Ameresco Reports Second Quarter 2021 Financial Results

FRAMINGHAM, Mass.–()–Ameresco, Inc. (NYSE:AMRC), a leading cleantech integrator specializing in energy efficiency and renewable energy, today announced financial results for the fiscal quarter ended June 30, 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.

“We are very pleased with our strong second quarter results. These results highlight the strength of our diversified business model as all business lines experienced outstanding growth,” said George P. Sakellaris, President and Chief Executive Officer. “We grew our portfolio of operating Energy Assets by 33 megawatt equivalents (MWe) during the quarter, continuing the expansion of this higher margin, recurring revenue business, which provides great long-term visibility. Our Projects business continued to benefit from the ongoing shift to more comprehensive projects that utilize a broad portfolio of advanced clean energy technologies in which Ameresco has substantial expertise providing us a competitive advantage. We also are gaining traction in our Energy-as-a-Service (EaaS) offering. Our recent EaaS win at Northwestern University highlights the growing interest in these “no up-front capital” solutions that address deferred maintenance, escalating energy costs, resiliency and customer commitments to lowering their carbon footprints. We are all seeing a heightened awareness of the importance of resiliency and sustainability across all markets, and we believe this is not only impacting our business in the short-term, but that it is paving the way for outstanding long-term growth.”

Second Quarter Financial Results

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

Total revenue increased 23% to $273.9 million, compared to $223.0 million driven by broad strength across all our business lines. The Projects business grew 23%, with contributions across a number of geographies and markets. Energy Assets revenue was up 28%, reflecting the continued growth of our operating portfolio. Additionally, we continued to benefit from strong renewable natural gas (RNG) production and favorable pricing on renewable identification numbers (RINs). Ameresco added 33 MWe of assets to its operating portfolio in the second quarter while adding 23 MWe of new Energy Assets into our Assets in Development. Gross margin of 19.5% increased 90 basis-points sequentially and 180 basis-points year-over-year as revenue mix continued to shift towards the Company’s higher margin Energy Assets business. Operating income increased 66% to $21.4 million and operating margin was 7.8%. Net income attributable to common shareholders increased to $13.7 million and GAAP EPS increased to $0.26. The GAAP results for 2021 and 2020 reflect a non-cash downward adjustment of $4.2 million and $4.5 million, respectively, related to non-controlling interest activities. Excluding these adjustments, 2021 Non-GAAP net income was $18.0 million compared to $9.0 million. Adjusted EBITDA, a Non-GAAP financial measure, increased 42% to $34.4 million, and Non-GAAP EPS was $0.34 compared to $0.19.

(in millions)

2Q 2021

2Q 2020

 

Revenue

Net Income

Adj. EBITDA

Revenue

Net Income

(Loss)

Adj. EBITDA

Projects

$196.3

$10.4

$11.3

$159.9

$4.5

$6.5

Energy Assets

$36.9

$1.1

$20.3

$28.7

$(0.7)

$15.6

O&M

$19.6

$1.9

$2.4

$17.3

$1.0

$1.9

Other

$21.1

$0.2

$0.3

$17.0

$(0.4)

$0.2

Total (1)

$273.9

$13.7

$34.4

$223.0

$4.4

$24.1

 

 

 

 

 

 

 

(1) Numbers in table may not foot due to rounding.

(in millions)

 

At June 30, 2021

Awarded Project Backlog

 

$1,430

Contracted Project Backlog

 

$781

Total Project Backlog

 

$2,211

 

 

 

O&M Revenue Backlog

 

$1,121

Energy Asset Visibility *

 

$1,016

Operating Energy Assets

 

315 MWe

Assets in Development

 

376 MWe

 

 

 

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

Project Highlights

In the second quarter of 2021:

  • Our Federal Solutions Group added three new contracts:

    • $21.6 million project at Fort Hunter Liggett in southern Monterey County, CA that will bolster the Army base’s work toward its goal of reaching net-zero energy use by 2022.
    • $19 million Energy Savings Performance Contract (ESPC) with Cannon Air Force Base (AFB) in Curry County, New Mexico to enhance the AFB’s operational efficiency and provide on-site energy generation.
    • $29 million Design Build project at Fort Totten in Bayside, New York, for a full facility revitalization.
  • Our EaaS offering in the higher education market continues to gain traction with the recent signing of an EaaS agreement with Northwestern University. This partnership will provide ongoing energy management, capital improvements, and related operations and maintenance – all under a long-term service agreement.

