Home / Businesswire / Ameresco Reports Fourth Quarter and Full Year 2019 Financial Results

Ameresco Reports Fourth Quarter and Full Year 2019 Financial Results

– Company Guides to Continued Strong Growth in 2020 –

– Contracted Backlog Up 52% to a Record $1.1 Billion at Year-end –

– Energy Assets in Development Increased by 80% to 321 MWe –

– Contracted O&M backlog increased 22% to $1.1 Billion at Year-end –

~~~

– Ameresco Delivered a Carbon Offset equivalent to 11M Metric Tons of CO2 in 2019 –

FRAMINGHAM, Mass.–(BUSINESS WIRE)–#earnings–Ameresco, Inc. (NYSE:AMRC), a leading energy solutions provider today announced financial results for the fiscal quarter and year ended December 31, 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.

“Ameresco had strong performance in 2019 and ended the year with record results across the key metrics that position the Company for continued growth in 2020,” said George P. Sakellaris, President and Chief Executive Officer.

“Contracted backlog increased 52% to a record $1.1 billion at year-end, led by the signing of several large federal Smart Energy Solutions contracts in the fourth quarter. Total project backlog increased 15% to $2.3 billion, and contracted O&M backlog increased 22% to $1.1 billion. At year end, energy assets in development increased 80% to 321 MWe, energy assets in operation were up 14% to 260 MWe, and we added five new Renewable Natural Gas (RNG) projects to our portfolio in the fourth quarter, which will add approximately 25 MWe in aggregate. These company-owned assets represent diversified renewable energy sources that provide renewable power and green gas across our North American footprint.”

“Full year 2019 revenue growth of 10% to $867 million benefited from increasing demand for advanced technologies from Ameresco’s government, institutional, and commercial & industrial customers. Net income grew 17% to $44.4 million, GAAP EPS grew 15% to $0.93, and non-GAAP EPS grew 2% to $0.83.

Fourth Quarter Financial Results

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

Revenues were $306.6 million, compared to $217.4 million last year, representing strong growth across the company’s advanced technology platform. Operating income was $18.5 million, compared to $19.6 million. Net income attributable to common shareholders was $22.2 million, compared to $11.6 million. Non-GAAP net income was $21.9 million, compared to $10.9 million. Net income per diluted share was $0.46 up from $0.24, and non-GAAP EPS was $0.46 compared to $0.23. Adjusted EBITDA, a non-GAAP financial measure, was $29.5 million, compared to $28.2 million. Cash flows used in operating activities were $75.6 million, compared to cash flows used in operating activities of $21.2 million, and adjusted cash from operations, a non-GAAP financial measure, was $8.2 million, compared to adjusted cash from operations of $23.5 million.

Full Year 2019 Financial Results

Revenues were $866.9 million, compared to $787.1 million last year. Operating income was $51.6 million, compared to $59.1 million. Net income and adjusted EBITDA were negatively impacted by approximately $7 million due to lower RIN prices. Net income benefited from the extension of the 179D tax credit for 2018 and 2019 which increased fourth quarter net income by $7.5 million. Net income attributable to common shareholders was $44.4 million, compared to $38.0 million in 2018. Non-GAAP net income was $39.9 million, compared to $37.8 million. Net income per diluted share was $0.93, and non-GAAP EPS was $0.83, up from $ 0.81 in the prior fiscal year. Adjusted EBITDA was $91.1 million compared to $91.0 million. Cash flows used in operating activities were $196.3 million, compared to $53.2 million in the prior year. Adjusted cash from operations was $3.1 million, compared to adjusted cash from operations of $105.0 million.

Project Backlog and Awards

Total project backlog at December 31, 2019 was $2.3 billion and was comprised of the following:

  • Record high contracted backlog of $1.1 billion, supported by $564 million of projects sold in the fourth quarter; and
  • $1.2 billion of awarded projects, including new awards during the quarter of $290 million.

Fourth Quarter Project Highlights:

  • Ameresco began construction on a comprehensive design-build modernization project at the iconic James A. Farley building, a USPS facility in New York City.
  • Ameresco partnered with the City of Phoenix to complete a conversion project to replace nearly 100,000 municipal streetlights with high-performance LEDs.
  • Ameresco and the New Bedford Housing Authority (NBHA) announced the execution of a $12.7 million Energy Performance Contract (EPC) that is expected to provide $19.6 million in energy and water cost savings over its sixteen-year term.
  • Ameresco was awarded $230 million in two ESPC task orders by U.S. Navy for energy resiliency projects at the Portsmouth Naval Shipyard and the Norfolk Naval Shipyard.
