Q2 2019 Earnings Call
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator says during the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I would now like to turn the conference over to your host Mr., Bob Kierlin Chief Financial Officer. Thank you you may begin.
Thank you operator.
Earlier this afternoon clean energy released financial results for the second quarter ending June 32019.
If you did not receive the release it is available on the Investor Relations section of the company's website at Www Dot clean energy fuels Dot 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 Energys Form 10-Q filed today.
These forward looking statements speak only as the date of this release the company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the circumstances. After the date of this release.
The company's non-GAAP EPS and adjusted EBITDA will there 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 FCC on form 8-K today.
With that I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.
Thank you Bob Good afternoon, everyone and thank you for joining US second quarter of this year demonstrated that our continued focus on increasing our fuel volume proved to be fruitful with an 11% increase over the same quarter in 2018.
We delivered just shy of 100 million gallons in the second quarter, which equates to 1.1 million gallons of natural gas fuel being delivered to our customers across the country every day of the quarter.
To put the growth an acceptance of natural gas fueling in perspective, we delivered 700000 gallons of fuel.
And our first full year of business and almost entirely in one state.
Our financial performance continue to improve through the second quarter as well with 72.3 million in revenue, which is slightly up over a year ago.
Well, what I would point out is that our operating results continued to improve as we add volumes and lower operating interest cost, which in the second quarter resulted in part was positive operating.
Cash flow.
[noise] what is propelling our fuel volume growth is that more and more customers are realizing the incredible benefits of renewable natural gas.
You've heard me report multiple times that our redeem branded RMG isn't easy way for fleets to capture tremendous environmental benefits, both long term carbon reduction in short term pollution.
At our existing natural gas fueling infrastructure, while remaining highly competitive with fleets operating on diesel.
What are the most significant advancements and the acceptance of Orange is the announcement.
That you PS made in the second quarter that they would be purchasing 170 million gallons of redeem from us through 2046, making it the largest R&D vehicle fuel purchase ever.
The significance of this move by EWP, Yes, one of the largest logistics companies in the world and a company that has been at the forefront in aggressively finding ways to operate in a more environmentally sustainable way cannot be overstated.
By expanding their use of the world's cleanest fuel to 18 existing you PS natural gas stations in 12 different states around the country you PS should realize a reduction of 1.074 million metric tons of greenhouse gases over the life of the agreement.
This is the equivalent to planting 17 million trees or removing 228000 cars off the road.
It is important to note that all of this additional R&D volume is in states outside of California, where you PS is already used 28 million gallons operate their California fleets since switching your R&D in 2014.
These significant environmental savings by U.P.S., including major reductions in greenhouse gases are being achieved today not years in the future like other alternatives such as electric or problems.
With this broad expansion of the use of Orange GBS is demonstrating that a company can easily switch to a fueled operate thousands of heavy duty trucks around the country, well, Stan hi, highly competitive in assuring quality and timely service for their customers.
Most recent UK steel is a great example of redeem being used in the heavy duty truck application, but all our transportation segments are embracing appeal.
During the last quarter, we also signed a significant agreement with Santa Monica's Big Blue bus to continue to supply the transit agencies 200 buses with redeem in one of the most environmentally conscious cities in the country.
The deal represents over 2.3 million gallons of redeem a year.
We recently expanded the availability of redeem to the New York City area by opening the city's first RMG publicly accessible station in the South Bronx.
Redeem is now being used by a variety of vehicles, including heavy duty trucks beverage beverage delivery trucks and service vehicles.
Los Angeles County Metropolitan Transportation Authority is recommitting to its use of redeem by replacing older CNG buses with 100, new CNG buses and upgrading another 125 with the new Commons near zero engines.
These new buses will be up in operation for up to 12 years, demonstrating that the transit agency likes their experience with RMG in the environmental benefits it brings.
Les Metro has also announced that they will increase their usage RMG further CNG buses from 50% to up to 100% by next year.
Okay, Abby M. aviation one of the country's largest aviation services companies.
The expanded their fleet of natural gas vehicles to help move passengers around LTX, while the airport undergoes a massive remodel.
Clean energy is expected to provide a b M with 180000 gallons of redeem for these new vehicles.
