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Clean Energy Fuels Corp. (NASDAQ: CLNE) today announced its operating results for the second quarter and six months ended June 30, 2009.
Gasoline gallon equivalents (Gallons) delivered during the second quarter of 2009 totaled 23.7 million, up 28% from 18.5 million Gallons in the same period a year ago. On a sequential basis, Gallons sold rose 30%. For the first six months of 2009, volume increased 16% to 42.0 million Gallons, compared with 36.1 million Gallons in the first six months of 2008. Gallons include the Company's sales of CNG, LNG, and biomethane and the Gallons associated with providing operations and maintenance services.
Revenue for the quarter ended June 30, 2009 totaled $27.9 million, compared with $33.8 million in the same period in 2008. For the six months ended June 30, 2009, revenue totaled $58.1 million, compared with $63.8 million a year ago. The reduction in revenue was primarily the result of lower natural gas commodity prices between periods, which reduced the natural gas commodity charges passed through by the Company to many of its customers. The reduced commodity prices, however, also reduce the Company's cost of sales, which helped the Company improve its gross margins during the quarter. Gross margin increased to $11.7 million in the second quarter of 2009, up from $8.6 million in the first quarter of 2009.
Net loss for the second quarter of 2009 was $6.4 million, or $0.13 per share, compared with a net loss of $3.2 million, or $0.07 per share, in the second quarter of 2008. For the first six months of 2009, net loss was $12.9 million, or $0.26 per share, compared to a net loss of $8.6 million, or $0.19 per share, in the first half of 2008. The Company recorded non-cash charges of $2.2 million and $2.4 million, respectively, related to valuing its Series I warrants in the second quarter and first six months of 2009. These charges contributed $0.04 and $0.05 per share, respectively, to the Company's net loss in the periods presented.
Non-GAAP loss per share for the second quarter of 2009 remained unchanged from the second quarter of 2008 at $0.01. Non-GAAP loss per share for the first half of 2009 was $0.07, compared with $0.08 in the first half of 2008. Non-GAAP EPS (or Non-GAAP loss per share) is described below and reconciled to the GAAP measure net income (loss).
Andrew J. Littlefair, Clean Energy's President and Chief Executive Officer, stated, "We are very encouraged by the solid growth of our business in the second quarter, as we improved both our volumes and margins on a sequential and year-over-year basis. The acquisition of four transit property operations and the commencement of our new sales agreement for our renewable landfill gas drove these results. We are continuing to win contracts in several key markets, and we currently have 25 stations under construction or being upgraded as well as a very strong backlog. Additionally, we are seeing tangible progress at the Ports of Los Angeles and Long Beach with their clean truck roll out, and we remain well-positioned to capitalize on this opportunity.
"With the equity raise we completed on July 1, we will have approximately $93 million of cash heading into the last half of the year. This cash, combined with our increasing operating cash flow, should put us in good position financially to capitalize on the opportunities we see coming in our business," concluded Littlefair.
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 a non-GAAP financial measure called non-GAAP Earnings per Share (Non-GAAP EPS or Non-GAAP loss per share).
The Company uses this non-GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding the Company's performance by excluding certain expenses that may not be indicative of our 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 this non-GAAP financial measure is useful to investors because (1) it allows for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) it is used by institutional investors and the analyst community to help them analyze the results of Clean Energy's business.
The material limitations of Non-GAAP EPS are as follows: Non-GAAP EPS is not a recognized term under GAAP and does not purport to be an alternative to 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 Non-GAAP EPS may not be comparable to other similarly titled measures of other companies. These limitations are compensated for by using Non-GAAP EPS in conjunction with traditional GAAP operating performance and cash flow measures.
Non-GAAP EPS
Non-GAAP EPS is defined as net income (loss), plus employee-related stock based compensation charges, net of related tax benefits, plus or minus any mark-to-market losses or gains on the Company's Series I warrants, the total of which is divided by the Company's weighted average shares outstanding on a diluted basis. While the Company has not done so for the periods presented in this release, for future quarters, the Company may add back certain non-recurring significant expenditures or other significant non-cash charges incurred to calculate Non-GAAP EPS. As it relates to stock-based compensation, because of varying available valuation methodologies, the volatility of the expense depending on market forces outside of management's control, subjective assumptions and the variety of award types that companies can use under FAS 123R, the Company's management believes that providing Non-GAAP EPS excluding these charges provides helpful information for investors when evaluating the Company's operating results (excluding the impact of these non-cash charges) over different periods of time. The Company also believes excluding significant items not expected to recur in the foreseeable future and significant non-cash gains or losses provides investors with helpful information when assessing the Company's underlying financial performance.
