Clean Energy Fuels Corp. (NASDAQ: CLNE) (“Clean Energy” or the
“Company”) today announced its operating results for the third
quarter of 2019.
Andrew J. Littlefair, Clean Energy’s President and Chief
Executive Officer, stated “Double-digit volume growth continued
during the third quarter of 2019. For the first time in the
Company's history we exceeded the century mark in total gallons
delivered for a quarter. The move by companies and trucking firms
toward clean air heavy-duty trucks, and particularly heavy-duty
trucks running on Redeem™, is driving this growth. We believe
renewable natural gas has a large role to play in helping America
address climate change challenges. Demand for this 100% renewable
fuel from our customers and prospects validates the billions of
dollars being invested in RNG production facilities and
distribution networks."
The Company delivered 102.7 million gallons in the third quarter
of 2019, an 11.3% increase from 92.3 million in the third quarter
of 2018. For the nine months ended September 30, 2019, the Company
delivered 297.5 million gallons, an 11.5% increase from 266.8
million in the nine months ended September 30, 2018. These
increases were principally due to growth in CNG volumes and
increased sales of Redeem.
The Company’s revenue for the third quarter of 2019 was $74.4
million, including an unrealized gain of $1.1 million on commodity
swap and customer fueling contracts that support the Company’s Zero
Now truck financing program, compared to $77.3 million of revenue
in the same period last year. Excluding the unrealized gain on
commodity swaps of $1.1 million in 2019, revenue decreased 5.2% for
the third quarter of 2019 compared to the prior year period
principally due to lower station construction revenue. Station
construction revenue was $6.4 million for the third quarter of 2019
compared to $9.4 million in the comparable 2018 period. Revenue
associated with higher volumes was largely offset by lower
effective fuel prices due to lower natural gas prices and fuel
price mix based on the variation of fuel types and geographies
where we deliver fuel gallons.
The Company’s revenue for the nine months ended September 30,
2019 was $224.5 million, including an unrealized loss of $3.3
million on commodity swap and customer fueling contracts that
support the Company’s Zero Now truck financing program, compared to
$250.2 million of revenue in the same period last year, which
included $26.9 million from U.S. federal excise tax credits for
alternative fuels ("AFTC"). The AFTC applied to vehicle fuel sales
made from January 1, 2017 through December 31, 2017 and expired
effective January 1, 2018. Excluding the unrealized loss on
commodity swap and customer fueling contracts of $3.3 million in
the 2019 period and the AFTC of $26.9 million in the 2018 period,
revenue increased 2.0% for the first nine months of 2019 compared
to the prior year period, principally due to higher volumes despite
the effect of lower effective fuel prices caused by lower natural
gas prices from the same period a year ago and fuel price mix based
on the variation of fuel types and geographies where we deliver
fuel gallons. Station construction revenue was $15.5 million for
the nine months ended September 30, 2019 compared to $20.9 million
in the 2018 period. Additionally, the 2018 period included $4.6
million in revenue from the sale of used natural gas trucks, which
did not recur in the comparable 2019 period.
On a GAAP (as defined below) basis, net loss attributable to
Clean Energy for the third quarter of 2019 was $(4.3) million or
$(0.02) per share, compared to $(10.9) million, or $(0.05) per
share, for the third quarter of 2018.
On a GAAP basis, net loss attributable to Clean Energy for the
nine months ended September 30, 2019 was $(20.7) million or $(0.10)
per share, compared to $(10.7) million, or $(0.06) per share, for
the nine months ended September 30, 2018. The nine months ended
September 30, 2019 was affected by an unrealized loss of $3.3
million on commodity swap and customer fueling contracts, while
comparable 2018 period was positively affected by AFTC revenue of
$26.9 million.
Non-GAAP loss per share and Adjusted EBITDA (each as defined
below) for the third quarter of 2019 was $(0.02) and $8.5 million,
respectively. Non-GAAP loss per share and Adjusted EBITDA for the
third quarter of 2018 was $(0.05) and $7.3 million,
respectively.
Non-GAAP loss per share and Adjusted EBITDA for the nine months
ended September 30, 2019 was $(0.06) and $28.6 million,
respectively. Non-GAAP loss per share and Adjusted EBITDA for the
nine months ended September 30, 2018 was $(0.02) and $47.0 million,
respectively, which included the AFTC revenue.
Non-GAAP loss per share and Adjusted EBITDA are described below
and reconciled to GAAP net loss per share attributable to Clean
Energy and GAAP net loss attributable to Clean Energy,
respectively.
