Ameresco Reports Second Quarter 2019 Financial Results

- Positioned for Strong Second Half Revenue and Earnings Comparisons -
- Reaffirms Full Year 2019 Guidance -
- Contracted Backlog and Assets in Development Support Future Growth -

Second Quarter 2019 Financial Highlights:

  • Revenues of $198.2 million
  • Net income attributable to common shareholders of $9.2 million
  • Net income per diluted share of $0.19
  • Adjusted EBITDA of $23.6 million
  • Placed 14MWe of assets into operations

 

FRAMINGHAM, Mass.--(BUSINESS WIRE)-- Ameresco, Inc. (NYSE:AMRC), a leading energy solutions provider today announced financial results for the fiscal quarter ended June 30, 2019. The Company has also furnished supplemental information in conjunction with this press release in a Current Report on Form 8-K. The supplemental information includes non-GAAP financial metrics and has been posted to the “Investor Relations” section of the Company’s website at www.ameresco.com.

“Second quarter results reflected solid execution in our smart energy solutions, while we continued to develop and place in operation an increasing number of energy assets,” said George P. Sakellaris, President and Chief Executive Officer. “We developed highly-complex projects for government and commercial clients, moved forward with the development of several large energy assets, and reached a milestone of over 100MW of Company-owned solar assets in operation during the quarter.

“Our recently-commissioned Parris Island project for the US Marine Corp highlights the increased demand for comprehensive smart energy solutions driven not only by cost savings, but also by reliability and resiliency requirements. We expect these types of projects, which involve advanced energy technology knowhow, to continue to drive Ameresco’s revenue opportunities as few companies have our level of expertise and experience in delivering the requisite solutions. Our regional teams are engaged in both winning smart energy projects and identifying additional distributed energy asset opportunities, enabling us to leverage our expertise across our entire geographic footprint. At the end of the second quarter, we had over 250MWe of energy assets in various stages of development across diversified geographies in the U.S. and Canada.

“Key first half 2019 metrics that provide visibility and support our long-term growth outlook were robust, namely contracted backlog, which increased 16% from year-ago levels, and energy assets in development, which more than doubled year-over-year.”

Second Quarter Financial Results
(All financial result comparisons made are against the prior year period unless otherwise noted.)

Revenues were $198.2 million, compared to $197.0 million last year, in line with our expectations of modest growth across our platforms. Operating income was $13.1 million, compared to $14.0 million. Net income attributable to common shareholders was $9.2 million, compared to $8.7 million, and non-GAAP net income was $8.6 million, compared to $8.4 million. Net income per diluted share was $0.19 and non-GAAP EPS was $0.18, each flat year-over-year. Adjusted EBITDA, a non-GAAP financial measure, was $23.6 million, compared to $21.4 million. Cash flows used in operating activities were $51.2 million, compared to $20.1 million, and adjusted cash used in operations, a non-GAAP financial measure, was $8.0 million, compared to adjusted cash from operations of $13.0 million.

Backlog and Awards
Total project backlog at June 30, 2019 was $2.0 billion and was comprised of the following:

  • $789 million in contracted backlog representing signed customer contracts for installation or construction of projects, which we expect to convert into revenue over the next one to three years, on average; and
  • $1.2 billion of awarded projects, representing projects in development for which we do not have signed contracts.

Energy assets in development were $518 million or 258MWe.

Project updates in the second quarter of 2019:

  • Ameresco completed a 10MWe distributed energy security ESPC project at Marine Corps Recruit Depot Parris Island
  • Ameresco completed a solar array with NASA at Goddard Space Flight Center’s Wallops Flight Facility
  • Ameresco completed the installation of a 2MW solar energy generation project for the University of Minnesota and advanced their goal to reduce emissions by 50% by 2020

Owned Energy Asset updates in the second quarter of 2019:

  • Ribbon cutting for historic Phoenix RNG plant (biogas-to-renewable natural gas facility - largest in the US)
  • Ribbon cutting to celebrate the completion of Sutter Santa Rosa Regional Hospital - 1.6MW solar energy generation project with Ameresco
  • Ribbon cutting announcing the construction of solar array on closed landfill in Westport, MA - source of renewable energy and revenue for the town

Summary and Outlook
First half performance was in line with the Company’s expectations and represented effective execution in smart energy solutions and expanded recurring revenue from its energy asset portfolio and O&M operations. Ameresco ended the first half of 2019 with a substantial contracted backlog and large energy asset development pipeline, which support Company expectations for strong second half 2019 revenue and earnings comparisons and accelerated growth entering 2020.

