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Form 8-K Clean Energy Fuels Corp. For: May 05

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May 5, 2016 4:28 PM EDT


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  May 5, 2016
 
CLEAN ENERGY FUELS CORP.
(Exact Name of Registrant as Specified in Charter)
 
Delaware
 
001-33480
 
33-0968580
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
4675 MacArthur Court, Suite 800
Newport Beach, CA
 
92660
(Address of Principal Executive Offices)
 
Zip Code
 
(949) 437-1000
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


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Item 2.02.  Results of Operations and Financial Condition.
 
On May 5, 2016, Clean Energy Fuels Corp. (the “Company”) issued a press release announcing financial results for its first quarter ended March 31, 2016. A copy of the Company’s press release containing this information is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 
The information furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
 
The information furnished in this report, including Exhibit 99.1, shall not be deemed to constitute an admission that such information or exhibit is required to be furnished pursuant to Regulation FD or that such information or exhibit contains material information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such information or exhibit in the future.
 
Item 9.01. Financial Statements and Exhibits.
 
(d)           Exhibits.
 
99.1        Press release dated May 5, 2016
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: May 5, 2016
Clean Energy Fuels Corp.
 
 
 
 
 
 
 
By:
/s/ Robert M. Vreeland
 
 
Name: Robert M. Vreeland
 
 
Title: Chief Financial Officer


2


Exhibit 99.1
 
 

4675 MacArthur Court, Suite 800
Newport Beach, California 92660 USA
949.437.1000   fax: 949.724.1397
www.cleanenergyfuels.com
 
Clean Energy Reports 77.5 Million Gallons Delivered and Revenue of $95.8 Million for First Quarter of 2016
 
NEWPORT BEACH, Calif.—(BUSINESS WIRE) — Clean Energy Fuels Corp. (NASDAQ: CLNE) (Clean Energy or the Company) today announced operating results for the first quarter ended March 31, 2016.
 
The Company delivered 77.5 million gallons in the first quarter of 2016, a 3% increase from 75.2 million gallons delivered in the first quarter of 2015.
 
Revenue for the first quarter of 2016 was $95.8 million, a 12% increase from $85.8 million for the first quarter of 2015. Revenue for the first quarter of 2016 included $6.4 million of excise tax credits for alternative fuels (VETC) whereas the first quarter of 2015 did not include any VETC revenue. Additionally the Company’s renewable natural gas deliveries favorably impacted revenue in the first quarter of 2016.
 
Andrew J. Littlefair, Clean Energy’s President and Chief Executive Officer, stated “We had a strong first quarter and took significant steps in managing our capitalization. Our operating results demonstrate the benefits of having a diverse product offering, good penetration into multiple transportation markets and the environmental attributes associated with natural gas vehicle fuel."
 
Adjusted EBITDA for the first quarter of 2016 was $29.8 million compared with Adjusted EBITDA of $(5.6) million in the first quarter of 2015. Adjusted EBITDA for the first quarter of 2016 included the VETC revenue and a gain of $15.9 million from the repurchase of a portion of the Company’s convertible debt (debt repurchase). Adjusted EBITDA is described below and reconciled to the GAAP measure net income (loss) attributable to Clean Energy Fuels Corp.
 
Non-GAAP income per share for the first quarter of 2016 was $0.05, compared with a non-GAAP loss per share for the first quarter of 2015 of $(0.32). Non-GAAP income per share for the first quarter of 2016 included the VETC revenue and the gain from the debt repurchase. Non-GAAP income (loss) per share is described below and reconciled to the GAAP measure net income (loss) attributable to Clean Energy Fuels Corp.
 
On a GAAP basis, net income for the first quarter of 2016 was $2.8 million, or $0.03 per share, compared to a net loss of $(31.1) million, or $(0.34) per share, for the first quarter of 2015. Net income on a GAAP basis for the first quarter of 2016 included the VETC revenue and the gain from the debt repurchase.

Subsequent to March 31, 2016 the Company paid $3.9 million in cash to repurchase $6.5 million of the 5.25% Notes due 2018 (the Notes), plus accrued interest. Additionally, the Company entered into a privately negotiated exchange agreement with certain holders of the Notes pursuant to which it issued 6,265,829 shares of common stock for $25.0 million aggregate principal amount of the Notes, plus accrued interest.

