Clean Energy Fuels Corp.

Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero. Good day, everyone, and welcome to today's Clean Energy Fuels third quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star one on your telephone keypad. You may withdraw yourself from the queue by pressing star two. Please note this call may be recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mr. Robert Vreeland, Chief Financial Officer. Please go ahead, sir.

Thank you, Operator. Earlier this afternoon, Clean Energy released financial results for the third quarter ending September 30, 2024. 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. 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 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. Companies non-GAAP EPS and adjusted EBITDA will be reviewed on this call and exclude certain expenses that Companies 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 8K today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.

Thank you, Bob. I'm pleased to report that our strong performance in the first half of the year continued through the third quarter. We reported $21.3 million in adjusted EBITDA for the quarter versus $14.2 million in the third quarter of last year. We sold $60 million gallons of RNG during the quarter and brought in $105 million of revenue versus $96 million for the same quarter in 2023. And we ended the quarter with a little over $243 million in cash and investments. All in all, a very solid quarter. I'd like to remind everyone that this performance is based on clean energy's underlying fuel business with a solid distribution network, allowing us the ability to offer solutions to customers that are ripe for their specific operations. As an example, during the third quarter, we opened another state-of-the-art station for our contract with Amazon in Bordertown, New Jersey. We are already seeing steady fuel volume from Amazon trucks utilizing both time-filled posts, specifically built for them, as well as the publicly accessible fast-fill dispensers. Bordentown Station is strategically located along one of the busiest trucking corridors in the country, right off the New Jersey Turnpike and Interstate 295, halfway between New York City and Philadelphia. The fuel volume from the Amazon trucks will anchor the station, as well as the other 17 that we've built under that contract. But an additional benefit is that these stations have allowed us to expand our fueling network by almost 15% this past year for other heavy-duty truck fleets. These stations are in key locations in preparation for the future adoption of renewable natural gas fueling associated with Cummins X-15N. Peterbilt and Kenworth trucks that are equipped with the X-15N continue to be tested by the most important fleets around the country and are receiving extremely good reviews. The likes of Warner, Walmart, UPS, and Night Swift are running these trucks nonstop over the toughest of terrains. We are particularly excited about launching our own X15N demo truck program last quarter. Clean Energy's new Peterbilt 579 day cab tractor equipped with an X15N was delivered to the first customer, JB Hunt, in September. JB Hunt tested it for several weeks in and around Southern California and Nevada. It was then handed off to Ruan and is booked through next year, working its way across the country. In fact, JB Hunt has asked to get back in the queue to operate the truck again along different routes. Police are gathering important data and experience from testing the X-15N. For instance, during their experience testing, Operating our demo truck, J.B. Hunt found that the truck got significantly better fuel mileage than the 12 liter, while the drivers noticed the additional power and torque. Ruan ran the truck from Fontana, California, down to the Mexican border and over different terrains, highways, and urban routes. We believe truck orders and deployments will increase next year, which we would expect to drive additional fuel volumes at our stations in the second half of the year. Our friends to the north are also giving us reason for optimism about the X-15N's impact on the heavy-duty market. Bob and I were in Calgary, Canada, a few weeks ago to celebrate the opening of a station that we constructed under our partnership with Tourmaline, one of the largest natural gas E&P companies in Canada. I stood with Mike Rose, Tourmaline's CEO, in front of multiple Mullen and Martin Brower natural gas heavy-duty trucks to cut the ribbon at the Calgary station. Murray Mullen, the CEO of one of Canada's largest third-party carriers, explained very nicely at the event that with the long-distance routes, cold weather, and extreme terrain in western Canada, natural gas is really the only alternative fuel solution that works. Canada is as serious, if not more so than the U.S., about reducing emissions, which is why they are embracing and promoting natural gas heavy-duty trucking. Another clean energy tourmaline station in Grand Prairie, Alberta, opened at the same time as the Calgary station, and with an existing station in Edmonton, we now have the first link to a new natural gas fueling corridor for heavy-duty trucks in western Canada. We recently broke ground on the fourth additional station and identified locations for three others, which is perfect timing for the arrival of the Cummins X-15N in Canada. We offer the transit market different fueling solutions, and it continues to remain strong. As an example, we announced last quarter that one of our largest agencies in the country, Harris