There are a number of limitations related to the use of Non-GAAP EPS versus EPS calculated in accordance with GAAP. First, non-GAAP EPS excludes stock-based compensation expenses that are recurring. Stock-based expenses have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. Second, stock-based awards are an important part of the Company's employees' compensation and impact their performance. Finally, the components of the costs that the Company excludes in its calculation of Non-GAAP EPS may differ from the components that its peer companies exclude when they report their results of operations. These limitations are compensated for by using non-GAAP EPS in conjunction with traditional GAAP EPS and other GAAP profitability measures. Management does not recommend placing undue reliance on this non-GAAP measure.
The table below shows Non-GAAP EPS and also reconciles these figures to the GAAP measure net income (loss):
Three Months Six Months
Ended June 30, Ended June 30,
2008 2009 2008 2009
Net Income $ (3,201,730 ) $ (6,376,766 ) $ (8,630,429 ) $ (12,870,813 )
(Loss)
Employee Stock
Based
Compensation, 2,599,895 3,506,322 5,098,331 7,020,144
Net of Tax
Benefits
Mark-to-Market
Loss on Series -- 2,209,596 -- 2,386,363
I Warrants
Adjusted Net (601,835 ) (660,848 ) (3,532,098 ) (3,464,306 )
Income (Loss)
Diluted
Weighted
Average Common 44,300,309 50,247,366 44,291,401 50,242,814
Shares
Outstanding
Non-GAAP
Earnings (Loss) $ (0.01 ) $ (0.01 ) $ (0.08 ) $ (0.07 )
Per Share
Gasoline gallon equivalents (Gallons) delivered during the second quarter of 2009 totaled 23.7 million, up 28% from 18.5 million Gallons in the same period a year ago. On a sequential basis, Gallons sold rose 30%. For the first six months of 2009, volume increased 16% to 42.0 million Gallons, compared with 36.1 million Gallons in the first six months of 2008. Gallons include the Company's sales of CNG, LNG, and biomethane and the Gallons associated with providing operations and maintenance services.
Revenue for the quarter ended June 30, 2009 totaled $27.9 million, compared with $33.8 million in the same period in 2008. For the six months ended June 30, 2009, revenue totaled $58.1 million, compared with $63.8 million a year ago. The reduction in revenue was primarily the result of lower natural gas commodity prices between periods, which reduced the natural gas commodity charges passed through by the Company to many of its customers. The reduced commodity prices, however, also reduce the Company's cost of sales, which helped the Company improve its gross margins during the quarter. Gross margin increased to $11.7 million in the second quarter of 2009, up from $8.6 million in the first quarter of 2009.
Net loss for the second quarter of 2009 was $6.4 million, or $0.13 per share, compared with a net loss of $3.2 million, or $0.07 per share, in the second quarter of 2008. For the first six months of 2009, net loss was $12.9 million, or $0.26 per share, compared to a net loss of $8.6 million, or $0.19 per share, in the first half of 2008. The Company recorded non-cash charges of $2.2 million and $2.4 million, respectively, related to valuing its Series I warrants in the second quarter and first six months of 2009. These charges contributed $0.04 and $0.05 per share, respectively, to the Company's net loss in the periods presented.
Non-GAAP loss per share for the second quarter of 2009 remained unchanged from the second quarter of 2008 at $0.01. Non-GAAP loss per share for the first half of 2009 was $0.07, compared with $0.08 in the first half of 2008. Non-GAAP EPS (or Non-GAAP loss per share) is described below and reconciled to the GAAP measure net income (loss).
Andrew J. Littlefair, Clean Energy's President and Chief Executive Officer, stated, "We are very encouraged by the solid growth of our business in the second quarter, as we improved both our volumes and margins on a sequential and year-over-year basis. The acquisition of four transit property operations and the commencement of our new sales agreement for our renewable landfill gas drove these results. We are continuing to win contracts in several key markets, and we currently have 25 stations under construction or being upgraded as well as a very strong backlog. Additionally, we are seeing tangible progress at the Ports of Los Angeles and Long Beach with their clean truck roll out, and we remain well-positioned to capitalize on this opportunity.
"With the equity raise we completed on July 1, we will have approximately $93 million of cash heading into the last half of the year. This cash, combined with our increasing operating cash flow, should put us in good position financially to capitalize on the opportunities we see coming in our business," concluded Littlefair.
