Ameresco Reports Fourth Quarter and Full Year 2020 Financial Results
– Reported Record Revenue and Profits for 2020 – – Q4 Outperformance Led by Strength in Federal Projects Group – – Energy Assets in Development Exceed 350 MWe – – Guiding to Continued Robust Growth for 2021 –
Fourth Quarter 2020 Financial Highlights:
Revenues of $314.3 million, up 3% compared to last year
Net Income of $23.5 million
GAAP EPS of $0.47, up 2%
Adjusted EBITDA of $35.7 million, up 21%
Full Year 2020 Financial Highlights:
Revenues of $1.03 billion, up 19% compared to last year
Net Income of $54.1 million, up 22%
GAAP EPS of $1.10, up 18%
Non-GAAP EPS of $1.18, up 42%
Adjusted EBITDA of $117.9 million, up 29%
FRAMINGHAM, MA – March 1, 2021 – Ameresco, Inc. (NYSE:AMRC), a leading clean technology integrator specializing in energy efficiency and renewable energy, today announced financial results for the fiscal quarter and year ended December 31, 2020. 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.
“In 2020, our resilient Ameresco team demonstrated tremendous execution which led to outstanding results. We came together to ensure that the company remained operational throughout the year while implementing strict protocols to protect the health and safety of our employees and customers. We navigated difficult business conditions and delivered record year-on-year performance, laying the foundation for our continued profitable growth in 2021 and beyond.”
“In the fourth quarter, we continued to execute on our contracted project backlog, taking advantage of improved worksite access. Revenue during the quarter increased year-on-year despite COVID-19 conditions and a difficult comparison with the exceptional fourth quarter results reported last year. Additionally, our Energy Asset and O&M recurring revenue businesses continued to grow, contributing high margin, annuity-like revenue and providing excellent long-term visibility. We were very pleased to surpass 350 MWe of assets in development during the quarter with the addition of significant new solar and RNG assets. As a recognized industry leading provider of Distributed Energy Resources (DER) solutions, we continue to see very attractive growth opportunities in our overall clean technology markets.”
“In the fourth quarter, we were very pleased to have released our first Environmental, Social and Corporate Governance (ESG) report titled ‘Doing Well by Doing Good’ highlighting our corporate vision of energizing a sustainable world. We are proud that our renewable energy assets and customer projects delivered a carbon offset equivalent to approximately 12.6 million metric tons of carbon dioxide during 2020 and over 60 million cumulative metric tons since going public in 2010.”
“Recently Ameresco was named number six on Forbes’ list of 2021 America’s Best Mid-Size Companies. We were pleased to be the only energy solutions provider included among the annual list’s 100 companies, reflecting our market leadership and our growth-oriented entrepreneurial culture,” concluded George P. Sakellaris, President and Chief Executive Officer.
Fourth Quarter Financial Results
(All financial result comparisons made are against the prior year period unless otherwise noted.)
Revenues increased 3% to $314.3 million, compared to a particularly strong quarter the previous year. Continued strength in the Federal Solutions Group along with growth in our recurring revenue businesses drove this positive performance. We continued to prioritize pulling in and executing on our contracted backlog given uncertainties around COVID-19 and its impact on future job site access. Operating income increased to $24.6 million. Net income attributable to common shareholders increased to $23.5 million and GAAP EPS increased to $0.47. Adjusted EBITDA, a non-GAAP financial measure, increased 21% to $35.7 million.
Full Year 2020 Financial Results
Revenues were $1.03 billion, compared to $866.9 million last year, an increase of 19%. Operating income was $71.5 million, compared to $51.6 million, as we continued to benefit from controlled spending, lower travel expense due to COVID-19, higher employee utilization and the leverage inherent in our scalable business model. Net income attributable to common shareholders was $54.1 million, compared to $44.4 million. Non-GAAP net income was $57.8 million, compared to $39.9 million. Earnings per diluted share was $1.10, and non-GAAP EPS was $1.18, up from $0.83 in the prior fiscal year. EPS results reflected $0.13 of one-time tax benefits. Adjusted EBITDA was $117.9 million compared to $91.1 million, an increase of 29%.
