Clean Energy Fuels Corp. (CLNE) Q1 2014 Earnings Report, Transcript and Summary

Greetings, and welcome to the Clean Energy Fuels First Quarter 2014 Earnings 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, Tony Kritzer, Director of Investor Communications. Thank you. You may begin.

Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the first quarter ending March 31, 2014. If you did not receive the release, it’s 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 risks, 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 Factors section of Clean Energy’s Form 10-Q filed May 8, 2014. 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 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 these non-GAAP and GAAP figures is provided in the company’s press release, which has been furnished to the SEC on Form 8-K today. Participating on today’s call from the company is President and Chief Executive Officer, Andrew Littlefair; and Chief Financial Officer, Rick Wheeler. And with that, I’ll turn the call over to Andrew.

Thank you, Tony. Good afternoon everyone and thank you for joining us. I’m pleased to review our first quarter 2014 operating results with you today. We reported 59.3 million gallons delivered for this quarter, compared to 49.9 million gallons in the first quarter of 2013. Gallons delivered were up 24% when excluding the 2.2 million gallons delivered in the first quarter of 2013 by our former Peruvian joint venture which we sold in March of 2013. We also generated $95.3 million of revenue in the first quarter of 2014, which was up from $66.8 million a year ago or 43%, when excluding the VETAC revenue which we had in the first quarter of 2013, but didn’t have in the first quarter of 2014. As you know we build up our fueling infrastructure and in-house capabilities over the past couple of years to get a jump start on our competition in anticipation of the 12 liter engine coming to market and demand increasing. And we know it was the right loop. As a result today, we have 96 trucks–friendly fueling stations open which is four times as many as our closest competitor. In doing so, we have put some pressure on our numbers. From an adjusted EBITDA perspective we were negative by $7 million this quarter. If you were to take out – take a rough average of about $0.30 margin per gallon that we’ve seen recently we need to add about 23 million gallons to close this gap. So to think about it in another way, this is a roughly a 10% volume increase from where we are today on an annual basis. And if you look at our historical volume growth rates of closer to 20%, we believe this is well within reach. We are extremely focused on getting this company to profitability and we are close. Keep in mind we have already deployed the capital to build out the base station infrastructure and scale up the capabilities of the company. So our CapEx spending going forward is essentially discretionary. Last quarter I said that our CapEx target for 2014 was approximately a $135 million. After a quarter under our belt and having raised capital at the subsidiary level to fund our R&D capital needs for the year, we believe a more accurate CapEx figure for 2014 is between $75 million and $85 million. We are committed to being disciplined with our capital to align our investments with the pace of the market. Additionally, our cash SG&A has come down 8% as a percentage of revenue excluding VETAC between periods and it is something that we are continuing to work to reduce. As I mentioned on our last call, the release of the Cummins Westport 12 liter engine has been the catalyst for the heavy-duty trucking industry to begin this transition to natural gas fueling. I was pleased to hear Westport announce last week that sales of the engine are doing well. In addition to the new engine availability, we are pleased to see the introduction of new natural gas sleeper cab options from Kenworth and Freightliner at the Mid-America Truck Show in March. These sleeper cab options are well suited for the many fleets that drive longer distances. Just two days ago executives from Kenworth, Volvo, Mack and Freightliner were on the panel at the ACT Expo and all gave glowing reports about the sales and performance of the 12 liter. I was fortunate enough to be a key note presented at the ACT Expo which is the largest alternative transportation conference in the country. I was incredibly impressed with the turnout, 3,000 people and hundreds of companies in the natural gas space. There were literally 12 heavy-duty trucks on display which is a dramatic increase from a couple – from two a couple of years ago. While we are excited with the natural gas engine and model developments, we recognize that our fleet customers are taking necessary amount of time to properly test and get comfortable with the 12 liter both CNG and LNG. And, all of us would do the same. And as I see this market unfolding, we wanted to make sure all these fleets know that we have a very robust network of stations that can fuel heavy-duty trucks. So as I mentioned a moment ago, it is important for everyone to understand the real scope of our national truck station network, America’s Natural Gas Highway. Today we have 96 stations across the country that are open and are truck friendly, no other company could come close to making that claim. I’m pleased to highlight this week’s announcement that Kroger, the country’s largest grocery retailer has chosen to partner with Clean Energy as they begin to transition their large fleet to natural gas. Kroger has placed in an order for their first 40 LNG trucks which will fuel at a private station we’re building for them in Clackamas, Oregon. These trucks will serve their network of stores in that region and are expected to use 1 million gallons annually. Additional trucking fleet announcements we made during the quarter include the signing of EPES Transport Systems, one of the preferred carriers for Lowe’s home-improvement centers. EPES will be deploying a fleet of LNG trucks to haul goods for Lowe’s out of their Valdosta, Georgia distribution center and will be fueling at our Valdosta station. We opened our station in London, Ohio to support the growing national presence of our customer Raven Transport who continues to prove their leadership through their commitments of sustainability. We signed on Cardenas Markets, a California-based supermarket chain who has ordered 15 CNG trucks and fuels throughout our Southern California network to serve their stores in the region. Our long time partners, Saddle Creek Logistics which continues to demonstrate their commitment to sustainability is working with us double the size of their Lakeland, Florida CNG station so we can accommodate an additional 25 CNG trucks [on work] [ph]. Saddle Creek already operates one of the largest fleets of CNG trucks in the country with over a 115 trucks in their fleet and have announced they will have up – they will have over 200 within a year. We are proud to be their fuel supplier. We are pleased to continue to sport UPS and their growing fleet of natural gas trucks. With our announcement on Tuesday that we’ll be fueling 15 additional heavy-duty UPS trucks between our stations in Jacksonville, Florida and Los Angeles. We are now fueling 230 UPS trucks daily at nine of our stations across the country. And lastly we are proud to support U.S. Foods, one of the nation’s largest food distribution – food service distributors who has ordered 19 CNG trucks to be based in San Antonio, but will be fueling throughout our station network in the Texas Triangle. Switching gears to the more established markets, we continue to see strong growth in transit, refuse, airports, fleet services during the first quarter. I’ll quickly touch on some highlights from each