Ameresco Reports Third Quarter 2020 Financial Results

- Exceptional Revenue and Profit Growth -

- High Utilization and Expense Control Drive Significant Operating Leverage -

- Raising Full Year 2020 Guidance -

- Backlog and Recurring Revenue Provide Visibility to Strong 2021 -

Third Quarter 2020 Financial Highlights:

  • Revenues of $282.5 million, up 33% compared to last year
  • Net Income of $20.0 million and GAAP EPS of $0.41
  • Adjusted EBITDA of $36.8 million, up 54%
  • Non-GAAP EPS of $0.38, up 111%

FRAMINGHAM, Mass.--(BUSINESS WIRE)-- Ameresco, Inc. (NYSE:AMRC), a leading energy efficiency and renewable energy company, today announced financial results for the fiscal quarter ended September 30, 2020. 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.

“Third quarter results marked another quarter of great revenue and profit performance driven by continued execution across the Ameresco platform. We grew our backlog due to our independent approach to integrating advanced technologies, including efficiency and renewable solutions. We have also used this growth, together with spending discipline, to gain significant operating leverage. These results demonstrate how well Ameresco is positioned and recognized as the industry leading provider of complete Distributed Energy Resources (DER) projects along with innovative and flexible financing solutions.”

“Improved site access combined with efficient execution led by our Federal Solutions Group contributed to the exceptional revenue performance. While we continue to prioritize project execution, we were pleased to see sequential growth resume in both our contracted and awarded backlogs. Business development activities contributed to continued long-term visibility, maintaining stability in our recurring revenue backlog and increasing energy assets in development. We also continued to focus on cash collections and other liquidity enhancement programs.”

“During the quarter Frost & Sullivan recognized Ameresco with the 2020 Global Company of the Year Award in the Distributed Energy Resources market. By remaining technology agnostic and innovation-driven, Ameresco continues to deliver cutting-edge efficiency and renewable energy solutions that deliver strong results to our customers,” concluded George P. Sakellaris, President and Chief Executive Officer.

Third Quarter Financial Results

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

Revenues increased 33% to $282.5 million, compared to $212.0 million driven primarily by a very strong quarter in the Federal Solutions Group with our recurring revenue businesses performing as expected. Our project teams worked hard to pull in and execute our contracted backlog given uncertainties around COVID-19 and future job site access. Gross margin of 18.2% was in line with this year's previous quarters, operating income increased to $24.5 million and operating margin was 8.7%. Operating income growth significantly exceeded revenue growth as a result of continued expense controls, higher utilization and the leverage inherent in our scalable business model. Net income increased 126% to $20.0 million compared to $8.9 million. Adjusted EBITDA, a non-GAAP financial measure, increased 54% to $36.8 million, from $23.9 million. EPS was $0.41 compared to $0.19, and non-GAAP EPS was $0.38 compared to $0.18, an increase of 111%.

Project Backlog and Awards

Total project backlog at September 30, 2020 remained strong at $2.2 billion and was comprised of:

  • $1.0 billion 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 customer contracts.

Third Quarter Project Highlights:

  • Three design-build/build contract awards for the Navy totaling $60 million for construction repair and restoration upgrades at buildings and roads on Marine Corps Air Station (MCAS) Cherry Point.
  • A $14.3 million contract award to implement renewable energy installation and facility energy improvements including solar carport installations on Joint Base Pearl Harbor Hickam.
  • An $8.3 million utility energy services contract (UESC) award by Oklahoma Gas & Electric to implement modernization and energy efficiency upgrades for GSA federal buildings in Oklahoma.
  • An automatic metering infrastructure (AMI) project with the City of Gatesville, Texas, to replace over 3,600 city water meters. Over a 15-year time period, the project is expected to provide over $860,000 in meter reading costs savings along with the potential capture of over $1.5 million in lost and unaccounted for water and sewer revenues.
  • The second phase of an energy and water efficiency project on behalf of the Lowell Housing Authority (LHA). This phase-two project extends the term of an energy services agreement originally signed between Ameresco and LHA in 2007 and will benefit more than 1,500 households across eight multifamily properties in the City of Lowell, Massachusetts.
  • An AMI project with Woodlands Water to install 34,000 meters across its service area in Montgomery County, Texas. This AMI project will optimize the operations of Woodlands Water by creating a more efficient and effective water distribution system, while enhancing transparency for customers into water consumption and their monthly bills.
  • A $36 million UESC award at Fort Bragg in partnership with Duke Energy including a 1.1 MW floating PV system and a 2 MW battery energy storage system. Ameresco will also implement improvements to the boiler system, HVAC systems and lighting systems, as well as water conservation systems. In year one of the performance period, the contract will result in utility cost savings for the Army of over $2 million, a reduction in site energy use of 7% and a site water use reduction of 20%.
  • A large-scale municipal streetlight energy conservation project with the City of Lawrence, Massachusetts. Self-funded by an energy savings performance contract (“ESPC”), this project comes at no upfront cost to the City and will involve replacing more than 3,800 lighting fixtures with new energy efficient light emitting diodes (“LED’s”) and will create over $12 million in cost savings over the contract term.

