Clean Energy Fuels Corp. (NASDAQ: CLNE) (“Clean Energy” or the “Company”) today announced its operating results for the second quarter of 2023.
Financial Highlights
- Revenue of $90.5 million in Q2 2023 compared to $97.2 million in Q2 2022.
- Net loss attributable to Clean Energy for Q2 2023 was $(16.3) million, or $(0.07) per share, on a GAAP (as defined below) basis, compared to $(13.2) million, or $(0.06) per share, for Q2 2022.
- Adjusted EBITDA (as defined below) was $12.1 million for Q2 2023, compared to $10.0 million for Q2 2022.
- Cash, Cash Equivalents (less restricted cash) and Short-Term Investments totaled $191.7 million as of June 30, 2023.
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Reaffirming 2023 outlook:
- GAAP net loss approximately $(105) million to $(115) million.
- Adjusted EBITDA of $50 million to $60 million.
Operational and Strategic Highlights
- Renewable natural gas (“RNG”) gallons sold of 58.6 million gallons in Q2 2023, a 17.2% increase compared to Q2 2022.
- Announced in April a joint development agreement with Tourmaline, Canada’s largest natural gas producer, to develop a network of compressed natural gas (“CNG”) fueling stations across Western Canada.
- Announced in June new RNG fueling agreements with several well-known consumer brands and some of the nation’s largest and most environmentally-conscious transit agencies.
Commentary by Andrew J. Littlefair, President and Chief Executive Officer
“We saw a nice rebound in our financial results coming off historically high natural gas prices in California in the first quarter of 2023.”
“We were also pleased with the announcement in June from the EPA on the final renewable volume obligation (“RVO”) demand targets that averaged approximately 30% annual growth for the next three years. We believe this new RVO for a three-year period is supportive of continued growth in RNG development and RNG’s use as a low-carbon fuel for the transportation sector.”
“Demand for RNG by our fleet customers remains strong and we remain very excited about the multitude of positive factors taking shape around RNG and the positive impact we can have on de-carbonizing the heavy-duty truck transportation sector. And reducing emissions is exactly what’s in store with our expansion in Western Canada where we share this common goal with our joint development partner Tourmaline.”
Summary and Review of Results
The Company’s revenue for the second quarter of 2023 was reduced by $13.9 million of non-cash stock-based sales incentive contra-revenue charges (“Amazon warrant charges”) related to the warrant issued to Amazon.com NV Investment Holdings LLC (the “Amazon warrant”), compared to Amazon warrant charges of $4.8 million in the second quarter of 2022. Revenue for the second quarter of 2023 also included an unrealized gain of $3.6 million on commodity swap and customer fueling contracts relating to the Company’s Zero Now truck financing program, compared to an unrealized loss of $1.1 million in the second quarter of 2022. Q2 2023 renewable identification number (“RIN”) and low carbon fuel standards (“LCFS”) revenues of $7.9 million versus $13.9 million of RIN and LCFS revenues in the second quarter of 2022 reflecting principally lower prices for both RIN and LCFS in the second quarter of 2023 versus 2022. Q2 2023 includes $5.1 million of alternative fuel excise tax credit (“AFTC”) revenue whereas no AFTC revenue was recognized in the second quarter of 2022 as AFTC was not reinstated and extended until the third quarter of 2022 under the Inflation Reduction Act of 2022. Natural gas costs were lower in the second quarter of 2023 compared to the second quarter of 2022 resulting in lower sales prices in the second quarter of 2023 which are based off the costs of natural gas, partially offset by an increase in gallons of fuel and services sold and serviced, respectively, in the second quarter of 2023 compared to the second quarter of 2022.
Net loss attributable to Clean Energy for the second quarter of 2023 had higher Amazon warrant charges than Q2 2022, offset by unrealized gains on derivative instruments relating to the Company’s Zero Now truck financing program compared to unrealized losses in Q2 2022 and the AFTC which was not in place in Q2 2022. However, Q2 2023 RIN and LCFS revenues were lower than Q2 2022 due to lower credit pricing, and Q2 2023 non-operating net interest expenses and losses from equity method investments were higher than Q2 2022 due to our expansion of RNG investment. Results were also negatively impacted by $(1.4) million due to our Texas LNG plant being down for repairs for an extended period.
Non-GAAP income (loss) per share (as defined below) for the second quarter of 2023 was $(0.00), compared to $(0.00) per share for the second quarter of 2022.
Adjusted EBITDA (as defined below) was $12.1 million for the second quarter of 2023, compared to $10.0 million for the second quarter of 2022.
In this press release, Clean Energy refers to various GAAP (U.S. generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures may not be comparable to similarly titled measures being used and disclosed by other companies. Clean Energy believes that this non-GAAP information is useful to an understanding of its operating results and the ongoing performance of its business. Non-GAAP income (loss) per share and Adjusted EBITDA are defined below and reconciled to GAAP net income (loss) per share attributable to Clean Energy and GAAP net income (loss) attributable to Clean Energy, respectively.