of these markets. In transit, a few months ago we announced our award for operations and maintenance contract of the four CNG stations we built for Dallas Area Rapid Transit. We are pleased to report that these stations fueled over 1.3 million gallons in the first quarter of this year. DART is currently operating a 186 CNG buses and a 112 light-duty CNG vehicles. They expect to take delivery of another 185 CNG buses during the second quarter. Again DART should consume approximately 6.5 million gallons per year once their bus fleet is fully in service. Additionally, we just opened our first of three CNG stations for Sun Metro, the large El Paso’s Texas Transit Agency, we acquired to our partnership with Mansfield. This station will serve the city’s transit, peer transit and rough use fleets. The other two sides will begin fueling in May. In total these sites should consume approximately 4 million gallons a year. The AMC also extended its LNG supply grant with Clean Energy for the next two years. We are selected to build an LNG station and supply LNG fuel for Anaheim Resort Transit which operates in existing fleet of 35 LNG buses for Disneyland and the surrounding area. The five year contract is expected to add approximately 500,000 gallons annually. In the East, we completed construction of a CNG station for Hillsborough Area Regional Transit in Tampa, Florida. Over the next five years HART will replace the entire diesel powered bus fleet to CNG. In Canada, we completed and commenced operations of BC Transit to new CNG station in the Nanaimo, British Columbia. The station will fuel the 50 buses currently operating from that transit depot. We have a 17 near operation and maintenance contract for the Nanaimo station and also TransLink ordered an additional 45 transit buses to fuel at their Clean Energy operated station here at Vancouver, British Columbia. And now on to refuse. Nationally our refuse market continues to thrive and expand. We will build or upgrade a dozen or more stations for Waste Management and Republic Services this year. Important the two largest solid waste companies in the U.S. combined Republic and Waste Management are now operating approximately 5,500 natural gas refuse trucks. This quarter we execute an agreement with progressive ways that makes us third largest solid waste company to design build and operate a new private time-fill CNG station on their property in Tampa, Florida. In California, longtime customer CR&R is adding 24 new CNG trucks to its fleet in Perris, California, where we also signed a low carbon fuel credit management contract. Other California customers adding CNG refuse trucks to their fleets included Vertec Waste, the City of Glendale, County of Sacramento, Recology, South San Francisco Scavenger and Ware Disposal. All together these independent solid waste customer orders on the West Coast were expected to add half a million new gallons with these purchases. And in Arizona, we finished construction of a private CNG station for the City of Mesa’s new fleet of CNG refuse trucks. Scottsdale, Tempe and Tucson all Clean Energy customers continued to add trucks. All in all our refuse trucks customers deployed 230 new trucks in the first quarter. In our airport and fleet services market, we just celebrated the grand opening of a new station at New York’s JFK airport. The station will provide fuel for the Port Authority of New York and New Jersey, New York City Department of Sanitation and numerous other fleets operating at around the airport. The Port Authority recently ordered 58 medium-duty trucks to operate at the three New York area airports JFK, LaGuardia and Newark; importantly with the addition of the JFK station we now have CNG stations at each of those airports. We began construction of the new CNG station under Orlando International Airport and the station is expected to be completed late in the second quarter of 2014. We recently purchased six existing CNG stations from PECO Philadelphia Regional Gas Utility and are making strategic upgrades to those sites to fuel the growing number of fleets in Pennsylvania transitioning to CNG including PECO’s own fleet. In late March, Pennsylvania’s Governor Tom Corbett announced the awarding of 25 grants to $7.7 million to fleets converting to natural gas. Of the funds granted over $3 million was awarded to Clean Energy customers using our stations both CNG and LNG. Our long time customer AT&T has taken delivery of approximately 900 CNG vans, trucks and sedans bought last year, vast majority of these vehicles fuel with Clean Energy at our public stations. We anticipate well over 1 million new gallons from AT&T this year. SuperShuttle one of our very first customers in the nation’s largest shared-ride van operator continues to expand their use of natural gas with an additional 70 CNG vans that will operate at Northern and Southern California airport. In Las Vegas, customers have ordered over 100 new CNG vehicles including 40 limousines and black cars for MGM resorts and 65 new taxies and buses from Bell Transportation that will fuel our public stations. Bell impressively currently operates a 180 natural gas vehicles as expected to have over 300 in its fleet by the end of the year. And finally the State of Colorado, ordered 81 light medium, light and medium-duty CNG vehicles that will fuel on our Denver area network public stations. We’ve had a long history of starting new markets. We were the first company to develop the refuse market, the first to build natural gas stations at airports and the first to develop stations with the heavy-duty trucking market. Now I would like to mention two attractive new markets that we are presuming. The ready-mix truck market and bulk fuel hauling market. Into the economic downturn and resulting slowdown within the construction industry a few years ago, there is a large pent up demand for new cement mixture trucks now that the economy and construction activity have rebounded. Many ready-mix fleets across the country exploring CNG trucks. We’re already fueling several of these companies and we expect this market to flourish as these companies continue to replace their old fleets. We’re also expanding our relationship with our partner Mansfield Energy to form a joint venture which will focus on the bulk fuel hauling truck market. Currently have two fueling sites in development near their fueling terminals in Georgia and Tampa and hope to have at least a half dozen locations in development by the end of the year. Coupling to support our growing CNG market is our compressor subsidiary IMW. The first quarter has been, seen a success with IMW strategy to accelerate growth in proven international markets by establishing in country sales resources across four continents and seven countries. Early results when these efforts include delivering the world’s largest mother-daughter station offsetting a significant portion of a large mine diesel requirements in Western Australia. IMW also manufactured installed and commissioned largest compressed natural gas mother station site in China and signed the contract to produce the country’s largest daughter station. In addition IMW has had its best quarterly margin since we purchased the company four years ago. In our biomethane business, we achieved a significant milestone in March with the first production in sales from our third biomethane facility located outside of Memphis, Tennessee. We also now entered into agreements like cover eight additional biomethane production facilities that will be flowing Redeem to our stations in the coming months. And as a reminder Redeem is the first commercially available natural gas vehicle fuel that is 100% renewable and up to 90% cleaner than diesel. And with that, I’ll turn the call over to Rick.