Ameresco Asset Metrics

Total operating assets were 269 MWe; assets in development were 322 MWe

  • $915 million of estimated contracted revenue and incentives during PPA period
  • 13-year weighted average PPA remaining

Third Quarter Asset Highlights:

  • 4 MWe placed into operations
  • Gross 13 MWe added to the in-development pipeline

Contracted O&M Backlog

Total O&M backlog of $1.1 billion increased 23% Y/Y

  • 16-year weighted average lifetime

Recent Event

On October 2, 2020, the staff of the United States Securities and Exchange Commission (SEC) requested that we provide information with respect to the timing of our revenue recognition for our software-as-a-service business during the period January 1, 2014 through September 30, 2020. During this period, our software-as-a-service revenue averaged no more than $8 million per year. We are fully cooperating with the SEC; and the Audit Committee of our Board of Directors is overseeing a review by our outside counsel of our software-as-a-service revenue recognition, including review procedures with respect to the revenue recognized during the period from 2018 to the present. The review to date has not identified material misstatements of our financial results.

Summary and Outlook

Given our strong year-to-date results, along with visibility from our project backlog and recurring revenue streams, we are raising our full year 2020 guidance. We now expect revenues of $960 million to $1 billion, Adjusted EBITDA of $107 million to $115 million, and non-GAAP EPS of $0.94 to $1.00, representing year-over-year growth of 13%, 22% and 17%, respectively, at the midpoint.

This guidance adjustment assumes we will have the same level of access to our work sites, and does not account for discrete items. Our results are variable from quarter to quarter, and importantly 2019 Q4 results were exceptionally strong due to contract timing.

“As Ameresco enters 2021, our customers will face more challenges than ever given the long-term budgetary impacts of the COVID-19 pandemic. Meanwhile we are also seeing the push for low to no carbon energy solutions and the rapidly evolving field of new distributed energy resources. Ameresco is uniquely positioned to address these opportunities with our flexible financial solutions which allow for no up-front capital investment, our customer centric approach to delivering the best advanced technology solutions and our globally recognized industry leading experts. These factors, combined with our substantial backlog, give us confidence that we are very well positioned to have another year of substantial growth in 2021,” Mr. Sakellaris concluded.

The Company’s guidance excludes the impact of any non-controlling interest activity, one-time charges, asset impairment charges, restructuring activities, as well as any related tax impact.

FY 2020 Guidance

Revenue

$960 million

$1 billion

Gross Margin

18%

19%

Adjusted EBITDA

$107 million

$115 million

Interest Expense & Other

$17 million

$19 million

Effective Tax Rate

6%

10%

Non-GAAP EPS

$0.94

$1.00

Conference Call/Webcast Information

The Company will host a conference call today at 4:30 p.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: 8769918)
  • International Participants: Dial 1-224-357-2393 (Access Code: 8769918)

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; market price of the Company's stock prevailing from time to time; the nature of other investment opportunities presented to the Company from time to time; the Company's cash flows from operations; and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission on March 4, 2020, and in our Quarterly Report on Form 10-Q, filed with the U.S. Securities and Exchange Commission on May 5, 2020. Currently, one of the most significant factors, however, is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on our financial condition, results of operations, cash flows and performance and the global economy and financial markets. The extent to which COVID-19 impacts us, suppliers, customers, employees and supply chains will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover, you should interpret many of the risks identified in our Annual Report and Quarterly Report as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19. 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 BALANCE SHEETS

