Ameresco Reports 2nd Quarter Financial Results

Source: 8/1/2022, Location: North America

– Record Q2 Revenue and Profit with Growth Across All Business Lines –
– Continued Momentum in New Project Awards and Proposal Activity –
– Announced Company’s Largest PV & Battery Storage Asset –
– Reiterates FY22 Guidance –

Second Quarter 2022 Financial Highlights:
- Revenues of $577.4 million, up 111%
- Net income attributable to common shareholders of $32.2 million, up 136%
- GAAP EPS of $0.61, up 135%
- Non-GAAP EPS of $0.62, up 82%
- Adjusted EBITDA of $60.3 million, up 75%

Ameresco, Inc., a leading cleantech integrator specializing in energy efficiency and renewable energy, today announced financial results for the fiscal quarter ended June 30, 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 “Investors” section of the Company’s website at Reconciliations of Non-GAAP measures to the appropriate GAAP measures are included herein.

“Ameresco, through dedication and diversification, is pleased to report another quarter of record results, with each of our four business lines posting considerable year-over-year growth. Second quarter revenue more than doubled, led by our Projects business line, which continues to benefit from the diversity and increased scale and complexity of projects in our backlog. We achieved sequential and year-over-year increases in our awarded backlog in the second quarter, reflecting Ameresco’s market share gains as well as the expansion of our addressable market. The combination of rising energy costs, the growing focus by customers on reducing their environmental impact, and the need for comprehensive energy efficient and resilient solutions has driven our bid and proposal activity to record levels in the first half of 2022.

“Together with our partner, Bright Canyon Energy, we signed a 37-year enhanced use lease with the Department of Navy and received approval for a 20-year PPA from the PUC of Hawaii that significantly expands our portfolio of Energy Assets in development. The Kupono Solar, LLC Asset will represent the largest combined PV and battery asset ever developed and constructed by Ameresco. When complete, this asset will add capacity of 42 megawatts (MW) of clean renewable electricity and 42 MW/168 MWh of battery storage to Hawaiian Electric’s grid on the island of O’ahu. Completion is expected in early 2024. This asset marks the first time we have worked with Bright Canyon Energy Corporation, who will have an equity ownership in the asset,” commented George P. Sakellaris, President and Chief Executive Officer.

Ameresco is providing an update on the progress of the Southern California Edison (SCE) battery energy storage systems (BESS) projects. During the second quarter, we made substantial progress on the projects, achieving a number of key milestones despite Covid, supply chain, and permitting challenges. Approximately two thirds of the batteries for the projects are on site with the balance in transit. We now expect 200 to 300MW of capacity to be in service in September and continue to expect completion by the end of this year.

“Ameresco continued to be recognized by industry experts during the quarter. We were ranked number one in the Guidehouse Insights Energy as a Service (EaaS) Leaderboard report for the second consecutive year and were granted two Platinum Hermes Creative Awards for our continued ESG initiatives,” concluded George P. Sakellaris, President and Chief Executive Officer.

Second Quarter Financial Results
Total revenue increased 111% with growth across all of the Company's lines of business. Project revenue increased 149% as we continued to execute on the SCE projects while certain other projects progressed ahead of our expectations. Continued growth in our operating energy asset base and increased performance from our existing assets drove Energy Asset revenue up 16%. Other revenue grew 15% with strength in integrated PV sales, and O&M revenue increased over 7%. Gross margin was 14.1%, in line with our expectations, reflecting the impact from the higher revenue contribution from our lower margin SCE design/build projects. Revenue performance combined with the Company’s strong operating leverage enhanced net income to $32.2 million, representing a 136% increase, and Adjusted EBITDA to $60.3 million, a 75% increase. The results for the three months ended June 30, 2022 and 2021 reflect a non-cash downward adjustment of $0.7 million and $4.2 million, respectively, related to non-controlling interest activities.

Working capital increased in-line with our expectations during the quarter due to the execution of our large SCE design/build projects. We collected a milestone payment of $33 million from SCE subsequent to the end of Q2.

Project Highlights

In the second quarter of 2022:
- Ameresco was awarded a 6 MW / 6 MWh BESS by the U.S. Army to add a comprehensive energy storage system to the existing 18.6 MW solar renewable energy facility at the Fort Detrick Army Garrison in Frederick, Maryland.
- The Company announced a $102 million energy conservation project and accompanying 25-year O&M service agreement at Joint Base Pearl Harbor-Hickam (JBPHH) Air Force Base in Hawaii.
- Ameresco completed a comprehensive energy and water retrofit project with the Massachusetts College of Art and Design (MassArt) including improved lighting controls, building management system and controls upgrades, steam heating improvements, make up air units and exhaust fans installations, real-time metering – demand response, general building code upgrades and more.

Asset Highlights

In the second quarter of 2022:
- Ameresco continued to grow its Assets in Development, bringing the total to 477 MWe. After subtracting the partner’s minority interests, Ameresco’s owned capacity of Assets in Development is 436 MWe.
- The Company, along with our equity partner Bright Canyon, announced the Kupono Solar joint venture, a 42 MW photovoltaic solar array and 42 MW/168 MWh lithium-ion battery storage system with a 20-year power purchase agreement (PPA) with Hawaiian Electric.
- Ameresco completed a 6.9 MW DC PV asset for off-taker GlaxoSmithKline (GSK) Consumer Healthcare who will purchase renewable electricity from the asset as part of a 17-year PPA.

Summary and Outlook
“Ameresco continues to deliver record results, while building the foundation for robust long-term growth. With our acknowledged technological expertise and proven track record, we are moving ahead to capture the expanding opportunities on the horizon, with a flexible business model that provides significant visibility,” Mr. Sakellaris noted.

“We are pleased to reiterate our 2022 guidance for year-over-year revenue, Adjusted EBITDA, and Non-GAAP EPS growth of 52%, 34%, and 26%, respectively, at the midpoints of our guidance ranges. We anticipate that Q3 revenue will be slightly greater than that of Q4, and second half 2022 gross margins will be approximately 18%. 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.” Mr. Sakellaris concluded.

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.

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