  • Ameresco was awarded $154 million in ESPC task orders by the U.S. Department of Veterans Affairs for energy efficiency and infrastructure upgrades for the facilities located in the Southeast region and the Capital Health Care region.
  • Ameresco completed a citywide energy efficiency project for the City of St. Peter, Minnesota.

Ameresco Asset Metrics

Total operating assets were 260 MW, assets in development were 321 MW.

Fourth Quarter Ameresco Asset Highlights:

  • Ameresco added 5 new RNG opportunities to our assets in development representing approximately 25 MWe in aggregate.
  • Ameresco announced it will develop a 27 MW solar farm in the Village of DePue, IL.

Contracted O&M Backlog

Total O&M backlog at December 31, 2019 of $1.1 billion was up 22%.

Summary and Outlook

“Market conditions remain strong, as governments and corporations across the country continue to demand clean and resilient energy sources. Our investments in cutting edge energy technologies and engineering talent position us to deliver the best and most flexible solutions for our customers. These differentiators have resulted in considerable positive momentum in both contracted backlog and assets in development heading into 2020, supporting our outlook for significant year-on-year growth,” Mr. Sakellaris concluded.

For the full year 2020, Ameresco expects to generate total revenue in the range of $910 million to $980 million, representing 9.0% year-on-year growth at the midpoint, and adjusted EBITDA of $102 million to $112 million, representing 17.5% growth at the midpoint. Non-GAAP EPS is expected to be in the range of $0.86 to $0.96, representing 10% year-on-year growth at the midpoint. The visibility we have in our contracted backlog entering 2020 demonstrates that several large projects will contribute to strong revenue growth, although we do expect to see slightly lower gross margins in 2020 versus recent years based on the mix of projects. Gross profit will grow at a higher rate than operating expenses, reflecting cost control and increased operating leverage, and as a result we expect to maintain EBITDA growth at a high teens rate. This guidance excludes the impact of any non-controlling interest activity and any additional charges relating to the company’s restructuring activities, as well as any related tax impact.

FY 2020 Guidance

Revenue

$910 million

$980 million

Gross Margin

18.5%

19.5%

Adjusted EBITDA

$102 million

$112 million

Interest & Other

$17 million

$19 million

Effective Tax Rate

8%

12%

Non-GAAP EPS

$0.86

$0.96

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: 7756686)
  • International Participants: Dial 1-224-357-2393 (Access Code: 7756686)

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.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

December 31,

2019

2018

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

33,223

$

61,397

Restricted cash

20,006

16,880

Accounts receivable, net

95,863

85,985

Accounts receivable retainage, net

16,976

13,516

Costs and estimated earnings in excess of billings

202,243

86,842

Inventory, net

9,236

7,765

Prepaid expenses and other current assets

29,424

11,571

Income tax receivable

5,033

5,296

Project development costs

13,188

21,717

Total current assets

425,192

310,969

Federal ESPC receivable

230,616

293,998

Property and equipment, net

10,104

6,985

Energy assets, net

579,461

459,952

Goodwill

58,414

58,332

Intangible assets, net

1,614

2,004

Operating lease assets

32,791

Other assets

35,821

29,394

Total assets

$

1,374,013

$

1,161,634

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portions of long-term debt and financing lease liabilities

$

69,969

$

26,890

Accounts payable

202,416

134,330

Accrued expenses and other current liabilities

31,356

35,947

Current portions of operating lease liabilities

5,802

Billings in excess of cost and estimated earnings

26,618

24,363

Income taxes payable

486

1,100

Total current liabilities

336,647

222,630

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

266,181

219,162

Federal ESPC liabilities

245,037

288,047

Deferred income taxes, net

115

4,352

Deferred grant income

6,885

6,637

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

29,101

Other liabilities

29,575

29,212

Redeemable non-controlling interests

31,616

14,719

AMERESCO, INC.