(In thousands, except share amounts)

 

September 30,

 

December 31,

2020

 

2019

(Unaudited)

 

 

ASSETS

Current assets:

Cash and cash equivalents

$

45,351

 

$

33,223

 

Restricted cash

 

15,598

 

 

20,006

 

Accounts receivable, net

 

121,672

 

 

95,863

 

Accounts receivable retainage, net

 

24,359

 

 

16,976

 

Costs and estimated earnings in excess of billings

 

179,909

 

 

202,243

 

Inventory, net

 

9,081

 

 

9,236

 

Prepaid expenses and other current assets

 

34,775

 

 

29,424

 

Income tax receivable

 

10,263

 

 

5,033

 

Project development costs

 

15,571

 

 

13,188

 

Total current assets

 

456,579

 

 

425,192

 

Federal ESPC receivable

 

330,607

 

 

230,616

 

Property and equipment, net

 

9,545

 

 

10,104

 

Energy assets, net

 

670,139

 

 

579,461

 

Goodwill

 

58,172

 

 

58,414

 

Intangible assets, net

 

1,072

 

 

1,614

 

Operating lease assets

 

36,336

 

 

32,791

 

Other assets

 

22,247

 

 

35,821

 

Total assets

$

1,584,697

 

$

1,374,013

 

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt and financing lease liabilities

$

61,521

 

$

69,969

 

Accounts payable

 

205,536

 

 

202,416

 

Accrued expenses and other current liabilities

 

30,059

 

 

31,356

 

Current portion of operating lease liabilities

 

6,010

 

 

5,802

 

Billings in excess of cost and estimated earnings

 

35,320

 

 

26,618

 

Income taxes payable

 

221

 

 

486

 

Total current liabilities

 

338,667

 

 

336,647

 

Long-term debt and financing lease liabilities, net of current portion and deferred financing fees

 

278,127

 

 

266,181

 

Federal ESPC liabilities

 

385,386

 

 

245,037

 

Deferred income taxes, net

 

3,994

 

 

115

 

Deferred grant income

 

7,007

 

 

6,885

 

Long-term portions of operating lease liabilities, net of current

 

32,509

 

 

29,101

 

Other liabilities

 

39,529

 

 

29,575

 

Redeemable non-controlling interests, net

 

36,421

 

 

31,616

 

 

Stockholders' equity:

Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at September 30, 2020 and December 31, 2019

 

 

 

 

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 31,967,870 shares issued and 29,866,075 shares outstanding at September 30, 2020, 31,331,345 shares issued and 29,230,005 shares outstanding at December 31, 2019

 

3

 

 

3

 

Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000 shares issued and outstanding at September 30, 2020 and December 31, 2019

 

2

 

 

2

 

Additional paid-in capital

 

141,599

 

 

133,688

 

Retained earnings

 

344,936

 

 

314,459

 

Accumulated other comprehensive loss, net

 

(11,695

)

 

(7,514

)

Treasury stock, at cost, 2,101,795 shares at September 30, 2020 and 2,101,340 shares at December 31, 2019

 

(11,788

)

 

(11,782

)

Total stockholders’ equity

 

463,057

 

 

428,856

 

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

$

1,584,697

 

$

1,374,013

 

 

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts) (Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Revenues

$

282,507

 

 

$

212,026

 

 

$

717,956

 

 

$

560,321

 

Cost of revenues

231,133

 

 

167,333

 

 

588,628

 

 

439,857

 

Gross profit

51,374

 

 

44,693

 

 

129,328

 

 

120,464

 

Selling, general and administrative expenses

26,859

 

 

31,231

 

 

82,403

 

 

87,396

 

Operating income

24,515

 

 

13,462

 

 

46,925

 

 

33,068

 

Other expenses, net

3,726

 

 

4,192

 

 

13,167

 

 

11,359

 

Income before income taxes

20,789

 

 

9,270

 

 

33,758

 

 

21,709

 

Income tax provision

3,100

 

 

939

 

 

597

 

 

2,000

 

