Clean Energy Fuels Corporation Q2 2009 Earnings Call Transcript

| About: Clean Energy (CLNE)

Clean Energy Fuels Corporation (NASDAQ:CLNE)

Q2 2009 Earnings Call

August 10, 2009 4:30 pm ET


Ina McGuinnes – Investor Relations

Andrew Littlefair – President, Chief Executive Officer

Richard Wheeler – Chief Financial Officer


Robert Brown – Craig-Hallum

David Woodburn – ThinkEquity Partners

Brian Gamble – Simmons

Steven Milunovich – Merrill Lynch

Eric Stine – Northland Securities


Welcome to Clean Energy Fuels second quarter 2009 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Ina McGuinness of ICR.

Ina McGuinnes

Earlier this afternoon, Clean Energy released financial results for the first quarter ended March 31, 2009. If you did not receive the press release, it is available on the Investor Relations section of the company's website at This call is being webcast and a replay will be available on the company's web site for 30 days.

Before we begin we would like to remind you that some of the information contained in the news release and on this conference call will contain forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words and expressions reflecting optimism, satisfaction with current prospects as well as words such as believe, intend, expect, plan, anticipate and similar variation identify forward-looking statements but their absence does not mean 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 the Clean Energy Form 10-K filed with the SEC on March 16, 2009 and subsequent filings including the prospectus supplement filed on June 26, 2009 and the Form 10-K for the quarter ended June 30, 2009.

These forward-looking statements speak only as of the date of this release and the company undertakes no obligation to publicly update any forward-looking statements, supply new information on events or circumstances after the date of this release.

The company's non-GAAP EPS which will be reviewed on this call excludes 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 an addition to results prepared in accordance with GAAP but should not be considered a substitute or superior to GAAP results.

The most directly comparable GAAP information, reasons why management uses non-GAAP information, a definition of non-GAAP EPS and a reconciliation between non-GAAP and GAAP figures is provided in our second quarter 2009 press release which has been furnished to the SEC on Form 8-K today.

Participating on today's call from the company are President and CEO Andrew Littlefair, and Chief Financial Officer Rick Wheeler. And with that, I'll turn the call over to Andrew.

Andrew Littlefair

Good afternoon everyone. Today, we're calling you from Las Vegas where we are participating in the Second Annual National Clean Energy Summit which features Boone, President Clinton, Vice-President Gore, Secretary of Energy Chu, Senate Majority Leader Harry Reid and a host of others.

The summit is focused on topics relating to reducing our dependence on foreign oil and focusing on alternative fuels that can reduce greenhouse gases and global warming. Of course, all of this also adds up to adding green jobs and there's a lot of buzz here about the NAV Gas Act and we believe this is going to lead to promising legislative activity in the fall.

Turning to our company, I'm pleased to report on a very good quarter. As you know, volume growth is one of the key drivers of our business and in the second quarter, we were successful in delivering good growth for this key metric. We sold $23.7 million gasoline gallon equivalents this quarter which is up 28% from a year ago and 30% sequentially.

From a margin perspective, we maintain our per gallon margins during the quarter as we integrated Exterran Natural Gas business into our operations in our new bio methane sales agreement kicked in. We also realized improved margins on the retail price piece of our business this quarter as opposed to last quarter as we benefited from a very favorable spread between the price of oil and natural gas.

One highlight this quarter was our acquisition of the natural gas vehicle operation of Exterran Energy Solutions, the old Hanover Compressor Company. This acquisition added four large transit fleets to our customer list with about 15,000 buses and 25 million gallons of volume a year.

These transit operators include large natural gas buses in the United States, the Los Angeles County MTA as well as large fleets in Boston, Washington DC and Montgomery County Maryland. These contracts are significant as it makes us the dominant natural gas fuel provider in the transit market. We now fuel about 5100 transit buses everyday.

Turning to the ports, in May we opened the largest LNG truck fueling station in the world. This public access station is specifically designed to support the goals of the San Pedro Bay ports Cleaner Action Plan and Clean Truck program. This is the second station Clean Energy has opened in the area to serve port dredge trucks.

Our new station is located on 2.9 acres right next to the Port of Long Beach. It is configured to fuel trucks on a 24/7 basis, features two 25,000 gallon LNG storage tanks, six LNG dispensers and two CNG dispensers and has the capacity to fuel six heavy duty trucks at one time.

