Clean Energy Fuels Corp.

Good afternoon and welcome to the Clean Energy Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the Start key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Start and 1 on your telephone keypad. To withdraw your question, please press Start and 2. Please note, this event is being recorded. I would now like to turn the conference over to Robert Reeland, CFO. Please, go ahead.

Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the third quarter ending September 30, 2021. 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 factor section of Clean Energy's Form 10-Q filed today. These forward-looking statements speak only as of 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's 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 those non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8K today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.

Thank you, Bob. Good afternoon, everyone, and thank you for joining us. The country continued to climb out of the pandemic-induced economic slowdown this last quarter, which helped the ongoing recovery of the transportation sector and our fuel volumes. We also added new customers to our roster of those fueling, with our ultra-clean renewable natural gas, or RNG, and we made significant advancements in securing future supplies of RNG, all in all, a very good quarter. Our fuel volumes exceeded 100 million gallons for a second straight quarter, coming in at over 104 million gallons, an increase of about 7% from the third quarter of last year. Our revenue was up very healthy, 21% to $86 million for the third quarter, even after the non-cast charge for the Amazon warrant. Without that charge, revenue would have been $88 million, a 24% increase over the third quarter of last year. Our RNG volumes of 42 million gallons grew 5% from a year ago, demonstrating the increasing demand for the negative carbon intensity fuel and clean energy's ability to deliver large volumes of RNG. Adjusted EBITDA for the quarter was $13.4 million, a 22% increase over the same quarter a year ago. We entered the quarter with $260 million in cash and investments, leaving us in a strong financial position as we continue to invest in future R&G supply and further expand our fueling infrastructure for our large new customer, Amazon, and other fleets. We communicated to you earlier in the year that we pivoted our business to focus on the expansion of our R&G offering and to begin to control more of our own destiny by investing in the production of new R&G supplies. All fleets are looking to decarbonize, which is why a fuel that can be rated negative carbon intensity is so appealing. Fleets, including some of our longtime customers like the transit agencies in L.A., Dallas, and New York, easily and quickly switched to R&G because their buses were already equipped with natural gas engines, and the existing fueling infrastructure could immediately deliver our organic renewable fuel. Other customers like Amazon are deploying their first alternative fleets, and they are choosing R&G. The risk for them is negligible because the heavy-duty trucks are equipped with a proven Cummins engine and immediately have access to a national existing fueling infrastructure. Amazon began rolling out their fleet of heavy-duty R&G trucks less than a year ago, and Amazon trucks have already fueled at over 85 clean energy network stations in 21 states around the country. That number does not include the additional stations we announced we would be building to accommodate the deployment of the Amazon fleet as the new anchor customer. We expect those new stations to begin coming online starting in early 2022 as Amazon continues to expand its fleet. R&G is a drop-in fuel and can be directed to any of our stations for any customer that has contracted for the ultra-clean fuel. Speaking of Cummins engines, I hope you saw the very important announcement that was made last month about a new 15-liter natural gas engine for heavy-duty trucks. As the president of Cummins Engine Business said at the announcement, quote, this natural gas option is a game-changer as a cost-competitive power option to existing diesel powertrains and heavy-duty trucking, making it a great complement to reduce CO2 emissions, end quote. This new engine should make the switch by heavy-duty trucking companies to R&G all that more compelling because many of their trucks need the extra power. Cummins has communicated recently that they've never been more bullish on the adoption of R&G. Besides the announcement of the new 15-liter engine, Cummins also recently acquired a 50% stake in Momentum Fuel Technologies, which manufactures C&G fuel delivery systems. Cummins also announced that their entire RNG product line of engines has received 2022 certifications from the California Air Resources Board, rating them 90% cleaner than a new diesel engine. It's great to have one of the most respected and trusted manufacturers of engines and powertrains continuing to make investments and advancements in the future of RNG. The growth of RNG continues to come from a variety of customers. For example, Our longtime customer, Republic Services, recently awarded us a contract to build new stations in Boise, Idaho and Fremont, California that will flow R&G provided by us. The transit agency, Santa Monica Big Blue Bus, re-upped its contract and we added new customers, Sacramento Regional Transit and Gold Coast Transit in Ventura, California, all representing about 5 million gallons of fuel a year. Big Blue Bus was one of our first agencies to see the long-term greenhouse gas reduction benefits of operating their bus fleet on R&G and has been a loyal customer for many