Other transit agencies and solid waste companies continue to expand their use of redeem or sign up for rich.
So an upward for the first time during the second quarter, allowing redeem to get close to the 50% Mark of clean Energys overall vehicle transportation fuel mix.
This puts us on track to achieve our goal of providing a 100% of our vehicle fleet customers with redeem which will translate into a tremendous amount of reduction in greenhouse gases all at a competitive price of diesel and no disruption in operations.
I'll also note that this impressive growth in our in GI product was done at a time when the prices of Rins.
The environmental credits generated under the federal renewable fuel standard by dispensing RMG product into vehicles was very low.
Over 70% lower than a year ago.
We believe that RIN pricing will begin to strengthen later this year and into next year as the EPA since the upcoming.
Renewable volume obligations or ARVO, and if so the upside should be substantial.
A segment that is expected to fuel the growth of our overall volume and redeem in particular is the heavy duty truck market.
As I reported last quarter, our new zero now financing program has begun to show results.
Orders for heavy duty trucks began earlier this year and continue at a nice pace.
We are in discussions with dozens of the country's largest trucking companies about how they can take advantage of this offer to expand their fleets with the new trucks equipped with the latest generation of the Commons 12 liter engine, which were deuces nox by over 90%.
I'm also pleased to announce that some of the companies have begun to take delivery of the first 100 trucks equipped with the new engine they will fuel at clean energy stations with redeem.
Many of these firms took part in a pilot program run at the Port of Los Angeles, and long Beach. The tested early version of the New Cummins 12 liter near zero engine.
Im pleased to say that the year long test program was a success demonstrated by the fact that the companies that participated at the confidence in the performance of the engines to order more trucks.
Another bit of information from the ports that I would like to pass along is that clean energy recently completed its station within the port of Los Angeles to fuel terminal tractors equipped with the new Cummins engine.
This is part of a program sponsored by the Port of L.A., and the California Energy Commission and their ongoing effort to clean up the dirtiest air in the country.
Grant was given for the purchase of 20, new natural gas terminal trucks and for the fueling station and by the way a grant of the same amount was given to a Chinese manufacturer of large electric vehicles for trucks and a charging station and it's worth noting that with the same amount of money only three E.V. trucks will eventually be delivered once the charging station is operational versus 20 natural gas trucks that have been begun to fuel at our station.
This is a great anecdote and helps to explain why there was a headline in the trucking trade publication earlier. This week that said quote natural gas truck sales surge, even as electric trucks get the hype input.
With driver shortages tariffs and other obstacles facing trucks and logistics firms there was only one alternative.
They can choose that won't give them added costs and additional headache as they look for ways to meet stricter emission standards and that is natural gas.
All in all the second quarter was very productive and the momentum continues in the in our business across the board as we improve our financial position, we are keeping our SGN a expense and capital levels spending at levels that will allow us to exploit our volume growth with higher margins.
Our interest expense is down 60% from a year ago and our cash position is strong.
And with that I will turn the call over to Bob for more details.
Thank you Andrew.
Our volume growth and financial results for the second quarter of 2019 were in line with our expectations and we maintain our volume and financial outlook for the full year 2019.
This assumes RIN pricing recovers from the more recent significant decline that occurred in June and that LCF as pricing remains consistent with what we've seen so far in 2019.
Our volume growth of 11% in the second quarter compared to last year came principally from CNG LNG volumes were slightly ahead of last year.
We continue to benefit from our growth and the delivery of redeem related to our expanded relationship with BP and beginning in the second quarter deliveries of redeem under our New York EPS contract.
Redeem volume grew 62% in the second quarter to 39 million gallons versus 24 million gallons a year ago.
Our revenue for the second quarter of 2019 was $72.3 million, which included $600000 noncash gain on our zeroed out fuel hedge.
Last year second quarter revenue was 70.5 million, which included 1.4 million in alternative fuel tax credits.
Our volume related revenue exclusive of the fuel hedge gain increased $3.2 million or 5% year over year due principally to our volume growth, partially offset by a lower effective price per gallon due to falling natural gas prices, which is a benefit on the cost side of the equation.
The decline in RIN prices and the mix of fuel sales.
