amrc-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.

Commission File Number: 001-34811

Ameresco, Inc.

(Exact name of registrant as specified in its charter)


Delaware						04-3512838
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)
111 Speen Street, Suite 410 Framingham, Massachusetts						01701
(Address of Principal Executive Offices)						(Zip Code)

(508) 661-2200

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of exchange on which registered
Class A Common Stock, par value $0.0001 per share	AMRC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ☑	Accelerated Filer o	Non-accelerated filer o	Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class			Shares outstanding as of July 29, 2022
Class A Common Stock, $0.0001 par value per share			33,833,893
Class B Common Stock, $0.0001 par value per share			18,000,000

TABLE OF CONTENTS


						Page
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at June 30 , 2022 (Unaudited) and December 31, 2021						1
Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022 and 2021 (Unaudited)						3
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30 , 2022 and 2021 (Unaudited)						4
Condensed Consolidated Statements of Changes in Redeemable Non-Controlling Interests and Stockholders’ Equity for the three and six months ended June 30 , 2022 and 2021 (Unaudited)						5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2022 and 2021 (Unaudited)						7
Notes to Condensed Consolidated Financial Statements (Unaudited)						9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						28
Item 3. Quantitative and Qualitative Disclosures About Market Risk						37
Item 4. Controls and Procedures						37

PART II - OTHER INFORMATION
Item 1. Legal Proceedings						38
Item 1A. Risk Factors						38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						38

Item 6. Exhibits						39
Signatures						40

Table of Contents

Part I - Financial Information

Item 1. Condensed Consolidated Financial Statements

AMERESCO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (1)	$	67,553	$	50,450
Restricted cash (1)	27,079		24,267
Accounts receivable, net of allowance of $2,262 and $2,266, respectively (1)	207,990		161,970
Accounts receivable retainage, net	43,444		43,067
Costs and estimated earnings in excess of billings (1)	663,798		306,172
Inventory, net	10,886		8,807
Prepaid expenses and other current assets (1)	23,153		25,377
Income tax receivable	4,299		5,261
Project development costs	16,668		13,214
Total current assets (1)	1,064,870		638,585
Federal ESPC receivable	671,241		557,669
Property and equipment, net (1)	14,000		13,117
Energy assets, net (1)	964,871		856,531
Deferred income tax assets, net	3,646		3,703
Goodwill, net	70,825		71,157
Intangible assets, net	5,532		6,961
Operating lease assets (1)	38,929		41,982
Restricted cash, net of current portion (1)	16,675		12,337
Other assets (1)	34,187		22,779
Total assets (1)	$	2,884,776	$	2,224,821
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portions of long-term debt and financing lease liabilities (1)	$	82,707	$	78,934
Accounts payable (1)	432,695		308,963
Accrued expenses and other current liabilities (1)	41,629		43,311
Current portions of operating lease liabilities (1)	5,953		6,276
Billings in excess of cost and estimated earnings	39,787		35,918
Income taxes payable	1,633		822
Total current liabilities (1)	604,404		474,224
Long-term debt and financing lease liabilities, net of current portion, unamortized discount and debt issuance costs (1)	698,365		377,184
Federal ESPC liabilities	657,235		532,287
Deferred income tax liabilities, net	8,855		3,871
Deferred grant income	8,099		8,498
Long-term operating lease liabilities, net of current portion (1)	32,642		35,135
Other liabilities (1)	45,691		43,176
Commitments and contingencies (Note 9)
Redeemable non-controlling interests, net	47,918		46,182

(1) Includes restricted assets of consolidated variable interest entities (“VIEs”) at June 30, 2022 and December 31, 2021 of $155,547 and $124,454, respectively. Includes non-recourse liabilities of consolidated VIEs at June 30, 2022 and December 31, 2021 of $32,251 and $31,125, respectively. See Note 12.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts) (Continued)


	June 30, 2022		December 31, 2021
	(Unaudited)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at June 30, 2022 and December 31, 2021	$	—	$	—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 35,935,688 shares issued and 33,833,893 shares outstanding at June 30, 2022, 35,818,104 shares issued and 33,716,309 shares outstanding at December 31, 2021	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, 2022 and December 31, 2021	2		2
Additional paid-in capital	294,240		283,982
Retained earnings	488,278		438,732
Accumulated other comprehensive loss, net	(4,354)		(6,667)
Treasury stock, at cost, 2,101,795 shares at June 30, 2022 and December 31, 2021	(11,788)		(11,788)
Stockholders’ equity before non-controlling interest	766,381		704,264
Non-controlling interest	15,186		—
Total stockholders’ equity	781,567		704,264
Total liabilities, redeemable non-controlling interests and stockholders’ equity	$	2,884,776	$	2,224,821