The station is already one of our highest volume stations and volumes are now running at about 8,800 gallons a day and we expect to see the volume growth continue through the remainder of the year.

We've seen some good signs of late in the acceleration of the deployment of LNG trucks at ports. In addition to about 200 LNG trucks already funded, the Port of Long Beach recently awarded subsidies for another 100 new trucks, 98 of which were LNG models. This will brings the total number of LNG trucks at the port to about 425.

In other good news, the port of LA, Long Beach, South Coast Air Quality Management District have joined in a program to fund up to 500 LNG trucks with $50 million. The applications for this program opened July 12 and closed July 24. There are about 500 or so applications for LNG trucks submitted. The program allocated about $100,000 each for 500 trucks and these awards will be out shortly.

In all these programs are complicated, factoring in emissions, mileages, the age of the truck being retired, but we hope this program will generate about 500 new LNG trucks on the road.

Additionally the Port of Las Angeles is still working on additional ways, and we're working with them to fund more LNG trucks. So if all the trucks under these existing programs are awarded and placed into service, and I think they will be, we could have about 1,000 port trucks fueling on LNG hopefully by year end.

Let me now turn to another development that bodes well for our penetration into the key market of regional trucking. In cooperation with Westport Innovations, the leading company that makes heavy duty trucks capable of running on natural gas, we have undertaken a national fleet sales program that targets about 20 of the nation's largest fleets and leaders in the trucking business.

The plan is to have these fleets take a meaningful number of trucks to test so they can gain a good degree of operating experience with natural gas. We believe it will spur their understanding and acceptance of natural gas and will drive growth in the regional trucking market much as it did in the same manner in which we grew the refuse market.

This is a good time for these fleet operators to test natural gas in light of the pending 2010 emissions standards and the impending incentives from the NAT Gas Act.

Now as you know, our new bio methane sales agreement began in the second quarter of 2009 which helped our financial results for the period. During March of this year, we completed certain upgrades to the processing plant whereby we have been successful in increasing in the plant's production capability about three fold since our acquisition.

In fact, as of now, we are producing up to 36,000 gasoline gallons per day. We are also continuing to work with the refuse sector to see if we can find other opportunities to repeat the success at other landfills. We look forward to reporting to you on how this endeavor unfolds.

Turning to our engineering carpet and backlog, we are very encouraged about the number of projects we're working on. As of today, we have 25 projects on our engineering carpet, many of which are under construction and we anticipate that almost all of these will be completed by year end.

These projects could be new stations for the most part, or upgrades to existing stations. In addition, we currently have almost 80 stations in our backlog which is about double what we had last year.

Remember, these are not signed contracts, but they have gone through a thorough review process involving our finance and engineering teams and they're far enough down the road that we need to start planning for construction. Historically, about half of our backlog stations get completed in the following year.

Another significant development that we have not factored into our backlog that we are working on is the AT&T commitment to invest up to almost $350 million to purchase 8,000 CNG vehicles over the next five years. This represents the largest corporate commitment to CNG vehicles in our nation's history and we believe it is a good sign that large corporations are starting to really understand the economic, political and environmental benefits of natural gas vehicle programs. As of now, the first 600 vehicles are being produced.

Also not included in our backlog are most of the proposals submitted under the Clean Cities Program in response to the federal stimulus package. We have proposals pending in conjunctions with almost 100 different partners on 71 stations in 12 states that involve more than 5,700 natural gas vehicles.

This program will be administered through DOE but in concert with local granting agencies with the goal of financing projects that utilize alternative fuels that reduce greenhouse gases and reduce imported petroleum.

While it's difficult to know how DOE will judge these proposals, natural gas vehicle solution seem to be aligned with the programs goals and we anticipate awards will be announced in August or early September and we'll let you know about any successes we have with this program.

As you know, we completed a very successful follow on public offering on July 1 that resulted in receiving net proceeds of approximately $73.2 million. These funds will primarily be used for capital expenditures related to station construction activities and investments in our own LNG plants and our bio methane production plant.

This capital also gives us the ability to take advantage of opportunities to acquire natural gas fueling infrastructure, vehicle or service businesses and other bio methane production assets. Barring any unanticipated large scale projects, we believe that this should cover our capital expenditure needs through 2010.