Our effective price per gallon in the second quarter of 2019 for all volumes delivered was 66 cents per gallon compared to an effective price of 70 cents per gallon delivered in the second quarter of 2018, and 84 cents per gallon in the first quarter of 2019.
But again to the extent that our revenue was lowered by the effect of falling natural gas prices. We also see a benefit in our commodity cost of goods sold.
Considering today's market conditions and looking forward, we see an effective price per gallon on all volumes delivered to be in a range between 66, and 68 cents per gallon, assuming a recovery in RIN pricing and consistent LCFS pricing as I mentioned previously.
Our station project sales of 5.9 million for the second quarter of 2019 or slightly ahead of a year ago and up significantly from the first quarter of 2019 station project revenues for the third and fourth quarters are expected to trend similar as what we saw in the second quarter. Thus, taking the total for 2019 to approximately 21 million without changing our expected net results for 2019.
We're seeing steady activity in station projects and a continued steady backlog.
Our overall gross profit margin in the second quarter of 2019 was $24.7 million, which benefited from the $600000 noncash zero now fuel hedge gain.
Gross margin in the second quarter of 2018 was 24.8 million.
Which benefited from the $1.4 million in alternative fuel tax credit income.
Exclusive of these gains are 2019 gross profit margin increased $700000 or 3% from a year ago.
This increase is principally attributed to our volume growth.
Our effective margin per gallon was 24.6 cents per gallon for the second quarter of 2019 compared to last year at 26.5 cents per gallon and the first quarter of this year at 25.7 cents per gallon.
It's important to note here that our volume growth is driving incremental gross profit margin dollars and volume growth momentum is a key element to our improved financial performance and being able to exploit our existing natural gas fueling infrastructure.
We are expecting year over year accretive gross profit margin dollars for 2019, as a result of our volume growth.
We also expect to finish the year within our effective gross profit margin per gallon range of 24 cents to 28 cents per gallon.
Our SGN a in the second quarter of 2019 was $17.9 million versus $19.9 million a year ago.
Looking forward, we still anticipate being within our expected range of 73 to 79 million. Although we are trending favorably toward the bottom half of that range.
Our GAAP net loss for the second quarter of 2019 was $5.4 million compared to a GAAP net loss of $12 million a year ago, noting again that last year included the favorable impact of $1.4 million in alternative fuel tax credit income in 2019 was favorably impacted by the noncash gain of 600000 from the zero now fuel hedge.
This improvement in our net results was driven principally by better operating margins and lower interest expense.
Our interest expense declined by $2.7 million for the second quarter compared to a year ago, bringing the year to date decline in interest expense to $5.3 million compared to last year.
Which is a direct result of our improved capital structure.
Our adjusted net loss for the second quarter of 2019 was $5 million compared to an adjusted net loss of $10.1 million.
In 2018.
And our adjusted EBITDA for the second quarter of 2019 was $8.9 million compared to $7.4 million in 2018.
Noting again that the adjusted net loss and adjusted EBITDA for 2018 included $1.4 million in alternative fuel tax credit income.
We ended the second quarter of 2019 with $107.5 million in cash and investments up $13.4 million from $94.1 million at the end of the first quarter.
The increase in cash during the second quarter was principally from cash provided by operations of $17 million.
Purchases of property and equipment were $3.4 million during the second quarter of 2019.
Our convertible debt due in June 2020 is unchanged at 50 million and our equipment and facility financing debt principally held that energy advantage is that $34 million as I mentioned on our last call. We see growth in our zero now truck program and expansions that energy advantage to support increased gas flow capabilities. So we'll likely see an increase in our capital expenditures and debt balances during the second half of 2019.
Keeping in mind this debt will be directly attributed to contracted volume growth.
And with that operator, we'll now open the call to questions.
Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad a confirmation. So indicate your line is in the question queue.
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Okay.
Our first question comes from the line of Eric Stine with Craig Hallum. Please proceed with your question.
Hi, Bob.
Hi, Eric.
Hey, first so on the zero now financing program. Just curious you know as you think about end of 2019 is that something where we should still.
Think about a couple thousand trucks.
You know rolling out.
For that and then also just a follow on.
Just curious what the conversations are like with fleets I know that earlier. This year, you really had to educate people about the program and that they could have a fixed discounted diesel.