Net income

17,689

 

 

8,331

 

 

33,161

 

 

19,709

 

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

2,313

 

 

539

 

 

(2,593

)

 

2,524

 

Net income attributable to common shareholders

$

20,002

 

 

$

8,870

 

 

$

30,568

 

 

$

22,233

 

Net income per share attributable to common shareholders:

 

 

 

 

 

 

 

Basic

$

0.42

 

 

$

0.19

 

 

$

0.64

 

 

$

0.48

 

Diluted

$

0.41

 

 

$

0.19

 

 

$

0.62

 

 

$

0.47

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

47,788

 

 

46,555

 

 

47,597

 

 

46,413

 

Diluted

49,101

 

 

47,693

 

 

48,785

 

 

47,675

 

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

 

 

Nine Months Ended September 30,

 

2020

 

2019

Cash flows from operating activities:

 

 

 

Net income

$

33,161

 

 

$

19,709

 

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

 

 

 

Depreciation of energy assets

28,496

 

 

26,338

 

Depreciation of property and equipment

2,492

 

 

2,115

 

Amortization of debt discount and deferred financing fees

1,849

 

 

1,734

 

Amortization of intangible assets

528

 

 

681

 

Accretion of ARO and contingent consideration

64

 

 

98

 

Recoveries of bad debts

(1,089

)

 

(134

)

Loss on disposal / impairment of long-lived assets

2,146

 

 

 

Gain on deconsolidation of VIE

 

 

(2,160

)

Net loss (gain) from derivatives

971

 

 

(1,072

)

Stock-based compensation expense

1,380

 

 

1,195

 

Deferred income taxes

5,146

 

 

152

 

Unrealized foreign exchange (gain) loss

(43

)

 

149

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(21,178

)

 

(4,468

)

Accounts receivable retainage

(7,422

)

 

(3,079

)

Federal ESPC receivable

(160,231

)

 

(110,374

)

Inventory, net

155

 

 

(2,137

)

Costs and estimated earnings in excess of billings

24,824

 

 

(23,130

)

Prepaid expenses and other current assets

3,916

 

 

(11,084

)

Project development costs

(2,557

)

 

(5,641

)

Other assets

1,050

 

 

(698

)

Accounts payable, accrued expenses and other current liabilities

(2,942

)

 

(8,931

)

Billings in excess of cost and estimated earnings

9,019

 

 

(952

)

Other liabilities

1,972

 

 

(1,602

)

Income taxes payable

(5,496

)

 

2,566

 

Cash flows from operating activities

(83,789

)

 

(120,725

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

(1,968

)

 

(6,188

)

Purchases of energy assets, net of grant proceeds

(125,504

)

 

(72,140

)

Acquisitions, net of cash received

 

 

(1,279

)

Contributions to equity investment

(130

)

 

(323

)

Cash flows from investing activities

(127,602

)

 

(79,930

)

Cash flows from financing activities:

 

 

 

Payments of financing fees

(3,955

)

 

(541

)

Proceeds from exercises of options and ESPP

6,531

 

 

5,265

 

Repurchase of common stock

(6

)

 

(139

)

Proceeds from senior secured credit facility, net

6,000

 

 

41,343

 

Proceeds from long-term debt financings

40,604

 

 

7,614

 

Proceeds from Federal ESPC projects

194,586

 

 

115,556

 

Proceeds for energy assets from Federal ESPC

1,435

 

 

1,639

 

Proceeds from investments by redeemable non-controlling interests, net

2,854

 

 

20,173

 

Payments on long-term debt

(42,550

)

 

(18,033

)

Cash flows from financing activities

205,499

 

 

172,877

 

Effect of exchange rate changes on cash

(465

)

 

249

 

Net decrease in cash, cash equivalents, and restricted cash

(6,357

)

 

(27,529

)

Cash, cash equivalents, and restricted cash, beginning of period

77,264

 

 

97,913

 

Cash, cash equivalents, and restricted cash, end of period

$

70,907

 

 

$

70,384

 

Non-GAAP Financial Measures (In thousands) (Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

20,002

 

 

$

8,870

 

 

$

30,568

 

 

$

22,233

 

Impact from redeemable non-controlling interests

(2,313

)

 

