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 March 31, 2018. 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.
Management Commentary
“First quarter results were
outstanding, demonstrating the momentum in our business,” said George P.
Sakellaris, President and Chief Executive Officer of Ameresco. “All of
our lines of business grew revenue meaningfully while expanding
profitability. Our recurring revenue streams grew over 20% and
contributed the majority of our profit, a direct result of our strategic
focus. Efficiency project revenue was up over 30% with broad strength
across the country complementing the continued momentum with the Federal
government. Looking ahead, we are expecting the momentum to continue,
which could help drive growth for years to come. Based on the strong
first quarter results, we are reiterating the annual guidance we offered
a few weeks ago, which reflects our confidence in the outlook for
another year of accelerating growth.”
Financial Results
(All financial result comparisons made are
against the prior year period unless otherwise noted.)
First Quarter 2018
Revenues were $167.4 million, compared to $134.6 million. Operating income was $8.3 million, compared to operating loss of $0.6 million.
Net income attributable to common shareholders was $7.0 million compared to a loss of $0.6 million, and net income per diluted share was $0.15 compared to a loss of $0.01. Non-GAAP EPS was $0.16, compared to a loss of $0.04.
Adjusted EBITDA, a non-GAAP financial measure, was $15.8 million, compared to $6.0 million.
Additional First Quarter 2018 Operating Highlights:
- Cash flows used in operating activities were $37.1 million, compared to $32.0 million, and adjusted cash from operations, a non-GAAP financial measure, was $(0.5) million, compared to $3.2 million.
- Total project backlog was $1.9 billion and consisted of:
- $595.6 million of fully-contracted backlog, representing signed customer contracts for installation or construction of projects, which we expect to convert into revenue over the next two to four years, on average; and
- $1.3 billion of awarded projects, representing projects in development for which we do not have signed contracts.
- Assets in development were $221.4 million or 90 MWe.
FY 2018 Guidance
Based on year to date performance and expectations for the remainder of 2018, Ameresco is revising its 2018 outlook. Ameresco expects net income per diluted share to be in the range of $0.60 to $0.70 for 2018. Ameresco reaffirms total revenue to be in the range of $765 million to $800 million and adjusted EBITDA to be in the range of $75 million to $85 million in 2018. This guidance excludes the impact of any non-controlling interest activity and our restructuring activities, as well as any related tax impact.
Share Repurchase Program
Through the end of the first quarter, the Company repurchased 2,085,397 shares of its Class A common stock for $11.5 million. The Company has approximately $3.5 million of remaining authorization under the share repurchase program it announced in May 2016.
Webcast Reminder
The Company will host a conference call
today at 8:30 a.m. ET today 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: 4396436)
- International Participants: Dial 1-224-357-2393 (Access Code: 4396436)
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, 2017, filed with the U.S. Securities and Exchange
Commission on March 7, 2018. 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.