Thanks Andrew. Before I review our financial results, I would like to point out that all of my references to our results would be comparing the first quarter of 2014 to the first quarter of 2013 unless otherwise noted. Volume rose to 59.3 million gallons during the quarter, up from 49.9 million gallons a year ago. Also keep in mind the first quarter of 2013 included 2.2 million gallons related to our Peruvian joint venture that we sold in March of 2013. For the quarter, our CNG volumes were 39.4 million gallons, our RNG volumes were 3.2 million gallons and the LNG volume – our LNG volumes were 16.7 million gallons. As a reminder, when we sold gallons of Redeem to an existing customer those gallons are not incremental to our volume totals, but rather a sale of the original gallons to our customer whereby we have replaced the traditional natural gas with renewable natural gas. In doing so, it allows us to capitalize on the credits available from selling a renewable fuel into the vehicle fuel market. To date all of our Redeem sales have been to existing customers. First quarter revenue increased to $95.3 million compared to $93 million; when comparing our numbers between periods please note that the first quarter of 2013 includes $26.2 million of volumetric excise tax credits or VETAC revenue that was not included in the first quarter of 2014 as the legislation for VETAC expired on December 31, 2013. Pulling this amount out, revenue increased $28.5 million between periods. On a non-GAAP basis for the first quarter, we reported a loss of $0.30 per share, this compares with non-GAAP earnings of $0.03 per share in the first quarter of 2013. Adjusted EBITDA in the first quarter of 2014 was minus $6.8 million compared to adjusted EBITDA of $20 million in 2013. Again please remember the first quarter of 2013 adjusted EBITDA and non-GAAP earnings per share amounts include an additional $26.2 million of VETAC revenue. In addition, the first quarter of 2013 also included a $4.7 million gain on the sale of our ownership interest in our Peruvian joint venture. Adjusted EBITDA and non-GAAP EPS are financial measures we develop to highlight our operating results, excluding certain large non-cash or non-recurring charges or gains which are not core to our business. Adjusted EBITDA and non-GAAP EPS are described in more detail in the press release we issued earlier today. Our net loss on a GAAP basis for the first quarter was $28.6 million or $0.30 per share includes a non-cash gain of $4.5 million related to valuing our Series I warrants, non-cash stock-based compensation charges of $3.4 million, $0.3 million in foreign currency losses related to our IMW purchase notes, $0.5 million write-down on the holdback shares we expect from Westport innovations related to our sale of BAF and probably $1 million in additional lease exit charges related to the relocation of our headquarters. This compares with the net loss of $3.9 million or $0.04 per share which includes a non-cash loss of $0.5 million related to valuing our Series I warrants, non-cash stock-based compensation charges of $6.2 million and foreign currency losses of $0.2 million on our IMW purchase notes. Our interest expense was up between periods, primarily due to the interest charges we are incurring on our convertible notes we issued in June 2013 and in September 2013. Our gross margin this quarter was $23.6 million, which compares to $42.3 million. The gross margin for the first quarter of 2013 includes $26.2 million of VETAC revenue. Our margin per gallon on our fuel sales this quarter was down $0.04 from the prior quarter to $0.27 per gallon. The decrease is primarily from an increase in natural gas cost related to the extreme cold weather conditions during February and March impacted our LNG production cost all the way across the country at our Boron plant in California. We are looking in the ways we can fix this issue perceptively. Our cash balance including restricted cash and short-term investments, totaled $330.7 million at March 31, 2014. With that, operator please open the call to questions.

Thank you. [Operator Instructions] Our first question comes from Eric Stine with Craig-Hallum. Please proceed with your question. Your line is live. Aaron Spychalla – Craig-Hallum: Hi guys, this is Aaron Spychalla on for Eric. Good afternoon.

Good afternoon.

Hello, Aaron. Aaron Spychalla – Craig-Hallum: First could you guys talk about how many of the highway stations you have with CNG capability as of today and maybe what that gets to here in the near-term? And then maybe just remind us on what the margin profile of those CNG volumes are, maybe in relation to the LNG margins that you guys have and how that might trend over time?

Right, so, the way I talked about here this afternoon is, you have 96. So it’s a little bit different way to think about it Aaron because, I think over the last quarter or couple of quarters we haven’t done a good job of reminding everybody, how big our network is, we casually sort of mention it by the way we have 400 or 500 stations. I think it’s important for everyone to realize is as you really look at it 96 of the stations that we have that we built today, 96 of our stations of that bigger number are truck friendly, they can take Class A trucks. 26 of those kind of which you are probably thinking of are sort of previously announced highway stations that certainly have LNG and out of those 26, about 17 of those have CNG as well. But when you look at that number 96, I don’t want you to really think about, so they all have natural gas, right. It’s less, they all have - all of them have natural gas, they all have CNG except about 10 or 11 of those. So, as I try to remind people we are the leader in CNG, we are the leader in LNG, but we have awful lot of, we fuel awful lot of trucks every day on CNG as well as LNG. Now on the margin side, I’m going to ask Rick to help a little bit, but I was kind of doing a little math here while you are doing the second part of the question. But, I think you’re asking the different margins from CNG versus LNG?

Aaron I would say, our margins are more dictated by the type of sale not necessarily CNG or LNG i.e. if it’s retail sale, if it’s an O&M sales or whatever, that dictates more the margin profile and then just within that CNG is typically a little better than LNG within the various buckets. Aaron Spychalla – Craig-Hallum: Okay, good. I mean that is sort of what I was getting at is just making sure that those non-O&M volumes even when they are CNG are still that had a much higher margin number than we see in kind of the financials that we see today?

Yeah, they are. And I think Aaron some people kind of assumed that CNG have worst margins, actually probably better margin. Aaron Spychalla – Craig-Hallum: Exactly, that’s what I was trying to clarify. The second piece maybe on the liquefaction side with what you guys announced on with Hawaii earlier this quarter. Can you just maybe size what that opportunity could be for us and maybe what that looks like over time and then also talk about what else you guys are seeing from an opportunity standpoint on similar fronts to that?

So Hawaii Gas that was, we’re pleased to do that for a shipment. Hawaii Gas there is the electric company over there and then there is a gas company, and then the gas company wants to get themselves in a position where they could be doing I think it’s about eight – six to eight containers more a week I guess. So eventually that have almost 20, 25 containers sort of in a rotation there. There is still some work to do there; I said we feel pretty comfortable that we’re in a nice position because of the location of our LNG supply. So, it’s good business; it’s not huge business, however, the electric company has even kind of more bold idea. They have asked the people in the business to think about a couple of thousand containers in rotation, a million gallons a day. So that will take a long time to do; there is a lot of [hair] [ph] on that one; it requires ships and all sorts of stuff, but it’s containerized, so those are kind of interesting for us and of course with our position out here on this coast, there is some other opportunities like that that are bubbling up in the Port of Oakland as well. Now kind of broadly - because we have our capability and our plants and our supply agreements with 13 LNG suppliers now in different parts of the country to support our trucking business we get to look at a lot of deals and this winter we did some stationary one-off sales to utilities with LNG for system reinforcement. So, we’re pleased with that, this good business came at a difficult time for the utilities and so it was - we were awarded for that. We’re just in the process of finishing a couple of big natural gas fueling stations that will do off system sales up in New Hampshire area and Maine and then Upstate New York. They are really large. So those would be different. We’re beginning to – we’re very close to signing a couple of deals with some very large asphalt guys that want to use natural gas instead of fuel oil and diesel fuel. So we’re seeing those opportunities pop up and of course, just in the heavy-duty there the high horsepower area, we’re currently supplying LNG fuel for three of the major rail companies as they are testing LNG locomotives and [inaudible] we’ve stopped before, we’re in a mud wrestle to try to win a deal down in Florida to be able to build a plant to fuel ships and send fuel down into the Caribbean. So, a lot of things are happening around the world on high horsepower rail, marine and this stationary sales. Aaron Spychalla – Craig-Hallum: Good, definitely, sounds very good. Thanks for the answers. I’ll hop back in queue.

