SOURCE: EnerNOC, Inc.
February 16, 2011 16:24 ET
EnerNOC Reports Fourth Quarter and Full Year 2010 Financial Results
Company Delivers Strong Cash Flow From Operating Activities and First Full Year of Profitability
BOSTON, MA--(Marketwire - February 16, 2011) - EnerNOC, Inc. (NASDAQ: ENOC)
-- Full year revenues increased 47% over prior year to $280.2 million
-- Fourth quarter cash flow from operating activities increased 227%
year-over-year to $16.5 million
-- Full year cash flow from operating activities increased 458%
year-over-year to $45.1 million
-- Full year free cash flow of $25.8 million
-- Full year GAAP net income of $9.6 million, or $0.37 per diluted share
-- Full year non-GAAP net income of $25.4 million, or $0.97 per diluted
share
-- Capacity base expanded by 49% year-over-year to over 5,300 megawatts
under management
EnerNOC, Inc. (NASDAQ: ENOC), a
leading provider of clean and intelligent energy management applications
and services, today announced financial results for the fourth quarter and
year ended December 31, 2010.
"We achieved all of our 2010 strategic and financial objectives, including
nearly 50% expansion of our megawatts under management, strong revenue
growth, and solid gross margins, resulting in GAAP net income per diluted
share of $0.37 and nearly one dollar in non-GAAP net income per diluted
share," commented Tim Healy, EnerNOC's Chairman and Chief Executive
Officer. "Moving forward, we expect strong utility and C&I customer demand
for our offerings and robust megawatt growth in our portfolio."
Healy continued, "2011 is the first year of our next three-year operating
plan, which prioritizes continued revenue and earnings growth, as well as
cash flow production. We delivered on our past promises to shareholders and
intend to do the same over the coming years."
Revenues for the fourth quarter of 2010 were $22.7 million, compared to
$26.7 million for the same period in 2009, a decrease of $4.0 million, or
15%. Revenues for the year ended December 31, 2010 were $280.2 million,
compared to $190.7 million for the year ended December 31, 2009, an
increase of $89.5 million, or 47%.
GAAP net loss for the fourth quarter of 2010 was $21.2 million, or $0.86
per diluted share, as compared to GAAP net loss for the fourth quarter of
2009 of $15.2 million, or $0.64 per diluted share. GAAP net income for the
year ended December 31, 2010 was $9.6 million, or $0.37 per diluted share,
as compared to GAAP net loss for the year ended December 31, 2009 of $6.8
million, or $0.32 per diluted share.
Non-GAAP net loss* for the fourth quarter of 2010 was $17.1 million, or
$0.69 per diluted share, as compared to non-GAAP net loss for the fourth
quarter of 2009 of $11.9 million, or $0.50 per diluted share. Non-GAAP net
income* for the year ended December 31, 2010 was $25.4 million, or $0.97
per diluted share, as compared to non-GAAP net income for the year ended
December 31, 2009 of $7.0 million, or $0.30 per diluted share.
Adjusted EBITDA* for the fourth quarter of 2010 was negative $14.9 million,
compared to negative $7.9 million in the fourth quarter of 2009. Adjusted
EBITDA for the year ended December 31, 2010 was $42.8 million, compared to
$20.1 million for the year ended December 31, 2009.
Cash flow from operating activities for the year ended December 31, 2010
was $45.1 million, or 16% of revenue during that period, up from $8.1
million, or 4% of revenue for the same period in 2009. The Company
generated $25.8 million of free cash flow* for the year ended December 31,
2010 as compared to negative $8.8 million for the year ended December 31,
2009.
As of December 31, 2010, the Company had cash and cash equivalents totaling
$153.4 million, an increase of $33.7 million from cash and cash equivalents
as of December 31, 2009.
(* Please refer to the section below titled "Use of Non-GAAP Financial
Measures" for non-GAAP definitions and the financial schedules attached to
this press release for reconciliation of non-GAAP financial measures to the
most directly comparable GAAP financial measure.)
Other Fourth Quarter and Recent Highlights
-- Increasing demand response megawatts under management to over 5,300 as
of December 31, 2010, up from over 3,550 as of December 31, 2009.