Non-GAAP Financial Measures
 
To supplement the Company’s consolidated financial statements, which statements are prepared and presented in accordance with generally accepted accounting principles (GAAP), the Company uses non-GAAP financial measures called non-GAAP earnings per share (non-GAAP EPS or non-GAAP earnings/loss per share) and Adjusted EBITDA. Management has presented non-GAAP EPS and Adjusted EBITDA because it uses these non-GAAP financial measures to assess its operational performance, for financial and operational decision-making, and as a means to evaluate period-to-period comparisons on a consistent basis. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance by excluding certain non-cash or non-recurring expenses that are not directly attributable to its core operating results. In addition, 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

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operational decision-making; (2) they exclude the impact of non-cash or, when specified, non-recurring items that are not directly attributable to the Company’s core operating performance and that may obscure trends in the core operating performance of the business; and (3) they are used by institutional investors and the analyst community to help them analyze the results of Clean Energy’s business. In future quarters, the Company may make adjustments for other non-recurring significant expenditures or significant non-cash charges 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 (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 similar to the non-cash, non-GAAP adjustments described below. Accordingly, unless otherwise stated, the exclusion of these and other similar items in the presentation of non-cash, 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 earnings/loss per share or operating income (loss) or any other GAAP measure as an indicator of operating performance. Moreover, because not all companies use identical measures and calculations, the presentation of non-GAAP EPS and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Management compensates for these limitations by using non-GAAP EPS and Adjusted EBITDA in conjunction with traditional GAAP operating performance and cash flow measures.
 
Non-GAAP EPS
 
Non-GAAP EPS is defined as net income (loss) attributable to Clean Energy Fuels Corp., plus stock-based compensation charges, plus or minus any loss (gain) from change in fair value of derivative warrants and plus the the charges relating to the move of the Company’s headquarters (HQ Lease Exit), the total of which is divided by the Company’s weighted average shares outstanding on a diluted basis. The Company’s management believes that excluding non-cash charges related to stock-based compensation provides useful information to investors because 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 may obscure trends in the Company’s core operating performance. Similarly, the Company’s management believes that excluding the non-cash, loss (gain) from change in fair value of derivative warrants is useful to investors because the valuation of the derivative warrants 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 it enables investors to compare the Company’s performance with other companies that have different capital structures. The Company’s management believes that excluding the HQ Lease Exit is useful to investors because they are not part of or representative of the core operations of the Company.

The table below shows non-GAAP EPS and also reconciles these figures to the GAAP measure net loss attributable to Clean Energy Fuels Corp.:
 
 
 
Three Months Ended March 31,
 
(in 000s, except per-share amounts)
 
2015
 
2016
 
Net Income (Loss) Attributable to Clean Energy Fuels Corp.
 
$
(31,147
)
 
$
2,828

 
Stock Based Compensation, Net of $0 Tax
 
2,690

 
2,419

 
Loss (Gain) From Change in Fair Value of Derivative Warrants
 
(883
)
 
2

 
HQ Lease Exit
 
101

 
—

 
Adjusted Net Income (Loss)
 
$
(29,239
)
 
$
5,249

 
Diluted Weighted Average Common Shares Outstanding
 
91,317,053

 
99,821,844

 
Non-GAAP (Income) Loss Per Share
 
$
(0.32
)
 
$
0.05

 
 
Adjusted EBITDA
 
Adjusted EBITDA is defined as net income (loss) attributable to Clean Energy Fuels Corp., plus or minus income tax expense or benefit, plus or minus interest expense or income, net, plus depreciation and amortization expense, plus stock-based compensation charges, plus or minus loss (gain) from change in fair value of derivative warrants and plus the HQ Lease Exit. The Company’s management believes that Adjusted EBITDA provides useful information to investors for the same reasons

2


discussed above for 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 these figures to the GAAP measure net loss attributable to Clean Energy Fuels Corp.:
 
 
 
Three Months Ended March 31,
 
(in 000s)
 
2015
 
2016
 
Net Income (Loss) Attributable to Clean Energy Fuels Corp.
 