Just maybe where that stands now.
Yes, Thanks, Eric.
When we talked about the number of a couple of thousand trucks 2500 trucks. You know we were kind of doing the math on the on the facility that we.
Yeah, the $100 million facility that we put in place which.
That we put in place.
Hold on one second we have Eric Foner.
That was really the bath that we did through the through the facility that we run into a total but I still think that number is a good number now as Eric we we've talked to you before.
It's we won't see the volume on a couple of thousand trucks by the end of this year, but I still like to think that towards the latter part of this year.
And probably the early.
Rolling into January I still like to think that couple of thousand trucks little more would still be a number that we'd like to move on.
As I said just roughly in my remarks, I mean, we are our salesforce is literally contacting dozens and dozens we have contacted really about 100 of the largest fleets and were in ongoing negotiations negotiations.
With dozens of those we literally had of those 100 fleets just a handful so the really rather not go forward right now so.
As I described in a call a couple of times ago that this is a.
This does take a while and I get a lot of questions on just what is the process. There is education involved theres education on understanding the portion of their fleet that might be.
Might be ready to work overlaying that on our fueling network.
Then going out and speaking of truck getting a price on the truck then becoming educated on the fuel Ed which by the way they really like.
You know most of the fleets out there or not hedging their fuel and so this is a little something new that they have to get comfortable with that they have to sign onto a fuel take.
But were able to to lock them into a fuel discount less than diesel for several years the length of the lease and Thats is very appealing to them. So.
It's kind of an eight step four or five month process, we're asking them to spend real money.
And we're really working with fleets Eric that it's more than.
One Z two Z. So were pass this test days were actually at actually asking fleets and what fleets are interested in is is beginning to get a number of 2040 50 trucks.
To get real experience and then it's our hope that in 2020 2021, as we move forward you'll begin to see the procurement cycle much like what we saw in the refuse cycle. When we started in 2008 when we got the first heavy duty engines warranty from the factory from Cummins for the rest refuse segment.
In that year, there were only 300.
Trash trucks, and and fleets a handful fleets tried.
Now a few trucks and it took about two or three years to we really got into a procurement into their normal procurement cycle, where we went from 3% to 8%, 10% and as you well know the story, 60% of every trash trucks sold in America today's natural gas. So I think thats, what will happen here in the heavy duty.
Segment, we're in the early days of that the reception has been good as I said in my remarks. The first 100 of those zero now trucks and are hitting the roads now beginning to feels that we're seeing the progress and so we feel pretty good about.
Good.
And maybe I'll, just stick with heavy duty trucking, but in terms of redeem just curious obviously in a pretty significant announcement from Aesynt and has that have you noticed any uptick in terms of.
Trucking interest because of that.
And it would also and just a follow up there just love to hear any thoughts on maybe year over year comparisons in terms of number of fleets using redeem versus last year.
Okay well.
The U.P.S. announcement, you PS is proud of what they've done here and they.
As you know the in the announcement it was it was GPS. So look you PS as a worldwide leader in logistics and transportation and so what they are doing people watch and so I'd say the answer to your question is yes, we've had a lot and it's why I talked a little so much about the redeem and today's remarks, our customers are interested in getting the redeem it is really for us. That's a good thing because it's a differentiated feel for us or the leader at and it's really captured the attention of audit fleets.
Yes, we talk about natural gas, but we more often than not end up getting them over to the renewal because they see they get a kind of a double bang for their buck.
And.
And the U.S. announcements really helped.
Eric I know you pay attention to this but a lot of our listeners may be don't but there's been a lot of trade stories about new PS and the renewable RMG purchase that they did and.
You know 170 million gallons of any feels a lot of fuel and so it was significant and people have noticed it.
Yes, more fleets today than last year are using redeem and we see it we see the uptick and I guess as Bob said or.
In our remarks, I mean, our redeem volumes up 60% or so over here over here. So it's a good it's a bright spot in our business and as good margin business and so.
We like to make sure everybody understands and you know what the reason I keep talking about is because there is confusion there is.
Focus on electric that that's somehow is the Holy Grail, but what people are beginning to understand this you PS thing makes them understand it is well wait a minute there is something else here and its available today is actually cheaper.
