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. 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.
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. 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. 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 �
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 )
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