Clean Energy Fuels Corp.

Greetings. Welcome to the Clean Energy Fuels Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Robert Vreeland, Chief Financial Officer. Please go ahead.

Thank you, operator. Earlier this morning, Clean Energy released financial results for the third quarter ending September 30, 2019. If you did not receive the release, it is available on the investor relations section of the company's website at www.cleanenergyfuels.com, where the call is also being webcast. There will be a replay available on the website for 30 days. Before we begin, We'd like to remind you that some of the information contained in the news release and on this conference call contains forward looking statements that involve risk, uncertainties, and assumptions that are difficult to predict. Words of expression reflecting optimism, satisfaction with current prospects, as well as words such as believe, intend, expect, plan, should, anticipate, and similar variations identify forward looking statements, but their absence does not mean that the statement is not forward looking. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the risk factors section of Clean Energy's Form 10-Q filed today. These forward-looking statements speak only as the date of this release. The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release. The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that the company management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information, reasons why management uses non-GAAP information, a definition of non-GAAP EPS and adjusted EBITDA, and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-K today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.

Thank you, Bob. Good morning, everyone, and thank you for joining us. The adoption of natural gas as a clean transportation fuel continued into the third quarter of this year. Our volume grew a healthy 11% year-over-year to 102.7 million gallons for the quarter. The first quarter in the company's history that we provided over 100 million gallons of natural gas to our customers around the U.S. and Canada. We saw increases in the core markets of rough use in transit as well as a very healthy bump in the trucking sector driven by the redeemed renewable natural gas fueling deal we signed with UPS earlier this year. Our financial operating performance continued to improve in the third quarter as we were delivering more gallons at less cost. Revenues of $74.4 million were slightly down from the same quarter of 2018, primarily due to lower revenues from our station construction business, which is very seasonal. Our third quarter adjusted EBITDA was up to $8.5 million with close to $100 million in cash. We believe our overall financial position is strong and it continues to improve. As I mentioned, much of our growth continues to be driven by the demand for a renewable natural gas product, Redeem. In addition to the UPS agreement to purchase the equivalent of 170 million gallons of Redeem over a seven-year period for their stations across the country, we have added additional customers seeking the superior performance in environmental qualities of a renewable non-fossil fuel at a competitive price. The City of Ontario, California signed a five-year Redeem supply contract for approximately 3 million gallons to help meet their sustainability goals. Ontario operates a fleet of 88 CNG vehicles, including their first powered asphalt patch truck. One of the largest street sweeping companies in the country, Nationwide Environmental Services, based in Norwalk, California, signed a five-year redeemed supply contract for approximately 1 million gallons for 70 street sweepers. The cities of Redondo Beach and Sacramento, California, also signed contracts to fuel their fleets with an anticipated 1.2 million gallons redeemed between the two. We also recently inked a 10-year agreement to fuel GFL Environmental's fleet of 50 CNG refuse trucks in Denver. That number is expected to grow to 70 by the end of next year as the company's commitment to sustainability continues. Ruan Transportation, a national trucking firm, signed a three-year contract for 450,000 gallons of Redeem to operate 20 new CNG heavy-duty trucks. Omnitrans, which provides bus and rail service in San Bernardino, California, signed a five-year O&M agreement for their two stations that will now be dispensing an expected 4 million gallons of redeem every year. We sold 110 million gallons of redeem in 2018 and expect that the number to grow approximately 30% in 2019. We have been able to do so because of the agreement that we signed late last year with BP, one of the world's largest energy companies. This co-marketing agreement with BP has enabled us to access BP's extended network of R&G producers as more and more fleets are asking for the fuel that produces at least 70% less carbon than diesel. Clean Energy has the largest natural gas fueling infrastructure in the country and fortunately has an important relationship with North America's largest supplier of R&G. I'd like to give you an update on the effort to sign heavy-duty truck fleets. I hope you saw our press release a few weeks ago announcing that over 100 new natural gas trucks have been delivered to firms that operate out