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AMERESCO, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) |
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| March 31, | December 31, | ||||||||||
| 2018 | 2017 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 34,125 | $ | 24,262 | |||||||
| Restricted cash | 16,894 | 15,751 | |||||||||
| Accounts receivable, net | 93,622 | 85,121 | |||||||||
| Accounts receivable retainage, net | 19,869 | 17,484 | |||||||||
| Costs and estimated earnings in excess of billings | 64,064 | 104,852 | |||||||||
| Inventory, net | 8,683 | 8,139 | |||||||||
| Prepaid expenses and other current assets | 23,258 | 14,037 | |||||||||
| Income tax receivable | 4,246 | 6,053 | |||||||||
| Project development costs | 14,652 | 11,379 | |||||||||
| Total current assets | 279,413 | 287,078 | |||||||||
| Federal ESPC receivable | 254,349 | 248,917 | |||||||||
| Property and equipment, net | 5,817 | 5,303 | |||||||||
| Energy assets, net | 381,724 | 356,443 | |||||||||
| Deferred income tax | 3,570 | — | |||||||||
| Goodwill | 56,294 | 56,135 | |||||||||
| Intangible assets, net | 2,231 | 2,440 | |||||||||
| Other assets | 28,377 | 27,635 | |||||||||
| Total assets | $ | 1,011,775 | $ | 983,951 | |||||||
| LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portions of long-term debt and capital lease liabilities | $ | 26,253 | $ | 22,375 | |||||||
| Accounts payable | 100,085 | 135,881 | |||||||||
| Accrued expenses and other current liabilities | 23,818 | 23,260 | |||||||||
| Billings in excess of cost and estimated earnings | 22,462 | 19,871 | |||||||||
| Income taxes payable | 564 | 755 | |||||||||
| Total current liabilities | 173,182 | 202,142 | |||||||||
| Long-term debt and capital lease liabilities, less current portions and net of deferred financing fees | 218,398 | 173,237 | |||||||||
| Federal ESPC liabilities | 244,341 | 235,088 | |||||||||
| Deferred income taxes, net | — | 584 | |||||||||
| Deferred grant income | 7,050 | 7,188 | |||||||||
| Other liabilities | 17,784 | 18,754 | |||||||||
| Redeemable non-controlling interests | 10,751 | 10,338 | |||||||||
| Stockholders' equity: | |||||||||||
| Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2018 and December 31, 2017 | — | — | |||||||||
| Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 29,552,750 shares issued and 27,467,353 shares outstanding at March 31, 2018, 29,406,315 shares issued and 27,533,049 shares outstanding at December 31, 2017 | 3 | 3 | |||||||||
| Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000 shares issued and outstanding at March 31, 2018 and December 31, 2017 | 2 | 2 | |||||||||
| Additional paid-in capital | 117,242 | 116,196 | |||||||||
| Retained earnings | 238,378 | 235,844 | |||||||||
| Accumulated other comprehensive loss, net | (3,786 | ) | (5,626 | ) | |||||||
| Less - treasury stock, at cost, 2,085,397 shares at March 31, 2018 and 1,873,266 shares at December 31, 2017 | (11,570 | ) | (9,799 | ) | |||||||
| Total stockholders' equity | 340,269 | 336,620 | |||||||||
| Total liabilities, redeemable non-controlling interests and stockholders' equity | $ | 1,011,775 | $ | 983,951 | |||||||
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AMERESCO, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share and per share amounts) |
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| Three Months Ended March 31, | ||||||||||||
| 2018 | 2017 | |||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Revenues | $ | 167,410 | $ | 134,610 | ||||||||
| Cost of revenues | 131,937 | 108,686 | ||||||||||
| Gross profit | 35,473 | 25,924 | ||||||||||
| Selling, general and administrative expenses | 27,204 | 26,487 | ||||||||||
| Operating income (loss) | 8,269 | (563 | ) | |||||||||
| Other expenses, net | 3,544 | 1,826 | ||||||||||
| Income (loss) before benefit for income taxes | 4,725 | (2,389 | ) | |||||||||
| Income tax benefit | (2,779 | ) | (645 | ) | ||||||||
| Net income (loss) | 7,504 | (1,744 | ) | |||||||||
| Net (income) loss attributable to redeemable non-controlling interests | (516 | ) | 1,100 | |||||||||
| Net income (loss) attributable to common shareholders | $ | 6,988 | $ | (644 | ) | |||||||
