Ameresco Reports First Quarter 2022 Financial Results
– Record Q1 Revenue and Profit –
– Added Over $400 Million in New Project Awards –
– Added 60 MWe to Energy Assets in Development –
– Added Over $100 Million in Long-term O&M Contracts –
– Reaffirms FY22 Guidance –
First Quarter 2022 Financial Highlights:
(All financial result comparisons made are against the prior year period unless otherwise noted)
- Revenues of $474.0 million, up 88%
- Net income attributable to common shareholders of $17.4 million, up 56%
- GAAP EPS of $0.32, up 46%
- Non-GAAP EPS of $0.36, up 44%
- Adjusted EBITDA of $45.1 million, up 52%
FRAMINGHAM, MA – May 2, 2022 – 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, 2022. The Company also furnished supplemental information in conjunction with this press release in a Current Report on Form 8-K. The supplemental information, which includes Non-GAAP financial measures, has been posted to the “Investor Relations” section of the Company’s website at www.ameresco.com. Reconciliations of Non-GAAP measures to the appropriate GAAP measures are included herein.
“Excellent execution by all of our teams led to robust first quarter revenue and profits, keeping us on track to achieve another year of record results in 2022. Each of our lines of business posted significant year-over-year growth. Even with record project revenues, we continued to grow our total project backlog with significant new awards, ending the quarter at $3.1 billion. Our work on the three Southern California Edison (SCE) BESS projects were a significant contributor to first quarter revenue growth as we hit many key milestones ahead of our expectations.
Update on the SCE BESS projects
- The production of the majority of the battery components needed for the projects is complete
- Construction, mobilization and the delivery of other major equipment is proceeding at the SCE sites
- As we stated in our previous press release, we are expecting delays in the delivery of certain batteries due to the COVID-19 lockdowns in several regions around China and newly implemented Chinese transportation safety policies
- Under the SCE contract, Force Majeure events, including COVID-related delays, result in extensions of required completion deadlines without liquidated damages and the contract price may be increased to account for the impact of the Force Majeure event
- Ameresco is engaged in continuing discussions with SCE regarding the applicability and scope of any Force Majeure relief relating to these circumstances
- We expect up to 300 MW of capacity to be online in August 2022, with the remainder to be online this year
“We were excited to announce another transformative win during the first quarter with the City of Bristol, UK in support of their ambitious 2030 carbon neutrality goal. Just six months after winning the SCE projects, Ameresco was awarded our second largest project ever. Once contracted, this unique 20-year partnership is designed to encompass a full range of advanced technologies, and efficiency and renewable solutions involving Project work, O&M as well as Energy Assets. We anticipate that this project will serve as a blueprint for cities, campuses and corporations across the US and Europe as they develop their net zero initiatives. The comprehensive scope of this project once again highlights our core capabilities to compete and win increasingly large and complex projects.
“The Energy Asset group had several significant wins during the quarter and our O&M business continued to add contracts as well, building its contracted backlog to over $1.2 billion. These sources of recurring revenue together with our project backlog provide us with over $5 billion in revenue visibility,” commented George P. Sakellaris, President and Chief Executive Officer.
First Quarter Financial Results
(All financial result comparisons made are against the prior year period unless otherwise noted.)
Total revenue increased 88% with growth across all our lines of business. Project revenue increased 118% as aspects of the SCE and other projects progressed ahead of our expectations during the quarter. The growth in our operating energy asset base, increased performance of existing assets and strong RIN prices drove a 15.4% growth in Energy Asset revenue with O&M and Other revenue increasing 9.6% and 11.0%, respectively. Gross margin was 14.4%, in line with our expectations given the impact from the lower gross margin profile of the SCE design/build project. Revenue performance combined with the Company’s strong operating leverage helped drive net income to $17.4 million, a 56% increase, and Adjusted EBITDA to $45.1 million, a 52% increase. Energy asset line of business net income was negatively impacted by non-cash mark-to-market charges on our commodity gas swaps that totaled approximately $2.5 million.
