Ameresco Reports Second Quarter 2010 Financial Results
Second Quarter 2010 Financial Highlights
-- Second quarter revenues increased 58% year-over-year to $141.4 million -- Second quarter net income increased 348% year-over-year to $7.7 million -- Net income per diluted share was $0.21 in the second quarter of 2010 compared to $0.05 per diluted share in the second quarter of 2009 -- Provides revenues and earnings guidance for full-year 2010
FRAMINGHAM, Mass.--(BUSINESS WIRE)-- Ameresco, Inc. (NYSE:AMRC) a leading provider of comprehensive energy solutions, today announced financial results for the quarter ended June 30, 2010. Ameresco had revenues of $141.4 million in the second quarter of 2010, compared to $89.5 million in the second quarter of 2009, an increase of 58%. Net income for the second quarter of 2010 was $7.7 million, compared to $1.7 million in second quarter of 2009, an increase of 348%. Net income per diluted share was $0.21 in the second quarter of 2010, compared to $0.05 per diluted share in the same quarter of 2009.
"Ameresco achieved strong growth in the second quarter as we continued to successfully implement our 2010 business plan," said George Sakellaris, president and chief executive officer of Ameresco. "In the second quarter, we continued to execute on our strategy of signing more projects across regions, including Massachusetts, Maryland and California, in our energy efficiency business. In addition, we signed the Grand Erie District School Board project which represents our largest solar project to-date in Canada in our renewable energy business. With strong operating results, continued market expansion, and the capital provided from our recent IPO, we believe that Ameresco is well positioned to continue to deliver top-quality customer-driven solutions, while creating value for our shareholders."
With greater market demand for energy solutions, Ameresco's second quarter results were driven by stronger overall revenues, improved gross profit margins particularly from renewable energy projects, and by increased operating leverage.
For the six months ended June 30, 2010, Ameresco reported total revenues of $247.0 million, compared to $162.8 million for the same period in 2009, an increase of 52%. Net income for the first six months of 2010 was $9.0 million, or $0.24 per diluted share, compared with $2.1 million, or $0.06 per diluted share for the first six months of 2009. Net income for the period increased 320%.
Some Key Project Highlights for Q2 2010
Ameresco expects that for the year ending December 31, 2010, it will earn total revenues in the range of $575 million to $585 million, EBITDA will be in the range of $52 million to $54 million, and net income will be in the range of $26.5 million to $27.2 million. The company also expects that net income per diluted share for 2010 will be in the range of $0.62 to $0.65.
Ameresco will hold its earnings conference call today, August 12, at 10:30 a.m. Eastern Time with president and CEO, George Sakellaris, and vice president and chief financial officer, Andrew Spence, to discuss details regarding the company's second quarter 2010 results, business outlook and strategy. Participants may access it by dialing domestically (888) 679-8034 or internationally (617) 213-4847. The passcode is 26427295. Those who wish to listen only to the conference call webcast may visit the "Investor Relations" section of the Company's website at www.ameresco.com. Participants are advised to dial-in at least ten minutes prior to the call to register.
Pre-Registration for the call is available at: https://www.theconferencingservice.com/prereg/key.process?key=PYPFH9J34. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection.
The webcast will be available on the Company's website shortly after the call.
Use of Non-GAAP Financial Measures
This press release and the accompanying tables reflect EBITDA, which is a non-GAAP financial measure. For a description of this non-GAAP financial measure, including the reasons management uses this measure and a reconciliation of EBITDA to operating income, the most directly comparable financial measure prepared in accordance with GAAP, please see the section of the accompanying tables titled "Non-GAAP Financial Measures" in Exhibit A.
About Ameresco, Inc.
Ameresco, Inc. was incorporated in Delaware in April 2000 and is a leading independent provider of comprehensive energy efficiency solutions for facilities throughout North America. Ameresco's solutions include upgrades to a facility's energy infrastructure, and the development, construction, and operation of renewable energy plants. With corporate headquarters located in Framingham, MA, Ameresco has 54 offices in 29 states and four Canadian provinces. For more information, visit www.ameresco.com.
