Clean Energy Fuels Corp. (NASDAQ: CLNE) today announced financial
results for the second quarter and six months ended June 30, 2008.
Financial Results Revenue for the second quarter of 2008 increased
to $34.6 million, up from $30.7 million in the second quarter of
the prior year. For the six months ended June 30, 2008, revenue
grew to $64.5 million, compared with $58.8 million in 2007. Net
loss for the second quarter of 2008 was $2.4 million, or $0.05 per
share, compared with a net loss of $3.6 million, or $0.09 per
share, in the second quarter of 2007. Net loss for the first half
of 2008 was $7.8 million, or $0.18 per share, compared with a net
loss of $4.4 million, or $0.12 per share, in the same period last
year. Non-GAAP earnings per share for the second quarter of 2008,
which excludes employee-related stock based compensation charges,
was $0.00. This compares with non-GAAP earnings per share of $0.01
in the second quarter of 2007. Year to date, non-GAAP loss per
share was $0.06, which compares to a non-GAAP loss per share of
$0.02 in the first six months of 2007. 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. In the second quarter of 2008,
the Company recorded mark-to-market derivative gains of $5.7
million on certain futures contracts it purchased in connection
with a fixed-price bid it submitted on a liquefied natural gas
supply contract. Excluding this gain, loss per share would have
been $0.18 and $0.31, respectively, for the three and six month
periods ended June 30, 2008, and non-GAAP loss per share would have
been $0.12 and $0.19 for the three and six month periods ended June
30, 2008, respectively. In July 2008, the Company sold the majority
of the futures contracts and realized a $6.0 million loss on the
sale in the period, which resulted in an overall loss of $0.3
million related to the ultimate purchase and sale of these
contracts when netted against the second quarter�s $5.7 million
gain. Adjusted Margin was $8.8 million for the second quarter of
2008, compared with $9.2 million for the same quarter last year.
Adjusted Margin for the first six months of 2008 was $17.4 million,
compared with $16.9 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. For the second quarter of 2008, the
Company�s combined volume of CNG and LNG was 18.5 million gasoline
gallon equivalents (Gallons), compared with 19.3 million Gallons in
the same period a year ago. For the six months ended June 30, 2008,
the combined volume of CNG and LNG delivered was 36.1 million
Gallons, which compares to 37.1 million Gallons in the same period
in 2007. �As we expected, our financial performance in the first
half of 2008 was hampered by the combination of the loss of a few
non-core customers, the impact of higher natural gas prices on our
fixed-price customer contracts, and the long lead time for our key
Port project to translate into gallons and revenue. With that said,
we continue to see our pipeline grow and remain optimistic about
the outlook for natural gas as a vehicle fuel,� said Andrew J.
Littlefair, Clean Energy�s President and Chief Executive Officer.
�We believe Clean Energy stands to benefit from the momentum
generated from energy issues coming to the forefront in the U.S.
There is proposed legislation in Congress promoting natural gas as
a transportation fuel and we are seeing an increasing number of
grants providing incentives to switch to natural gas fueling
solutions. Highlighting Clean Energy�s industry leadership, we
recently teamed up with General Motors Corp. to open a hydrogen
fueling station at our Clean Energy natural gas fueling station at
the Los Angeles International Airport. Our role in supporting a
path to fuel-cell vehicles is just one example of our efforts to
expand our leadership position in the market. We are continuing to
explore new partnerships to promote the use of natural gas as a
vehicle fuel and we believe we are well positioned to fulfill a
growing demand for natural gas to fuel vehicles today and in the
years to come.� 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 the Company�s
recurring core business operating results and may help in comparing
our 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.
