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Clean Energy Fuels Corp. Reports Operating Results (10-Q)

August 06, 2012 | About:
10qk

10qk

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Clean Energy Fuels Corp. (CLNE) filed Quarterly Report for the period ended 2012-06-30.

Clean Energy Fuels Corp. has a market cap of $1.2 billion; its shares were traded at around $14.63 with and P/S ratio of 4.1.

Highlight of Business Operations:

During 2011 and the first six months of 2012, prices for oil, gasoline, and diesel fuel were generally substantially higher than the price for natural gas. Oil hit a high of $107.07 in February 2012 and settled at $84.96 per barrel on June 30, 2012. In California, average retail prices for gasoline have increased from $3.68 per gallon in January 2012 to $3.94 per gallon at June 30, 2012, and the average retail price for diesel fuel hit a high of $4.48 per diesel gallon in March 2012 and was $3.91 per diesel gallon at June 30, 2012. Higher gasoline and diesel prices typically improve our margins on fuel sales to the extent we price fuel at a discount to gasoline or diesel. During this time period, the NYMEX price for natural gas fluctuated from a high of $3.08 per MMbtu in January 2012 to $2.42 per MMbtu at June 30, 2012. The average retail sales price of our CNG fuel sold in the Los Angeles metropolitan area ranged from $2.60 for the month of January 2011 to $2.80 for the month of June 2012. The average retail sales price of our LNG fuel sold in the Los Angeles metropolitan area ranged from $2.50 for the month of January 2011 to $2.90 at June 30, 2012.

station construction revenues between periods, primarily due to the completion of two new CNG stations for two new refuse customers. Also contributing to the revenue increase between periods were $2.1 million of low carbon fuel standard credits (LCFS) that we recognized due to the lifting, during the three months ended June 30, 2012, of a federal court injunction that had prohibited enforcement of the California Low Carbon Fuel Standard. These increases were offset by the decrease in our effective price per gallon that we charged to our customers between periods. Our effective price per gallon was $0.80 in the three months ended June 30, 2012, which represents a $0.07 per gallon decrease from $0.87 per gallon in the three months ended June 30, 2011. The decrease was due to a combination of lower natural gas prices in the second quarter of 2012, upon which we base a portion of our pricing to our customers, and a higher percentage of O&M contracts in the second quarter of 2012, which generate less revenue per gallon than contracts where we supply the natural gas commodity. Northstars revenues decreased by $1.6 million between periods as they were primarily focused on building LNG stations for our Americas Natural Gas Highway during the three months ended June 30, 2012. Revenue attributable to VETC also decreased between periods as we did not record any revenue related to fuel tax credits in the second quarter of 2012 because the fuel tax credits expired on December 31, 2011, and we recorded $4.7 million of revenue related to fuel tax credits during the second quarter of 2011. In addition, the increase in revenue between periods was offset by $2.5 million due to decreased sales of natural gas vehicle equipment in the second quarter of 2012.

Cost of sales. Cost of sales decreased by $1.9 million to $48.5 million in the three months ended June 30, 2012, from $50.4 million in the three months ended June 30, 2011. Our cost of sales primarily decreased between periods as a result of a decrease in our effective cost per gallon between periods. Our effective cost per gallon decreased by $0.15 per gallon, from $0.62 per gallon to $0.47 per gallon, in the three months ended June 30, 2012. This decrease was the result of lower natural gas costs and a higher percentage of O&M contracts in the second quarter of 2012 that are included in our volume totals but do not increase our cost of sales amount significantly as we do not pay for the natural gas consumed at the properties. Northstar contributed $1.1 million to our decreased cost of sales between periods. We also experienced a $1.2 million decrease in costs related to BAFs vehicle equipment sales between periods as BAFs sales of natural gas vehicle equipment decreased. These decreases were offset by a $4.5 million increase in costs as a result of delivering more volume to our customers and a $2.0 million increase, excluding Northstar, in station construction costs between periods.

Revenue. Revenue increased by $9.0 million to $143.5 million in the six months ended June 30, 2012, from $134.5 million in the six months ended June 30, 2011. A portion of this increase was the result of an increase in the number of gallons delivered between periods from 74.7 million gasoline gallon equivalents to 92.3 million gasoline gallon equivalents. The increase in volume was primarily from an increase in CNG sales of 12.9 million gallons. Our net increase in CNG volume was primarily from 11 new refuse customers, seven new airport customers, two new transit customers, one new station from an existing transit customer, three new trucking customers, and one new public customer, which together accounted for 7.1 million gallons of the CNG volume increase. We also experienced an increase of 5.8 million gallons in CNG volume between periods from our existing airport, transit and refuse customers, combined with the volume growth from our share of our joint venture in Peru. Further, we experienced an increase of 3.8 million gallons in LNG volume between periods, which was primarily due to a combination of 1.9 million gallons from Northstar O&M services and 1.6 million gallons from six new trucking, transit and refuse customers. We experienced an increase in our RNG sales (through our 70% share of the RNG sales at DCEMB) of 0.9 million gallons due to increased RNG production at DCEMBs facility. We experienced a $9.2 million increase, excluding Northstar, in station construction revenues between periods, primarily due to the completion of five new CNG stations for new trucking customers, one new CNG station for an existing trucking customer, three new CNG stations for new refuse customers, two CNG station upgrades for two existing refuse customers, one new CNG station for an existing refuse customer, one new CNG station for a transit customer, one CNG station upgrade for an existing transit customer, and one new CNG station for a new airport customer. Revenue also increased by $2.2 million between periods due to increased sales of natural gas vehicle equipment and emission control services by BAF. Also contributing to the revenue increase between periods were $2.1 million of LCFS credits that we recognized due to the lifting, during the six months ended June 30, 2012, of a federal court injunction that had prohibited enforcement of the California Low Carbon Fuel Standard. These increases were offset by the decrease in our effective price per gallon that we charged to our customers between periods. Our effective price per gallon was $0.82 in the six months ended June 30, 2012, which represents a $0.04 per gallon decrease from $0.86 per gallon in the six months ended June 30, 2011. The decrease was due to a combination of lower natural gas prices in the first six months of 2012, upon which we base a portion of our pricing to our customers, and a higher percentage of O&M contracts in the first six months of 2012, which generate less revenue per gallon than contracts where we supply the natural gas commodity. Revenue attributable to VETC also decreased between periods as we did not record any revenue related to fuel tax credits in the first six months of 2012 because the fuel tax credits expired on December 31, 2011 and we recorded $8.9 million of revenue related to fuel tax credits during the first six months of 2011. IMW and Northstar each contributed $3.1 million, respectively, to our decreased revenue between periods.

Cost of sales. Cost of sales increased by $7.0 million to $104.4 million in the six months ended June 30, 2012, from $97.4 million in the six months ended June 30, 2011. Our cost of sales primarily increased between periods as a result of delivering more volume to our customers. We experienced a $9.8 million increase, excluding Northstar, in station construction costs between periods. We also experienced a $1.8 million increase in costs related to BAFs vehicle equipment sales and emission control services between periods as BAFs sales of natural gas vehicle equipment increased. These increases were offset by the decrease in our effective cost per gallon of $0.11 per gallon, from $0.62 per gallon to $0.51 per gallon, in the six months ended June 30, 2012. This decrease was the result of lower natural gas costs and a higher percentage of O&M contracts in the first six months of 2012 that are included in our volume totals but do not increase our cost of sales amount significantly as we do not pay for the natural gas consumed at the properties. IMW and Northstar contributed $3.8 million and $1.9 million, respectively, to our decreased cost of sales between periods.

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