Thank you.

Our next question comes from Rob Brown with Lake Street Capital Markets. Please proceed with your question. Rob Brown – Lake Street Capital Markets: Good afternoon.

Hey Rob. Rob Brown – Lake Street Capital Markets: Westport started to sell more 12 liter trucks; could you give us a sense of where those engines are in the process in terms of when they start to fuel from you? Will you see - when will you see more and more of those hitting your network?

Rob, maybe I went through this a little bit last quarter, but I’ve been educated on this a little. There is a lag right, between the time that somebody orders an engine and that order gets fulfilled at the engine - at the factory and then it gets shipped to the OEM and then it gets configured either CNG and LNG at the factory or at a third-party location and then it gets shipped to the dealer and prepped it then it gets shipped to the customer and it gets prepped again. Rob, I kind of think the way we’ve seen it and we’re learning a little bit here, we’ve always known there was a big lag on the trash trucks because those are more hand built. It looks to us like it’s about four month lag between the time somebody puts in that order and that truck is beginning to drink some fuel. So we’re pleased that the numbers appear to be ticking up and those trucks are beginning to show up at our fuel - and fuel with us. Because, last year as you know Rob those trucks really, the 400 horsepower 12 liters really didn’t leave the engine production facilities until late August. So we weren’t seeing them till the very end of the year. Rob Brown – Lake Street Capital Markets: Okay great, thank you. And then you mentioned the Mansfield deal, what’s sort of the size of that in terms of potential trucks and volumes?

That’s an interesting business and as we work more and more with Mansfield. We have kind of two lines of business with them, we’re integrating our sales forces to do behind the gate sales as they, they sell about 3.5 billion gallons of fuel behind the gate to people that kind of haven’t spoken and fuel up in their backyards, they are dropping off diesel or gasoline, they do it for states, they do it for crash customers and hope some of the same people we do. And we’re working with them as those customers want to go to natural gas, they sling us into that offering that’s one piece of our Mansfield relationship that’s, that was part of that deal that we announced last year. This is exciting that’s one that Mansfield folks know very, very well and this is people to go out to terminals and pick up fuel and then jump off that fuel somewhere else and come back and it’s a big business, you’ll have terminals literally have 900 to 1000 trucks that operate out there that go once or twice a day. Mansfield themselves have 900 different carriers that they work with on a daily basis they haul fuel for them. So they have great reach into working with their partners and friends and longtime fuel hauling associates, and it gives, it gives us unique opportunity to really bring those people and educate them, bringing the party pretty fast and locate those fueling stations, or terminals where these guys are already growing. Mansell, frankly is one of the bigger customers. So, we’re starting out with two we got them under construction already and we hope to have six more, but these fueling locations are all over the United States in fact in Chicago to do the job properly. You’ll need to have four or five those locations just in the Chicago and environment. So, I don’t have a 100s of millions or billions of gallon type figure for you, but there is 10s and 1000s of these fueling trucks, it’s a pretty big market, it’s an exciting one for us. And it’s, we have the product ready to go, it could be CNG or LNG the first two that we are doing are going to be CNG, but LNG tractors work, some of these guys are pretty very sensitive, so the LNG make sense as well. But it’s kind of a neat new market that really hasn’t it is just now starting. Rob Brown – Lake Street Capital Markets: Okay great. And then the last question, you mentioned a gallon volume just sort of breakeven, does that sort of that equate to in terms of number of new trucks that need to get into your network?

I told them that it’s going to be Rob Brown to ask question, come on right now and you can give me right back to the truck counting deal. Well let’s think about it this way right, so 23 million is and the truck uses, we’re seeing these early adopters use 20,000 plus now truck. Rob Brown – Lake Street Capital Markets: And so just maybe you could backward some math and just divide by 15 or 20,000 gallons whatever you like per truck and kind of come up with some numbers?

So it’s not, the way we think about it, it’s me it’s pretty, it’s very manageable. We’re trying to show folks that there is a pathway here to how this all kind of comes together. Rob Brown – Lake Street Capital Markets: Okay, great, thank you.

You’re welcome.

Our next question comes from Jeff Schnell with Jefferies. Please proceed with your question. Jeff Schnell – Jefferies: Hi clarifying on the margin question earlier today CNG gallons are higher margin or on par with LNG. But is it safe to assume that LNG gallon going forward on the America’s Natural Gas Highway would be a higher margin product for Clean Energy?

No again it just depends, if their retail which in theory everything on the highway should be a retail type sale, we’ll give discounts ex-cents off retail price et cetera. But if you are in the retail world in CNG and LNG typically CNG is a better margin that both of those fuels in the retail world are our best margins, as opposed to when we’re in the O&M world where we’re just providing various services and we’re not providing perhaps the fuel and everything else and that’s where the margin start to come down on both the LNG and the CNG. Jeff Schnell – Jefferies: Right.

That make sense? Jeff Schnell – Jefferies: Yes. Okay, and then there is no lot of talk about cold fuel or saturated fuel and I was just curious if you guys had to take on, what will be most prevalent stations and if you are seeing any differentials in the cost either for sourcing it or for the consumer and if consumers are agnostic or have actually been choosing one and of course the other?

Okay, well the general rule firm is cold is better. And the reason for that and we have a little leg up here, because we’ve been doing some work on station deliveries, we’ve been doing some work on how we off-load our fuel at our LNG locations and plans, we just have little advantage is we are really able to produce some pretty cold fuel. And the reason why that, you get more on board and therefore you get more range. Jeff Schnell – Jefferies: Right.

And the new chart tanks, but you know are really receptive this is colder fuel. So I think you will see a general effort, our new Greenfield stations we built cold is better. Jeff Schnell – Jefferies: Got it thank you.