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
June 30, � Six Months Ended June 30, � 2007 � � � 2008 � � 2007 � �
� 2008 � Operating Loss $ (4,003,847 ) $ (2,628,220 ) $ (5,033,898
) $ (8,745,678 ) Futures contract adjustment 1,021,726 2,762,414
1,890,293 3,838,624 Derivative (gains) losses - (5,706,981 ) -
(5,706,981 ) Selling, general, and administrative 10,440,718
12,139,133 16,740,596 23,726,851 Depreciation and amortization �
1,700,164 � � 2,184,019 � � 3,276,220 � � 4,247,440 � Adjusted
Margin $ 9,158,761 � $ 8,750,365 � $ 16,873,211 � $ 17,360,256 �
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 June 30, � Six Months Ended
June 30, � 2007 � � � 2008 � � 2007 � � � 2008 � Net Loss $
(3,562,902 ) $ (2,412,730 ) $ (4,433,081 ) $ (7,841,429 ) Stock
Based Compensation, Net of Tax Benefits � 3,787,654 � � 2,599,895 �
� 3,787,654 � � 5,098,331 � Adjusted Net Income (Loss) 224,752
187,165 (645,427 ) (2,743,098 ) Diluted Weighted Average Common
Shares Outstanding 38,149,455 44,300,309 36,071,554 44,291,401
Non-GAAP Earnings (Loss) Per Share $ 0.01 $ 0.00 $ (0.02 ) $ (0.06
) 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 Wednesday, August 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 291208. 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 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 inside and outside the
United States and Canada, the progress of the clean air plans at
the Ports of Los Angeles and Long Beach, loss of customers 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
Annual Report on Form 10-K filed with the SEC (www.sec.gov) on
March 19, 2008 contains risk factors which you should consider
before investing. � Clean Energy Fuels Corp. and Subsidiaries
Condensed Consolidated Balance Sheets December 31, 2007 and June
30, 2008 (Unaudited) � December 31,2007 June 30,2008 � Assets
Current assets: Cash and cash equivalents $ 67,937,602 $ 22,528,139
Short-term investments 12,479,684 8,469,119 Accounts receivable,
net of allowance for doubtful accounts of $501,751 and $845,909 as
of December 31, 2007 and June 30, 2008, respectively 11,026,890
12,457,566 Other receivables 23,153,904 26,770,502 Inventory, net
2,403,890 2,696,414 Deposits on LNG trucks 15,515,927 17,355,927
Prepaid expenses and other current assets 3,633,318 5,791,221 Total
current assets 136,151,215 96,068,888 � Land, property and
equipment, net 88,676,318 119,637,259 Capital lease receivables
763,500 564,000 Notes receivable and other long-term assets
2,511,813 4,771,319 Fair market value of futures contracts �
3,565,441 Goodwill and other intangible assets 20,922,098
20,904,353 Total assets $ 249,024,944 $ 245,511,260 � Liabilities
and Stockholders� Equity Current liabilities: Current portion of
capital lease obligation $ 63,520 $ 66,763 Accounts payable
10,547,451 10,541,662 Accrued liabilities 5,381,541 4,654,020
Deferred revenue 677,826 655,778 Total current liabilities
16,670,338 15,918,223 � Capital lease obligation, less current
portion 161,377 127,165 Other long-term liabilities 1,260,755
1,182,942 Total liabilities 18,092,470 17,228,330 � 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 44,274,375 shares and 44,291,401
shares at December 31, 2007 and June 30, 2008, respectively 4,428
4,431 Additional paid-in capital 297,866,745 303,113,716
Accumulated deficit (69,086,583 ) (76,928,011 ) Accumulated other
comprehensive income 2,147,884 2,092,794 Total stockholders� equity
230,932,474 228,282,930 Total liabilities and stockholders� equity
$ 249,024,944 $ 245,511,260 � � Clean Energy Fuels Corp. and
Subsidiaries Condensed Consolidated Statements of Operations For
the Three Months and Six Months Ended June 30, 2007 and 2008
(Unaudited) � Three Months Ended June 30, Six Months Ended June 30,
� 2007 � � � 2008 � � 2007 � � � 2008 � � Revenue $ 30,663,597 $
34,601,981 $ 58,830,640 $ 64,549,338 Operating expenses: Cost of
sales 22,526,562 28,614,030 43,847,722 51,027,706 Derivative
(gains) losses � (5,706,981 ) � (5,706,981 ) Selling, general and
administrative 10,440,718 12,139,133 16,740,596 23,726,851
Depreciation and amortization � 1,700,164 � � 2,184,019 � �
3,276,220 � � 4,247,440 � Total operating expenses � 34,667,444 � �
37,230,201 � � 63,864,538 � � 73,295,016 � Operating loss
(4,003,847 ) (2,628,220 ) (5,033,898 ) (8,745,678 ) � Interest
income, net 546,750 265,347 838,963 1,104,563 Other income
(expense), net (55,805 ) 1,622 (179,177 ) 39,978 Equity in gains
(losses) of equity method investee � � � � 4,724 � � � � � (140,322
) Loss before income taxes (3,512,902 ) (2,356,527 ) (4,374,112 )
(7,741,459 ) Income tax expense � 50,000 � � 56,203 � � 58,969 � �
99,970 � Net loss $ (3,562,902 ) $ (2,412,730 ) $ (4,433,081 ) $
(7,841,429 ) � Loss per share Basic $ (0.09 ) $ (0.05 ) $ (0.12 ) $
(0.18 ) Diluted $ (0.09 ) $ (0.05 ) $ (0.12 ) $ (0.18 ) � Weighted
average common shares outstanding Basic � 38,149,455 � � 44,300,309
� � 36,071,554 � � 44,291,401 � Diluted � 38,149,455 � � 44,300,309
� � 36,071,554 � � 44,291,401 � � Included in net loss are the
following amounts (in millions): � Three Months Ended June 30, Six
Months Ended June 30, � 2007 � � 2008 � � 2007 � � � 2008 �
Construction Revenues 1.4 0.3 3.2 � 0.4 Construction Cost of Sales
(1.1 ) (0.2 ) (2.8 ) � (0.2 ) Fuel Tax Credits 4.4 5.2 8.2 � 9.9
Stock Option Expense, Net of Tax Benefits (3.8 ) (2.6 ) (3.8 ) �
(5.1 )
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