Asset Highlights

In the second quarter of 2021:

  • Ameresco brought 33 MWe into operation while adding 23 MWe (gross) to our development backlog, bringing our total to 376 MWe.
  • Projects placed in operation during the quarter included the 11.7 MWe McCarty Road RNG asset as well as four solar installations totaling 19 MWe.

Summary and Outlook

“Our strong second quarter performance represented excellent execution and demonstrated the substantial demand for Ameresco’s energy efficiency and renewable energy services. Total project backlog was stable at $2.2 billion while our 12-month contract backlog also remained at a healthy level of $606.5 million. Subsequent to the end of the second quarter, we converted $98 million from awarded to contracted project backlog. Furthermore, proposal activity for both our projects business and energy assets opportunities are at record levels and support our confidence in Ameresco’s future growth prospects,” Mr. Sakellaris noted.

Based on visibility from our project backlog and our increased levels of recurring revenues, the Company reaffirms 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 22 MWe to 42 MWe of energy assets and plans to invest approximately $115 million to $165 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: 2779293)
  • International Participants: Dial +1 (224) 357-2393 (Access Code: 2779293)

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 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, net income, adjusted EBITDA, non-GAAP EPS, other financial guidance 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 COVID-19 (and its variants) pandemic 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 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)

 

 

June 30,

 

December 31,

 

2021

 

2020

 

(Unaudited)

 

 

ASSETS

Current assets:

 

 

 

Cash and cash equivalents

$

58,807

 

 

$

66,422

 

Restricted cash

23,672

 

 

22,063

 

Accounts receivable, net

115,462

 

 

125,010

 

Accounts receivable retainage, net

36,485

 

 

30,189

 

Costs and estimated earnings in excess of billings

195,027

 

 

185,960

 

Inventory, net

8,798

 

 

8,575

 

Prepaid expenses and other current assets

25,389

 

 

26,854

 

Income tax receivable

5,688

 

 

9,803

 

Project development costs

14,508

 

 

15,839

 

Total current assets

483,836

 

 

490,715

 

Federal ESPC receivable

512,737

 

 

396,725

 

Property and equipment, net

8,826

 

 

8,982

 

Energy assets, net

798,609

 

 

729,378

 

Deferred income tax assets, net

3,972

 

 

3,864

 

Goodwill, net

58,901

 

 

58,714

 

Intangible assets, net

769

 

 

927

 

Operating lease assets

40,608

 

 

39,151

 

Restricted cash, non-current portion

11,363

 

 

10,352

 

Other assets

19,069

 

 

15,307

 

Total assets

$

1,938,690

 

 

$

1,754,115

 

 

 

 

 

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

Current portion of long-term debt and financing lease liabilities

$

79,778

 

 

$

69,362

 

Accounts payable

193,373

 

 

230,916

 

Accrued expenses and other current liabilities

40,108

 

 

41,748

 

Current portion of operating lease liabilities

5,995

 

 

6,106

 

Billings in excess of cost and estimated earnings

26,561

 

 

33,984

 

Income taxes payable

 

 

981

 

Total current liabilities

345,815

 

 

383,097

 

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

305,351

 

 

311,674

 

Federal ESPC liabilities

506,680

 

 

440,223

 

Deferred income taxes, net

7,159

 

 

6,227

 

Deferred grant income

8,075

 

 

8,271

 

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

36,731

 

 

35,300

 

Other liabilities

37,300

 

 

37,660

 

Commitments and contingencies

 

 

 

Redeemable non-controlling interests, net

$

46,003

 

 

$

38,850

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at June 30, 2021 and December 31, 2020

 

 

 