Project Backlog and Awards
Total project backlog at December 31, 2020 remained strong at $2.2 billion and was comprised of:
$895.7 million in contracted backlog representing signed customer contracts for installation or construction of projects, which we expect to convert into revenue over the next one to three years, on average; and
$1.3 billion of awarded projects representing projects in development for which we do not have signed customer contracts.
Fourth Quarter Project Highlights:
A plant-wide energy efficiency project for The Mattabassett District in Cromwell, Connecticut. Under this energy services agreement (ESA), the project includes energy conservation measures across 9 buildings and operations, resulting in more than $1 million in energy cost savings over the 12-year contract term.
A citywide energy efficiency project for the City of Virginia, Minnesota. Improvements will guarantee energy cost savings and an overall reduction in municipal energy demand and is expected to reduce the City’s energy consumption by approximately 21%, or the equivalent of 819 metric tons of CO2 per year.
An Energy Savings Performance Contract (ESPC) with the City of Medford, Oregon to convert approximately 8,000 street lights and parks department lighting fixtures to light emitting diode (LED) technology.
An ESPC with Grants Pass School (District 7) in Oregon, at thirteen separate locations across the district. Work includes lighting, HVAC, and building envelope upgrades. Utilizing an ESPC and third-party financing, the district can complete upgrades and pay for them over time, aided by utility incentives and reimbursement programs, as well as energy savings.
Ameresco Asset Metrics
Total operating assets were 282 MWe:
Assets in development were 351 MWe
$900 million of estimated contracted revenue and incentives during power purchase agreement (PPA) period
14-year weighted average PPA remaining
Fourth Quarter Asset Highlights:
14 MWe placed into operations
Gross 46 MWe added to the in-development pipeline
2 RNG plants
Completed construction and started commissioning of McCarty Road RNG plant
Contracted O&M Backlog
Total O&M backlog remained at $1.1 billion
16-year weighted average contract life
Summary and Outlook
“Based on visibility from our project backlog and our increased levels of recurring revenues, we are pleased to provide guidance for another year of strong growth in 2021. Specifically, we expect revenues in the range of $1.1 billion to $1.15 billion and Adjusted EBITDA of $135 million to $145 million, representing year-over-year growth of 9% and 19% at the midpoints. We expect non-GAAP EPS to range from $1.18 to $1.26, representing 16% growth at the midpoint, excluding the impact of approximately $0.13 of one-time tax benefits realized in 2020. During the year, we anticipate commissioning between 60 to 80 MWe of energy assets. We currently plan to invest approximately $200 million to $250 million in capital investments in 2021, the majority of which will be funded with project finance debt.”
“We see substantial growth opportunities on the horizon for Ameresco. With the new Administration in Washington, low to no carbon energy solutions are once again in focus leading to an ever-increasing addressable market. At the same time, we also see a significant need for our full range of flexible financial solutions, including our Energy-as-a-Service (EaaS) offering, as our customers face financial challenges given the long-term budgetary impacts of the COVID-19 pandemic. Ameresco is well-positioned to benefit from these positive market dynamics with our flexible value propositions, our customer centric approach to delivering the best advanced technology solutions and our globally recognized expertise in sustainability,” Mr. Sakellaris concluded.
FY 2021 Guidance Ranges
Interest Expense & Other
Effective Tax Rate
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 results and the Company’s business outlook and strategy. The conference call will be available via the following dial in numbers:
U.S. Participants: Dial 1-877-359-9508 (Access Code: 8769918)
International Participants: Dial 1-224-357-2393 (Access Code: 8769918)
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 independent clean technology integrator 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, 2019, filed with the U.S. Securities and Exchange Commission (SEC) on March 4, 2020, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed with the SEC on May 5, 2020, and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 3, 2020. 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.