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 a non-GAAP financial measure called non-GAAP Earnings per Share (Non-GAAP EPS or Non-GAAP loss per share).
The Company uses this non-GAAP financial measure for financial and operational decision making and as a means to evaluate period-to-period comparisons. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding the Company's performance by excluding certain expenses that may not be indicative of our 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 this non-GAAP financial measure is useful to investors because (1) it allows for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) it is used by institutional investors and the analyst community to help them analyze the results of Clean Energy's business.
The material limitations of Non-GAAP EPS are as follows: Non-GAAP EPS is not a recognized term under GAAP and does not purport to be an alternative to 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 Non-GAAP EPS may not be comparable to other similarly titled measures of other companies. These limitations are compensated for by using Non-GAAP EPS in conjunction with traditional GAAP operating performance and cash flow measures.
Non-GAAP EPS
Non-GAAP EPS is defined as net income (loss), plus employee-related stock based compensation charges, net of related tax benefits, plus or minus any mark-to-market losses or gains on the Company's Series I warrants, the total of which is divided by the Company's weighted average shares outstanding on a diluted basis. While the Company has not done so for the periods presented in this release, for future quarters, the Company may add back certain non-recurring significant expenditures or other significant non-cash charges incurred to calculate Non-GAAP EPS. As it relates to stock-based compensation, because of varying available valuation methodologies, the volatility of the expense depending on market forces outside of management's control, subjective assumptions and the variety of award types that companies can use under FAS 123R, the Company's management believes that providing Non-GAAP EPS excluding these charges provides helpful information for investors when evaluating the Company's operating results (excluding the impact of these non-cash charges) over different periods of time. The Company also believes excluding significant items not expected to recur in the foreseeable future and significant non-cash gains or losses provides investors with helpful information when assessing the Company's underlying financial performance.
There are a number of limitations related to the use of Non-GAAP EPS versus EPS calculated in accordance with GAAP. First, non-GAAP EPS excludes stock-based compensation expenses that are recurring. Stock-based expenses have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. Second, stock-based awards are an important part of the Company's employees' compensation and impact their performance. Finally, the components of the costs that the Company excludes in its calculation of Non-GAAP EPS may differ from the components that its peer companies exclude when they report their results of operations. These limitations are compensated for by using non-GAAP EPS in conjunction with traditional GAAP EPS and other GAAP profitability measures. Management does not recommend placing undue reliance on this non-GAAP measure.
The table below shows Non-GAAP EPS and also reconciles these figures to the GAAP measure net income (loss):
Three Months Six Months
Ended June 30, Ended June 30,
2008 2009 2008 2009
Net Income $ (3,201,730 ) $ (6,376,766 ) $ (8,630,429 ) $ (12,870,813 )
(Loss)
Employee Stock
Based
Compensation, 2,599,895 3,506,322 5,098,331 7,020,144
Net of Tax
Benefits
Mark-to-Market
Loss on Series -- 2,209,596 -- 2,386,363
I Warrants
Adjusted Net (601,835 ) (660,848 ) (3,532,098 ) (3,464,306 )
Income (Loss)
Diluted
Weighted
Average Common 44,300,309 50,247,366 44,291,401 50,242,814
Shares
Outstanding
Non-GAAP
Earnings (Loss) $ (0.01 ) $ (0.01 ) $ (0.08 ) $ (0.07 )
Per Share
Clean Energy owns and operates two LNG production plants in Texas and California, with a combined capacity of 260,000 LNG gallons per day.
Analysts on average were looking for a loss of 7 cents a share, before items, on revenue of $31.5 million, according to Reuters Estimates.
Shares of Clean Energy were down 2 percent at $10 in trading after the bell. The stock has tripled in value since November 2008, when it had touched a low of $3.23. It traded as high as $19.95 in September last year
Analysts on average were looking for a loss of 7 cents a share, before items, on revenue of $31.5 million, according to Reuters Estimates.
Shares of Clean Energy were down 2 percent at $10 in trading after the bell. The stock has tripled in value since November 2008, when it had touched a low of $3.23. It traded as high as $19.95 in September last year
I still have a buy rating on CLNE , this is a long term play , CLNE has more contracts coming in thru out the up & coming years to come ! So buy on the dips and you will be rewarded in the long term. this is a small growing company , that has a bright future ahead , oil will rise again & congress will wake up and pass Clean Energy Bill shortly ! ( Natural Gas for cars )
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