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenues	$	577,397	$	273,920	$	1,051,399	$	526,122
Cost of revenues	496,094		220,598		901,718		425,891
Gross profit	81,303		53,322		149,681		100,231
Selling, general and administrative expenses	38,249		31,882		77,941		60,483
Operating income	43,054		21,440		71,740		39,748
Other expenses, net	5,249		5,450		12,330		9,122
Income before income taxes	37,805		15,990		59,410		30,626
Income tax provision (benefit)	4,932		(1,896)		7,239		309
Net income	32,873		17,886		52,171		30,317
Net income attributable to redeemable non-controlling interests	(657)		(4,231)		(2,571)		(5,488)
Net income attributable to common shareholders	$	32,216	$	13,655	$	49,600	$	24,829

Net income per share attributable to common shareholders:
Basic	$	0.62	$	0.27	$	0.96	$	0.49
Diluted	$	0.61	$	0.26	$	0.93	$	0.48
Weighted average common shares outstanding:
Basic	51,818		51,315		51,781		50,158
Diluted	53,173		52,570		53,407		51,475

See notes to condensed consolidated financial statements.

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AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) (Unaudited)


	Three Months Ended June 30,
	2022		2021
Net income	$	32,873	$	17,886
Other comprehensive income (loss):
Unrealized gain (loss) from interest rate hedges, net of tax effect of $531 and $(188)	1,565		(472)
Foreign currency translation adjustments	(2,030)		477
Total other comprehensive (loss) income	(465)		5
Comprehensive income	32,408		17,891

Comprehensive income attributable to redeemable non-controlling interests	(657)		(4,231)
Comprehensive income attributable to common shareholders	$	31,751	$	13,660

	Six Months Ended June 30,
	2022		2021
Net income	$	52,171	$	30,317
Other comprehensive income (loss):
Unrealized gain from interest rate hedges, net of tax effect of $1,448 and $531	4,276		1,645
Foreign currency translation adjustments	(1,963)		891
Total other comprehensive income	2,313		2,536
Comprehensive income	54,484		32,853

Comprehensive income attributable to redeemable non-controlling interests	(2,571)		(5,488)
Comprehensive income attributable to common shareholders	$	51,913	$	27,365

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

For the Three Months Ended June 30, 2022 and 2021

(In thousands, except share amounts) (Unaudited)


			Class A Common Stock			Class B Common Stock									Treasury Stock
	Redeemable Non-controlling Interests		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Shares	Amount		Non-controlling Interest		Total Stockholders’ Equity
Balance, March 31, 2021	$	39,668	33,265,925	$	3	18,000,000	$	2	$	267,864	$	379,533	$	(6,759)	2,101,795	$	(11,788)	$	—	$	628,855

Equity offering costs			—						(135)											(135)
Exercise of stock options	—		101,109	—		—	—		1,225		—		—		—	—		—		1,225
Stock-based compensation expense	—		—	—		—	—		1,349		—		—		—	—		—		1,349
Employee stock purchase plan	—		15,297	—		—	—		652		—		—		—	—		—		652

Unrealized loss from interest rate hedges, net	—		—	—		—	—		—		—		(472)		—	—		—		(472)
Foreign currency translation adjustment	—		—	—		—	—		—		—		477		—	—		—		477

Contributions from redeemable non-controlling interests, net of fees	2,269		—	—		—	—		—		—		—		—	—		—		—
Distributions to redeemable non-controlling interests	(195)		—	—		—	—		—		—		—		—	—		—		—
Accretion of tax equity financing fees	30		—	—		—	—		—		(30)		—		—	—		—		(30)
Net income	4,231		—	—		—	—		—		13,655		—		—	—		—		13,655
Balance, June 30, 2021	$	46,003	33,382,331	$	3	18,000,000	$	2	$	270,955	$	393,158	$	(6,754)	2,101,795	$	(11,788)	$	—	$	645,576

Balance, March 31, 2022	$	47,438	33,808,964	$	3	18,000,000	$	2	$	289,459	$	456,089	$	(3,889)	2,101,795	$	(11,788)	$	6,335	$	736,211

Exercise of stock options	—		7,933	—		—	—		158		—		—		—	—		—		158
Stock-based compensation expense	—		—	—		—	—		3,675		—		—		—	—		—		3,675
Employee stock purchase plan	—		16,996	—		—	—		948		—		—		—	—		—		948

Unrealized gain from interest rate hedges, net	—		—	—		—	—		—		—		1,565		—	—		—		1,565
Foreign currency translation adjustment	—		—	—		—	—				—		(2,030)		—	—		—		(2,030)

Distributions to redeemable non-controlling interests	(204)		—	—		—	—		—		—		—		—	—		—		—
Accretion of tax equity financing fees	27		—	—		—	—		—		(27)		—		—	—		—		(27)