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 35,484,126 shares issued and 33,382,331 shares outstanding at June 30, 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 June 30, 2021 and December 31, 2020

2

 

 

2

 

Additional paid-in capital

270,955

 

 

145,496

 

Retained earnings

393,158

 

 

368,390

 

Accumulated other comprehensive loss, net

(6,754

)

 

(9,290

)

Treasury stock, at cost, 2,101,795 shares at June 30, 2021 and December 31, 2020

(11,788

)

 

(11,788

)

Total stockholders’ equity

645,576

 

 

492,813

 

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

$

1,938,690

 

 

$

1,754,115

 

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Revenues

$

273,920

 

 

$

223,036

 

 

$

526,122

 

 

$

435,449

 

Cost of revenues

220,598

 

 

183,528

 

 

425,891

 

 

357,495

 

Gross profit

53,322

 

 

39,508

 

 

100,231

 

 

77,954

 

Selling, general and administrative expenses

31,882

 

 

26,620

 

 

60,483

 

 

55,544

 

Operating income

21,440

 

 

12,888

 

 

39,748

 

 

22,410

 

Other expenses, net

5,450

 

 

4,052

 

 

9,122

 

 

9,441

 

Income before income taxes

15,990

 

 

8,836

 

 

30,626

 

 

12,969

 

Income tax (benefit) provision

(1,896

)

 

 

 

309

 

 

(2,503

)

Net income

17,886

 

 

8,836

 

 

30,317

 

 

15,472

 

Net income attributable to redeemable non-controlling interests

(4,231

)

 

(4,471

)

 

(5,488

)

 

(4,906

)

Net income attributable to common shareholders

$

13,655

 

 

$

4,365

 

 

$

24,829

 

 

$

10,566

 

Net income per share attributable to common shareholders:

 

 

 

 

 

 

 

Basic

$

0.27

 

 

$

0.09

 

 

$

0.49

 

 

$

0.22

 

Diluted

$

0.26

 

 

$

0.09

 

 

$

0.48

 

 

$

0.22

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

51,315

 

 

47,488

 

 

50,158

 

 

47,500

 

Diluted

52,570

 

 

48,519

 

 

51,475

 

 

48,571

 

AMERESCO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

 

 

Six Months Ended June 30,

 

2021

 

2020

Cash flows from operating activities:

 

 

 

Net income

$

30,317

 

 

$

15,472

 

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

 

 

 

Depreciation of energy assets, net

20,136

 

 

18,949

 

Depreciation of property and equipment

1,637

 

 

1,659

 

Accretion of ARO liabilities

57

 

 

43

 

Amortization of debt discount and debt issuance costs

1,477

 

 

1,176

 

Amortization of intangible assets

161

 

 

356

 

Provision for (recoveries of) bad debts

6

 

 

(80

)

Net loss from derivatives

1,225

 

 

517

 

Stock-based compensation expense

2,115

 

 

859

 

Deferred income taxes

335

 

 

4,619

 

Unrealized foreign exchange (gain) loss

(32

)

 

201

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

15,230

 

 

12,125

 

Accounts receivable retainage

(6,211

)

 

(2,222

)

Federal ESPC receivable

(125,146

)

 

(89,761

)

Inventory, net

(224

)

 

235

 

Costs and estimated earnings in excess of billings

(8,893

)

 

6,410

 

Prepaid expenses and other current assets

2,445

 

 

1,857

 

Project development costs

760

 

 

(2,758

)

Other assets

(3,691

)

 

516

 

Accounts payable, accrued expenses and other current liabilities

(22,941

)

 

(45,256

)

Billings in excess of cost and estimated earnings

(8,174

)

 

8,569

 

Other liabilities

(207

)

 

316

 

Income taxes payable

3,135

 

 

(7,396

)

Cash flows from operating activities

(96,483

)

 

(73,594

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

(1,484

)

 

(1,355

)

Capital investment in energy assets

(104,267

)

 

(77,218

)

Contributions to equity investment

 

 

(127

)

Cash flows from investing activities

(105,751

)

 

(78,700

)

Cash flows from financing activities:

 

 

 