The table below shows GAAP and non-GAAP income (loss) attributable to Clean Energy per share and also reconciles GAAP net income (loss) attributable to Clean Energy to the non-GAAP net income (loss) attributable to Clean Energy figure used in the calculation of non-GAAP income (loss) per share:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in thousands, except share and per share data) | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Net loss attributable to Clean Energy Fuels Corp. | $ | (13,235 | ) | $ | (16,301 | ) | $ | (37,426 | ) | $ | (54,998 | ) | ||||
Amazon warrant charges | 4,777 | 13,922 | 8,533 | 27,652 | ||||||||||||
Stock-based compensation | 6,468 | 6,093 | 14,721 | 12,189 | ||||||||||||
Loss (income) from SAFE&CEC S.r.l. equity method investment | 63 | (193 | ) | 221 | 253 | |||||||||||
Loss (gain) from change in fair value of derivative instruments | 1,079 | (3,600 | ) | 2,114 | (1,068 | ) | ||||||||||
Non-GAAP net loss attributable to Clean Energy Fuels Corp. | $ | (848 | ) | $ | (79 | ) | $ | (11,837 | ) | $ | (15,972 | ) | ||||
Diluted weighted-average common shares outstanding | 222,433,900 | 222,908,402 | 222,496,426 | 222,813,286 | ||||||||||||
GAAP loss attributable to Clean Energy Fuels Corp. per share | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.17 | ) | $ | (0.25 | ) | ||||
Non-GAAP loss attributable to Clean Energy Fuels Corp. per share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.05 | ) | $ | (0.07 | ) | ||||
The table below shows Adjusted EBITDA and also reconciles this figure to GAAP net loss attributable to Clean Energy:
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(in thousands) | 2022 | 2023 | 2022 | 2023 | ||||||||||||
Net loss attributable to Clean Energy Fuels Corp. | $ | (13,235 | ) | $ | (16,301 | ) | $ | (37,426 | ) | $ | (54,998 | ) | ||||
Income tax expense (benefit) | 68 | (55 | ) | 117 | (119 | ) | ||||||||||
Interest expense | 732 | 4,365 | 3,809 | 8,719 | ||||||||||||
Interest income | (490 | ) | (2,766 | ) | (754 | ) | (5,483 | ) | ||||||||
Depreciation and amortization | 10,556 | 10,893 | 21,946 | 21,571 | ||||||||||||
Amazon warrant charges | 4,777 | 13,922 | 8,533 | 27,652 | ||||||||||||
Stock-based compensation | 6,468 | 6,093 | 14,721 | 12,189 | ||||||||||||
Loss (income) from SAFE&CEC S.r.l. equity method investment | 63 | (193 | ) | 221 | 253 | |||||||||||
Loss (gain) from change in fair value of derivative instruments | 1,079 | (3,600 | ) | 2,114 | (1,068 | ) | ||||||||||
Depreciation and amortization from RNG equity method investments | — | 301 | — | 410 | ||||||||||||
Interest expense from RNG equity method investments | — | 359 | — | 488 | ||||||||||||
Interest income from RNG equity method investments | (52 | ) | (876 | ) | (176 | ) | (1,440 | ) | ||||||||
Adjusted EBITDA | $ | 9,966 | $ | 12,142 | $ | 13,105 | $ | 8,174 | ||||||||
Fuel and Service Volume
The following tables present, for the three and six months ended June 30, 2022 and 2023, (1) the amount of total fuel volume the Company sold to customers with particular focus on RNG volume as a subset of total fuel volume and (2) operation and maintenance (“O&M”) services volume dispensed at facilities the Company does not own but at which it provides O&M services on a per-gallon or fixed fee basis. Certain gallons are included in both fuel and service volumes when the Company sells fuel (product revenue) to a customer and provides maintenance services (service revenue) to the same customer.
Three Months Ended | Six Months Ended | |||||||||||
Fuel volume, GGEs(2) sold (in millions), | June 30, | June 30, | ||||||||||
correlating to total volume-related product revenue | 2022 | 2023 | 2022 | 2023 | ||||||||
RNG(1) | 50.0 | 58.6 | 89.7 | 112.0 | ||||||||
Conventional natural gas(1) | 16.0 | 14.1 | 34.6 | 29.5 | ||||||||
Total fuel volume | 66.0 | 72.7 | 124.3 | 141.5 | ||||||||
Three Months Ended | Six Months Ended | |||||||||||
O&M services volume, GGEs(2) serviced (in millions), | June 30, | June 30, | ||||||||||
correlating to volume-related O&M services revenue | 2022 | 2023 | 2022 | 2023 | ||||||||
O&M services volume | 60.5 | 65.9 | 116.1 | 125.5 | ||||||||
| (1) | All RNG and conventional natural gas sold were sourced from third-party suppliers. | |
| (2) | The Company calculates one gasoline gallon equivalent (“GGE”) to equal 125,000 British Thermal Units (“BTUs”), and, as such, one million BTUs (“MMBTU”) equal eight GGEs. |
Sources of Revenue
The following table shows the Company’s sources of revenue for the three and six months ended June 30, 2022 and 2023:
Three Months Ended | Six Months Ended | |||||||||||||
June 30, | June 30, | |||||||||||||
Revenue (in millions) | 2022 | 2023 | 2022 | 2023 | ||||||||||
Product revenue: | ||||||||||||||
Volume-related(1) | ||||||||||||||
Fuel sales(2) | $ | 67.1 | $ | 53.3 | $ | 125.8 | $ | 160.2 | ||||||
Change in fair value of derivative instruments(3) | (1.1 | ) | 3.6 | (2.1 | ) | 1.1 | ||||||||
RIN Credits | 9.8 | 5.4 | ||||||||||||