(539

)

 

2,593

 

 

(2,524

)

Plus: Income tax provision

3,100

 

 

939

 

 

597

 

 

2,000

 

Plus: Other expenses, net

3,726

 

 

4,192

 

 

13,167

 

 

11,359

 

Plus: Depreciation and amortization

10,552

 

 

9,831

 

 

31,516

 

 

29,134

 

Plus: Stock-based compensation

521

 

 

413

 

 

1,380

 

 

1,195

 

Plus: Energy asset impairment

1,028

 

 

 

 

1,028

 

 

 

Plus: Restructuring and other charges

160

 

 

169

 

 

1,310

 

 

410

 

Less: Gain on deconsolidation of VIE

 

 

 

 

 

 

(2,160

)

Adjusted EBITDA

$

36,776

 

 

$

23,875

 

 

$

82,159

 

 

$

61,647

 

Adjusted EBITDA margin

13.0

%

 

11.3

%

 

11.4

%

 

11.0

%

 

 

 

 

 

 

 

 

Non-GAAP net income and EPS:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

20,002

 

 

$

8,870

 

 

$

30,568

 

 

$

22,233

 

Adjustment for accretion of tax equity financing fees

(91

)

 

 

 

(91

)

 

 

Impact from redeemable non-controlling interests

(2,313

)

 

(539

)

 

2,593

 

 

(2,524

)

Plus: Energy asset impairment

1,028

 

 

 

 

1,028

 

 

 

Plus: Restructuring and other charges

160

 

 

169

 

 

1,310

 

 

410

 

Less: Gain on deconsolidation of VIE

 

 

 

 

 

 

(2,160

)

Less: Income tax effect of non-GAAP adjustments

(309

)

 

 

 

(608

)

 

 

Non-GAAP net income

$

18,477

 

 

$

8,500

 

 

$

34,800

 

 

$

17,959

 

 

 

 

 

 

 

 

 

Diluted net income per common share

$

0.41

 

 

$

0.19

 

 

$

0.62

 

 

$

0.47

 

Effect of adjustments to net income

(0.03

)

 

(0.01

)

 

0.09

 

 

(0.09

)

Non-GAAP EPS

$

0.38

 

 

$

0.18

 

 

$

0.71

 

 

$

0.38

 

 

 

 

 

 

 

 

 

Adjusted cash from operations:

 

 

 

 

 

 

 

Cash flows from operating activities

$

(10,195

)

 

$

(11,471

)

 

$

(83,789

)

 

$

(120,725

)

Plus: proceeds from Federal ESPC projects

60,988

 

 

32,769

 

 

194,586

 

 

115,556

 

Adjusted cash from operations

$

50,793

 

 

$

21,298

 

 

$

110,797

 

 

$

(5,169

)

 

 

 

 

 

 

 

 

 

As of September 30,

 

 

 

2020

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

Project backlog:

 

 

 

 

 

 

 

Awarded(1)

$

1,211,300

 

 

$

1,434,900

 

 

 

 

 

Fully-contracted

1,033,700

 

 

787,200

 

 

 

 

 

Total project backlog

$

2,245,000

 

 

$

2,222,100

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy assets in development(2)

$

784,600

 

 

$

572,000

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

New contracts and awards:

 

 

 

 

 

 

 

New contracts

$

227,600

 

 

$

144,000

 

 

$

439,800

 

 

$

425,000

 

New awards(1)

$

237,000

 

 

$

343,000

 

 

$

490,700

 

 

$

619,000

 

(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):

Year Ended December 31, 2020

 

Low

High

Operating income(1)

$62 million

$67 million

Depreciation and amortization

$42 million

$43 million

Stock-based compensation

$1 million

$2 million

Restructuring and other charges

$2 million

$3 million

Adjusted EBITDA

$107 million

$115 million

(1) Although net income is the most directly comparable GAAP measure, this table reconciles adjusted EBITDA to operating income because we are not able to calculate forward-looking net income without unreasonable efforts due to significant uncertainties with respect to the impact of accounting for our redeemable non-controlling interests and taxes.

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 and asset impairment charges, and gain or loss 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 and asset impairment charges, and gain or loss 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 and asset impairment charges, gain or loss 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.