Based on year-to-date performance and visibility into the remainder of 2019, the Company reaffirms its 2019 guidance for net income per diluted share of $0.77 to $0.85 and adjusted EBITDA of $95 million to $103 million. Ameresco also reaffirms total revenue guidance of $845 million to $885 million. This guidance excludes the impact of any non-controlling interest activity, restructuring activities, deconsolidation of a variable interest entity, as well as any related tax impact. Also 2019 guidance does not assume any benefit from IRC Section 179D deductions, which in 2018 provided a benefit of $5.8 million, and have since expired.

Conference Call/Webcast Information
The Company will host a conference call today at 8:30 a.m. ET to discuss results. The conference call will be available via the following dial in numbers:

  • U.S. Participants: Dial 1-877-359-9508 (Access Code: 6139208)
  • International Participants: Dial 1-224-357-2393 (Access Code: 6139208)

Participants are advised to dial into the call at least ten minutes prior to register. A live, listen-only webcast of the conference call will also be available over the Internet. Individuals wishing to listen can access the call through the “Investor Relations” section of the Company’s website at www.ameresco.com. An archived webcast will be available on the Company’s website for one year.

Use of Non-GAAP Financial Measures
This press release and the accompanying tables include references to adjusted EBITDA, Non- GAAP EPS, non-GAAP net income and adjusted cash from operations, which are non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses these measures, please see the section following the accompanying tables titled “Exhibit A: Non-GAAP Financial Measures”. For a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, please see Other Non-GAAP Disclosures and Non-GAAP Financial Guidance in the accompanying tables.

About Ameresco, Inc.
Founded in 2000, Ameresco, Inc. (NYSE:AMRC) is a leading independent provider of comprehensive services, energy efficiency, infrastructure upgrades, asset sustainability and renewable energy solutions for businesses and organizations throughout North America and Europe. Ameresco’s sustainability services include upgrades to a facility’s energy infrastructure and the development, construction and operation of renewable energy plants. Ameresco has successfully completed energy saving, environmentally responsible projects with federal, state and local governments, healthcare and educational institutions, housing authorities, and commercial and industrial customers. With its corporate headquarters in Framingham, MA, Ameresco has more than 1,000 employees providing local expertise in the United States, Canada, and the United Kingdom. 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 market conditions, pipeline and backlog, as well as estimated future revenues and net income, and other statements containing the words “projects,” “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 the timing of, and ability to, enter into contracts for awarded projects on the terms proposed; the timing of work we do on projects where we recognize revenue on a percentage of completion basis, including the ability to perform under recently signed contracts without unusual delay; 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 ability of customers to cancel or defer contracts included in our backlog; the effects of our recent acquisitions and restructuring activities; 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 our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission on March 8, 2019. In addition, the forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

AMERESCO, INC.

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

(in thousands, except share amounts)

 

June 30,

 

December 31,

 

2019

 

2018

 

(Unaudited)

 

 

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

38,343

 

 

$

61,397

 

Restricted cash

13,530

 

 

16,880

 

Accounts receivable, net

109,332

 

 

85,985

 

Accounts receivable retainage, net

15,383

 

 

13,516

 

Costs and estimated earnings in excess of billings

120,686

 

 

86,842

 

Inventory, net

9,219

 

 

7,765

 

Prepaid expenses and other current assets

16,717

 

 

11,571

 

Income tax receivable

1,622

 

 

5,296

 

Project development costs

23,849

 

 

21,717

 

Total current assets

348,681

 

 

310,969

 

Federal ESPC receivable

133,850

 

 

293,998

 

Property and equipment, net

7,871

 

 

6,985

 

Energy assets, net

492,681

 

 

459,952

 

Goodwill

58,129

 

 

58,332

 

Intangible assets, net

2,052

 

 

2,004

 

Operating lease assets

32,051

 

 

 

Other assets

34,579

 

 

29,394

 

Total assets

$

1,109,894

 

 

$

1,161,634

 

 

 

 

 

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY

Current liabilities:

 

 

 

Current portions of long-term debt and capital lease liabilities

$

54,351

 

 

$

26,890

 

Accounts payable

117,188

 

 

134,330

 

Accrued expenses and other current liabilities

29,259

 

 

35,947

 

Current portion of operating lease liabilities

5,807

 

 

 

Billings in excess of cost and estimated earnings

24,380

 

 

24,363

 

Income taxes payable

138

 

 

1,100

 

Total current liabilities

231,123

 

 