Also during the quarter, we made some very good additions to our sales force. In particular, in refuse we expanded our specialized refuse team with the addition of key sales people on new market territories. Also, in the airports, we added a senior member of our airport team, Dan Hubert who hails from one of the nation's parking companies and who we think will help accelerate our growth in this sector just as we've seen good progress in the refuse market after adding an experienced industry expert to that team.

In refuse, only two years ago we were working with seven refuse operators or so, and today, we're working with 40 operators that own 87,000 refuse trucks. Now our job is to expand natural gas usage into those fleet customers.

Airports afford a great opportunity for expansion. You have terminal buses, rental car, hotel shuttles, package delivery vans as well as taxis, and all of these are great candidates for natural gas. The interesting thing about airports is that oftentimes, the airport services has an anchor for public access in the region, so success in the airport segment has broader implications for our growth.

Let me now provide you with a legislative update, turning to the NAT Gas Act. We are pleased with how this legislation is moving forward. As you probably know, the bill was introduced in the Senate on July 8, and would give fleet operators, especially regional truckers, a compelling economic rational for buying natural gas.

There are a few very key things this legislation will do, and importantly, it doubles the credit for vehicle acquisitions and extends the tax credit on the fuel. And, it includes purchase requirements for vehicles to be put into operation by the federal government. It seems like there's growing bi-partisan support for this bill and our legislative team in Washington DC is working diligently to help get it passed.

We believe that after the summer recess, sometime in September, October, things should heat up on the Natural Gas Act.

And with that, I'd like to now turn the call over to Rick to review our financial results.

Richard Wheeler

Before I review our financial results, I would like to point out that all my references to our results will be comparing the second quarter of 2009 to the second quarter of 2008 or comparing a six month period ended June 30, 2009 to the six month period ended June 30, 2008 unless otherwise specified.

We delivered $23.7 million gallons in the second quarter of 2009 versus 18.5 million gallons last year. For the first six months of 2009 we delivered 42 million gallons of fuel to our customers compared with 36.1 million gallons delivered during the same period in 2008.

The increased volume between periods was primarily related to the increases sales at the landfill project, increased port volumes and increased volumes from the transit properties we acquired from Exterran during the quarter.

Also from a volume perspective, the additional Phoenix LG volumes we recently won started July 1, so this contract should add about three million gallons of incremental sales volume over the remainder of the year.

For the quarter, our revenues were $27.9 million which compares to $33.8 million. For the first six months, our revenues totaled $58.1 million which compares to $63.8 million. A significant portion of our revenues are based on the price on natural gas which was down about 17% between the second quarter of 2008 and 2009, but as you know, when the price of natural gas goes down, and our revenues go down, our cost to buy the natural gas we're selling also goes down and generally by similar amounts.

In these instances, the price of natural gas is in essence a pass through to our customers, so at the end of the day, we are making our same margin per gallon on these customers regardless of the price of natural gas and corresponding revenues and expenses. So as we have discussed before, this is the main reason you need to look at us from a margin perspective because while the revenues and expenses of our gas sales go up and down in concert with the price of natural gas with these customers, the margin per gallon we make on these sales remains the same.

On a sequential basis, our gross margin this quarter rose to $0.49 per gallon from $0.47 per gallon in the prior quarter. The increase is primarily due to the increased economics we realized during the period as our new biomethane sales agreement started April 1 of this year and the improved margins on the retail piece of our business which were driven in part by an improved spread between the price of oil and natural gas during the period.

Also contributing to our improved margins on the retail piece of our business in the second quarter was the increased sales at our port stations which fall into this category. Our net loss for the second quarter was $6.4 million or $0.13 per share which compares to a net loss of $3.2 million or $0.07 per share. Our net loss for the first six months was $12.9 million or $0.26 per share versus a loss of $8.6 million or $0.19 per share in the prior period.

During the second quarter of 2009 we recorded a non cash charge of $2.2 million related to valuing our Series One warrants which is required this year under EITF 07-5. The primary driver of the increased amount recorded this quarter was the impact our higher stock price had on the valuation model we used to value the warrants.

Before I move on, I would like to emphasize that this is not a cash liability of the company, but rather a required exercise we must do under the accounting rules due to the exercise price reset feature included in the warrants. This charge contributed $0.04 per share to our net loss during the second quarter of '09.

In addition to the valuation charge, our year to date loss increased over the 2008 amount primarily due to an increase in our depreciation expense. The depreciation expense increase was mainly due to higher property and equipment balances on hand between periods due to our expanded station networks and our California LNG plant that came online in the fourth quarter of 2008.