Contributions from non-controlling interest	—		—	—		—	—		—		—		—		—	—		8,851		8,851
Net income	657		—	—		—	—		—		32,216		—		—	—		—		32,216
Balance, June 30, 2022	$	47,918	33,833,893	$	3	18,000,000	$	2	$	294,240	$	488,278	$	(4,354)	2,101,795	$	(11,788)	$	15,186	$	781,567

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2022 and 2021

(In thousands, except share amounts) (Unaudited)


			Class A Common Stock			Class B Common Stock									Treasury Stock
	Redeemable Non-controlling Interests		Shares	Amount		Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Shares	Amount		Non-controlling Interest		Total Stockholders’ Equity
Balance, December 31, 2020	$	38,850	30,224,654	$	3	18,000,000	$	2	$	145,496	$	368,390	$	(9,290)	2,101,795	$	(11,788)	$	—	$	492,813
Equity offering of common stock, net of offering costs of $6,419	—		2,875,000	—		—	—		120,081		—		—		—	—		—		120,081

Exercise of stock options	—		267,380	—		—	—		2,611		—		—		—	—		—		2,611
Stock-based compensation expense	—		—	—		—	—		2,115		—		—		—	—		—		2,115
Employee stock purchase plan	—		15,297	—		—	—		652		—		—		—	—		—		652

Unrealized loss from interest rate hedges, net	—		—	—		—	—		—		—		1,645		—	—		—		1,645
Foreign currency translation adjustment	—		—	—		—	—		—		—		891		—	—		—		891
Contributions from redeemable non-controlling interests, net of fees	2,252		—	—		—	—		—		—		—		—	—		—		—
Distributions to redeemable non-controlling interests	(648)		—	—		—	—		—		—		—		—	—		—		—
Accretion of tax equity financing fees	61		—	—		—	—		—		(61)		—		—	—		—		(61)
Net income	5,488		—	—		—	—		—		24,829		—		—	—		—		24,829
Balance, June 30, 2021	$	46,003	33,382,331	$	3	18,000,000	$	2	$	270,955	$	393,158	$	(6,754)	2,101,795	$	(11,788)	$	—	$	645,576

Balance, December 31, 2021	$	46,182	33,716,309	$	3	18,000,000	$	2	$	283,982	$	438,732	$	(6,667)	2,101,795	$	(11,788)	$	—	$	704,264

Exercise of stock options	—		100,588	—		—	—		1,866		—		—		—	—		—		1,866
Stock-based compensation expense	—		—	—		—	—		7,206		—		—		—	—		—		7,206
Employee stock purchase plan	—		16,996	—		—	—		948		—		—		—	—		—		948

Unrealized gain from interest rate hedges, net	—		—	—		—	—		—		—		4,276		—	—		—		4,276
Foreign currency translation adjustment	—		—	—		—	—		—				(1,963)		—	—		—		(1,963)

Distributions to redeemable non-controlling interests	(651)		—	—		—	—		—		—		—		—	—		—		—
Accretion of tax equity financing fees	54		—	—		—	—		—		(54)		—		—	—		—		(54)
Investment fund call option exercise	(238)		—	—		—	—		238		—		—		—	—		—		238
Contributions from non-controlling interest	—		—	—		—	—		—		—		—		—	—		15,186		15,186
Net income	2,571		—	—		—	—		—		49,600		—		—	—		—		49,600
Balance, June 30, 2022	$	47,918	33,833,893	$	3	18,000,000	$	2	$	294,240	$	488,278	$	(4,354)	2,101,795	$	(11,788)	$	15,186	$	781,567

See notes to condensed consolidated financial statements.

Table of Contents

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net income	$	52,171	$	30,317
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation of energy assets, net	23,978		20,136
Depreciation of property and equipment	1,404		1,637
Gain on contingent consideration	(320)		—
Accretion of ARO liabilities	72		57
Amortization of debt discount and debt issuance costs	2,036		1,477
Amortization of intangible assets	1,020		161
Provision for bad debts	244		6

Equity in earnings of unconsolidated entity	(989)		—
Net loss from derivatives	555		1,225

Stock-based compensation expense	7,206		2,115
Deferred income taxes, net	3,606		335

Unrealized foreign exchange loss (gain)	467		(32)
Changes in operating assets and liabilities:
Accounts receivable	(44,334)		15,230
Accounts receivable retainage	(458)		(6,211)
Federal ESPC receivable	(113,478)		(125,146)
Inventory, net	(2,080)		(224)
Costs and estimated earnings in excess of billings	(358,603)		(8,893)
Prepaid expenses and other current assets	(1,629)		2,445
Project development costs	(1,332)		760
Other assets	(10,020)		(3,691)
Accounts payable, accrued expenses and other current liabilities	126,783		(22,941)
Billings in excess of cost and estimated earnings	4,073		(8,174)
Other liabilities	18		(207)
Income taxes receivable, net	1,767		3,135
Cash flows from operating activities	(307,843)		(96,483)
Cash flows from investing activities:
Purchases of property and equipment	(