| Net income (loss) per share attributable to common shareholders: | ||||||||||||
| Basic | $ | 0.15 | $ | (0.01 | ) | |||||||
| Diluted | $ | 0.15 | $ | (0.01 | ) | |||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 45,373,000 | 45,514,000 | ||||||||||
| Diluted | 45,994,000 | 45,514,000 | ||||||||||
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AMERESCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
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| Three Months Ended March 31, | ||||||||||||
| 2018 | 2017 | |||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) | $ | 7,504 | $ | (1,744 | ) | |||||||
| Adjustments to reconcile net income (loss) to cash flows from operating activities: | ||||||||||||
| Depreciation of energy assets | 6,312 | 5,109 | ||||||||||
| Depreciation of property and equipment | 542 | 693 | ||||||||||
| Amortization of deferred financing fees | 419 | 397 | ||||||||||
| Amortization of intangible assets | 253 | 380 | ||||||||||
| Provision for bad debts | 64 | — | ||||||||||
| Gain on sale of assets | — | (104 | ) | |||||||||
| Unrealized gain on ineffectiveness of interest rate swaps | (102 | ) | (123 | ) | ||||||||
| Stock-based compensation expense | 355 | 343 | ||||||||||
| Deferred income taxes | (2,920 | ) | (859 | ) | ||||||||
| Unrealized foreign exchange gain (loss) | 492 | (185 | ) | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (1,837 | ) | 30,478 | |||||||||
| Accounts receivable retainage | (2,453 | ) | (1,333 | ) | ||||||||
| Federal ESPC receivable | (37,967 | ) | (34,418 | ) | ||||||||
| Inventory, net | (544 | ) | 1,154 | |||||||||
| Costs and estimated earnings in excess of billings | 30,906 | 7,193 | ||||||||||
| Prepaid expenses and other current assets | (4,578 | ) | (2,686 | ) | ||||||||
| Project development costs | (2,325 | ) | (1,155 | ) | ||||||||
| Other assets | (281 | ) | (23 | ) | ||||||||
| Accounts payable, accrued expenses and other current liabilities | (33,227 | ) | (31,939 | ) | ||||||||
| Billings in excess of cost and estimated earnings | 565 | (3,053 | ) | |||||||||
| Other liabilities | 135 | 65 | ||||||||||
| Income taxes payable | 1,617 | (201 | ) | |||||||||
| Cash flows from operating activities | (37,070 | ) | (32,011 | ) | ||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of property and equipment | (1,015 | ) | (387 | ) | ||||||||
| Purchases of energy assets | (12,818 | ) | (29,121 | ) | ||||||||
| Proceeds from sale of assets of a business | — | 2,777 | ||||||||||
| Acquisitions, net of cash received | (21,343 | ) | (2,409 | ) | ||||||||
| Cash flows from investing activities | (35,176 | ) | (29,140 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Payments of financing fees | (575 | ) | (338 | ) | ||||||||
| Proceeds from exercises of options | 691 | 240 | ||||||||||
| Repurchase of common stock | (1,771 | ) | (2,049 | ) | ||||||||
| Proceeds from senior secured credit facility, net | 17,404 | 18,000 | ||||||||||
| Proceeds from long-term debt financings | 33,501 | 12,878 | ||||||||||
| Proceeds from Federal ESPC projects | 36,581 | 35,167 | ||||||||||
| Proceeds from Federal ESPC energy assets | 717 | — | ||||||||||
| Proceeds from sale-leaseback financings | — | 8,783 | ||||||||||
| Distributions from investment by redeemable non-controlling interests, net | (103 | ) | (62 | ) | ||||||||
| Payments on long-term debt | (2,322 | ) | (8,010 | ) | ||||||||
| Cash flows from financing activities | 84,123 | 64,609 | ||||||||||
| Effect of exchange rate changes on cash | (185 | ) | 51 | |||||||||
| Net increase in cash, cash equivalents and restricted cash | 11,692 | 3,509 | ||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 60,105 | 52,826 | ||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 71,797 | $ | 56,335 | ||||||||
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Non-GAAP Financial Measures (in thousands) |
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| Three Months Ended March 31, | |||||||||||||||||
| 2018 | 2017 | ||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||