Our next question comes from Carter Driscoll with Ascendiant Capital Markets. Carter Driscoll – Ascendiant Capital Markets: Hey guys.

Hey Carter. Carter Driscoll – Ascendiant Capital Markets: Two really CapEx question, if I recall what you explained out last quarter in terms of what you’re going to stand among those are the numbers you saw there higher, I think you talked about 135 but the discussion, the core number was closer to 80 million. Its and first of all is anything changed in that core number, I think you all came in somewhere around 20 million for core station, but 40 million for truck stops and then close to 20 million for CNG In Boxes. Is there any changed there or is that this fuel what we’re thinking today on, and is that number you also quoted in context with the 75 data sites after what you already spent this quarter or is that an addition?

The 80, 75 or 85 is for the full year. We basically spent 45ish into the first quarter and in that is the 18 million we spent for the CNG In a Box units, so let me just tell we’ll spend another 40 or so over the last three quarters. As far as the buckets go on the stations, I’d say the only thing it may have come down from what you originally thought with some of the LNG stations. That’s kind of a timing issue and also just a lot of the business that we’re seeing is kind of starting to fuel up at our existing stations. At the beginning we had kind of allotted a lot of capital for kind of new type projects, those for whatever reason just starting to materialize, because I said, as I said people are kind of using the existing station. So based on that kind of timing and the need that numbers come down. Carter Driscoll – Ascendiant Capital Markets: And then what you have to do with GE in that bucket?

Certainly is, we’re kind of in a process of evaluating the timing of one we’re going to need those GE plans, I mean we want to make sure that we’re synced up a), we get the plans in the right locations and b), we get them timed up, so that we basically have the supply when we need it. So we’re kind of looking at that right now and we’re talking with those guys, because our partners they basically want the same things. So we’re working with them to kind of see, what makes sense as far as when we’re going to need to spend those dollars. So that’s a little bit up in the air right now, but we’re thinking that, that may get pushed out a little bit. Carter Driscoll – Ascendiant Capital Markets: Okay. And then maybe just shifting gears going back to IMW, can you talk about any potential progress you made that the deal signing pressure machines and that was going to start off slowly and then maybe also talk about and progress, the movement and the challenges?

Sure, let me talk about this. So we’ve made steady progress and in fact our President of our IMW subsidiary sent it over to Russia here I think next week, make steady progress with them, we’ve made steady progress on certifications which are necessary in Russia for our equipment. We and that frankly is what I think I talked about last time this is for in preparation of these big RFPs coming out from Ross Knapp and Gazprom and a couple of others. So we’ve sold some units to Russian machines which is, handful we’re really kind of in the ball pin now working to make sure we’re well positioned with Russian machines as our partner, there to that we want to try to be successful for big swing of these orders coming from those two big companies. That RP has not been, those RPs haven’t been released yet, that anything supportably anytime, so we’re watching that close and we’re working it. China gas, we are making good headway in China we have that ongoing kind of deal, we’re producing stations kind of at their request. You remember that was about a $160 million piece of business over a few year periods. We got kind of good order and then it has slowed down a little bit until this morning they asked about this very thing where we stood. These things kind of have been for a little bit in China and it looks like it’s now beginning to pick back up again. Though there hardly days goes by that we don’t continuing to hear more and more interest in China for CNG and LNG stations, in fact we had our own user name we had one of the largest companies within that business here in our offices here. And they said that they had already built, I think it was 250 LNG stations ahead of couple hundred CNG stations, they thought in the next year or two they can see that they need 4,000 more. So, we’re working it over there, China gas is a big player and so I hope as that continues to grows, we’ll get more and more of that. Carter Driscoll – Ascendiant Capital Markets: Okay. And then just really a last question, Rick, back to the impact of the very cold winter on Boron. You guys have any concrete times about how you potentially merge with that and how that plays into, what you do on the ongoing basis for the fuel scheduling [indiscernible]?

Well the nice thing, I think we really need to have, we may just have to kind of change how we buy our gas at Boron that one was very surprising kind of really unique, I mean obviously the weather extremely cold all across the country which caused significant upward price on the price of natural gas, such that it even came all the way across the country and lifted the price in California and that’s we kind of call this off guard a little bit. So, I think it’s just a matter we need to go back and look at how we buy our natural gas that supplies the Boron plant, if we can fix it that way great. And if not we always do on theory we could hedged to the extent we start to see some prices shown up in the winter or the colder months. So, good as that it’s not that, I don’t think difficult to fix it’s just something that we never really contemplated never really happened… Carter Driscoll – Ascendiant Capital Markets: Had ever really happened before?

Never ever, popped up, so yes something we’ll make sure doesn’t happen again. For the most part, at our stations well by natural gas we are pretty well protected right, because we’re purchasing that gas from utilities on a monthly basis and so the spikes, the hurricanes or some of these others, we may see that smoothed over time a little bit it goes up so we can respond to this one kind of caught us. Now we did what we could to mitigate it for instance we shut the plant out and we stopped producing for a while rather than buy really expensive despite gas. But, this was just one those more of winter thing that… Carter Driscoll – Ascendiant Capital Markets: Pretty winter thing.

Start to manage. So, we’re on and we have a guy in Total gas purchases and he is been working on these things since it happened to us. Carter Driscoll – Ascendiant Capital Markets: Well excuse me, lastly, I want to before to say that given what your expectation was through your margin both of particularly the differential was due to this spike for Boron some compared to 27 or with various assets?

Vast majority, it was pretty much difficult. Carter Driscoll – Ascendiant Capital Markets: Okay, thank you. I’ll get back in queue.

Sure, you bet.

Our next question comes from Colin Rusch with Northland Capital Markets. Colin Rusch – Northland Capital Markets: Thanks guys. Can you talk a little bit or actually quantify the operational efficiencies you’re getting from the changes your making in the stations. Just, how much are you saving in terms of the cost of operating in stations?

Well that’s got a broad question, we’re working that all the time right on point of sale and but on what I was talking about what I was referring to is Mitch Pratt, who is our Chief Operating Officer, and we’ve been working hard. We have sort of examining on and we were creating some kind of increased head pressure when we are offloading gas into our LNG into our stations and frankly warming up the fuel and therefore winning some fuel that you really rather not do. So we worked on some things to be able to mitigate that. We worked on some things to be able to take, because we remember we’re in early, we’re in early phases here with these stations and some of them well don’t been at all and never will because, they are selling lot of fuel every day. For instance, Port of LA we don’t get fueled there and haven’t really since day one, because we opened up with 100s of trucks, we have almost 1,100 or 1,000 trucks there so that is an issue. And some of these early phases that we opened, we’re trying to be good environments and we don’t want to do NPO they’ve been working on a couple of different recirculation techniques and other things to do something with the fuel in fact it’s kind of working out well that some of our gas is finding its way into our CNG and in our compressed gas operations of those things stations. But those are some of the things we are doing, volumes, lot of these stations will take care of most of this. Colin Rusch – Northland Capital Markets: Perfect.