CONSOLIDATED BALANCE SHEETS – (Continued)

(in thousands, except share amounts)

December 31,

2019

2018

(Unaudited)

Stockholders' equity:

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

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 31,333,345 shares issued and 29,230,005 shares outstanding at December 31, 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 December 31, 2019 and 2018

2

2

Additional paid-in capital

133,688

124,651

Retained earnings

314,459

269,806

Accumulated other comprehensive loss, net of income taxes

(7,514

)

(5,949

)

Less – treasury stock, at cost, 2,101,340 shares at December 31, 2019, and 2,091,040 shares at December 31, 2018

(11,782

)

(11,638

)

Total stockholder's equity

428,856

376,875

Total liabilities, redeemable non-controlling interests and stockholder's equity

$

1,374,013

$

1,161,634

AMERESCO, INC.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

Three Months Ended December 31,

Twelve Months Ended December 31,

2019

2018

2019

2018

(Unaudited)

(Unaudited)

(Unaudited)

Revenues

$

306,612

$

217,371

$

866,933

$

787,138

Cost of revenues

258,958

168,170

698,815

613,526

Gross profit

47,654

49,201

168,118

173,612

Selling, general and administrative expenses

29,108

29,642

116,504

114,513

Operating income

18,546

19,559

51,614

59,099

Other expenses, net

3,702

5,955

15,061

16,709

Income before (benefit) provision for income taxes

14,844

13,604

36,553

42,390

Income tax (benefit) provision

(5,748

)

2,934

(3,748

)

4,813

Net income

20,592

10,670

40,301

37,577

Net loss attributable to redeemable non-controlling interests

1,611

923

4,135

407

Net income attributable to common shareholders

$

22,203

$

11,593

$

44,436

$

37,984

Net income per share attributable to common shareholders:

Basic

$

0.47

$

0.25

$

0.95

$

0.83

Diluted

$

0.46

$

0.24

$

0.93

$

0.81

Weighted average common shares outstanding:

Basic

47,101

46,114

46,586

45,729

Diluted

48,061

47,327

47,774

46,831

AMERESCO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended December 31,

2019

2018

(Unaudited)

Cash flows from operating activities:

Net income

$

40,301

$

37,577

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

Depreciation of energy assets

35,543

27,305

Depreciation of property and equipment

2,987

2,167

Amortization of deferred financing fees

2,229

2,193

Amortization of intangible assets

909

1,057

Accretion of ARO and contingent consideration

137

Provision for (recovery of ) bad debts

(216

)

610

Loss on disposal / sale of assets

298

Gain on deconsolidation of VIE

(2,160

)

Net gain from derivatives

(1,068

)

(121

)

Stock-based compensation expense

1,620

1,258

Deferred income taxes

(3,346

)

5,517

Unrealized foreign exchange loss (gain)

(130

)

1,816

Changes in operating assets and liabilities:

Accounts receivable

(8,499

)

9,772

Accounts receivable retainage

(3,370

)

3,774

Federal ESPC receivable

(188,060

)

(155,539

)

Inventory, net

(1,471

)

373

Costs and estimated earnings in excess of billings

(106,696

)

8,015

Prepaid expenses and other current assets

(18,397

)

6,763

Project development costs

8,120

(8,659

)

Other assets

1,056

(3,499

)

Accounts payable, accrued expenses and other current liabilities

43,531

2,938

Billings in excess of cost and estimated earnings

2,662

2,866

Other liabilities

(1,625

)

(783

)

Income taxes payable

(350

)

1,101

Cash flows from operating activities

(196,293

)

(53,201

)

Cash flows from investing activities:

Purchases of property and equipment

(6,674

)

(3,943

)

Purchases of project assets, net of grant proceeds

(133,954

)

(125,673

)

Acquisitions, net of cash received

(1,294

)

(3,590

)

Contributions to equity investment

(301

)

Cash flows from investing activities

(142,223

)

(133,206

)

Cash flows from financing activities:

Payments of financing fees