Safe Harbor Statement
Any statements in this press release about future expectations, plans and prospects for Ameresco, Inc., including statements about backlog, estimated future revenues and projects, as well as other statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including demand for our energy efficiency and renewable energy solutions; our ability to arrange financing for our projects; changes in federal, state and local government policies and programs related to energy efficiency and renewable energy; the timing of work we do on projects where we recognize revenue on a percentage of completion basis; seasonality in construction and in demand for our products and services; a customer's decision to delay our work on, or other risks involved with, a particular project; availability and costs of labor and equipment the addition of new customers or the loss of existing customers; and other factors discussed in Ameresco's final prospectus related to its initial public offering, filed with the U.S. Securities and Exchange Commission on July 22, 2010, as well as in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which will be filed with the SEC. In addition, the forward-looking statements included in this press release represent Ameresco's views as of the date of this press release. Ameresco anticipates that subsequent events and developments will cause its views to change. However, while Ameresco may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Ameresco's views as of any date subsequent to the date of this press release.
A registration statement relating to Ameresco's Class A common stock has been filed with, and declared effective by, the Securities and Exchange Commission. The offering of these securities may be made only by means of a prospectus. A copy of the final prospectus relating to the offering may be obtained from BofA Merrill Lynch at 4 World Financial Center, New York, NY 10080, Attn: Prospectus Department, or by emailing email@example.com. It may also be obtained from the Securities and Exchange Commission website at http://www.sec.gov/Archives/edgar/data/1488139/000095012310067046/b79273b4e424b4.htm.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Exhibit A: Ameresco, Inc. and Subsidiaries Consolidated Financial Tables AMERESCO, INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2009 AND JUNE 30, 2010 2009 2010 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 47,927,540 $ 21,134,396 Restricted cash 9,249,885 12,678,202 Accounts receivable, net 61,279,515 61,796,173 Accounts receivable retainage 9,242,288 11,467,635 Costs and estimated earnings in excess of 14,009,076 21,694,313 billings Inventory, net 4,237,909 5,332,967 Prepaid expenses and other current assets 8,077,761 11,748,800 Deferred income taxes 9,279,473 10,071,666 Project development costs 8,468,974 8,386,250 Total current assets 171,772,421 164,310,402 Federal ESPC receivable financing 51,397,347 110,087,030 Property and equipment, net 4,373,256 4,204,292 Project assets, net 117,637,990 126,439,662 Deferred financing fees, net 3,582,560 4,311,988 Goodwill 16,132,429 16,132,429 Other assets 10,648,605 8,627,293 203,772,187 269,802,694 $ 375,544,608 $ 434,113,096 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 8,093,016 $ 9,304,492 Accounts payable 75,578,378 64,795,981 Accrued expenses 18,362,674 9,815,128 Billings in excess of cost and estimated 28,166,364 31,737,557 earnings Incomes taxes payable 2,129,529 3,705,988 Total current liabilities 132,329,961 119,359,146 Long-term debt, less current portion 102,807,203 163,411,373 Subordinated debt 2,998,750 2,998,750 Deferred income taxes 11,901,645 11,901,645 Deferred grant income 4,158,508 4,049,541 Other liabilities 18,578,754 21,628,116 140,444,860 203,989,425 Stockholders' equity: Series A convertible preferred stock, $0.0001 par value, 3,500,000 shares authorized, 321 321 3,210,000 shares issued and outstanding Common stock, $0.0001 par value, 60,000,000 shares authorized, 17,998,168 shares issued and 13,282,284 1,800 1,904 outstanding at 12/31/2009, 19,044,060 shares issued and 14,210,776 outstanding at 6/30/2010 Additional paid-in capital 10,466,312 11,986,225 Retained earnings 97,882,985 106,868,301 Accumulated other comprehensive income 2,831,970 1,090,345 Less - treasury stock, at cost, 4,715,884 shares and 4,833,284 shares, (8,413,601 ) (9,182,571 ) respectively Total stockholders' equity 102,769,787 110,764,525 Total liabilities and stockholders' equity $ 375,544,608 $ 434,113,096