years. Another longtime customer, Foothill Transit, which serves a large portion of the LA Basin, expressed their loyalty in a different way by awarding Clean Energy a contract to build Foothill's first hydrogen fueling station. The station design, construction, and maintenance agreement, as well as the hydrogen fuel supply, is a tremendous confirmation of our strategy to give customers what they want as they explore ways to decarbonize their fleets. Not only did we have the best overall proposal in the competitive solicitation process, but Foothill also recognized Clean Energy's past performance over the last two decades of providing exceptional service, keeping their large fleet of buses operating on C&G initially and R&G more recently. The CEO of the agency that provides an average of 14 million rides a year cited our long, successful track record of building alternative fuel stations and said Foothill looks forward to continuing to work with Clean Energy as they expand into hydrogen fuel cell technology. This won't be the first hydrogen station that Clean Energy has built, but it is the first since OEMs. But it is the first since OEMs of large vehicles have recently agreed to test their new fuel cell technologies. Foothill Transit has placed an initial order of 30 fuel cell buses that will operate on hydrogen. And I'd like to note that a third of the feedstock to create the hydrogen will be low-carbon RNG. As I mentioned, following customers to where their alternative fuel plants take them is a long-term strategy for us. We acknowledge that there will be multiple alternatives going forward. Fortunately, by being the pioneer in building alternative fueling stations and our 25-plus years of maintaining those stations, combined with our access to the cleanest fuel in the world that can be used directly as a fuel or as a feedstock, we believe we are in the best position in this evolving market. But for any alternative to get a low carbon intensity rating, the fuel must either be low CI itself or its feedstock must be low CI. As everyone knows, it makes no sense to power a vehicle with electricity that was produced from a coal power plant. Most hydrogen produced today is not green. That is the beauty of R&G and why we are making significant investments in its production. Fortunately, we have two partners in Total Energies and BP that not only bring financial resources, but have centuries of experience in the energy business as well. I know there has been a lot of interest by many of you to hear more details about our progress in RNG production. And let me assure you, it's going very well. For instance, I'm traveling to the Texas Panhandle in a few weeks to participate in a groundbreaking of a new RNG facility at a large dairy. The project is one of the first that will be financed through our joint venture with Total Energies. That same week, we will be breaking ground at our fourth dairy in the Upper Midwest, all of which are funded through our BP joint venture. And just last week, we signed a contract with one of the country's largest dairies, which is in Idaho, to develop a new RNG production facility, which, when operational, will produce millions of gallons of negative carbon RNG per year. Details of these deals will be forthcoming. But please understand, the RNG produced at these dairies I just mentioned will be coming online in 2023, after the facilities are built. CARB certifies the carbon intensity of the RNG, and the pathways of the fuel are locked in. But in the meantime, we continue to secure additional RNG from dozens of third-party suppliers to meet growing demand in our downstream station network. Some of that demand is coming from our Adopt-A-Port finance program with Chevron that you've heard me speak about. Over 680 RNG heavy-duty trucks have either received grants, been purchased, or are in the process of being financed through the program. Trucks will operate in the very busy ports of L.A. and Long Beach, and most are owned by small companies or are owner-operated and benefited from grants administered by California state agencies that Clean Energy helps secure. In fact, I'm proud to say that our hard-working grants division recently surpassed the half-a-billion-dollar mark in securing grants to purchase new R&G trucks for our customers. I must brag about our entire clean energy team. They have continued to perform above and beyond expectations under difficult circumstances during these past 18 months, while at the same time taking the company to a new level. The sales team brought in our biggest customer in the company's history, Amazon, which was sold on the idea of fueling their new fleet of heavy-duty trucks with our R&G. The team also signed our first LNG bunkering contract with World Fuel Services for two cargo ships operated by PACIA out of the port of Long Beach. When the ships begin their regular routes back and forth from Hawaii, they're expected to operate on LNG that reduces nitrous oxide emissions by 90% and carbon dioxide by 25% compared to the incumbent shipping fuel. The contract is for five years, and we anticipate volumes to be at least 78 million LNG gallons. Our engineering and construction group continues to expand our fueling footprint around the continent with 66 different station projects in progress, and our superior maintenance team of men and women, which keep our customers happy and asking for more. Since the beginning of the year, we've made some significant pivots with our focus on offering a renewable fuel that can make a huge difference in the effort to combat climate change, and I'm pleased to say the Clean Energy team has risen to the occasion. And with that, I'll hand the call over to Bob.