222,630

 

Long-term debt and capital lease liabilities, less current portions and net of deferred financing fees

224,025

 

 

219,162

 

Federal ESPC liabilities

163,856

 

 

288,047

 

Deferred income taxes, net

3,677

 

 

4,352

 

Deferred grant income

6,361

 

 

6,637

 

Long-term portions of operating lease liabilities

28,308

 

 

 

Other liabilities

30,179

 

 

29,212

 

 

 

 

 

Redeemable non-controlling interests

32,037

 

 

14,719

 

 

 

 

 

Stockholders' equity:

 

 

 

Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at June 30, 2019 and December 31, 2018

 

 

 

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 30,503,934 shares issued and 28,412,894 shares outstanding at June 30, 2019, 30,366,546 shares issued and 28,275,506 shares outstanding at December 31, 2018

3

 

 

3

 

Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000 shares issued and outstanding at June 30, 2019 and December 31, 2018

2

 

 

2

 

Additional paid-in capital

126,693

 

 

124,651

 

Retained earnings

283,386

 

 

269,806

 

Accumulated other comprehensive loss, net

(8,118

)

 

(5,949

)

Treasury stock, at cost, 2,091,040 shares at June 30, 2019 and December 31, 2018

(11,638

)

 

(11,638

)

Total stockholders' equity

390,328

 

 

376,875

 

Total liabilities, redeemable non-controlling interests and stockholders' equity

$

1,109,894

 

 

$

1,161,634

 

AMERESCO, INC.

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF INCOME

(in thousands, except per share amounts)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Revenues

$

198,183

 

 

$

196,982

 

 

$

348,295

 

 

$

364,392

 

Cost of revenues

155,044

 

 

154,206

 

 

272,524

 

 

286,143

 

Gross profit

43,139

 

 

42,776

 

 

75,771

 

 

78,249

 

Selling, general and administrative expenses

30,082

 

 

28,801

 

 

56,165

 

 

56,005

 

Operating income

13,057

 

 

13,975

 

 

19,606

 

 

22,244

 

Other expenses, net

3,746

 

 

3,966

 

 

7,167

 

 

7,510

 

Income before provision (benefit) for income taxes

9,311

 

 

10,009

 

 

12,439

 

 

14,734

 

Income tax provision (benefit)

804

 

 

1,307

 

 

1,061

 

 

(1,472

)

Net income

8,507

 

 

8,702

 

 

11,378

 

 

16,206

 

Net loss (income) attributable to redeemable non-controlling interests

709

 

 

 

 

1,985

 

 

(516

)

Net income attributable to common shareholders

$

9,216

 

 

$

8,702

 

 

$

13,363

 

 

$

15,690

 

Net income per share attributable to common shareholders:

 

 

 

 

 

 

 

Basic

$

0.20

 

 

$

0.19

 

 

$

0.29

 

 

$

0.35

 

Diluted

$

0.19

 

 

$

0.19

 

 

$

0.28

 

 

$

0.34

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

46,387

 

 

45,470

 

 

46,340

 

 

45,469

 

Diluted

47,681

 

 

46,406

 

 

47,666

 

 

46,272

 

AMERESCO, INC.

CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF CASH FLOWS

(in thousands)

 

Six Months Ended June 30,

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

Cash flows from operating activities:

 

 

 

Net income

$

11,378

 

 

$

16,206

 

Adjustments to reconcile net income to cash flows from operating activities:

 

 

 

Depreciation of energy assets

17,495

 

 

12,946

 

Depreciation of property and equipment

1,351

 

 

1,072

 

Amortization of debt issuance costs

1,218

 

 

838

 

Amortization of intangible assets

457

 

 

502

 

Accretion of ARO and contingent consideration

62

 

 

 

Provision for bad debts

124

 

 

303

 

Gain on deconsolidation of VIE

(2,160

)

 

 

Net gain from derivatives

(888

)

 

(63

)

Stock-based compensation expense

782

 

 

747

 

Deferred income taxes

152

 

 

9,174

 

Unrealized foreign exchange loss

10

 

 

900

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(22,744

)

 

(23,750

)

Accounts receivable retainage

(1,784

)

 

2,704

 

Federal ESPC receivable

(61,849

)

 

(69,276

)

Inventory, net

(1,454

)

 

(125

)

Costs and estimated earnings in excess of billings

(18,848

)

 

29,824

 

Prepaid expenses and other current assets

(5,199

)

 

3,490

 

Project development costs

(1,703

)

 

(5,331

)

Other assets

(1,005

)