|(in millions)||1Q 2022||1Q 2021|
|Revenue||Net Income (1)||Adj. EBITDA||Revenue||Net Income (1)||Adj. EBITDA|
|(1) Net Income (Loss) represents net income (loss) attributable to common shareholders.|
|(2) Numbers in table may not foot due to rounding.|
|($ in millions)||At March 31, 2022|
|Awarded Project Backlog (1)||$1,754|
|Contracted Project Backlog||$1,342|
|Total Project Backlog||$3,096|
|O&M Revenue Backlog||$1,212|
|Energy Asset Visibility (2)||$1,040|
|Operating Energy Assets||353 MWe|
|Assets in Development||464 MWe|
|(1) customer contracts that have not been signed yet|
|(2) estimated contracted revenue and incentives on our operating Energy Assets, which may vary with actual production and future values of certain environmental attributes|
In the first quarter of 2022:
- We were awarded a 20-year project to reduce energy costs and decarbonize the City of Bristol by 2030 through a series of energy and infrastructure investment opportunities, designed to attract upwards of £1 billion of inward investment to be shared with us and our partner Vattenfall.
- We announced a contract through our partnership at Joint Base Pearl Harbor-Hickam (JBPHH) Air Force Base in Hawaii for a $102 million energy conservation project and accompanying $95 million 25-year O&M service agreement increasing energy efficiency, reducing carbon emissions, and increasing the comfort of military families on Hickam Air Force Base.
- We were awarded the 10-MW Slemon Park Microgrid project in collaboration with PEI Energy Corporation incorporating a 10-MW solar facility with direct current-coupled energy storage.
In the first quarter of 2022:
- Ameresco brought 10 MWe assets into operation while adding 60 MWe (gross) to our Assets in Development, bringing our total Assets in Development to 464 MWe.
- Added a 50 MWe battery and medium RNG project into our Assets into Development.
Summary and Outlook
“Ameresco’s first quarter performance demonstrates our strong positioning in an expanding addressable market that is benefiting from long term industry trends. These trends, together with the breadth of our technological expertise and proven track record position Ameresco to benefit from the growing number of opportunities on the horizon,” Mr. Sakellaris noted.
“We are pleased to reaffirm our 2022 guidance for year-over-year revenue growth of 52%, Adjusted EBITDA growth of 34% and Non-GAAP EPS of 26% at the midpoints of our guidance ranges. During 2022, we anticipate placing between 60 and 80 MWe of energy assets in service, while investing approximately $225 million to $275 million of capital, the majority of which we expect to fund with non-recourse debt. In addition, we now expect Q2 revenue to be about 10-15% higher than Q1. Q2 gross margins are still expected to be approximately 14%. Q3 revenue is expected to be slightly greater than Q4. We expect Q3 and Q4 gross margins to be approximately 18%,” Mr. Sakellaris concluded.
|FY 2022 Guidance Ranges|
|Revenue||$1.83 billion||$1.87 billion|
|Adjusted EBITDA||$200 million||$210 million|
|Interest Expense & Other||$25 million||$27 million|
|Effective Tax Rate||13%||17%|
The Company’s guidance excludes the impact of any non-controlling interest activity, one-time charges, asset impairment charges, restructuring activities, as well as any related tax impact.
Conference Call/Webcast Information
The Company will host a conference call today at 4:30 p.m. ET to discuss first quarter financial results, business and financial outlook and other business highlights. The conference call will be available via the following dial in numbers:
- S. Participants: Dial +1 (877) 359-9508 (Access Code: 1647646)
- International Participants: Dial +1 (224) 357-2393 (Access Code: 1647646)
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 Non-GAAP Financial Measures 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 Europe. 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 1,200 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, net income, adjusted EBITDA, Non-GAAP EPS, gross margin, capital investments, other financial guidance, statements about our agreement with SCE including the impact of any delays, 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 or at all; 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 delay; demand for our energy efficiency and renewable energy solutions; our ability to complete and operate our projects on a profitable basis and as committed to our customers; our ability to arrange financing to fund our operations and projects and to comply with covenants in our existing debt agreements; changes in federal, state and local government policies and programs related to energy efficiency and renewable energy and the fiscal health of the government; the ability of customers to cancel or defer contracts included in our backlog; the effects of our acquisitions and joint ventures; 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 particularly given global supply chain challenges; our reliance on third parties for our construction and installation work; the addition of new customers or the loss of existing customers including our reliance on the agreement with SCE for a significant portion of our revenues in 2022; the impact from Covid-19 on our business; global supply chain challenges, component shortages and inflationary pressures; 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; cybersecurity incidents and breaches; and other factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (SEC) on March 1, 2022 and other SEC filings. 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.