Proceeds from equity offering, net of offering costs

120,081

 

 

 

Payments of financing fees

(1,162

)

 

(2,198

)

Proceeds from exercises of options and ESPP

3,263

 

 

5,078

 

Repurchase of common stock

 

 

(6

)

(Payments on) proceeds from senior secured credit facility, net

(28,073

)

 

16,000

 

Proceeds from long-term debt financings

64,854

 

 

14,232

 

Proceeds from Federal ESPC projects

70,159

 

 

133,598

 

(Payments on) proceeds for energy assets from Federal ESPC

(117

)

 

1,488

 

Proceeds from redeemable non-controlling interests, net

1,583

 

 

74

 

Payments on long-term debt

(33,664

)

 

(25,860

)

Cash flows from financing activities

196,924

 

 

142,406

 

Effect of exchange rate changes on cash

315

 

 

(457

)

Net decrease in cash, cash equivalents, and restricted cash

(4,995

)

 

(10,345

)

Cash, cash equivalents, and restricted cash, beginning of period

98,837

 

 

77,264

 

Cash, cash equivalents, and restricted cash, end of period

$

93,842

 

 

$

66,919

 

Non-GAAP Financial Measures (In thousands) (Unaudited)

 

Three Months Ended June 30, 2021

Adjusted EBITDA:

Projects

Energy

Assets

O&M

Other

Consolidated

Net income attributable to common shareholders

$

10,379

 

$

1,146

 

$

1,932

 

$

198

 

$

13,655

 

Impact from redeemable non-controlling interests

 

4,231

 

 

 

4,231

 

Less: Income tax benefit

(1,080

)

(422

)

(73

)

(321

)

(1,896

)

Plus: Other expenses, net

316

 

5,172

 

5

 

(43

)

5,450

 

Plus: Depreciation and amortization

624

 

9,938

 

433

 

340

 

11,335

 

Plus: Stock-based compensation

966

 

182

 

97

 

104

 

1,349

 

Plus: Restructuring and other charges

133

 

25

 

12

 

64

 

234

 

Adjusted EBITDA

$

11,338

 

$

20,272

 

$

2,406

 

$

342

 

$

34,358

 

Adjusted EBITDA margin

5.8

%

54.9

%

12.3

%

1.6

%

12.5

%

 

Three Months Ended June 30, 2020

Adjusted EBITDA:

Projects

Energy

Assets

O&M

Other

Consolidated

Net income (loss) attributable to common shareholders

$

4,486

 

$

(749

)

$

1,001

 

$

(373

)

$

4,365

 

Impact from redeemable non-controlling interests

 

4,471

 

 

 

4,471

 

Plus: Other expenses, net

631

 

3,229

 

171

 

21

 

4,052

 

Plus: Depreciation and amortization

896

 

8,608

 

673

 

476

 

10,653

 

Plus: Stock-based compensation

308

 

55

 

34

 

33

 

430

 

Plus: Restructuring and other charges

153

 

11

 

6

 

4

 

174

 

Adjusted EBITDA

$

6,474

 

$

15,625

 

$

1,885

 

$

161

 

$

24,145

 

Adjusted EBITDA margin

4.0

%

54.3

%

10.9

%

0.9

%

10.8

%

 

Six Months Ended June 30, 2021

Adjusted EBITDA:

Projects

Energy

Assets

O&M

Other

Consolidated

Net income attributable to common shareholders

$

14,471

 

$

6,737

 

$

3,208

 

$

413

 

$

24,829

 

Impact from redeemable non-controlling interests

 

5,488

 

 

 

5,488

 

(Less) Plus: Income tax (benefit) provision

(134

)

(86

)

138

 

391

 

309

 

Plus: Other expenses, net

1,378

 

7,521

 

30

 

193

 

9,122

 

Plus: Depreciation and amortization

1,200

 

19,116

 

922

 

696

 

21,934

 

Plus: Stock-based compensation

1,515

 

282

 

153

 

165

 

2,115

 

Plus: Restructuring and other charges

153

 

30

 

34

 

65

 

282

 