 

(1,380

)

Accounts payable, accrued expenses and other current liabilities

(26,560

)

 

(24,365

)

Billings in excess of cost and estimated earnings

(664

)

 

(1,421

)

Other liabilities

(137

)

 

508

 

Income taxes payable

2,712

 

 

(10,640

)

Cash flows used in operating activities

(109,254

)

 

(57,137

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

(2,810

)

 

(2,056

)

Purchases of energy assets

(46,466

)

 

(58,341

)

Acquisitions, net of cash received

(1,279

)

 

(1,900

)

Contributions to equity investment

(191

)

 

 

Cash flows used in investing activities

(50,746

)

 

(62,297

)

Cash flows from financing activities:

 

 

 

Payments of financing fees

(447

)

 

(2,285

)

Proceeds from exercises of options and ESPP

1,260

 

 

2,314

 

Repurchase of common stock

 

 

(1,772

)

Proceeds for senior secured credit facility, net

41,365

 

 

6,100

 

Proceeds from long-term debt financings

2,742

 

 

58,634

 

Proceeds from Federal ESPC projects

82,787

 

 

69,664

 

Proceeds for energy assets from Federal ESPC

1,842

 

 

690

 

Contributions from redeemable non-controlling interests, net of distributions

19,301

 

 

1,468

 

Payments on long-term debt

(13,187

)

 

(10,776

)

Cash flows from financing activities

135,663

 

 

124,037

 

Effect of exchange rate changes on cash

100

 

 

(231

)

Net (decrease) increase in cash, cash equivalents and restricted cash

(24,237

)

 

4,372

 

Cash, cash equivalents and restricted cash, beginning of period

97,914

 

 

60,105

 

Cash, cash equivalents and restricted cash, end of period

$

73,677

 

 

$

64,477

 

Non-GAAP Financial Measures (in thousands)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Adjusted EBITDA:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

9,216

 

 

$

8,702

 

 

$

13,363

 

 

$

15,690

 

Impact from redeemable non-controlling interests

(709

)

 

 

 

(1,985

)

 

516

 

Plus: Income tax provision (benefit)

804

 

 

1,307

 

 

1,061

 

 

(1,472

)

Plus: Other expenses, net

3,746

 

 

3,966

 

 

7,167

 

 

7,510

 

Plus: Depreciation and amortization of intangible assets

10,064

 

 

7,413

 

 

19,303

 

 

14,520

 

Plus: Stock-based compensation

397

 

 

392

 

 

782

 

 

747

 

Plus: Restructuring and other charges

92

 

 

(352

)

 

241

 

 

(320

)

Less: Gain on deconsolidation of VIE

 

 

 

 

(2,160

)

 

 

Adjusted EBITDA

$

23,610

 

 

$

21,428

 

 

$

37,772

 

 

$

37,191

 

Adjusted EBITDA margin

11.9

%

 

10.9

%

 

10.8

%

 

10.2

%

 

 

 

 

 

 

 

 

Non-GAAP net income and EPS:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

9,216

 

 

$

8,702

 

 

$

13,363

 

 

$

15,690

 

Impact from redeemable non-controlling interests

(709

)

 

 

 

(1,985

)

 

516

 

Plus: Restructuring and other charges

92

 

 

(352

)

 

241

 

 

(320

)

Less: Gain on deconsolidation of VIE

 

 

 

 

(2,160

)

 

 

Less: Income tax effect of non-GAAP adjustments

 

 

 

 

 

 

(27

)

Non-GAAP net income

$

8,599

 

 

$

8,350

 

 

$

9,459

 

 

$

15,859

 

 

 

 

 

 

 

 

 

Diluted net income per common share

$

0.19

 

 

$

0.19

 

 

$

0.28

 

 

$

0.34

 

Effect of adjustments to net income

(0.01

)

 

(0.01

)

 

(0.08

)

 

 

Non-GAAP EPS

$

0.18

 

 

$

0.18

 

 

$

0.20

 

 

$

0.34

 

 

 

 

 

 

 

 

 

Adjusted cash from operations:

 

 

 

 

 

 

 

Cash flows from operating activities

$

(51,160

)

 

$

(20,062

)

 

$

(109,254

)

 

$

(57,137

)

Plus: proceeds from Federal ESPC projects

43,189

 

 

33,083

 

 

82,787

 

 

69,664

 

Adjusted cash from operations

$

(7,971

)

 

$

13,021

 

 

$

(26,467

)

 

$

12,527

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

2019

 

