Ameresco Reports Third Quarter 2012 Financial Results

Ameresco Reports Third Quarter 2012 Financial Results

Third Quarter 2012 Financial Highlights:

  • Revenue of $163.9 million

  • Net income of $6.8 million

  • Net income per diluted share of $0.15

9 Month Year-to-Date 2012 Financial Highlights:

  • Revenue of $474.6 million

  • Net income of $13.4 million

  • Net income per diluted share of $0.29


FRAMINGHAM, Mass.--(BUSINESS WIRE)-- Ameresco, Inc. (NYS: AMRC) a leading energy efficiency and renewable energy company, today announced financial results for the fiscal quarter ended September 30, 2012. The Company has also furnished prepared remarks in conjunction with this press release in a Current Report on Form 8-K. Those prepared remarks contain supplemental information, including non-GAAP financial metrics, and have been posted to the "Investor Relations" section of the Company's website at www.ameresco.com.

Total revenue for the third quarter of 2012 was $163.9 million, compared to $227.8 million for the same period in 2011, a decrease of 28.0% year-over-year. Operating income for the third quarter of 2012 was $10.7 million, compared to $16.4 million for the third quarter of 2011, a decrease of 34.7% year-over-year. Third quarter 2012 adjusted EBITDA, a non-GAAP financial measure, was $16.3 million, compared to $20.9 million for the same period in 2011, a decrease of 21.9% year-over-year. Net income for the third quarter of 2012 was $6.8 million, compared to $12.4 million for the same period of 2011, a decrease of 45.2% year-over-year. Third quarter 2012 net income per diluted share was $0.15, compared to $0.27 per diluted share for the same period of 2011.

"Increased uncertainty within our customers' respective political environments as well as their ongoing budgetary concerns impacted third quarter results," stated George P. Sakellaris, President and Chief Executive Officer of Ameresco. "Customers have been proceeding more cautiously with greater attention to care and diligence, which has further extended conversion times from awarded projects to signed contracts during the quarter."

"We continued to execute well on our projects in construction and third quarter revenue from all other offerings increased 20%, helped by annuity-based revenues," continued Sakellaris. "Further, awarded projects increased 46% year-over-year and gross additions to backlog for the third quarter were $281 million, a new record, more than offsetting a 27% decline in fully-contracted backlog. As a result, total construction backlog of awarded projects and fully-contracted backlog reached a new record level at nearly $1.5 billion."

"We believe that as our customers gain greater clarity going forward and as market uncertainties, including the elections, are resolved, awarded projects will begin to convert at a pace more consistent with what we have experienced historically. In the meantime, we continue to focus on achieving our long-term strategic plan, improving our competitive position, and offering innovative budget-neutral energy services for customers looking to cut operating costs while addressing their aging infrastructure needs."

For the nine months ended September 30, 2012, Ameresco reported total revenue of $474.6 million, compared to $539.7 million for the same period in 2011, a decrease of 12.1% year-over-year. Operating income for the first nine months of 2012 was $22.4 million, compared to $38.1 million for the first nine months of 2011, a decrease of 41.2% year-over-year. Adjusted EBITDA for the first nine months of 2012 was $39.4 million, compared to $49.7 million for the first nine months of 2011, a decrease of 20.7% year-over-year. Net income for the first nine months of 2012 was $13.4 million, compared to $26.5 million for the first nine months of 2011, a decrease of 49.2% year-over-year. Net income per diluted share was $0.29 for the first nine months of 2012, compared to $0.58 for the first nine months of 2011.

Additional Third Quarter 2012 Operating Highlights:

  • Revenue generated from backlog was $120.7 million for the third quarter of 2012, a decrease of 37.0% year-over-year.

  • All other revenue was $43.2 million for the third quarter of 2012, an increase of 19.8% year-over-year.

  • Operating cash flows were $3.1 million for the third quarter of 2012.

  • Total construction backlog was $1.46 billion as of September 30, 2012 and consisted of:

    • $318.4 million of fully-contracted backlog, which represents signed customer contracts for installation or construction of projects that are expected to convert into revenue over the next 12-24 months, on average; and

    • $1.14 billion of awarded projects, which prior to the current lengthening of conversion times from awarded projects to signed contracts, has historically represented estimated future revenue for projects for which contracts are expected to be signed over the next 6-12 months, on average.

FY 2012 Guidance

Ameresco is revising its guidance for the fiscal year ending December 31, 2012. We continue to experience a lengthening of backlog conversion times, and as a consequence, a portion of revenue that was previously expected to be recognized in the second half of 2012 is now not expected to be recognized until future periods. The Company now expects total revenue to be in the range of $640 million to $660 million; and net income in the range of $22 million to $26 million.

Webcast Reminder

Ameresco will hold its earnings conference call today, November 8th, at 8:30 a.m. Eastern Time with President and Chief Executive Officer, George Sakellaris, and Vice President and Chief Financial Officer, Andrew Spence, to discuss details regarding the Company's third quarter 2012 results, business outlook and strategy. Participants may access it by dialing domestically 888.680.0860 or internationally 617.213.4852. The passcode is 60524689. Participants are advised to dial into the call at least ten minutes prior to the call 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. If you are unable to listen to the live call, the webcast will be archived on the Company's website shortly after the call and be available for one year.

Pre-Registration for the call is also available at:
https://www.theconferencingservice.com/prereg/key.process?key=PJVDEQN8B. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide faster access to the conference by bypassing the operator upon connection.

Use of Non-GAAP Financial Measures

This press release and the accompanying tables include references to adjusted EBITDA, which is a non-GAAP financial measure. For a description of this non-GAAP financial measure, including the reasons management uses this measure, please see the section following the accompanying tables titled "Exhibit A: Non-GAAP Financial Measures". For a reconciliation of adjusted EBITDA to operating income, the most directly comparable financial measure prepared in accordance with GAAP, please see Other Non-GAAP Disclosure in the accompanying tables.