Non-GAAP Financial Measures
To supplement the Company’s unaudited condensed consolidated
financial statements 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 loss per share”) and
adjusted EBITDA (“Adjusted EBITDA”). Management presents non-GAAP
loss per share and Adjusted EBITDA because it believes these
measures provide meaningful supplemental information about the
Company’s performance, for the following reasons: (1) these
measures allow for greater transparency with respect to key metrics
used by management to assess the Company’s operating performance
and make financial and operational decisions; (2) these measures
exclude the effect 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 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 are limited 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 loss per share and
Adjusted EBITDA are not recognized terms under GAAP and do not
purport to be an alternative to GAAP loss, GAAP loss per share or
any other GAAP measure as an indicator of operating performance.
Moreover, because not all companies use identical measures and
calculations, the Company’s presentation of non-GAAP loss per share
and Adjusted EBITDA may not be comparable to other similarly titled
measures used by other companies.
Non-GAAP Loss Per Share
Non-GAAP loss per share, 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, plus (minus) loss (income) from equity method
investments, and plus (minus) any loss (gain) from changes in the
fair value of derivative instruments, the total of which is divided
by the Company’s weighted-average common 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, which may
obscure trends in a company’s core operating performance.
Similarly, the Company believes excluding the non-cash results from
equity method investments is useful to investors because these
charges are not part of or representative of the core operations of
the Company. In addition, the Company’s management believes
excluding the non-cash loss (gain) from changes in the fair value
of derivative instruments is useful to investors because the
valuation of the derivative instruments is based on a number of
subjective assumptions, the amount of the loss or gain is derived
from market forces outside of management’s control, and the
exclusion of these amounts enables investors to compare the
Company’s performance with other companies that do not use, or use
different forms of, derivative instruments.
The table below shows GAAP and non-GAAP loss per share 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
loss per share:
Three Months Ended September
30,
Nine Months Ended September
30,
(in thousands, except share and
per-share amounts)
2018
2019
2018
2019
Net Loss Attributable to Clean Energy
Fuels Corp.
$
(10,899
)
$
(4,334
)
$
(10,652
)
$
(20,663
)
Stock-Based Compensation
1,206
892
4,312
3,056
Loss (Income) from Equity Method
Investments
542
(377
)
2,739
123
Loss (Gain) from Change in Fair Value of
Derivative Instruments
(9
)
(1,139
)
(101
)
4,854
Adjusted (Non-GAAP) Net Loss
$
(9,160
)
$
(4,958
)
$
(3,702
)
$
(12,630
)
Diluted Weighted-Average Common Shares
Outstanding
203,469,222
204,712,888
172,946,896
204,522,984
GAAP Loss Per Share
$
(0.05
)
$
(0.02
)
$
(0.06
)
$
(0.10
)
Non-GAAP Loss Per Share
$
(0.05
)
$
(0.02
)
$
(0.02
)
$
(0.06
)
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, plus stock-based
compensation expense, plus (minus) loss (income) from equity method
investments, and plus (minus) any loss (gain) from changes in the
fair value of derivative instruments. 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 loss per share. 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 September
30,
Nine Months Ended September
30,
(in thousands)
2018
2019
2018
2019
Net Loss Attributable to Clean Energy
Fuels Corp.
$
(10,899
)
$
(4,334
)
$
(10,652
)
$
(20,663
)
Income Tax Expense
89
68
266
194
Interest Expense
4,096
1,704
13,126
5,437
Interest Income
(1,129
)
(560
)
(2,193
)
(1,707
)
Depreciation and Amortization
13,363
12,247
39,496
37,331
Stock-Based Compensation
1,206
892
4,312
3,056
Loss (Income) from Equity Method
Investments
542
(377
)
2,739
123
Loss (Gain) from Change in Fair Value of
Derivative Instruments
(9
)
(1,139
)
(101
)
4,854
Adjusted EBITDA
$
7,259
$
8,501
$
46,993
$
28,625
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, 2018 and 2019:
Three Months Ended September
30,
Nine Months Ended September
30,
Gallons Delivered (in millions)
2018
2019
2018
2019
CNG
75.4
86.1
220.0
248.5
LNG
16.9
16.6
46.8
49.0
Total
92.3
102.7
266.8
297.5
Sources of Revenue
The following table shows the Company's sources of revenue for
the three and nine months ended September 30, 2018 and 2019:
Three Months Ended September
30,
Nine Months Ended September
30,
Revenue (in millions)
2018
2019
2018
2019
Volume -Related (1)
$
67.8
$
67.9
$
197.8
$
208.7
Station Construction Sales
9.4
6.4
20.9
15.5
AFTC
—
—
26.9
—
Other (2)
0.1
0.1
4.6
0.3
Total Revenue
$
77.3
$
74.4
$
250.2
$
224.5
(1) For the three and nine months ended
September 30, 2019, volume-related revenue includes an unrealized
gain (loss) from the change in fair value of commodity swap and
customer fueling contracts of $1.1 million and $(3.3) million,
respectively.