Non-GAAP loss per share in the second quarter of 2009 was $0.01 on a per share basis which is consistent with the second quarter of 2008. Non-GAAP loss per share for the first six months of 2009 was $0.07 per share and was a loss of $0.08 last year.

We are also seeing our operating cash flow improve. In the second quarter of 2009 our cash provided by operations was $5.6 million which is up approximately $4 million over the first quarter of 2009. With the equity raise we recently completed on July 1, we will have approximately $93 million of cash heading into the last half of the year.

This cash, combined with our increased operating cash flow and hopefully our increased ability to obtain debt financing with the improved cash flow, should put us in good position financially to capitalize on the opportunities in our business we see coming.

With that, please open the call to questions.

Question-and-Answer Session


(Operator Instructions) Your first question comes from Robert Brown – Craig-Hallum.

Robert Brown – Craig-Hallum

Maybe you could provide a little more color on the national trucking initiative, sort of what that involves and how long the sales cycle might be before you start to see contracts.

Andrew Littlefair

Many of those customers right now, and I'm not going to read them all off to you because I don't think that's probably wise for me to do, but they're very familiar names. Several of them are already testing vehicles, but we know talking and working with these guys that really in order to get them with the appropriate level of confidence and experience, they need to be testing more vehicles.

So we work closely with Westport to come up with a package of incentives that we think will be really frankly attractive for these guys to take 20 or 30 units each into these fleets. Our team has met with them. Our combined team has met with, I don't know if they've met with all 20 yet, but they've met with the vast majority of them.

We've had a very nice reception. So now the devil is in the details of getting contracts. We'll have the first one of those announced I hope here shortly. It looks like it's already done. And so I have high hopes for this.

I would imagine though you're going to see that over the course of the next 30 to 60 days and then those vehicles will be put into service a month or two after that. So it's something that's in the later part of this year.

The timing is good though because all of these trucking companies are now looking at the NAT Gas Act. We know from talking with that that gets the incremental down to where it's very attractive, so it's time to get these things in place and I think this is a good way to go about it.

It's kind of what we did in the refuse market. We started out with getting anybody that would do it. We'd get them five or seven refuse trucks. But it wasn't until we got 15 or 20, 30 in a given fleet that they really got the confidence that they have now, and so that's what we need to do with these big sophisticated operators.

Robert Brown – Craig-Hallum

How many gallons did you have in the quarter from your Exterran acquisition?

Richard Wheeler

About 3.2 million.

Robert Brown – Craig-Hallum

Maybe you could give us your CapEx thoughts for 2009.

Richard Wheeler

I think you'll see it in our Q which we just filed as well. We're anticipating about $14.9 million for station projects for the rest of the year.


Your next question comes from David Woodburn – ThinkEquity Partners.

David Woodburn – ThinkEquity Partners

Can you give us the breakdown of CNG, LNG and biomethane in the quarter?

Richard Wheeler

CNG was $16.8 million, biomethane $1.5 million, LNG $5.9 million and that gets you to your $23.7 million.

David Woodburn – ThinkEquity Partners

Have you talked with Senator Reid there in Las Vegas? What are his thoughts on how these NAT Gas bills at this point could actually move forward? Is it likely that they go out of committee and get voted on by themselves or is it sort of have the text ready in case they need it to insert into the energy bill?

Andrew Littlefair

You're right. He said, about two weeks ago, and I think he said it at a private breakfast that I was not at this morning, because Boone mentioned that to me. He said on a couple of occasions that he could envision the NAT Gas Act moving as a stand alone bill. Now I'm always warned by our federal lobbying team that he perhaps would like that to happen. Not sure that it could happen, but he's now said it a few times.

So we have to like that. They are I think doing the work that's required. We've been meeting with various senators. There's been a couple of other bills. One from Senator Prior that had other various pieces of natural gas in and I think it's the second part of your question which is, you have to have these things ready to go in case they find their way onto a seemingly unrelated tax bill or a larger energy piece or a highway bill.

And we haven't been able to read all the tea leaves yet on how that's going to happen, but I think we do realize that it's something that you're going to have to look at in the September time frame or October.


Your next question comes from Brian Gamble – Simmons.

Brian Gamble – Simmons

The $3.2 million from Exterran in the quarter, how quickly are we thinking that's going to reach the full $25 million run rate per annum?