And it's a drop in fuel into the existing network of fueling stations that are out there not only ours, but others. It's the renewable fuel, which is better than electric and lower on carbon and so we need to tell that story because it's it's a strong one and it's good for Americas and got a lot of renewable fuel either.
Yes, absolutely okay. Thanks for all the detail.
You bet.
Our next question comes from the line of Rob Brown with Lake Street Capital markets. Please proceed with your question.
Hi, Good Hey, Rob.
Good afternoon Roger.
Sticking with the U.S. contract when does that start to rollout and how does that ramp and impact volume going forward.
What started already and then started really last month kind of late April late April .
So its been in process, we're seeing those volumes hitting now it ramps up.
I'm going to have to defer to Bob here I think we get about 17 million gallons of it. So this year and then it goes up to next year on 25 to 27 million gallons. So it's in that range and then it kind of rolls at about that level for the next few years, yes, and so.
And so those.
I mean those gallons are in.
Those gallons are in our fuel gallons if you will.
Okay, great. Thank you.
And then on the.
On the Rins situation.
What's sort of your pricing expectations in the in the guidance or how do you view that market kind of putting out over that over the next 12 months.
Well, let me start and then Bob can talk about how we have it in there.
So you know there's two there's two pieces that are important for us is the RIN right, which is the federal.
And the reason clean energy is in a pretty good position here is because you know you don't get the RIN unless you get it in the fuel if you get this bio methane into the fuel tank right and Thats, what thats, how we see why we are an important component with our partner.
BP and renewable fuels, because we have the feeling infrastructure and the customers.
So theres the federal piece, which is the Rins and then there is the low carbon fuel standard credit, which is out here in California, and I guess in Washington, and Oregon, and other states are looking at it.
RIN pricing has gone down quite a bit of theirs.
There is an oversupply and.
It's gone down.
We don't you don't see it all in the numbers the second quarter, just started out higher but it's come down from.
Gosh dollar and a half dollar 60.
To 70 cents, so its cut by 60 or 70% so.
We're watching that really closely we think that will take care of itself in the latter part of the year and early next year.
As we believe the.
The EPA will.
Adopt our veo number that will that will better balance supply and demand and so we think the RIN pricing will go back up.
In the meantime, the low carbon fuel standards at historic high.
And so we benefit from that now we have more rins and we do lose low carbon fuel standard, but it's kind of it's a nice balance for us Bob I don't know if you have any thing that you give I mean, just kind of specific one first I mean theres.
There is a lot of variables within our delivery of of reading and so it's hard to just pinpoint one element one variable in in when we deliver redeem but.
From a pricing a RIN pricing.
You know in the for the first quarter.
We saw averages.
Between.
Dollar closer to $1.80 the second.
Quarter that number was closer to maybe.
$1.30, but now are we've also seen 80 cents in looking forward and my comments.
You know I am factoring in something between kind of between that average of Q2 and Q1.
It starts to take into account.
Dollar and a half or so.
It is really.
Kind of an estimate on the on the pricing, but again.
We have a number of decisions that we go through on the delivery of redeem and with the volume would optimizing it in the best locations all the various stations as well as what the different split starwood the supplies and all of that.
Factors into how we ultimately perform on though.
On delivering our redeem.
Okay, great. Thank you for that overview I'll turn it over.
Our next question.
Comes from the line of personnel monitor with Raymond James. Please proceed with your question.
Thanks for taking my question, let me start off with.
What about the income statement revenues, specifically I know that the linkage between gallons and product revenue is always rather loose because of different mix issues, but it feels like this quarter.
Kind of the product revenue per gallon.
Wise.
On the low side relative to what it has been historically.
Is that a fair statement.
It is a fair statement and so I kind of brought out the reasons behind that.
Really and Theres, a number of things I mean, most of the time were impacted by.
What's going on with natural gas prices. So you kind of get the product impact, but you also get a favorable impact on on the cost side of the equation.
You have that in there then we did see some decline in the RIN.
Values as we as Andrew noted it wasn't.
A full extent, but certainly it was lower.
And.
And then and then the mix just kind of the fuel mix can.