(2) For the nine months ended September
30, 2018, other revenue was comprised of sales of used natural gas
heavy-duty trucks the Company purchased in 2017 and 2018.
Today’s Conference Call
The Company will host an investor conference call today at 8:30
a.m. Eastern time (5:30 a.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 Thursday, December 12, 2019, by dialing
1.844.512.2921 from the U.S., or 1.412.317.6671 from international
locations, and entering Replay Pin Number 13695648. 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 and renewable natural gas (RNG) for transportation in the
United States and Canada, with a network of approximately 540
stations across North America that we own or operate. Clean Energy
builds and operates compressed natural gas (CNG) and liquefied
natural gas (LNG) stations and delivers more CNG, LNG and RNG
vehicle fuel than any other company in the United States. Clean
Energy sells Redeem™ RNG fuel and believes it is the cleanest
transportation fuel commercially available, reducing greenhouse gas
emissions by at least 70%. Clean Energy owns natural gas
liquification facilities in California and Texas which produce LNG
for the transportation and other markets. 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, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including statements about, among other things, the
Company’s continued volume growth and the reasons for this growth:
the importance of renewables and renewable energy to the Company's
customers and prospective customers, and the significance of
renewables and renewable energy in achieving global environmental
initiatives and executing the Company's strategies: the Company's
expectations regarding the state of the natural gas vehicle fuels
market, including the level of adoption of natural gas vehicle
fuels generally, and specifically in the trucking sector and with
respect to renewable natural gas: and the effect, if any, of the
foregoing on the Company’s performance, financial condition and
ability to execute its strategic initiatives.
Forward-looking statements are statements other than historical
facts and relate to future events or circumstances or the Company’s
future performance, and they are based on the Company’s current
assumptions, expectations and beliefs concerning future
developments and their potential effect on the Company and its
business. As a result, actual results, performance or achievements
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: the willingness of
fleets and other consumers to adopt natural gas as a vehicle fuel,
and the rate and level of any such adoption; future supply, demand,
use and prices of crude oil, gasoline, diesel, natural gas, and
other vehicle fuels, including overall levels of and volatility in
these factors; natural gas vehicle and engine cost, fuel usage,
availability, quality, safety, convenience, design, performance and
residual value, as well as operator perception with respect to
these factors, in general and in the Company’s key customer
markets, including heavy-duty trucking; the Company’s ability to
execute its Zero Now truck financing program, a key strategic
initiative related to the market for natural gas heavy-duty trucks,
and the effect of this initiative on the Company’s business,
prospects, performance and liquidity; the Company’s ability to
capture a substantial share of the market for alternative vehicle
fuels and vehicle fuels generally and otherwise compete
successfully in these markets, including in the event of
improvements in or perceived advantages of non-natural gas vehicle
fuels or engines powered by these fuels or other competitive
developments; the availability of environmental, tax and other
government regulations, programs and incentives that promote
natural gas, such as AFTC, 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 that favor
these or other vehicles or vehicle fuels over natural gas; future
availability of capital, which may include equity or debt
financing, in the amounts and at the times needed to fund any
growth in the Company’s business and the repayment of its debt
obligations (whether at or before their due dates) or other
expenditures, as well as the terms and other effects of any such
capital-raising transaction; the effect of, or potential for
changes to greenhouse gas emissions requirements or other
environmental regulations applicable to vehicles powered by
gasoline, diesel, natural gas or other vehicle fuels and crude oil
and natural gas fueling, drilling, production, transportation or
use; the Company’s ability to manage and grow its RNG business,
including its ability to continue to receive revenue from sales of
tradable credits the Company generates by selling conventional and
renewable natural gas as vehicle fuel and the effect of any
increase in competition for RNG supply; the Company’s ability to
manage and grow its business of transporting and selling CNG for
non-vehicle purposes via virtual natural gas pipelines and
interconnects; 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 strategies, timing