(1,666

)

(4,073

)

Proceeds from exercises of options and ESPP

7,417

7,197

Repurchase of common stock

(144

)

(1,839

)

Proceeds (payments) from senior secured credit facility, net

73,347

(900

)

AMERESCO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)

(in thousands)

Year Ended December 31,

2019

2018

(Unaudited)

Proceeds from long-term debt financing

43,883

88,115

Proceeds from Federal ESPC projects

199,358

158,237

Proceeds for energy assets from Federal ESPC

2,277

4,236

Proceeds from sale-leaseback financing

5,145

Contributions from redeemable non-controlling interests, net

21,372

4,788

Payments on long-term debt

(28,425

)

(36,395

)

Cash flows from financing activities

317,419

224,511

Effect of exchange rate changes on cash

447

(295

)

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

(20,650

)

37,809

Cash, cash equivalents and restricted cash, beginning of year

97,914

60,105

Cash, cash equivalents and restricted cash, end of year

77,264

$

97,914

Non-GAAP Financial Measures (in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2019

2018

2019

2018

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Adjusted EBITDA:

Net income attributable to common shareholders

$

22,203

$

11,593

$

44,436

$

37,984

Impact from redeemable non-controlling interests

(1,611

)

(923

)

(4,135

)

(407

)

Plus (less): Income tax (benefit) provision

(5,748

)

2,934

(3,748

)

4,813

Plus: Other expenses, net

3,702

5,955

15,061

16,709

Plus: Depreciation and amortization of intangible assets

10,305

8,486

39,439

30,529

Plus: Stock-based compensation

425

121

1,620

1,258

Plus: Restructuring and other charges

219

80

629

146

Less: Gain on deconsolidation of VIE

(2,160

)

Adjusted EBITDA

$

29,495

$

28,246

$

91,142

$

91,032

Adjusted EBITDA margin

9.6

%

13.0

%

10.5

%

11.6

%

Non-GAAP net income and EPS:

Net income attributable to common shareholders

$

22,203

$

11,593

$

44,436

$

37,984

Impact from redeemable non-controlling interest

(1,611

)

(923

)

(4,135

)

(407

)

Plus: Restructuring and other charges

219

80

629

146

Less: Gain on deconsolidation of VIE

(2,160

)

Plus: Income tax effect of non-GAAP adjustments

1,101

198

1,101

70

Non-GAAP net income

$

21,912

$

10,948

$

39,871

$

37,793

Diluted net income per common share

$

0.46

$

0.24

$

0.93

$

0.81

Effect of adjustments to net income

(0.01

)

(0.10

)

Non-GAAP EPS

$

0.46

$

0.23

$

0.83

$

0.81

Adjusted cash from operations:

Cash flows from operating activities

$

(75,568

)

$

(21,160

)

$

(196,293

)

$

(53,201

)

Plus: Proceeds from Federal ESPC projects

83,802

44,667

199,358

158,237

Adjusted cash from operations

$

8,234

$

23,507

$

3,065

$

105,036

December 31,

2019

2018

(Unaudited)

(Unaudited)

Construction backlog:

Awarded(1)

$

1,160,400

$

1,241,400

Fully-contracted

1,107,600

726,600

Total project backlog

$

2,268,000

$

1,968,000

Energy assets in development(2)

$

681,000

$

424,700

Three Months Ended December 31

Twelve Months Ended December 31

2019

2018

2019

2018

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

New contracts and awards:

New contracts

$

564,000

$

61,000

$

989,000

$

699,000

New awards(1)

$

290,000

$

87,000

$

909,000

$

742,000

(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):

(in thousands)

Year Ended December 31, 2020

Low

High

Operating income

$

59,000

$

67,000

Depreciation and amortization of intangible assets

42,000

43,000

Stock-based compensation

1,000

2,000

Adjusted EBITDA

$

102,000

$

112,000

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.

Contacts

Media Relations

Leila Dillon, 508.661.2264, [email protected]
Investor Relations

Eric Prouty, AdvisIRy Partners 212.750.5800, [email protected]
Lynn Morgen, AdvisIRy Partners, 212.750.5800, [email protected]

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