AMERESCO, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2009 AND 2010 Three Months Ended June 30, 2009 2010 (Unaudited) Revenue: Energy efficiency revenue $ 77,258,254 $ 100,827,659 Renewable energy revenue 12,199,224 40,526,848 89,457,478 141,354,507 Direct expenses: Energy efficiency expenses 64,100,331 83,064,955 Renewable energy expenses 10,011,218 32,135,716 74,111,549 115,200,671 Gross Profit 15,345,929 26,153,836 Operating expenses: Salaries and benefits 5,387,395 5,327,713 Project development costs 2,857,289 2,047,505 General, administrative and other 5,331,328 6,765,107 13,576,012 14,140,325 Operating income 1,769,917 12,013,511 Other income (expense), net 612,798 (1,216,698 ) Income before provision for income taxes 2,382,715 10,796,813 Income tax provision 662,266 3,089,175 Net income 1,720,449 7,707,638 Other comprehensive income (loss): Unrealized loss from interest rate hedge, - (1,231,352 ) net of tax Foreign currency translation adjustment 402,628 (1,183,944 ) Comprehensive income: $ 2,123,077 $ 5,292,342 Net income per share attributable to common shareholders: Basic $ 0.18 $ 0.56 Diluted $ 0.05 $ 0.21 Weighted average common shares outstanding: Basic 9,549,427 13,742,472 Diluted 34,926,267 38,412,419 Non-GAAP Financial Measures Other non-GAAP Disclosures Gross Margins Energy efficiency revenue 17.0 % 17.6 % Renewable energy revenue 17.9 % 20.7 % Total 17.2 % 18.5 % Operating expenses as a percent of revenue 15.2 % 10.0 % Earnings before interest, taxes, depreciation and amortization (EBITDA) Operating income $ 1,769,917 $ 12,013,511 Depreciation and impairment 1,479,307 1,919,581 Stock-based compensation 616,386 668,065 EBITDA $ 3,865,610 $ 14,601,157 EBITDA margin 4.3 % 10.3 % Construction backlog Awarded $ 711,026,718 $ 464,968,041 Fully-contracted 457,394,099 668,106,767 Total construction backlog $ 1,168,420,817 $ 1,133,074,808 Note: Awarded represents estimated future revenues from projects that have been awarded, though the contracts have not yet been signed.
AMERESCO, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2010 Six Months Ended June 30, 2009 2010 (Unaudited) Revenue: Energy efficiency revenue $ 134,486,311 $ 175,715,228 Renewable energy revenue 28,358,248 71,267,865 162,844,559 246,983,093 Direct expenses: Energy efficiency expenses 110,870,599 145,589,102 Renewable energy expenses 22,935,046 56,841,126 133,805,645 202,430,228 Gross Profit 29,038,914 44,552,865 Operating expenses: Salaries and benefits 11,453,135 13,484,742 Project development costs 5,594,996 5,176,942 General, administrative and other 9,553,489 11,315,045 26,601,620 29,976,729 Operating income 2,437,294 14,576,136 Other income (expense), net 588,357 (2,072,387 ) Income before provision for income taxes 3,025,651 12,503,749 Income tax provision 887,293 3,518,433 Net income 2,138,358 8,985,316 Other comprehensive income (loss): Unrealized loss from interest rate hedge, net - (1,551,579 ) of tax Foreign currency translation adjustment (261,110 ) (190,045 ) Comprehensive income: $ 1,877,248 $ 7,243,692 Net income per share attributable to common shareholders: Basic $ 0.22 $ 0.66 Diluted $ 0.06 $ 0.24 Weighted average common shares outstanding: Basic 9,585,190 13,513,649 Diluted 34,962,030 38,115,517 Non-GAAP Financial Measures Other non-GAAP Disclosures Gross Margins Energy efficiency revenue 17.6 % 17.1 % Renewable energy revenue 19.1 % 20.2 % Total 17.8 % 18.0 % Operating expenses as a percent of revenue 16.3 % 12.1 % Earnings before interest, taxes, depreciation and amortization (EBITDA) Operating income $ 2,437,294 $ 14,576,136 Depreciation and impairment 2,585,908 4,062,244 Stock-based compensation 1,232,986 1,107,151 EBITDA $ 6,256,188 $ 19,745,531 EBITDA margin 3.8 % 8.0 %