Andrew Littlefair

We'll be on that rate starting next quarter because we got all four of them in during the second quarter so third quarter you'll see that level of run rate.

Brian Gamble – Simmons

On that point, when you closed that acquisition last quarter we talked about possibly selling some additional services to those customers. Have those discussions commenced? What's the thought there on recognizing some additional revenue flow?

Andrew Littlefair

We have on one of those customers; we're well down the trail of negotiating a contract to do some fairly extensive modifications to some of the facilities. And I don't want to go too much more than that, but our engineering teams have been working with them. We've responded, we've gone back and forth.

We've also met with all of them about other services and it looks like there may be an upgrade in one of those other properties. This is something you remember I mentioned last time, we see with these that over time, as they get comfortable with our level of expertise and operation, you begin to do other services that they need, and they trust us to do it.

Brian Gamble – Simmons

The 600 vehicles on AT&T that you mentioned as being produced currently, is there a time line when those are supposed to be on the road?

Andrew Littlefair

They're being produced now and I don't remember the number they're turning out a day. Something tells me they're doing eight a day right now, or eight to ten. But they're on it and if you go to the DAF facility in Dallas, it's stacked up with AT&T vans out there. So they're busy.

So I'm kind of guessing here, but I'm guessing that's something that happens in the next 60 to 90 days you get all those done. Then there's the next tranches come behind that and I don't know exactly where they stand on that right now.

Brian Gamble – Simmons

On the comments you mentioned 36K a day flowing out of there, going forward are we talking about ramping it up more or are you getting kind of a full run rate there?

Andrew Littlefair

That has a long life and that landfill has the ability, we have to add production capabilities, spend some money. We're working on a plan now that would look like you could expand about two and half times. We have some great plans for that and think we can increase that production.

Richard Wheeler

It's basically at capacity with the capital improvements that we've done to date. There's certainly a lot more gas that's available and we can improve and increase the capacity. We just need to invest in the plant, drill more wells, that type of think which we're looking into.

Brian Gamble – Simmons

How much capital would it cost to get the two and a half as mentioned?

Richard Wheeler

Our engineering crew are analyzing that and going back and forth and looking at some different technologies and some different concepts with the existing equipment versus going new and electrical, gas versus electric drive, all that type of stuff which has a heavy impact on the cost. It's anywhere from $10 million to $30 million depending on which track we go, maybe more toward the higher end of that.


Your next question comes from Steven Milunovich – Merrill Lynch.

Steven Milunovich – Merrill Lynch

CNG versus LNG, the CNG volumes are up pretty nicely year over year. LNG I believe was down a little bit. Over time, I thought we were going to see faster growth in LNG.

Andrew Littlefair

I think you will. I think over time as regional trucking kicks in and remember, regional trucking is new. It's the newest market. But even in the remainder of this year, you're going to see more LNG volume coming from the ports which will be significant. You'll see more LNG volume coming from Phoenix. It starts up July 1.

And then the regional trucking will be, but if I look out years ahead, I think you'll begin to look LNG I think will grow at a faster rate than CNG.

Richard Wheeler

Keep in mind that three million incremental gallons we just got back, we didn't have that in the prior quarter of '08. It's coming back in '09, so if you factor that out, that makes the numbers look better.

Steven Milunovich – Merrill Lynch

How about that $0.49 margin? You had indicated over time it might come down as you have extra [inaudible].

Andrew Littlefair

Actually this was going to be an interesting quarter for us because there was a lot of things melding together. The retail spread was increasing as the spreads between natural gas and oil starting going back up, so our retail piece of our business we're seeing some improvement.

The DCE improvement, that was a huge contributor during the quarter. If you recall, before the Shell agreement started, we were selling gas in the first quarter at a local index that was I believe was below $3.00 and now we're selling well in excess of that with our new deal. That coupled with the increased production, that certainly helped our margin.

And also blending in the Exterran acquisition which we knew was a little bit on the lower end of our margin perspective, how all that was going to shake out. We were pleasantly surprised to see it hand in there and actually go up a couple of pennies from what it was last quarter.

Now I think next quarter once the full impact of the Exterran acquisition is in for the full quarter, it may pull it down a touch but a lot of that is contingent on, we've got more port trucks showing up all the time, that's in our higher margin retail side and the spread continues to hang in there so there may be some more opportunities to offset some of that on the retail side.