And we are doing things, we do things at our CNG stations all the time in order to prior reduce electricity cost and all sorts of different things, its ongoing. Colin Rusch – Northland Capital Markets: Okay. And then just in the – the approach on CapEx I mean it sounds like kind of the slowly shifting approach to how you are spending, could you just talk about what’s going on internally in terms of your three to five years plants in terms of the CapEx spend and how we should be thinking about target time for reaching profitability? I know you talked about little bit, but kind of what are you guys thinking internally in terms of how you want to grow this business, from a pacing standpoint as we look at three to five years?

Right. So, we – I think if you know – if you kind of some people have been turned up nervous or inpatient and really I haven’t been the really one of those. I have seen these markets grow before. And this one in the heavy goods truck with heavy-duty truck market, well let me back up our core markets have been growing and growing steadily, our transit markets are picking up, our airport markets are picking up and they are growing in the 20 some odd percent range. So they have and they will and they’ll continue, so we’re pleased with that. There is new big heavy-duty truck market, its new and just getting going and frankly it was about a year later than we had anticipated and so if there is a criticism here me, is we got that those highway stations put in place early. And so, our job right now is to open lot of those stations this year and we feel good about that. We know we’re having those stations in place; it’s really given us some ability to change the discussion between the shippers and truckers. So we’re very comfortable with what we’ve done. But we also want to make sure that we’re deploying the capital best way we can and it doesn’t we don’t need another 25 or 30 spec truck locations out there right now, there is going to be, we still have a whole bunch of stations and we think is, we want to build, our customers wants to build and eventually, we talk about locating things at production facilities and distributions centers. And I think all those are going to happen, we are going to make sure we time that up with the adoption of these trucks. And so, I think what you’re seeing here is us just wanting to make sure we’re good towards the capital, we’re sitting out at $300 million cash, we don’t need to pull the trigger, at Christmas time on two LNG plants where we have to contribute 25 or so million dollars each. We haven’t working with our friends last week for two days in GE, we haven’t lost any enthusiasm for them, we will build those plants. I feel confident of that, we’ve just asked to work with them a little flexibility to push them out to make sure that they easily come on board when we need them. And so, that’s a big, that’s some of what you seeing there. When we look out to 2015, 2016 we put some sort of adoption rate, we think on these trucks, you’re going to all your stations well over it, you’re going to require new stations to be built, will have to pull the trigger on those plants, so that they are ready to go by the end of 2016 early 2017, because you are going to add the LNG in the country. And so the way we look at it is if we’re prudent the $80 million spend or so $85 million whatever is this year I think will go a long way right now on our carted, we’re building 70 some odd stations, some of those for customers, many of them for own account were opening those stations that we build. It should provide us plenty of capitals with that kind of continued CapEx spend for 2015 as well and we should be able to make it all the way through 2016. So we have it and we think by that time you’re going to – you’re volume will be up and you will be in a position where you will be able to value yourself to some other kind of financing. As you know we’re not that interested and wanting to dilute our shareholders anymore. But we wanted to make sure that we’re here for the kind of the finish line and we see – in 2016 you’re going to have, it’s going to be a much different picture and a much better visibility in the next six or eight months. And we just want to make sure that we have plenty of capital to respond. Colin Rusch – Northland Capital Markets: Prefect, thanks a lot guys.

Yes.

Our next question comes from Caleb Dorfman with Simmons & Company. Please proceed with your question. Caleb Dorfman – Simmons & Company: Good afternoon, gentlemen.

Hey, Caleb.

Hi, Caleb. Caleb Dorfman – Simmons & Company: It’s nice to see volume growth this quarter, can you sort of give us a bridge from the Q4 volumes to the Q1 volume sort of breaking out any of those one-time sales to the utility customers and then how much of that additional growth was organic growth that with existing stations versus the new stations?

Absolutely, the one-off number just to kind of get that off the table is probably 800,000 or 900,000 gallons between the fourth quarter 2013 and the first quarter of 2014. So basically we’re up about 3 million gallons over the prior quarter. Lot of that was refuse trucks, and a good chunk of that was with the existing customers, but also some new. But our friends the Waste Management Republic just added a total of crash trucks in the first quarter, which is great. As Andrew mentioned, DART the O&M contract started in the first quarter of 2014 that kicked in another 1.3 million gallons into the actual bucket. So that was certainly good in an uplift and the other thing it was nice is, we opened several trucking stations, 9 or 10 right. So those stations opening up with new and existing customers adding trucks, our trucking volumes had a nice uptick. So the nice thing was it was kind of across the board increase in a lot of the different sectors and certainly was encouraging for us. Caleb Dorfman – Simmons & Company: I know that you are always hesitant to provide guidance, but do you think it’s still appropriate to think that most of the increase in volume this year will still be a second half of that, just because of the timing of the ANGH spacing in the trucking fleet?

That’s we kind of think about it. Caleb Dorfman – Simmons & Company: Okay. And then I guess you called out the number of actual UPS trucks that you are fueling right now, across all of the America’s Natural Gas Highway fleet how trucks do you have with you?

I don’t know, its good question, because jeez kind of how you slice it, so like you know we have some of our America’s Natural Gas Highways starts out here in the west coast and in Southern California, we got 1000 trucks at the port and so.

Caleb this is a good one, well lets us do little work on how many, it’s going to be in the couple of 1000s range, 2,500 I bet you.

May be even more. Caleb Dorfman – Simmons & Company: So that the UPS is actually fair with small percentage?

What I like and what we see happening, I love to see every fleet in America ordering 300 or 400 trucks to their fleet. But, what we are seeing and it’s interesting to me is right now we have about 230, 250 fleets now testing this new 12 liter engine that, its CNG and LNG which is, way up from where we were before. So you’re seeing a great deal of breadth and some of these players, buy 1000s of trucks. So I like that, I would be more concerned if we don’t really have 30 new fleets fueling around us. Now we’ve got just our company, we know about 250, so that’s I don’t know the percentage gain, but over a couple of years ago it would have been a handful. So it’s grown – it’s grown dramatically a lot of people are testing it now. Caleb Dorfman – Simmons & Company: That’s helpful. And then I guess finally, do you have any sort of same-store sales growth number for those ANGH station, which has been opened say six months or a year, because once which were established we started with 20 trucks are they gaining more trucks for you in at those stations?