AMERESCO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 2009 AND 2010 Three Months Ended June 30, 2009 2010 (Unaudited) Cash flows from operating activities: Net income $ 1,720,449 $ 7,707,638 Adjustments to reconcile net income to cash provided by operating activities: Depreciation of project assets 1,249,390 1,661,726 Depreciation of property and equipment 229,917 257,855 Amortization of deferred financing fees 37,444 97,655 Provision for bad debts - 2,111,000 Unrealized (gain) loss on interest rate swaps 1,306,578 2,861,794 Stock-based compensation expense 616,386 668,065 Deferred income taxes (1,667,352 ) (2,394,601 ) Changes in operating assets and liabilities: (Increase) decrease in: Restricted cash draws 5,746,160 55,536,045 Accounts receivable (18,419,853 ) (13,865,733 ) Accounts receivable retainage 2,279,034 1,007,235 Federal ESPC receivable financing (6,352,109 ) (60,539,815 ) Inventory 893,238 (551,643 ) Costs and estimated earnings in excess of (3,862,955 ) (5,096,250 ) billings Prepaid expenses and other current assets (2,373,616 ) (185,082 ) Project development costs (1,127,285 ) (50,222 ) Other assets 4,714,428 821,536 Increase (decrease) in: Accounts payable and accrued expenses 213,592 8,907,545 Billings in excess of cost and estimated 5,752,093 4,358,402 earnings Other liabilities 1,903,822 (2,163,890 ) Income taxes payable 601,670 1,329,064 Net cash provided by (used in) operating (6,538,969 ) 2,478,324 activities Cash flows from investing activities: Purchases of property and equipment (545,590 ) (59,719 ) Purchases of project assets (7,440,852 ) (6,492,890 ) Net cash provided by (used in) investing (7,986,442 ) (6,552,609 ) activities Cash flows from financing activities: Payments of financing fees - (711,355 ) Issuance of stock - 412,866 Repurchase of stock - (768,970 ) Proceeds from (repayments of) senior secured 4,746,895 6,418,897 credit facility Proceeds from long-term debt financing 11,628,546 - Restricted cash (1,052,492 ) (509,477 ) Payments on long-term debt (295,308 ) (3,450,145 ) Net cash provided by (used in) financing 15,027,641 1,391,816 activities Effect of exchange rate changes on cash 1,423,105 (544,614 ) Net increase (decrease) in cash and cash 1,925,335 (3,227,083 ) equivalents Cash and cash equivalents, beginning of year 6,930,067 24,361,479 Cash and cash equivalents, end of year $ 8,855,402 $ 21,134,396
AMERESCO, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2010 Six Months Ended June 30, 2009 2010 (Unaudited) Cash flows from operating activities: Net income $ 2,138,358 $ 8,985,316 Adjustments to reconcile net income to cash provided by operating activities: Depreciation of project assets 2,052,797 3,416,858 Depreciation of property and equipment 533,111 645,386 Amortization of deferred financing fees 102,646 168,005 Provision for bad debts - 2,111,000 Unrealized (gain) loss on interest rate swaps 1,988,945 2,728,203 Stock-based compensation expense 1,232,986 1,107,151 Deferred income taxes 733,141 (792,193 ) Changes in operating assets and liabilities: (Increase) decrease in: Restricted cash draws 7,934,602 55,750,984 Accounts receivable (8,081,111 ) (2,933,663 ) Accounts receivable retainage 1,522,245 (2,287,508 ) Federal ESPC receivable financing (8,296,695 ) (58,689,683 ) Inventory 308,353 (1,095,058 ) Costs and estimated earnings in excess of (12,121,185 ) (7,800,862 ) billings Prepaid expenses and other current assets (1,618,440 ) (3,701,125 ) Project development costs (1,643,651 ) 82,038 Other assets 6,118,743 2,021,312 Increase (decrease) in: Accounts payable and accrued expenses (10,120,902 ) (19,190,845 ) Billings in excess of cost and estimated 1,991,911 3,652,554 earnings Other liabilities (9,360,668 ) (1,230,357 ) Income taxes payable (1,607,697 ) 1,595,453 Net cash provided by (used in) operating (26,192,511 ) (15,457,034 ) activities Cash flows from investing activities: Purchases of property and equipment (922,138 ) (484,095 ) Purchases of project assets (16,928,569 ) (12,367,371 ) Net cash provided by (used in) investing (17,850,707 ) (12,851,466 ) activities Cash flows from financing activities: Payments of financing fees (70,063 ) (897,433 ) Issuance of stock - 412,866 Repurchase of stock (874,948 ) (768,970 ) Proceeds from (repayments of) senior secured 10,612,791 11,435,901 credit facility Proceeds from long-term debt financing 26,722,299 812,398 Restricted cash (1,282,874 ) (4,819,258 ) Payments on long-term debt (1,448,529 ) (4,792,696 ) Net cash provided by (used in) financing 33,658,676 1,382,808 activities Effect of exchange rate changes on cash 1,090,799 132,548 Net increase (decrease) in cash and cash (9,293,743 ) (26,793,144 ) equivalents Cash and cash equivalents, beginning of year 18,149,145 47,927,540 Cash and cash equivalents, end of year $ 8,855,402 $ 21,134,396
Ameresco defines EBITDA as operating income before depreciation and impairment expense and share-based compensation expense. EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income or any other measure of financial performance calculated and presented in accordance with GAAP.
The Company believes EBITDA is useful to investors in evaluating its operating performance for the following reasons: EBITDA and similar non-GAAP measures are widely used by investors to measure a company's operating performance without regard to items that can vary substantially from company to company depending upon financing and accounting methods, book values of assets, capital structures and the methods by which assets were acquired; securities analysts often use EBITDA and similar non-GAAP measures as supplemental measures to evaluate the overall operating performance of companies; and by comparing our EBITDA in different historical periods, our investors can evaluate our operating results without the additional variations of depreciation and amortization expense, and share-based compensation expense.
Ameresco's management uses EBITDA: as a measure of operating performance, because it does not include the impact of items that management does not consider indicative of our core operating performance; for planning purposes, including the preparation of the annual operating budget; to allocate resources to enhance the financial performance of the business; to evaluate the effectiveness of Ameresco's business strategies; and in communications with the board of directors and investors concerning Ameresco's financial performance.
The Company understands that, although measures similar to EBITDA are frequently used by investors and securities analysts in their evaluation of companies, EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for GAAP operating income or an analysis of Ameresco's results of operations as reported under GAAP. Some of these limitations are: EBITDA does not reflect the Company's cash expenditures or future requirements for capital expenditures or other contractual commitments; EBITDA does not reflect changes in, or cash requirements for, Ameresco's working capital needs; EBITDA does not reflect stock-based compensation expense; EBITDA does not reflect cash requirements for income taxes; EBITDA does not reflect net interest income (expense); although depreciation, amortization and impairment are non-cash charges, the assets being depreciated, amortized or impaired will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for these replacements; and other companies in Ameresco's industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.
To properly and prudently evaluate Ameresco's business, we encourage you to review our GAAP financial statements included above, and not to rely on any single financial measure to evaluate the business. Please refer to the above reconciliation of EBITDA to operating income, the most comparable GAAP measure.
Source: Ameresco, Inc.
Released August 12, 2010