2018

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

Construction backlog:

 

 

 

 

 

 

 

Awarded(1)

$

1,236,500

 

 

$

1,298,500

 

 

 

 

 

Fully-contracted

788,700

 

 

679,100

 

 

 

 

 

Total construction backlog

$

2,025,200

 

 

$

1,977,600

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy assets in development(2)

$

518,000

 

 

$

285,900

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

New contracts and awards:

 

 

 

 

 

 

 

New contracts

$

167,000

 

 

$

221,800

 

 

$

281,000

 

 

$

356,800

 

New awards(1)

$

121,000

 

 

$

227,300

 

 

$

276,000

 

 

$

456,300

 

(1) Represents estimated future revenues from projects that have been awarded, though the contracts have not yet been signed

(2) Estimated total construction value of all energy assets in construction and development

Non-GAAP Financial Guidance

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA):

(in thousands)

Year Ended December 31, 2019

 

Low

High

Operating income

$

61,000

 

$

67,000

 

Depreciation and amortization of intangible assets

35,000

 

36,000

 

Stock-based compensation

1,000

 

2,000

 

Restructuring and other charges

(2,000

)

(2,000

)

Adjusted EBITDA

$

95,000

 

$

103,000

 

Exhibit A: Non-GAAP Financial Measures

We use the non-GAAP financial measures defined and discussed below to provide investors and others with useful supplemental information to our financial results prepared in accordance with GAAP. These non-GAAP financial measures should not be considered as an alternative to any measure of financial performance calculated and presented in accordance with GAAP. For a reconciliation of these non-GAAP measures to the most directly comparable financial measures prepared in accordance with GAAP, please see Other Non-GAAP Disclosure and Non-GAAP Financial Guidance in the tables above.

We understand that, although measures similar to these non-GAAP financial measures are frequently used by investors and securities analysts in their evaluation of companies, they have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for the most directly comparable GAAP financial measures or an analysis of our results of operations as reported under GAAP. To properly and prudently evaluate our business, we encourage investors to review our GAAP financial statements included above, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA and Adjusted EBITDA Margin

We define adjusted EBITDA as operating income before depreciation, amortization of intangible assets, accretion of asset retirement obligations, contingent consideration expense, stock-based compensation expense, restructuring charges, and gain upon deconsolidation of a variable interest entity ("VIE"). We believe adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons: adjusted 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 adjusted EBITDA and similar non-GAAP measures as supplemental measures to evaluate the overall operating performance of companies; and by comparing our adjusted EBITDA in different historical periods, investors can evaluate our operating results without the additional variations of depreciation and amortization expense, accretion of asset retirement obligations, contingent consideration expense, stock-based compensation expense, restructuring charges, and gain upon deconsolidation of a VIE. We define adjusted EBITDA margin as adjusted EBITDA stated as a percentage of revenue.

Our management uses adjusted EBITDA and adjusted EBITDA margin as measures of operating performance, because they do not include the impact of items that we do not consider indicative of our core operating performance; for planning purposes, including the preparation of our annual operating budget; to allocate resources to enhance the financial performance of the business; to evaluate the effectiveness of our business strategies; and in communications with the board of directors and investors concerning our financial performance.

Non-GAAP Net Income and EPS

We define non-GAAP net income and earnings per share ("EPS") to exclude certain discrete items that management does not consider representative of our ongoing operations, including restructuring charges, gain upon deconsolidation of a VIE and impact from redeemable non-controlling interest. We consider non-GAAP net income and non-GAAP EPS to be important indicators of our operational strength and performance of our business because they eliminate the effects of events that are not part of the Company's core operations.

Adjusted Cash from Operations

We define adjusted cash from operations as cash flows from operating activities plus proceeds from Federal ESPC projects. Cash received in payment of Federal ESPC projects is treated as a financing cash flow under GAAP due to the unusual financing structure for these projects. These cash flows, however, correspond to the revenue generated by these projects. Thus we believe that adjusting operating cash flow to include the cash generated by our Federal ESPC projects provides investors with a useful measure for evaluating the cash generating ability of our core operating business. Our management uses adjusted cash from operations as a measure of liquidity because it captures all sources of cash associated with our revenue generated by operations.

Media Relations
Leila Dillon, 508.661.2264, news@ameresco.com

Investor Relations
Eric Prouty, Advisiry Partners, 212.750.5800, eric.prouty@advisiry.com

Lynn Morgen, Advisiry Partners, 212.750.5800, lynn.morgen@advisiry.com

Source: Ameresco, Inc.