of the ports of Los Angeles and Long Beach. As we've discussed in the past, the ports are in the process of implementing a new clean air program that calls for doing away with old, dirty diesel trucks that operate there. The delivery of these new 100 trucks is significant because it is an affirmation by these firms that natural gas is the best alternative to meet The more restrictive emission standards while maintaining the high performance that they need. Most of the firms participated in a pilot program late last year and early this year, testing the new Cummins Westport 12-liter near-zero engines. After a successful year of testing the trucks, they have now begun to add new trucks to their fleets. I think this is a strong sign for the new 12-liter engine and in the confidence of natural gases of fuel. Policymakers in California continue to understand that natural gas is a good solution to address the state's ongoing emissions problem. Last week, the South Coast Air Quality Management District proposed a bill to impose a half-cent sales tax to help fund cleaner-burning heavy-duty trucks. They noted that if the bill passes, that most of the money should go to what they refer to as near-zero trucks, and natural gas fits that definition. The AQMD realizes that the results of getting more natural gas trucks on the road now would have a greater and more immediate impact on air quality and reducing NOx versus waiting for other technologies like electric to advance to commercialization. We also continue to have success with our Zero Now program, which helps fleets get into new natural gas trucks for the same price as diesel trucks while saving on the price of the fuel. We just struck a deal with one of the largest trucking companies in the country, and I look forward to sharing more details when I'm able to in the near future. The company is in the process of ordering 200 new heavy-duty trucks equipped with new Cummins Westport 12-liter natural gas engines. The 200 truck order is in addition to 20 other natural gas trucks that the company ordered earlier this year, which are beginning to be delivered now. demonstrating their commitment to natural gas. In addition to this large single order, our Zero Now program has recently shown other results. Ecology Auto Parts ordered 46 trucks that will be fueling at Irvine, California Station. Trademark Transport, which is a carrier that operates out of the Port of Long Beach, has now ordered 20 trucks through the Zero Now program. Key Heat Distributors, a leading carrier in the food industry, has just signed a Zero Now deal and will be purchasing their first natural gas trucks which will fuel at our existing Fontana, California station. I would also like to highlight something that I'm sure most of you saw last month. UPS's announcement that it would be spending $450 million over the next few years on thousands of additional heavy duty natural gas trucks and infrastructure is very significant on many levels. In their own words, UPS, one of the world's largest Leading Logistics Company states that the use of CNG is, quote, no longer in the test or experimental phase, but rather in the mainstream. This means they are so pleased with the performance and cost of operating their current large CNG fleet that they have decided to significantly expand it. They also pointed out that the price stability of CNG versus diesel plays a large role in why they continue to purchase CNG trucks. said that this big addition to their CNG truck fleet can be easily deployed across the U.S. and Canada. And while the UPS announcement was not part of our Zero Now program, we will be providing much of the fuel. As I've pointed out in the past, other alternatives in the heavy-duty truck market are currently getting the lion's share of the media attention, particularly electric. But none could come close to meeting the claims the UPS made about their very large expansion of their CNG fleet. Natural gas is the only fuel choice today that can meet stricter emission standards, help to address long-term climate change issues with R&G, costs less than the incumbent diesel, and most importantly, provides demanding fleet operators the performance they are used to. We believe the momentum towards natural gas and the heavy-duty truck market is on the verge of really accelerating. Not only are we seeing it in response to our Zero Now offering, but another example took place last week in Indianapolis. were Cummins hosted a natural gas engine technology forum. 200 people representing over 50 fleets attended on their own dime to learn about operating a natural gas heavy duty truck fleet. Cummins was so pleased with the turnout and the reception of this first time event that they have already scheduled a similar gathering early next year that will target the shipper community as well as public policy makers. The third quarter of this year proved to be a good one with solid volume growth driven by all markets. We also continue to effectively manage our balance sheet by keeping our spending and capital expenditures at levels that allow us to continue selling more and more fuel, but are also in line with our goal to reach net income profitability. And with that, I will hand the call over to Bob. Thank you, Andrew.