 112,819,041 150,128,204
Diluted 130,436,038 150,927,825
112,819,041 150,128,204
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version on businesswire.com: http://www.businesswire.com/news/home/20171102006628/en/
Clean Energy Fuels Corp.Investor Contact:Tony
KritzerDirector of Investor Communications949.437.1403orNews
Media Contact:Jason JohnstonManager of Corporate
Communications949.437.1411
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