| Adjusted EBITDA: | |||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 6,988 | $ | (644 | ) | ||||||||||||
| Impact from redeemable non-controlling interests | 516 | (1,100 | ) | ||||||||||||||
| Plus: Income tax benefit | (2,779 | ) | (645 | ) | |||||||||||||
| Plus: Other expenses, net | 3,544 | 1,826 | |||||||||||||||
| Plus: Depreciation and amortization of intangible assets | 7,107 | 6,182 | |||||||||||||||
| Plus: Stock-based compensation | 355 | 343 | |||||||||||||||
| Plus: Restructuring and other charges | 32 | — | |||||||||||||||
| Adjusted EBITDA | $ | 15,763 | $ | 5,962 | |||||||||||||
| Adjusted EBITDA margin | 9.4 | % | 4.4 | % | |||||||||||||
| Non-GAAP net income (loss) and EPS: | |||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 6,988 | $ | (644 | ) | ||||||||||||
| Impact from redeemable non-controlling interests | 516 | (1,100 | ) | ||||||||||||||
| Plus: Restructuring and other charges | 32 | — | |||||||||||||||
| Plus: Income Tax effect of non-GAAP adjustments | (27 | ) | — | ||||||||||||||
| Non-GAAP net income (loss) | $ | 7,509 | $ | (1,744 | ) | ||||||||||||
| Diluted net income (loss) per common share | $ | 0.15 | $ | (0.01 | ) | ||||||||||||
| Effect of adjustments to net income (loss) | 0.01 | (0.03 | ) | ||||||||||||||
| Non-GAAP EPS | $ | 0.16 | $ | (0.04 | ) | ||||||||||||
| Adjusted cash from operations: | |||||||||||||||||
| Cash flows from operating activities | $ | (37,070 | ) | $ | (32,011 | ) | |||||||||||
| Plus: proceeds from Federal ESPC projects | 36,581 | 35,167 | |||||||||||||||
| Adjusted cash from operations | $ | (489 | ) | $ | 3,156 | ||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2018 | 2017 | ||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||
| Construction backlog: | |||||||||||||||||
| Awarded(1) | $ | 1,293,000 | $ | 1,138,200 | |||||||||||||
| Fully-contracted | 595,600 | 505,000 | |||||||||||||||
| Total construction backlog | $ | 1,888,600 | $ | 1,643,200 | |||||||||||||
| Energy assets in development(2) | $ | 221,400 | $ | 206,600 | |||||||||||||
| Three Months Ended March 31 | |||||||||||||||||
| 2018 | 2017 | ||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||
| New contracts and awards: | |||||||||||||||||
| New contracts | $ | 135,000 | $ | 55,000 | |||||||||||||
| New awards(1) | $ | 229,000 | $ | 236,000 | |||||||||||||
(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): |
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| (in thousands) | ||||||||||||
| Year Ended December 31, 2018 | ||||||||||||
| Low | High | |||||||||||
| Operating income | $ | 44,000 | $ | 52,000 | ||||||||
| Depreciation and amortization of intangible assets | 30,000 | 31,000 | ||||||||||
| Stock-based compensation | 1,000 | 2,000 | ||||||||||
| Restructuring and other charges | — | — | ||||||||||
| Adjusted EBITDA | $ | 75,000 | $ | 85,000 | ||||||||
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, stock-based compensation expense, restructuring
charges, loss related to a significant non-core project in Canada and
charges related to a significant customer bankruptcy. 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, stock-based compensation expense,
restructuring charges and loss related to a significant non-core project
in Canada. 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.
During the first quarter of 2016, we changed our calculation and presentation of adjusted EBITDA to exclude restructuring charges and losses related to a significant non-core project in Canada and during the third quarter of 2016, we changed our calculation and presentation of adjusted EBITDA in order to exclude charges related to a significant customer bankruptcy. We do not consider these items indicative of our core operating performance. Adjusted EBITDA and adjusted EBITDA margin for the prior periods have been recalculated to be presented on a comparable basis.
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, loss related to a significant non-core
project in Canada, impact from redeemable non-controlling interest and
charges related to a significant customer bankruptcy. 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.
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