So it's a long winded answer to say we're pleasantly surprised with how they are hanging in there and where they go next quarter will be kind of contingent on how all those factors kind of play out. It could tick down some, but it may hang in there pretty close to where it's been.

Richard Wheeler

I know you guys follow all this, but it is impressive when you look at that spread between oil and natural gas today. I didn't do the math yet today, but you've got to be at the high end of the historical range of the relationship, 18 to 1 or 19 to 1. And we're seeing gasoline prices tick up. In LA basin this morning, I noticed its $3.15, and so you've got pretty low gas prices so our retail margins are pretty strong right now.

Steven Milunovich – Merrill Lynch

You said that something like half your backlog typically gets filled in the year?

Andrew Littlefair

It seems to have gone that way.

Steven Milunovich – Merrill Lynch

You could do 40 next year?

Andrew Littlefair

Yes, that's what it means. Of course it all depends on how it goes and which ones we get under contract early and timing. But that's what we've seen over the last few years, and I have reason to believe that, I think it's a good likelihood that will be the way it goes.

And, that doesn't take into account some wonderful success on the Clean Cities program. I don't even have that factored in. So let's say I get lucky and we get 20 of those projects, that's in addition to those 80 and if AT&T eventually, we get that nailed down, you might see several more so yes, I think that's realistic.

Steven Milunovich – Merrill Lynch

When you're going for buses are you running into electrification guys who are trying to sell batteries and those types of folks?

Andrew Littlefair

Not on the heaviest of vehicles, certainly not on regional trucking of course. Occasionally in the federal transit arena, you recall that diesel hybrid electric bus costs $250,000 more than natural gas bus, but they get a whole bunch of that paid for by the feds. So occasionally you'll see transit properties go with that more expensive diesel hybrid electric buses. You don't see the trash trucks. It's just really not ready for prime time.

Diesel hybrid electrics, you can't point to very many cases where the increased cost is taken care of by the efficiency gains. It just hasn't come out that way. So the federal transit guys do it because they're using your money and my money, but others don't seem to be doing it.


Your next question comes from Eric Stine – Northland Securities.

Eric Stine – Northland Securities

I was wondering if you could give us, I don't think you could give the portion of LNG and GGE's that was from the ports. And do you still plan on five stations at the ports of LA and Long Beach.

Andrew Littlefair

The combined port station volume just for the month of June was high 200,000 gallons I believe. It's in that magnitude and growing as more and more trucks get unveiled and through the process and on the road. So that will give you some magnitude of where that's roaming.

We have two other locations that are agreed to in the ports. We're going to bring those on once we see the volume of trucks come up some more. We are readying some what called LNG port if you will, port truck stations that would be in the OLM empire, so 40 miles away from the port at the distribution centers out east.

So I think you could see three or four more sort of related to the ports, not necessarily in the ports. That new station if you haven't seen it is pretty impressive. It can handle an awful lot of volume and we'll probably do one more in the port for sure, and then you're going to do some others that augment the port operation. But I want to see the truck count come up some.

Richard Wheeler

And just to clarify, that 300,000 was LNG gallons or the high 200,000 number. It's about 200,000 GGE's. Just an FYI.

That's how many trucks are out there as of June, and obviously more and more showing up daily.


There are no further questions. I'd like to turn the call back over to management for closing remarks.

Andrew Littlefair

Thank you everybody for joining us. I'm pleased that the signs indicate that we can continue on this year's trends of growth in volumes. You'll recall we weren't pleased with where the volumes were headed last year and that's corrected itself and I'm very pleased about it.

I know I've said this before, but it bears repeating, although we are seeing extremely favorable spreads in the commodities market, our business model is solid even if the spread narrows. We obviously can't predict the price of natural gas or oil, but domestic natural gas will I think be in a very enviable position in terms of price relative to oil where it doesn't have the same pressures that oil does.

Based on the growing national interest in natural gas, and I came from that meeting this morning, and we are in a much different profile than where we were a year ago or even certainly two years ago. But the recent public policies pushing alternative fuels and our strong backlog, we believe we're approaching kind of an inflection point in our business.

We now feel that we have the appropriate financial flexibility to capitalize on our growth opportunities and solidify Clean Energy's leadership in the alternative fuels industry. Moreover, we have a world class team of professionals. We've added to it and we're executing on our vision, and we believe that will serve our shareholders and our country well here in the future.

So thank you everybody for participating and we'll look forward to talking to you. Thank you and good day.

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