Ameresco Reports First Quarter 2021 Financial Results

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Ameresco, Inc. (NYSE:AMRC), a leading cleantech integrator specializing in energy efficiency and renewable energy, today announced financial results for the fiscal quarter ended March 31, 2021. 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.

"Our first quarter results were excellent and exceeded our expectations across all major metrics," said George P. Sakellaris, President and Chief Executive Officer. "Business conditions improved progressively throughout the period and our employees rose to overcome the challenges presented during the quarter. This was another strong quarter for the Projects business, particularly within our Federal group. Our Energy Asset business also posted a meaningful pickup in revenue and profit. We were also pleased to see a considerable increase in project and asset proposals during the quarter, indicating a return to a more normalized activity level post-COVID-19 and leading to significant sequential and year-over-year growth in our awarded backlog."

"In the first quarter, we completed our first public equity offering since Ameresco's IPO in 2010, raising over $120 million for the company, positioning us to accelerate the growth of our recurring revenue Energy Asset business. Specifically, we will be taking advantage of strong demand and opportunity in the emerging RNG space, where we now plan to construct and commission three RNG facilities in 2022 and four additional sites in 2023. These developments will be in addition to our continued buildout of other energy technologies, including solar, energy storage, microgrids and EaaS."

First Quarter Financial Results

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

Total revenue increased 19% to $252.2 million, compared to $212.4 million year-over-year. The projects business saw 25% growth led by another strong quarter in the Federal group which benefited from favorable timing of certain approvals and progress on customized equipment. Energy Assets revenue increased 18% as the company continues to grow its assets in operation, improved production from existing assets and realized favorable RIN prices during the quarter. Gross margin of 18.6% increased 10 basis points sequentially and 50 basis points year-over-year. Operating income increased 92% to $18.3 million and operating margin was 7.3%. 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 attributable to common shareholders increased 80% to $11.2 million and GAAP EPS increased 69% to $0.22 compared to $0.13. Adjusted EBITDA, a non-GAAP financial measure, increased 40% to $29.7 million.

(in millions)

1Q 2021

1Q 2020

Revenue

Net Income

Adj. EBITDA

Revenue

Net Income (Loss)

Adj. EBITDA

Projects

$180.7

$4.4

$8.3

$144.4

$(0.7)

$1.7

Energy Assets

$33.3

$5.9

$18.7

$28.2

$4.3

$15.5

O&M

$18.5

$0.6

$1.8

$18.1

$1.2

$2.4

Other

$19.7

$0.2

$0.9

$21.7

$1.3

$1.6

Total

$252.2

$11.2

$29.7

$212.4

$6.2

$21.2

(in millions)

At March 31, 2021

Awarded Project Backlog

$1,521

Contracted Project Backlog

$788

Total Project Backlog

$2,309

O&M Revenue Backlog

$1,127

Energy Asset Visibility *

$940

Operating Energy Assets

287 MWe

Assets in Development

386 MWe

* estimated contracted revenue and incentives throughout PPA term on our operating energy assets

Project Highlights

In the first quarter of 2021:

  • Our recently announced construction start of the Norfolk Naval Shipyard (NNSY) in Portsmouth, Virginia highlights our total solutions capabilities utilizing clean advanced technologies. The $173 million project includes a new 17.3 megawatt (MW) combined heat and power (CHP) plant, a 3 MW battery energy storage system, and a microgrid control system. These will provide the site with long-term energy security while reducing the electricity imported from the grid by 68 percent and mission critical steam. After construction is completed in 2022, Ameresco will operate and maintain the CHP plant, IWTP (industrial waste water treatment plant), and microgrid until January 2044 providing a long-term recurring O&M revenue stream.
  • We anticipate continued demand from the C&I market as more forward-looking companies look to save money while also lowering their carbon footprint. Our recently announced solar project with Wells Fargo to develop and install approximately 30 MW of new, onsite solar generation assets at corporate and retail locations in seven states is a great example of the growing opportunities in the C&I market. Construction of the nearly 100 solar arrays will go into 2022.

Asset Highlights

In the first quarter of 2021:

  • Ameresco brought 5 MWe into operation while adding 40 MWe to our development backlog, bringing our total to 386 MWe.
  • Asset additions in the quarter included the award of Energy as a Service for a C&I customer and awards of distributed solar installations in our East, Central and West regions.

Summary and Outlook

"The first quarter represented a strong start to the year and has laid the foundation for 2021 to be another year of strong growth for Ameresco. Additionally, we see substantial opportunities ahead as our customers prioritize cost savings and resiliency, combined with reducing their carbon footprints. Ameresco's services are well aligned with the new Administration's overarching goal of decarbonizing the U.S. economy and its mandate that climate change be considered in major decisions across all government agencies," Mr. Sakellaris noted.