About Ameresco, Inc.

Founded in 2000, Ameresco, Inc. (NYS: AMRC) is a leading independent provider of comprehensive services, energy efficiency, infrastructure upgrades, asset sustainability and renewable energy solutions for facilities throughout North America. Ameresco's 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 provides local expertise through its 63 offices in 34 states and five Canadian provinces. Ameresco has more than 900 employees. 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 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 Ameresco does on projects where it recognizes revenue on a percentage of completion basis, including the ability to perform under recently signed contracts without unusual delay; demand for Ameresco's energy efficiency and renewable energy solutions; the Company's ability to arrange financing for its 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; seasonality in construction and in demand for its products and services; a customer's decision to delay the Company's 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 Annual Report on Form 10-K for the year ended December 31, 2011, filed with the U.S. Securities and Exchange Commission on March 15, 2012 and in its quarterly reports on Form 10-Q. 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.

AMERESCO, INC.

CONSOLIDATED BALANCE SHEETS

December 31,
2011

September 30,
2012

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

26,277,366

$

26,176,800

Restricted cash

12,372,356

15,771,219

Accounts receivable, net

109,296,773

103,092,925

Accounts receivable retainage

26,089,216

21,059,147

Costs and estimated earnings in excess of billings

69,251,022

63,136,398

Inventory, net

8,635,633

7,093,211

Prepaid expenses and other current assets

8,992,963

8,310,732

Income tax receivable

9,662,771

7,851,575

Deferred income taxes

6,456,671

7,409,218

Project development costs

6,027,689

8,262,787

Total current assets

283,062,460

268,164,012

Federal ESPC receivable

110,212,186

138,557,444

Property and equipment, net

7,086,164

9,245,310

Project assets, net

177,854,734

197,638,679

Deferred financing fees, net

2,994,692

2,812,625

Goodwill

47,881,346

50,317,305

Intangible assets, net

12,727,528

10,390,246

Other assets

3,778,357

4,573,877

362,535,007

413,535,486

$

645,597,467

$

681,699,498

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$

11,563,983

$

11,363,774

Accounts payable

93,506,089

79,153,405

Accrued expenses and other current liabilities

8,917,723

12,827,600

Book overdraft

7,297,122

-

Billings in excess of cost and estimated earnings

26,982,858

28,246,514

Total current liabilities

148,267,775

131,591,293

Long-term debt, less current portion

196,401,588

223,977,467

Deferred income taxes

29,953,103

29,526,453

Deferred grant income

6,024,099

6,694,046

Other liabilities

28,529,867

30,860,993

260,908,657

291,058,959

Stockholders' equity:

Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and
outstanding at December 31, 2011 and September 30, 2012

-

-

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 30,713,837
shares issued and 25,880,553 outstanding at December 31, 2011; 31,865,164

shares issued and 27,031,880 outstanding at September 30, 2012

3,071

3,186

Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000
shares issued and outstanding at December 31, 2011 and September 30, 2012

1,800

1,800

Additional paid-in capital

86,067,852

93,987,142

Retained earnings

161,335,621

174,780,969

Accumulated other comprehensive loss

(1,868,352

)

(612,594

)

Minority interest

63,614

71,314

Less - treasury stock, at cost, 4,833,284 shares

(9,182,571

)

(9,182,571

)

Total stockholders' equity

236,421,035

259,049,246

$

645,597,467

$

681,699,498

AMERESCO, INC.
CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended September 30,

2011

2012

(Unaudited)

Revenue:

Energy efficiency revenue

$

188,718,434

$

108,418,955

Renewable energy revenue

39,085,134

55,487,250

227,803,568

163,906,205

Direct expenses:

Energy efficiency expenses

155,890,159

87,898,560

Renewable energy expenses

32,058,319

41,205,349

187,948,478

129,103,909

Gross profit

39,855,090

34,802,296

Operating expenses:

Salaries and benefits

10,984,929

12,441,502

Project development costs

5,174,930

4,288,657

General, administrative and other

7,286,542

7,362,802

23,446,401

24,092,961

Operating income

16,408,689

10,709,335

Other expenses, net

(1,359,913

)

(1,254,217

)

Income before provision for income taxes

15,048,776

9,455,118

Income tax provision

(2,690,196

)

(2,683,936

)

Net income

$

12,358,580

$

6,771,182

Net income per share attributable to common shareholders:

Basic

$

0.29

$

0.15

Diluted

$

0.27

$

0.15

Weighted average common shares outstanding:

Basic

43,116,861

44,788,160

Diluted

46,308,032

46,247,239

OTHER NON-GAAP DISCLOSURES

Gross margins:

Energy efficiency revenue

17.4

%

18.9

%

Renewable energy revenue

18.0

%

25.7

%

Total

17.5

%

21.2

%

Operating expenses as a percent of revenue

10.3

%

14.7

%

Adjusted earnings before interest, taxes, depreciation and amortization

(Adjusted EBITDA):

Operating income

$

16,408,689

$

10,709,335

Depreciation and amortization

4,022,951

4,738,264

Stock-based compensation

432,624

853,866

Adjusted EBITDA

$

20,864,264

$

16,301,465

Adjusted EBITDA margin

9.2

%

9.9

%

Construction backlog:

Awarded

$

782,358,080

$

1,142,847,053

Fully-contracted

438,003,732

318,368,389

Total construction backlog

$

1,220,361,812

$

1,461,215,442

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

Nine Months Ended September 30,

2011

2012

(Unaudited)

Revenue:

Energy efficiency revenue

$

418,697,750

$

341,620,742

Renewable energy revenue

121,007,530

132,958,737