and levels of investments to be consistent with this demand; the
Company’s ability to recognize the anticipated benefits of its CNG
and LNG fueling station network; construction, permitting and other
factors that could cause delays or other problems at station
construction projects; the Company’s ability to manage the safety
and environmental risks inherent in its operations; the Company’s
compliance with all applicable government regulations; the
Company’s ability to execute and realize the intended benefits of
any acquisitions, divestitures, investments or other strategic
relationships or transactions; 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 periodic reports filed
with the Securities and Exchange Commission (www.sec.gov),
including its Quarterly Report on Form 10-Q filed on November 12,
2019, contain additional information about 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
and per share data; Unaudited)
December 31, 2018
September 30, 2019
Assets
Current assets:
Cash, cash equivalents and current portion
of restricted cash
$
30,624
$
32,855
Short-term investments
65,646
66,755
Accounts receivable, net of allowance for
doubtful accounts of $1,919 and $2,247 as of December 31, 2018 and
September 30, 2019, respectively
68,865
65,349
Other receivables
15,544
9,110
Derivative assets, related party
1,508
931
Inventory
34,975
31,040
Prepaid expenses and other current
assets
8,444
9,538
Total current assets
225,606
215,578
Operating lease right-of-use assets
—
24,043
Land, property and equipment, net
350,568
322,870
Long-term portion of restricted cash
4,000
4,848
Notes receivable and other long-term
assets, net
17,470
21,106
Long-term portion of derivative assets,
related party
8,824
5,742
Investments in other entities
26,079
25,870
Goodwill
64,328
64,328
Intangible assets, net
2,207
1,461
Total assets
$
699,082
$
685,846
Liabilities and Stockholders’
Equity
Current liabilities:
Current portion of debt
$
4,712
$
55,397
Current portion of finance lease
obligations
693
642
Current portion of operating lease
obligations
—
3,176
Accounts payable
19,024
13,972
Accrued liabilities
48,469
41,399
Deferred revenue
7,361
6,855
Total current liabilities
80,259
121,441
Long-term portion of debt
75,003
24,044
Long-term portion of finance lease
obligations
3,776
3,140
Long-term portion of operating lease
obligations
—
21,901
Other long-term liabilities
15,035
12,853
Total liabilities
174,073
183,379
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value.
Authorized 1,000,000 shares; no shares issued and outstanding
—
—
Common stock, $0.0001 par value.
Authorized 304,000,000 shares; issued and outstanding 203,599,892
shares and 204,719,995 shares as of December 31, 2018 and September
30, 2019, respectively
20
20
Additional paid-in capital
1,198,769
1,202,339
Accumulated deficit
(688,653
)
(709,316
)
Accumulated other comprehensive loss
(2,138
)
(2,058
)
Total Clean Energy Fuels Corp.
stockholders’ equity
507,998
490,985
Noncontrolling interest in subsidiary
17,011
11,482
Total stockholders’ equity
525,009
502,467
Total liabilities and stockholders’
equity
$
699,082
$
685,846
Clean Energy Fuels Corp. and
Subsidiaries
Condensed Consolidated
Statements of Operations
(In thousands, except share
and per share data; Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2018
2019
2018
2019
Revenue:
Product revenue
$
67,441
$
62,808
$
220,812
$
190,947
Service revenue
9,879
11,626
29,378
33,503
Total revenue
77,320
74,434
250,190
224,450
Operating expenses:
Cost of sales (exclusive of depreciation
and amortization shown separately below):
Product cost of sales
48,063
43,145
139,658
137,696
Service cost of sales
4,743
6,787
13,595
18,674
Change in fair value of derivative
warrants
(9
)
(10
)
(101
)
1,587
Selling, general and administrative
18,405
17,640
57,202
54,007
Depreciation and amortization
13,363
12,247
39,496
37,331
Total operating expenses
84,565
79,809
249,850
249,295
Operating income (loss)
(7,245
)
(5,375
)
340
(24,845
)
Interest expense
(4,096
)
(1,704
)
(13,126
)
(5,437
)
Interest income
1,129
560
2,193
1,707
Other income (expense), net
(193
)
165
(126
)
2,928
(Loss) income from equity method
investments
(542
)
377
(2,739
)
(123
)
Loss from formation of equity method
investment
(1,163
)
—
(1,163
)
—
Loss before income taxes
(12,110
)
(5,977
)
(14,621
)
(25,770
)
Income tax expense
(89
)
(68
)
(266
)
(194
)
Net loss
(12,199
)
(6,045
)
(14,887
)
(25,964
)
Loss attributable to noncontrolling
interest
1,300
1,711
4,235
5,301
Net loss attributable to Clean Energy
Fuels Corp.
$
(10,899
)
$
(4,334
)
$
(10,652
)
$
(20,663
)
Loss per share:
Basic and diluted
$
(0.05
)
$
(0.02
)
$
(0.06
)
$
(0.10
)
Weighted-average common shares
outstanding:
Basic and diluted
203,469,222
204,712,888
172,946,896
204,522,984
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191112005298/en/
Investor Contact: investors@cleanenergyfuels.com
News Media Contact: Raleigh Gerber Manager of Corporate
Communications 949.437.1397
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