Clean Energy Fuels Corp (CLNE) 2009 Q2 法說會逐字稿

Greetings and welcome to the Clean Energy Fuels Second Quarter 2009 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions).

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Miss Ina McGuinness of Integrated Corporate Relations. Thank you. You may begin.

Thank you, Joe. Earlier this afternoon, Clean Energy released financial results for the second quarter and six months ended June 30, 2009. If you did not receive the press release, it is available on the Investor Relations section of the Company's Website at www.CleanEnergyFuels.com. This call is being Webcast and a replay will be available on the Company's Website 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 variations identify forward-looking statements but their absence does not mean that a 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 10K filed with the SEC on March 16, 2009, and subsequent filings including the prospectus supplement filed on June 26, 2009 and the Form 10K 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 [about] circumstances after the date of this release.

The Company's non-GAAP EPS which will be reviewed on this call 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, which 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 8K 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 will turn the call over to Andrew. Andrew.

Thank you, Ina, and good afternoon everyone. Today we are 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 could 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 Nat Gas Act. And we believe this is going to lead to promising legislative activity in the fall.

Turning to our Company, I am 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 maintained our per gallon margins during the quarter as we integrated Exterran's natural gas business into our operations, and our new biomethane sales agreement kicked in. We also realized improved margins on the retail price of a piece of our business this quarter, as opposed to last quarter, as we've 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 operations of Exterran Energy Solutions, the old Hanover compressor company. This acquisition added four large transit fleets to our customer list, with about 1500 buses and 25 million gallons of volume a tear.

These transit operators include the largest natural gas (inaudible) 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 every day.

Turning to the ports, in May, we 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 Port's Clean Air Action Plan and Clean Truck Program.

This is the second station Clean Energy has opened in the area to serve Port drayage 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 8800 gallons a day.

We expect to see the volume growth continue through the remainder of the year.

We have seen some good signs of late in the acceleration of the deployment of LNG trucks at the 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 bring the total number of -- really 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.

You know, all of 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 Los Angeles is still working on additional ways and we are 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 can have about 1000 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 further understand 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 biomethane 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 at [Nokomis], whereby we have been successful in increasing the plant's production capability about threefold 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. Now remember that these are not signed contracts, but they have gone through a thorough review process involving our finance and engineering teams. And they are 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 and that we are working on is the AT&T commitment to invest up to almost $350 million to purchase 80,000 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 conjunction 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 is difficult to know how DOE will judge these proposals, Natural Gas Vehicles solutions seem to be aligned with the program's goals. And we anticipate awards will be announced in August or early September and we'll let you know how we -- about any successes that 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 LNG plants and our biomethane 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 biomethane production assets.

Barring any unanticipated large-scale projects, we believe 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 salespeople and new market territories.

Also in the airports, we added a senior member of our airport team, [Dan Huberty], who hails from one of the nation's largest 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 experts that team. You know, in refuse -- only two years ago -- we were working with seven refuse operators or so and today we are 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 because you have terminal busses, 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 serves as 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 will give fleet operators -- especially regional truckers -- a compelling economic rationale 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 bipartisan support for this bill and our legislative team in Washington DC is working diligently to keep it passed -- to help get it passed. We believe that after the summer recess some time in September, October, things should heat up on the Nat Gas Act.

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

Thanks, Andrew. Before I review our financial results I would like to point out that all of my references to our results will be comparing the second quarter of 2009 to the second quarter of 2008 or comparing the 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 increased sales at our 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 LNG volumes we recently won started July 1 so this contract should add about 3 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 of our revenues totaled $58.1 million which compares to $63.8 million. A significant portion of our revenues are based on the price of 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 are 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 in [Nokomis] 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 1 warrants, which is required this year under EITF No. 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 warrant. 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 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 network 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 eight cents 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 raised 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 opportunities in our business we see coming.

With that, Operator, please open the call to questions.

(Operator Instructions). Rob Brown with Craig-Hallum.

Good afternoon. Andrew, maybe you could provide a little more color on the national trucking initiative -- sort of what that involved and how long the sales cycle might be before you start to see contracts?

Yes sure, Rob. Thanks. You know we -- we are doing -- 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 there's very familiar names -- several of them are already testing vehicles.