$
(31,147
)
 
$
2,828

 
Income Tax (Benefit) Expense
 
854

 
381

 
Interest Expense, Net
 
9,895

 
9,160

 
Depreciation and Amortization
 
12,886

 
14,961

 
Stock Based Compensation, Net of $0 Tax
 
2,690

 
2,419

 
Loss (Gain) From Change in Fair Value of Derivative Warrants
 
(883
)
 
2

 
HQ Lease Exit
 
101

 
—

 
Adjusted EBITDA
 
$
(5,604
)
 
$
29,751

 
 
Gallons Delivered
 
The Company defines “gallons delivered” as its gallons of compressed natural gas (CNG), liquefied natural gas (LNG) and renewable natural gas (RNG), along with its gallons associated with providing operations and maintenance services, delivered to its customers during the applicable period plus the Company's proportionate share of gallons delivered by joint ventures.
 
The table below shows gallons delivered for the three months ended March 31, 2015 and 2016:
 
 
 
Three Months Ended March 31,
 
Gallons Delivered (in millions)
 
2015
 
2016
 
CNG
 
52.4

 
61.1

 
RNG(1)
 
4.5

 
1.0

 
LNG
 
18.3

 
15.4

 
Total
 
75.2

 
77.5

 
(1) Represents RNG sold as non-vehicle fuel. RNG sold as vehicle fuel is included in CNG and LNG.

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 Saturday, June 5 by dialing 1.877.870.5176 from the U.S., or 1.858.384.5517 from international locations, and entering Replay Pin Number 13635572. 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. (Nasdaq: CLNE) is the largest provider of natural gas fuel for transportation in North America. We build and operate CNG and LNG fueling stations; manufacture CNG and LNG equipment and technologies for ourselves and other companies; develop RNG production facilities; and deliver more CNG, LNG, and RNG fuel than any other company in the U.S. 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

3


regarding, among other things: adoption of natural gas as a vehicle fuel in multiple transportation markets, continued interest and investment in natural gas as a vehicle fuel, including tax credits and other government incentives promoting the use of cleaner fuels; the strength of the Company’s key markets and businesses; the benefits of natural gas relative to gasoline, diesel and other vehicle fuels, including economic and environmental benefits; the Company’s ability to successfully enter new markets and more deeply penetrate its current key markets, build, sell and open new natural gas fueling stations and add incremental volume its gallons delivered, and future growth and sales opportunities in all of the Company’s key customer markets, which include trucking, refuse, airports, public transit, industrial and institutional energy users and government fleets. 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, among others: future supply, demand, use and prices of crude oil and natural gas and fossil and alternative fuels, including gasoline, diesel, natural gas, renewable natural gas, biodiesel, ethanol, electricity and hydrogen, as well as vehicles powered by these various fuels; the Company’s ability to recognize the anticipated benefits of building CNG and LNG stations, including receiving revenue from these stations equal or greater to their costs; the availability and deployment of, as well as the demand for, natural gas engines that are well-suited for the U.S. heavy-duty truck market; future availability of capital, including equity or debt financing, as needed to fund the growth of the Company’s business and its debt repayment obligations (whether at or prior to maturity); the Company’s ability to hire and retain key personnel; the availability of tax credit and other government incentives for natural gas fueling and vehicles, changes to federal, state or local fuel emission standards or other environmental regulation applicable to natural gas production, transportation or use; the Company’s ability to capture a substantial share of the anticipated growth in the market for natural gas fuel and otherwise compete successfully; the Company’s ability to manage risks and uncertainties related to its international operations; construction, permitting and other factors that could cause delays or other problems at station construction projects; the Company’s ability to integrate acquisitions and investments; compliance with governmental regulations; the Company’s ability to effectively manage its current LNG plants and RNG production facilities; and the Company’s ability to manage and grow its RNG business. 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, except as otherwise required by law. Additionally, the Company’s Annual Report on Form 10-K filed on March 3, 2016 and its Quarterly Report on Form 10-Q filed on May 5, 2016 with the Securities and Exchange Commission (www.sec.gov), contain more information on potential factors that may cause actual results to differ materially from the forward-looking statements contained in this press release. 