Adjusted EBITDA

$

18,583

 

$

39,088

 

$

4,485

 

$

1,923

 

$

64,079

 

Adjusted EBITDA margin

4.9

%

55.7

%

11.8

%

4.7

%

12.2

%

 

Six Months Ended June 30, 2020

Adjusted EBITDA:

Projects

Energy

Assets

O&M

Other

Consolidated

Net income attributable to common shareholders

$

4,292

 

$

4,315

 

$

1,835

 

$

124

 

$

10,566

 

Impact from redeemable non-controlling interests

 

4,906

 

 

 

4,906

 

Less: Income tax benefit

(803

)

(1,700

)

 

 

(2,503

)

Plus: Other expenses, net

1,983

 

6,695

 

690

 

73

 

9,441

 

Plus: Depreciation and amortization

1,676

 

16,954

 

1,425

 

909

 

20,964

 

Plus: Stock-based compensation

600

 

113

 

70

 

76

 

859

 

Plus: Restructuring and other charges

875

 

30

 

65

 

180

 

1,150

 

Adjusted EBITDA

$

8,623

 

$

31,313

 

$

4,085

 

$

1,362

 

$

45,383

 

Adjusted EBITDA margin

2.8

%

55.0

%

11.5

%

3.5

%

10.4

%

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2021

2020

2021

2020

Non-GAAP net income and EPS:

 

 

 

 

Net income attributable to common shareholders

$

13,655

 

$

4,365

 

$

24,829

 

$

10,566

 

Adjustment for accretion of tax equity financing fees

(30

)

 

(61

)

 

Impact from redeemable non-controlling interests

4,231

 

4,471

 

5,488

 

4,906

 

Plus: Restructuring and other charges

234

 

174

 

282

 

1,150

 

Less: Income tax effect of Non-GAAP adjustments

(61

)

 

(73

)

(212

)

Non-GAAP net income

$

18,029

 

$

9,010

 

$

30,465

 

$

16,410

 

 

 

 

 

 

Diluted net income per common share

$

0.26

 

$

0.09

 

$

0.48

 

$

0.22

 

Effect of adjustments to net income

0.08

 

0.10

 

0.11

 

0.12

 

Non-GAAP EPS

$

0.34

 

$

0.19

 

$

0.59

 

$

0.34

 

 

 

 

 

 

Adjusted cash from operations:

 

 

 

 

Cash flows from operating activities

$

(57,759

)

$

(21,954

)

$

(96,483

)

$

(73,594

)

Plus: proceeds from Federal ESPC projects

36,639

 

72,400

 

70,159

 

133,598

 

Adjusted cash from operations

$

(21,120

)

$

50,446

 

$

(26,324

)

$

60,004

 

Other Financial Measures (In thousands) (Unaudited)

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2021

2020

2021

2020

New contracts and awards:

 

 

 

 

New contracts

$

188,000

 

$

127,000

 

$

261,000

 

$

213,000

 

New awards (1)

$

97,000

 

$

198,000

 

$

372,000

 

$

253,000

 

(1) Represents estimated future revenues from projects that have been awarded, though the contracts have not yet been signed

Non-GAAP Financial Guidance

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA):

Year Ended December 31, 2021

 

Low

High

Operating income(1)

$89 million

$97 million

Depreciation and amortization

$47 million

$48 million

Stock-based compensation

$4 million

$5 million

Adjusted EBITDA

$140 million

$150 million

 

(1) Although net income is the most directly comparable GAAP measure, this table reconciles adjusted EBITDA to operating income because we are not able to calculate forward-looking net income without unreasonable efforts due to significant uncertainties with respect to the impact of accounting for our redeemable non-controlling interests and taxes.

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 Non-GAAP Financial Measures 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, accretion of asset retirement obligations, contingent consideration expense, stock-based compensation expense, restructuring and asset impairment charges. 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, accretion of asset retirement obligations, contingent consideration expense, stock-based compensation expense, impact from redeemable non-controlling interests, restructuring and asset impairment charges. 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.

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 and asset impairment charges and impact from redeemable non-controlling interest. 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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