But we know with 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 have worked closely with Westport to come up with a package [and] 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 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 is already done. And so I have high hopes for this.

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

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

It is kind of what we did frankly in the refuse market. You know, we started out with getting kind of anybody that would do it, we would 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 is what we need to do with these big sophisticated operators.

Thank you. And then, how many gallons did you have in the quarter from your Exterran acquisition?

About $3.2 million.

Okay. Good. And then maybe Rick you could just give us your sort of CapEx thoughts for 2009?

Yes, I think Rob you'll see this in our Q, which we just filed as well, we are anticipating about $14.9 million for station projects rest of the year.

Thank you.

David Woodburn with ThinkEquity Partners.

I think I am stealing this question from somebody else. Usually I (inaudible). Can you give us the breakdown of the CNG/LNG and biomethane in the quarter?

Absolutely but Eric Stein will not be happy with you for stealing his thunder. CNG was 16.3. Biomethane 1.5, LNG 5.9. And that gets you to your 23.7.

Great. And have you talked with Senator Reid there in Las Vegas? What are his thoughts on how these Nat Gas bills -- I guess 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?

You're right David. He said that about two weeks ago and he said I think he said it at a private breakfast that I was not at this morning because Boone mentioned that to me. He's said now on a couple of occasions that he could envision the Nat Gas Act moving as a stand-alone bill.

Now you know I'm always worn by our federal auditing team that he perhaps would like that to happen. Not sure that it could happen but he has now said it a few times. So we have to like that.

They are, I think, doing the work that is required. We have been meeting with the various Senators to kind of g -- there have been a couple of other bills, one from Senator Pryor that have 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 kind of seemingly unrelated tax bill or a larger energy piece or a highway bill.

And we haven't been able to kind of read all of the tea leaves yet on how that's going to happen. But I think we do realize that it is probably something that you are going to have to look at in the September timeframe or October. Obviously they are in recess right now.

Right. Thank you.

Brian Gamble with Simmons.

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

It will 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.

Okay, that's what I thought I had remembered. And then, secondly on that point, I think when you closed that acquisition last quarter we talked about possibly selling some additional services to those customers. Have those discussions --? Have those commenced? What is the thought there on maybe recognizing some additional revenue flow?

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

We've also met with -- well, all of them, about other services which like there may be an upgrade in one of those other properties. So this is something -- as you remember I mentioned last time, we see with these is 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.

And then the 600 vehicles on AT&T that you mentioned that are being produced currently. Is there a timeline when those are supposed to be on the road?

You know, they are being produced now and I don't remember the number that they are turning out a day. Something tells me they are doing eight today right now or eight to 10, but they are on it. And they you go to the [BAF] facility in Dallas, it's stacked up with AT&T vans out there. So they are busy.

So I'm guessing here, but I'm guessing that is something that happens for 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.

And then finally on the comments you mentioned $36,000 a day flowing out of there. Going forward are we talking about ramping that up more or are you getting into kind of a full run rate there?

No. That is a long life and that landfill has the ability to -- we have to add to it. We have to add production capability and spend some money. We are working on a plan now that would look like you could expand about 2.5 times. So no, we have some great plans for that and think we can increase the production.

Yes. It's basically at capacity with the capital improvements 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 plan, drill more wells, that type of thing, which we are looking into.

How much capital would it cost to get the 2.5 extra that was just mentioned?

Good question and not ducking the question, but our engineering crew they are analyzing that and going back and forth and looking at some different technologies and different concepts with existing equipment versus going new and electrical gas versus electric drive, all that type of stuff which has a heavy impact on the cost. You know, it's anywhere from $10 million to $30 million maybe. Just depends on which track we go. Maybe more toward the higher end of that.

(Operator instructions) Steve Milunovich with Merrill Lynch.

Few questions. First of all, CNG versus LNG. The CNG volumes are up pretty nicely year over year. LNG, I believe, is down a bit. Over time I thought we were going to see faster growth in LNG. Can you discuss that?

I think you will. I think over time as regional trucking kicks in -- and remember, regional trucking is new right? It's the news market. But even in this year, and 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. You know it starts up July 1 and then the regional trucking will be -- but if I look out years ahead I think you will begin to look, LNG, I think will grow at a faster rate than CNG.