Where the fuel is delivered and the type of fuel drives it but.
Overall, our pro for our net performance is better. So I mean, we continue to really look at our margin per gallon.
I know the revenue numbers kind of it is a difficult one to always pay but.
Ultimately, it's what we're making on all the gallons that we're selling and our and our financials. Our operating margins are improving because we are adding more volume, but it all starts with volume you don't do much without the volume. So that's what our focus has been and making sure the economics are improving.
Okay, that's fair.
You commented about the the high cost of of electric trucks.
If we broaden the conversation to two buses.
The economics make maybe comparable but clearly there are more and more bus fleets municipal bus fleets that are pursuing a partial or a full.
Electrification I think la Metro would would be a notable one within your.
Sales mix.
Which particular or.
Maybe you can just give an overall percentage of customers have a policy of shifting their their fleet towards electric bus as I'm, specifically, referring to transit fleets.
Right. So you know as I look at the future of our business its not transit for us by value and I've kind of adjusted on this before that's not the future of this business.
These just were everybody on the on the call.
Transit properties are funded 90% by the federal government. So the reason you're seeing electric buses being produced and being sold into federal transit fleets is because of the economics of the transit other transit bus won't you couldn't force that on the on the on the public on the private sector. So it's being done in transit properties, where the federal government's pick up the 90% tap. So the other day prevail I was talking to senior administration officials that FID transit buses.
And just wanted to make sure that I understood and they understood.
What that all means is that today you can the federal government pays roughly 90% of a $925000 electric bus.
Or a $450000 CNG bus.
But the feds are picking up the difference.
So guess what.
Stakes now, California has decided that they want to push a rule to require transit properties to go all electric because that's really their their thing you know.
Their mantra and so I was telling the administration has said you know I guess this is an unfunded mandate in the reverse order. The state now is forcing Los Angeles to go to electric buses by 2035, and you guys you the federal government to get ready to pick up the tab for.
And I have a feeling five I'll watch out because I don't think this is good policy I don't think it's good government on I don't think it's going to work, but here's what I do know is it won't work in the private sector with with trucks.
So as I look at our future it's over the road trucking. That's the 35 billion gallon market Thats, where the economics make sense Thats, where the pollution is and the federal transit deal that you and I talk about a lot is kind of yes. It's a good business for us its a good margin for us.
But it gets easily eclipsed here in the future as we begin to put more and more trucks on the road just like it has moved the refuse industry.
You know starting back a few years ago transit overwhelmed what we did the refuse now is right at the size in our company of where transit is.
And you will see it eclipse transit here eventually to answer your specific question.
I would guess of our properties, we I want to say and I may be little I'll be close here I think we do about 28 transit properties 30 transit properties.
Now I would think four or five of those are fooling around with the electric buses or have some sort of six maybe seven.
I do know some about L.A. metro.
So there was a big.
Competition about it and the mayor of Los Angeles Force them to do I guess 100 transit buses, a while ago. They haven't taken delivery of any of them yet, but they have gone ahead and ordered more CNG buses.
So all I can say is as you look at the future of transit and electric.
And you think Thats, where the money is going to be made watch out because I don't think the economics hold up and I don't think the operating characteristics of those vessels will end up being very good.
Yes, I appreciate the perspective, what portion of your current.
Gallons go to trends that customers.
I want to say, it's about a 100 million gallons and it's about a 100 million for our reference refuse is kind of in that sort of breaks down that way.
If you kind of look at our gallons and you know those are service gallons for us, but but it's in that kind of size.
A little more maybe a little bit about that.
Okay.
Yes, I'd say until it's a little more I'm going to maybe under 15, but it's it's it's kind of in that sort of in that range, but once upon a time. It was it was a larger it was larger percentage, but these other markets will end up eclipsing it because you know.
Buses they keep their bus is 12 years and bye bye on order of the FDA and they just don't turn over the fleet as fast.
Okay I appreciate it.
You bet. Thank you.
This seems to be no further question left in the queue I would like to pass the floor back over to management for any closing remarks.
Well. Thank you everyone I want to thank you for listening today on this call. This afternoon and look forward to updating you on our progress next quarter.
Good afternoon.
This concludes today's teleconference. You may now disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.