Keeping It Simple

[eastunder]

CLNE

http://finance.yahoo.com/news/edited-transcript-clne-earnings-conference-032007992.html

For the fourth quarter the Company delivered 84 million gallons, a 7.4% increase over the fourth quarter 2015. For the full year we delivered 329 million gallons, a 7% increase over the 308 million gallons we delivered in 2015.

Our fourth-quarter revenue was $102 million, and for the full year 2016 revenue was $403 million, a 5% increase over 2015. Bob will be going into more detail in a moment, but it's important to note that we recorded a full year of VETC in the fourth quarter of 2015 but only one quarter of VETC in the fourth quarter of 2016.

We reported $18 million of adjusted EBITDA in the fourth quarter, our sixth consecutive quarter of positive adjusted EBITDA. For the year we reported $85 million of adjusted EBITDA compared to $27 million in 2015.

In the beginning of 2016 we stated that our main focus as a Company would be to grow our fuel sales, deleverage our balance sheet and conserve our cash. As we review the year I feel that we have accomplished those goals, but understand that there is more work to do.

Specifically, we reduced our outstanding convertible debt by $285 million in 2016, which provides $18 million of interest savings annually. We reduced our SG&A by 7% year over year while increasing our margin per gallon 25% over 2015.

For the year our CapEx was $23.6 million, which was more than a 50% reduction from 2015. For 2017 we anticipate our CapEx budget to be around $22 million, with an additional $7 million for potential growth projects at NG Advantage. At the end of the year we had $110 million of cash and short-term investments on our balance sheet.

2016 was one of our strongest customer-focused construction years to date. For the year we completed 61 station projects and generated roughly $65 million in station construction revenue.

We grow our public station network, opening nine more truck stops including two stations on our Interstate 5 corridor, allowing fleet customers to operate along the entire West Coast from Seattle down to San Diego. We opened two stations in our Southeast corridor and two truck stops in Texas, as well as stations in North Platte, Nebraska, Salt Lake City and Oklahoma City where we anticipate supplying redeemed to over 100 Fed Ex freight trucks.

The refuse sector is one of our largest and most established markets, and it continues to grow at a healthy pace. 2016 was our strongest year yet.

We completed 32 new station projects and grew volumes to over 100 million gallons, a 15% increase over the prior year. We currently work with 152 different refuse customers fueling at 280 locations. This market has embraced natural gas fueling and invested over $1 billion in new natural gas trucks and fueling projects last year.

The transit market is another well-established and growing market. Municipal transit agencies continue to choose natural gas for their fleets of buses because of the ease, the superiority of the clean air impact and affordability. We added another nine transit customers last year, and we now fuel about 8,000 transit buses daily at 80 transit stations.

On the public policy front, we continue to be very engaged with local clean air initiatives. Here in Southern California the Port of Los Angeles and Long Beach are developing their Comprehensive Clean Air Action Plan to improve the air quality in one of the busiest ports systems in the country.

We hope spearhead the initial 2008 Clean Truck Program in the Port, which helped to launch natural gas fueling in the heavy-duty truck market. Now due to stricter air quality mandates and an aging truck fleet, the Ports are embarking on the next phase of the Clear Air Action Plan.

We anticipate that the point thousands of new trucks, powered by the zero NOx engines from Cummins Westport and fueled with low carbon renewable natural gas, will be instrumental part of this ambitious plan. And we will keep you posted as this continues to develop.

Speaking of renewable natural gas, I assume everyone saw the announcement we made last week. But I feel it's important to highlight it again.

BP is acquiring the upstream portion of our renewable natural gas business, which includes our biomethane production plants and our third-party biomethane supply contracts. This is very significant for several reasons.

First, the $155 million of proceeds from the sale will allow us to address the majority of our outstanding convertible debt without dilution to our shareholders. Additionally, there is an earn-out of up to $25 million, and BP will be absorbing $10 million of debt from our renewable business.

This agreement allows both Companies to leverage their respective capabilities to further develop the renewable fuel market. And importantly, we feel this investment from BP is validation of Clean Energy's leadership in RNG fueling and the confidence they have that this business is well positioned for long-term growth.

Clean Energy will be taking the supply from these contracts and will continue to sell it as our Redeem branded renewable natural gas through our natural gas fueling infrastructure, and we will receive a revenue split on all of those gallons. So in essence the two Companies will focus on what each does best. BP will focus on the upstream business and we will continue to focus on the downstream business.

Since we first launched our Redeem renewable fuel business in our California stations over three years ago, we have seen phenomenal sales growth. In 2016 we sold approximately 60 million gallons to customers like UPS, Republic Services, Ryder, Kroger and multiple transit agencies, and we have expanded to multiple states.

We believe our Redeem fuel is the cleanest transportation commercially -- fuel commercially available for heavy-duty vehicles in the country today. BP recognizes the enormous potential of renewable natural gas, and we're thrilled that they want to collaborate with Clean Energy to grow this market. This is a good deal for BP, Clean Energy, our customers and our communities.

This morning the Federal Trade Commission granted early termination of the HSR waiting period, thereby eliminating the single largest condition to completing the deal. We fully expect to close in March -- we fully expect to close at the end of March.

We are proud of what we accomplished in 2016. We had our most profitable year and dramatically improved our balance sheet.

For 2017 our focus is on growth, profitability and the long-term opportunity in the marketplace. Growth and profitability are straightforward.

We want to add profitable volume to our existing recurring revenue base. In addition, and just as importantly, we will be working in 2017 to set ourselves up for long-term success.

We're confident that we're in a great position. The next generations of natural gas trucks have a superior emissions profile with new zero equivalent NOx engines that can run on a renewable biomethane, are far more cost effective than any other heavy-duty solution.

We have a developing market opportunity for significant deployment of these trucks in our backyard, which could be the catalyst for accelerated growth nationwide. Lastly, we have the largest nationwide network of fueling stations and infrastructure that can deliver this transformational solution to any fleet.