Based on visibility from our project backlog and our increased levels of recurring revenues, the Company is increasing its 2021 guidance ranges detailed in the table below, representing year-over-year revenue and adjusted EBITDA growth of 10% and 23%, respectively, at the midpoints, and Non-GAAP EPS growth of 20% at the midpoint, excluding the impact of approximately $0.13 of one-time tax benefits realized in 2020. The Company anticipates commissioning a further 55 to 75 MWe of energy assets and plans to invest approximately $165 million to $215 million in additional energy asset capital expenditures during the remainder of 2021, the majority of which will be funded with project finance debt.

FY 2021 Guidance Ranges

Revenue

$1.11 billion

$1.16 billion

Gross Margin

18.5%

19.5%

Adjusted EBITDA

$140 million

$150 million

Interest Expense & Other

$20 million

$22 million

Effective Tax Rate

12%

18%

Non-GAAP EPS

$1.22

$1.30

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: 5664848)
  • International Participants: Dial +1 (224) 357-2393 (Access Code: 5664848)

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 cleantech integrator and renewable energy asset developer, owner and operator. Our comprehensive portfolio includes energy efficiency, infrastructure upgrades, asset sustainability and renewable energy solutions delivered to clients throughout North America and the United Kingdom. Ameresco's sustainability services in support of clients' pursuit of Net Zero include upgrades to a facility's energy infrastructure and the development, construction, and operation of distributed energy resources. 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, 2020, filed with the U.S. Securities and Exchange Commission (SEC) on March 2, 2021. 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)

March 31,

December 31,

2021

2020

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

80,971

$

66,422

Restricted cash

24,869

22,063

Accounts receivable, net

113,095

125,010

Accounts receivable retainage, net

32,071

30,189

Costs and estimated earnings in excess of billings

179,474

185,960

Inventory, net

8,527

8,575

Prepaid expenses and other current assets

26,753

26,854

Income tax receivable

5,446

9,803

Project development costs

14,573

15,839

Total current assets

485,779

490,715

Federal ESPC receivable

459,347

396,725

Property and equipment, net

8,804

8,982

Energy assets, net

765,122

729,378

Goodwill

58,812

58,714

Intangible assets, net

847

927

Operating lease assets

41,484

39,151

Restricted cash, non-current portion

10,507

10,352

Other assets

18,047

15,307

Total assets

$

1,848,749

$

1,750,251

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt and financing lease liabilities

$

71,770

$

69,362

Accounts payable

202,123

230,916

Accrued expenses and other current liabilities

40,297

41,748

Current portion of operating lease liabilities

5,680

6,106

Billings in excess of cost and estimated earnings

30,211

33,984

Income taxes payable

1,501

981

Total current liabilities

351,582

383,097

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

268,411

311,674

Federal ESPC liabilities

473,882

440,223

Deferred income taxes, net

4,474

2,363

Deferred grant income

8,167

8,271

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

37,718

35,300

Other liabilities

35,992

37,660

Redeemable non-controlling interests, net

39,668

38,850

Stockholders' equity:

Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2021 and December 31, 2020

$

--

$

--

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 35,367,720 shares issued and 33,265,925 shares outstanding at March 31, 2021, 32,326,449 shares issued and 30,224,654 shares outstanding at December 31, 2020

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, 2021 and December 31, 2020

2

2

Additional paid-in capital

267,864

145,496

Retained earnings

379,533

368,390

Accumulated other comprehensive loss, net

(6,759

)

(9,290

)

Treasury stock, at cost, 2,101,795 shares at March 31, 2021 and December 31, 2020

(11,788

)

(11,788

)

Total stockholders' equity

628,855

492,813

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

$

1,848,749

$

1,750,251

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

Three Months Ended March 31,

2021

2020

Revenues

$

252,202

$

212,413

Cost of revenues

205,293

173,967

Gross profit

46,909

38,446

Selling, general and administrative expenses

28,601

28,924

Operating income

18,308

9,522

Other expenses, net

3,672

5,389

Income before income taxes

14,636

4,133

Income tax provision (benefit)

2,205

(2,503

)

Net income

12,431

6,636

Net income attributable to redeemable non-controlling interests

(1,257

)

(435

)

Net income attributable to common shareholders

$

11,174

$

6,201

Net income per share attributable to common shareholders:

Basic

$

0.23

$

0.13

Diluted

$

0.22

$

0.13

Weighted average common shares outstanding:

Basic

48,975

47,384

Diluted

50,357

48,497

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

Three Months Ended March 31,

2021

2020

Cash flows from operating activities:

Net income

$

12,431

$

6,636

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

Depreciation of energy assets, net

9,686

9,299

Depreciation of property and equipment

833

833

Accretion of ARO liabilities

24

21

Amortization of debt discount and debt issuance costs

747

660

Amortization of intangible assets

80

179

Provision for bad debts

3

49

Net gain from derivatives

(377

)

(223

)

Stock-based compensation expense

766