Yes. Keep in mind that 3 million incremental gallons we just got back, we didn't have that in the prior quarter of '08. It is coming back in '09. So if you factor that out, that makes the numbers look better.

How about that $0.49 margin. You had indicated over time it might come down, as you add extra and etc. Do you think this is as high as it gets or not necessarily?

(Technical difficulty) $3 a (inaudible) at some point and now we are selling well in excess of that with our new deal. Plus that, coupled with the increased production, that certainly helped our margins.

So that and then also kind of blending in the Exterran acquisition, which we kind of knew a little bit on our margin perspective, how all that was going to shake out, we were pleasantly surprised to see it hang 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 you know we've got more port trucks showing up all the time. That's in our highest -- 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 are 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 play out, but it could tick down some. But it may hang in there pretty close to where it has been.

And you know, Steve, and I know you guys follow all this but it is impressive when you look at that spread between oil and natural gas. I mean 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. I don't know, 18 to 1 or 19 to 1.

And you know we are seeing gasoline prices tick up. In the LA basin this morning it was I noticed it was $3.15 and so pretty low gas prices. So our retail margins are pretty strong right now.

All right. And you said that I think something like half your backlog typically gets filled from a station perspective in a given year?

Yes, it kind of is -- it seems to have gone that way.

Does that mean you could do up to 40 next year?

Yes. Yes. That's what it means. And of course it all depends on how it goes and which ones we get under contract early and timing -- and timing, but (multiple speakers) that that is what we have seen over the last few years and I have reason to believe that -- I think is a good likelihood that will be the way it goes.

All right and finally --.

And -- and, if I may, 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 is in addition to those 80. And then if AT&T eventually, we get that nailed down, you might see several more. So yes. I think that's realistic.

Then finally, when you're going from (inaudible) and buses are you running into electrification guys who are trying to sell (inaudible) batteries into those kinds of folks?

Not on the heaviest of vehicles. Certainly not in regional trucking, of course. Occasionally in the federal transit arena, right, and you'll recall that diesel hybrid electric bus costs $250,000 more than the 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 the more expensive diesel hybrid electric buses. You don't see it in trash trucks. It's just not really ready for prime time.

And diesel hybrid electrics, you can't show -- 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 are using your money and my money, but others don't seem to be doing it.

Okay. Thank you.

Eric Stine with Northland Securities.

Hello. I was wondering if you could give us -- I don't think you did give us a portion of LNG and GGEs that was from the ports. And the second question would be do you you guys still plan on the five stations at the ports of LA and Long Beach?

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

Okay (multiple speakers).

Well the other -- we have two other locations that are agreed to in the ports. We are going to bring those on once we see the volume of the trucks come up some more.

We are readying some let's call the LNG port if you will port truck stations that would be in the (inaudible) empire right? So 40 miles away from the port kind of where they hit the distribution centers out east. So I think you could see three or four more 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 you'd probably do one more in the port for sure. And then you are going to do some others that augment the port operation as -- but, but I want to see them -- I want to see the truck count come up some.

Okay. Thank you.

We have pretty good coverage right now.

And just to clarify that 300,000 was LNG gallons. It's more like -- or the high 200,000 number I fed you. It is about 200,000 GGEs. Step YI.

Okay.

But you've had almost a doubling of those port trucks since then.

Oh, yes. That's what I was saying. That's how many trucks were out there as of June and now obviously more and more showing up daily.

All right, great. Thanks.

There are no further questions in queue. I would like to turn the call back over to management for closing remarks.

Sure. Thank you. Thank you, everybody, for joining us. I'm pleased that the signs indicate that we can continue on this year's trend of growth in volumes. You will recall I was -- we weren't pleased with where the volumes were headed last year and that has corrected itself. And I am very pleased about it.

You know -- and I know I have said this before, but it bears repeating that 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 growing national interest in natural gas and, gosh, 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 are -- and our strong backlog, we believe, we are approaching kind of an inflection point in our business. We now feel, though, 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 are 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 will look forward to talking to you. Thank you and good day.

This concludes the teleconference. You may disconnect your lines. Thank you for your participation.