Not really it’s still early for that, lot of them are just kind of opening now or just recently opened. So can be fair to those, you want to get a little time for our sales team can kind of work the area around the stations to grow the volumes that’s one thing we’ve done is once the station opens we cast our sales team with starting to call all the fleet within a say a 5 or 10 mile radius to that station to start, to try and load it with additional trucks and volumes as soon as possible. So, I think we want to let those, kind of run there of course a little bit and fruits of those efforts and then maybe we can contemplate looking at that down the road perhaps. Caleb Dorfman – Simmons & Company: Thank you gentlemen.

Thank you.

Our next question comes from Chris McDougall with Westlake Securities. Please proceed with your question. Chris McDougall – Westlake Securities: Hello gentlemen thanks for all the positive updates.

Sure Chris. Chris McDougall – Westlake Securities: So discussion on few things, the IMW at quarter, certainly a good quarter from the commentary and last can through Q1, how sustainable are, this is the format and how much of the gross margin pick up is driven from volume versus mix?

On the IMW side, just the margin pick up, I would say more a lot of – lot of issues due to their efforts of kind of targeting the business around and getting efficient on the production making sure they understand their cost and pricing of products. So, I just lot of things are capable, enable COO and Pratt has been working with them on starting to come to fruition which is good. And that’s to get more business, so I would say it’s kind of a combination, they are starting to get a lot of really good international opportunities, our sales efforts are starting to pay off. So that’s good, and the other thing is embedded in there is once you do get kind of producing at higher volume levels that’s great from the margin perspective, because your utilizations get better. One thing I think we forget about is over the last year or two we kind of expanded our China production facility we expanded our British Columbia production facility. So when you do that and you don’t put a lot of volume through there, kind of it has draining effect on to your margins, once you start putting more volumes through there, it helps your margin. So it’s kind of confluence of all of those which is helped on IMW side. So, all that efforts are starting to come to fruition. Chris McDougall – Westlake Securities: And then back on the core business, you talked a lot about CapEx and I appreciate the updated guidance, so how quickly can you ramp up or down the station CapEx, excluding the potential LNG plant or something, but for station CapEx?

Well it, that’s easy you can spend a way on that stuff. And what I like about this, and this isn’t really that new for us, I mean I think we’ve and I think we’ve done the right thing we’re trying to tell the investor community kind of the big number, I mean we did it last year, I think we said our capital, CapEx number is going to be a $167 million or $180 million when we came in, $68 million less than that or so didn’t Rick.

Yes.

And so this isn’t something we haven’t done before, we want you to know, what do you know kind of when we look at our whole bench of things that we can do and that we think we need to do that’s sometimes you just don’t get them all done because of the calendar runs out on you. But, what I like about this business is, the stations, other than those plants as you currently identified, these things are $1.5 million clips, they are $2 million things. So you want to slow it down, you stop it. We don’t have anything nearly here that’s like and I’m not picking on them. But this isn’t like a [shinear] [ph] right, we are committed to build a $5 billion plant and we just have to rent and bear it. We can really adjust this where we want to spend it and when we want to spend it. We have a bolt-in right now of projects that we – that aren’t on what we call our carpets. So that means they are not in, in engineering design permitting a construction. We have 70. We finished 11 already this year. We think we got about another 59 that will likely get done or more this year. That’s just gone up five in the last – four in the last week. But, there is another 70 or 80 projects right behind that. And those will begin to percolate in and we will make decisions on those. Some of those are for customers, some of them are for us. But, we can – that number can grow quickly if we wanted to and if we needed… Chris McDougall – Westlake Securities: And then on the other side, do you think it may be 6 months out?

Yes. I’m sorry, the other thing I was going to say is the business really has from a station perspective essentially no maintenance CapEx. I mean our maintenance CapEx budget is probably $1 million or $2 million a year. So that it extend all of our CapEx spending in essence discretionary and we can go after specific projects or those types of things, which is good. Just to your point, we very good cut it off worst case tomorrow, if you want to do and just have a couple of million dollars that we would need to spend. Chris McDougall – Westlake Securities: Okay. Great. Thanks. And then lastly, Andrew, if you can give us just a little bit of color on the competitive environment, I mean there are number of names out there and some announcements and stuff. But if you could characterize maybe sequentially if it’s getting much more competitive or about the same or any other color would be great? Thanks.

Yes. It’s been fun for me to watch because for a while people used to say, whether you don’t have any competitors and then that would leave one to believe, if you don’t have any competitors business, there is no real business. And so that has changed by the way. I think over the last couple of years, with probably 50 new companies that have announced they are in this business now. Some of them very small. Some of them are regional. Some of them are offshoot utilities. Some of them are I would say probably difficult on the capital side. Some of them are not though. Some of them are large. Some of the ones that we saw the big things talk about a couple of years ago, there was one that says he was going to build 1000 stations, it was very well known billionaire – company for a billionaire in the southeast of the United States, they are into the business any more. So they went from 1000 to zero. So we do see some people come in and make some announcements. There is one, yesterday or today I think whether projecting how many stations they are going to build over the next two years, a lot can happen in two years. So it’s been a lot of announcements, lot of people saying they are going to get into the business. Some of the stuff will shake out. But I would say, I mean you are right, there is a lot more competitors there aren’t that many competitors in the LNG side of the business. And most – all of the rest are in the CNG side. And then many of them regional in nature. And so it gives us a little bit of an edge with many of them because we can respond to a nationwide fleet, where others have tougher time doing that. But there is definitely a lot more competition today, that’s a good thing. It’s a very big market. This is – I talked at the ACT Expo, when you look at our core markets of rough used trash, airports and then you – that’s about 6 billion gallon annual market, you then put on the regional and kind of over the road trucking market that’s another 25 or 30 billion gallons. Then you add in marine which is 6.6 billion and rail is 3.6 billion and mining is 1.6 billion, this is big – this is a big market. So there is a lot of opportunity and lots of places for people to participate. Chris McDougall – Westlake Securities: Okay. Thank you very, gentlemen.

You are welcome.

Our next question comes from Matthew Blair with Macquarie. Please proceed. Matthew Blair – Macquarie: Hey, good afternoon. Andrew, I think you mentioned of the 26 open highway stations, 17 are now providing CNG, can you clarify, are those stations connected to pipeline natural gas or they all making CNG from an LNG base? Thanks.