Investor Contact:
 
Tony Kritzer
Director of Investor Communications
949.437.1403
 
News Media Contact:
 
Gary Foster
Senior Vice President, Corporate Communications
949.437.1113

4


Clean Energy Fuels Corp. and Subsidiaries
 
Condensed Consolidated Balance Sheets

 (In thousands, except share data, Unaudited)
 
December 31,
2015
 
March 31,
2016
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
43,724

 
$
87,239

Restricted cash
4,240

 
8,775

Short-term investments
102,944

 
75,696

Accounts receivable, net of allowance for doubtful accounts of $1,895 and $2,038 as of December 31, 2015 and March 31, 2016, respectively
73,645

 
71,898

Other receivables
60,667

 
26,045

Inventory
29,289

 
30,037

Prepaid expenses and other current assets
14,657

 
14,194

Total current assets
329,166

 
313,884

Land, property and equipment, net
516,324

 
505,940

Notes receivable and other long-term assets, net
14,732

 
17,415

Investments in other entities
5,695

 
5,621

Goodwill
91,967

 
94,207

Intangible assets, net
42,644

 
43,579

Total assets
$
1,000,528

 
$
980,646

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Current portion of debt and capital lease obligations
$
149,856

 
$
139,991

Accounts payable
26,906

 
21,717

Accrued liabilities
59,082

 
55,828

Deferred revenue
10,549

 
9,325

Total current liabilities
246,393

 
226,861

Long-term portion of debt and capital lease obligations
352,294

 
319,495

Long-term debt, related party
65,000

 
65,000

Other long-term liabilities
7,896

 
8,077

Total liabilities
671,583

 
619,433

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 92,382,717 shares and 100,237,328 shares at December 31, 2015 and March 31, 2016, respectively
9

 
10

Additional paid-in capital
915,199

 
938,990

Accumulated deficit
(591,683
)
 
(588,855
)
Accumulated other comprehensive loss
(20,973
)
 
(15,026
)
Total Clean Energy Fuels Corp. stockholders’ equity
302,552

 
335,119

Noncontrolling interest in subsidiary
26,393

 
26,094

Total stockholders’ equity
328,945

 
361,213

Total liabilities and stockholders’ equity
$
1,000,528

 
$
980,646


5


Clean Energy Fuels Corp. and Subsidiaries
 
Condensed Consolidated Statements of Operations

(In thousands, except share and per share data, Unaudited)
 
 
Three Months Ended
March 31,
 
 
2015
 
2016
 
Revenue:
 
 
 
 
Product revenues
$
69,297

 
$
83,992

 
Service revenues
16,551

 
11,790

 
Total revenues
85,848

 
95,782

 
Operating expenses:
 
 
 
 
Cost of sales (exclusive of depreciation and amortization shown separately below):
 
 
 
 
Product cost of sales
55,379

 
53,371

 
Service cost of sales
9,354

 
5,884

 
Loss (gain) from change in fair value of derivative warrants
(883
)
 
2

 
Selling, general and administrative
30,233

 
25,593

 
Depreciation and amortization
12,886

 
14,961

 
Total operating expenses
106,969

 
99,811

 
Operating income (loss)
(21,121
)
 
(4,029
)
 
Gain from extinguishment of debt
—

 
15,923

 
Interest expense, net
(9,895
)
 
(9,160
)
 
Other income (expense), net
547

 
250

 
Loss from equity method investments
(204
)
 
(74
)
 
Income (loss) before income taxes
(30,673
)
 
2,910

 
Income tax (expense) benefit
(854
)
 
(381
)
 
Net income (loss)
(31,527
)
 
2,529

 
Loss from noncontrolling interest
380

 
299

 
Net income (loss) attributable to Clean Energy Fuels Corp.
$
(31,147
)
 
$
2,828

 
Income (loss) per share attributable to Clean Energy Fuels Corp.:
 
 
 
 
Basic
$
(0.34
)
 
$
0.03

 
Diluted
$
(0.34
)
 
$
0.03

 
Weighted-average common shares outstanding:
 
 
 
 
Basic
91,317,053

 
97,178,768

 
Diluted
91,317,053

 
99,821,844

 



6



Included in net income (loss) are the following amounts (in millions):
 
 
 
Three Months Ended
March 31,
 
 
 
2015
 
2016
 
Station Construction Project Revenues
 
$
6.5

 
$
13.3

 
Station Construction Project Cost of Sales
 
(5.7
)
 
(11.3
)
 
Stock-based Compensation Expense, Net of $0 Tax
 
(2.7
)
 
(2.4
)
 
VETC
 
—

 
6.4

 


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