County MTA in Houston, awarded Clean Energy a contract to build a private fueling station, which is one of the largest transit stations ever awarded to us. The station is expected to use about 2 million gallons a year to fuel Houston buses. We currently provide 60 different transit sites for 32 customers around the country with R&G. In fact, just last week, we moved NICE, the largest transit agency in Long Island, New York, from C&G to R&G, benefiting the bus system both sustainably and financially. Another solution that we offer transit agencies is the construction and maintenance of hydrogen stations as agencies begin to explore that alternative. As you know, we were awarded the contract to build a hydrogen station for Foothill Transit and completed it earlier this year. Foothill is already expanding the number of fuel cell buses that will be utilizing the station. And hot off the presses late last week, we were awarded a contract by Riverside Transit Agency here in Southern California to build a new state-of-the-art hydrogen station. As we said, after 27 years of being the leading alternative fuel company, we will go where our customers go and have the capability to provide them with a superior experience with multiple solutions. The beauty of RNG is that it can be used as a fuel itself or as the cleanest feedstock for other alternatives. Turning to our RNG production business, we continue to make good progress on our projects at dairy farms across the U.S. We currently have six operating projects, new projects under construction that are expected to come online in the second half of 2025, and other R&G projects in advanced development through our new partnership with Moss Energy. I spoke about the new relationship with Daryl Moss on our last call as the ink was barely dry on the contract. Over the last three months, we have only become more bullish about the partnership with Moss. We've identified locations in Georgia, Florida, New Mexico, Nebraska, and South Dakota instruct RNG projects utilizing the covered lagoon method that MAS has perfected. Let me end my remarks by addressing what is top of mind for all of us. Here we are a day after an election with the unknowns of a new administration in Congress. And to heighten the regulatory drama even more, The California Air Resources Board is meeting tomorrow to address the future of the state's low-carbon fuel standard program. On the latter, we have worked with a broad coalition of partners supporting the LCFS and feel relatively optimistic that the members of CARB will vote to approve supportive adjustments to the LCFS. The R&G production and transportation industries work with CARB to improve certain aspects of the program, and we should be pleased with the final product. California will continue to be a leader in supporting low-carbon transportation, which should result in stronger credit prices. Now, on the federal side, I have a level of comfort that R&G will continue to be seen as a rational alternative with the new administration and Congress. All the criticism of environmental policies from President Trump, as well as important members of Congress who will be in the leadership, have been aimed at those that only support a single technology, electric vehicles. We believe that there will be strong support for emissions reductions, but that needs to be accomplished by market forces rather than government picking a technology. As an example, as you know, the current alternative fuel tax credit is set to expire at the end of this year. Expirations of the AFTC have come in presidential election years as well as off years in Republican administrations and Democratic. And it continues to be extended, either in a lame duck session or Congress, or even after the expiration date through some sort of tax policy vehicle. And it receives bipartisan support when it is extended. However, for now, its status for 2020 2025 is uncertain. In addition to the AFTC, we are hopeful that the RNG tax credit will be taken up next year by Congress. Very strong bipartisan members in both the U.S. Senate and the House are sponsoring the legislation with a combination of urban congressional members seeking cleaner air and rural members that like the economic development in their states and districts. The RNG industry continues to await final guidance on Section 45Z production tax credit. This PTC, which begins in 2025, will play a role in supporting low-carbon fuels like the dairy RNG that we produce and deliver through our station network. We believe that with the support from the transportation and agricultural industries, either the current administration will issue the guidance before leaving, or the next administration will release the final guidance soon after settling in. So there is a lot of wood to chop on the regulatory and legislative front. Fortunately, we have never been totally reliant on grants or direct subsidies. We continue to operate our business with a realization that different outcomes could happen. As I've given you a few examples, we have an underlying business that remains strong based on the integrated platform, a full suite of services to offer customers to decarbonize their operations with RNG and a recurring financial model. And with the introduction of an exciting new engine for the heavy duty market, we believe RNG will continue to gain acceptance when other technologies continue to struggle. And with that, I'll hand the call back to Bob, who will give more detail about a strong quarter. Thank you, Andrew, and good afternoon to everyone.