I will look at – when my guys and my operating guys are here. Some of them majority and some of them CNG. Matthew Blair – Macquarie: Okay.

Majority of the 17 and the 26 that have – both have capability of those particular highway stations. They are all CNG now. Of the other 70, truck friendly stations those were all CNG and oil pipeline. Matthew Blair – Macquarie: Got it. Okay. And then sorry, if another margin question but if you – isn’t the margin opportunity on the CNG going to be a lot less because that’s CNG that’s been both liquefied and compressed compared to say like a retail CNG gallon or retail LNG gallon…

Yes. It’s got less margin. You are doing another. Now, the real challenge is the LNG part of it, right? You don’t have a lot of compression costs and a lot of the costs and they are all CNG. Thank goodness. You are doing another step there. And it is costing us a little bit more but its surprisingly Matthew not what you would expect. It’s not the same scale as compressed natural gas starting from scratch. Matthew Blair – Macquarie: Okay. And then finally, Rick, could you provide the IMW gross margin, I think the revenue was around $22 million, but I’m not sure that you provided that gross margin yet?

2.6. Excuse me that was a change over last quarter, 4.0. Matthew Blair – Macquarie: Great.

Now is the record for them. Matthew Blair – Macquarie: Great. Thanks guys.

Thank you.

Our next question comes from Rob Bennett from Dougherty & Company. Rob Bennett – Dougherty & Company: I’m on for Andrea James. Congratulations on the volume.

Thanks.

Thanks. Rob Bennett – Dougherty & Company: Just two quick questions, can you talk a little bit more about UPS and its trajectory or plans?

Well, I can only tell you what I think they have announced. And then you would have to ask them. I mean believe on the heavy duty there, I haven’t heard much change at all. And they reported order of 985 a piece, started with last year, they taken some last year, they were taking in them now. I don’t – I can’t give you how many they have taken, but still the best change. What I think I heard more recently was and I think its accurate that they are not really buying any diesel – any diesel trucks in 2014. so that seems to be in place. They, I know have stepped up on the – buying some full time vehicles for kind of their medium duty package fleet and also the CNG vehicles. So that’s so harsh. They continue to really show leadership there. And its impressive what they are doing. Rob Bennett – Dougherty & Company: Great. Thanks for that. And then you said, you need about 23 million gallons to get to EBITDA break-even. Then I know you have a pipeline of shippers that you are talking to for fill-in contracts. So that current pipeline get you to you’re the striking distance of 23 million gallons.

Yes. I mean I think – here Rick wants to say that.

Yes. I just want to tell you when.

The way I look at it is traditionally generally all right there can be exception here. We have been growing around 20 some odd percent. So we did 217 million gallons, right, last year that’s 214. So if you put a 20% on there that’s 40 some odd million gallons.

Yes. The whole point now is just to show our rebate. They were not that far away, right? I mean if you take 23 million gallons at $0.30 that’s $7 million. That kind of covers our adjusted EBITDA shortfall and hopefully you kind of see from the math Andrew just went through and look at the raw totals and growth rates. And what we have historically or this quarter kind of look at some numbers, we are not that far away. Because I think a lot of times people think we need 100s of 1000s trucks for this now when it’s really 1000s is to kind of get hopefully to some sort of break-even from an operating perspective. And then on after that it all becomes incremental and upside. So I just want to give a little color – that’s the stuff we talk about too. I mean obviously, we are focused on that we understand that at some time, we got to start making money in addition to just getting this thing going, now, it is going. Now, we are focused on that and just want people to know. So that’s what it’s all about. Rob Bennett – Dougherty & Company: Great. Appreciate the color. Thanks guys.

You are welcome.

Just if I could I want to say one more thing about IMW, a lot of times people forget, they during a quarter sold Clean Energy $5.8 million worth of compressors and equipment that does not show up in our numbers. That’s all get eliminated because there are some severity and we all know. So there is a lot of other economic value in addition to just the operational and other things that they bring to the table. That they produce the kind of gets smashed and covered up a little bit. So that’s another thing just to think about and then also just if the guys up there just really doing a good job. I guess I stumped everybody.

I’m sorry. I apologize.

That’s okay.

I thought you may – is this questioner conclude?

Yes.

Yes.

Your next question comes from Pavel Molchanov with Raymond James. Please proceed with your question. John Jenkins – Raymond James: This is actually John Jenkins on for Pavel. And I think most of mine have been answered. But thanks for taking the questions anyway. And I guess, the first one I have is more of a clarification in regards to the figure you mentioned that you will need to add 23 million gallons from current levels to reach adjusted EBITDA positive. Is that was on a quarterly basis for both gallons sold and EBITDA, is that right?

Yes. Again, if we have 23 million more gallons or $0.30 I would have 7 million more of margin/EBITDA. John Jenkins – Raymond James: Got you. Thank you.

So that quick math comes from, right? John Jenkins – Raymond James: Okay. Thanks. And I guess back to the CapEx plans, I know you touched on this already but from the figures provided for the full year effect station build up plans at all? And I suppose secondly, when you think you will be in a better position to provide what 2015 spending may look like?

Oh, no. I guess, we are kind of building what we think we need, right now, as I just indicated, it actually ticked up in the last week. So there hasn’t been some dramatic down shifting or cutting of the inventories stations are pulled back so I hope that wasn’t what you got out of this. It’s wanting to make sure that we are timing them correctly. I mean, we are still slated to build 70 some odd stations probably this year. So it’s just still very busy. 2015, we haven’t really said it but what we told people, I think we said before, it would be like number, of course, if the whole industry just goes bananas, we will respond. Accordingly that’s a very good thing. But what we envisioned you would have a CapEx spend in 2015 that would be some more this year, like we see that sort of need to continue. This business is growing pretty fast. I guess, that’s a good thing. We need to spend the money that means trucks are starting to show up, gallons are showing up and the volumes showing up and we need it. And as we alluded to earlier we kind of control the timing and how much and when – stuff on the CapEx side and we have 300 some millions. If we are accurate, we are in a pretty position on that. John Jenkins – Raymond James: Got it. Appreciate the clarity guys.

Okay, sure.

Thank you.

All right. Operator, I think we are – yes.

You are like to say, turn the floor back to Andrew Littlefair for closing remarks.

Okay. Thanks operator. And thank you all for listening today and for your continued support. We look forward to reporting to you on our progress next quarter.