-- Increasing the number of commercial, institutional, and industrial
demand response customers to approximately 3,600 customers and sites
to approximately 8,600 as of December 31, 2010, up from 2,800 customers
and 6,500 sites as of December 31, 2009.
-- Dispatching demand response resources in its network over 220 times
during the year, maintaining the Company's 2010 average event
performance of over 100% based on nominated versus delivered capacity.
-- Announcing selection to participate in UK Power Networks' Low Carbon
London project.
-- Joining the OpenADR Alliance, an industry group created to foster the
development and adoption of Open Automated Demand Response standards.
-- Announcing the release of EfficiencySMART™, a suite of data-driven
energy efficiency applications and services -- including
EfficiencySMART Commissioning, EfficiencySMART Insight -- that drive
C&I energy savings.
-- Signing a contract with existing corporate customer, Stop & Shop, to
deliver data-driven energy efficiency and visibility through the
EfficiencySMART Insight application.
-- Completing the acquisitions in January of Global Energy Partners, a
California-based energy efficiency and demand response program
management firm, and M2M Communications, an Idaho-based wireless
technology solutions provider to the demand response and energy
efficiency markets.
-- Announcing in February selection for a program with Bonneville
Power Administration.
Financial Outlook
The Company currently expects to deliver the following financial results
for the quarter ending March 31, 2011 and the year ending December 31,
2011:
First Quarter 2011: The Company expects first quarter 2011 revenue to be in
the range of $25 million to $31 million. First quarter GAAP net loss is
expected to be in the range of $0.85 to $1.05 per basic and diluted share.
GAAP net loss includes an estimated stock-based compensation expense of
$4.8 million and an estimated amortization of acquisition-related
intangibles expense of $1.6 million, net of an estimated $1.0 million of
tax effects. First quarter non-GAAP net loss per share is expected to be in
the range of $0.64 to $0.84 per basic and diluted share. These estimates
are based on basic and diluted weighted average shares outstanding of 25.1
million shares, and the non-GAAP estimate includes the per share impact of
the adjustments for the estimated stock-based compensation and amortization
expenses, net of tax effects discussed above.
Full Year 2011: The Company expects full year 2011 revenue to be in the
range of $300 million to $320 million. GAAP net income is expected to be
in the range of $0.25 to $0.50 per diluted share. GAAP net income includes
an estimated stock-based compensation expense of $16.6 million and an
estimated amortization of acquisition-related intangibles expense of $7.2
million, net of an estimated $3.8 million of tax effects. Non-GAAP net
income per share is expected to be in the range of $0.97 to $1.23 based on
diluted weighted average shares outstanding of 27.5 million shares, and
includes the adjustments for the estimated stock-based compensation and
amortization, net of tax effects discussed above.
These statements are forward-looking and actual results may differ
materially. These statements are based on information available as of
February 16, 2011, and the Company assumes no obligation to publicly update
or revise its financial outlook. Investors are reminded that actual results
may differ from these estimates for the reasons described below and in the
Company's filings with the Securities and Exchange Commission.
Webcast Reminder
The Company will host a conference call today, February 16, 2011 at 4:30
p.m., Eastern Time, to discuss the Company's fourth quarter and full year
2010 operating results, as well as other forward-looking information about
the Company's business. Domestic callers may access the earnings conference
call by dialing 877-837-3911 (International callers, dial 973-796-5063).
Investors and other interested parties may also go to the Investor
Relations section of EnerNOC's website at
http://investor.enernoc.com/webcasts.cfm for a live webcast of the
conference call. Please access the website at least 15 minutes prior to the
call to register, download, and install any necessary audio software. A
replay of the conference call will be available on the Company's website
noted above or by phone (dial 800-642-1687 and enter the pass code
41091717) until February 23, 2011 and the webcast will be archived on
EnerNOC's website for a period of three months.
About EnerNOC
EnerNOC unlocks the full value of energy management for our utility and
commercial, institutional, and industrial (C&I) customers by reducing
real-time demand for electricity, increasing energy efficiency, improving
energy supply transparency in competitive markets, and mitigating
emissions. We accomplish this by delivering world-class energy management
applications including DemandSMART™, comprehensive demand response;
EfficiencySMART™, data-driven energy efficiency; SupplySMART™, energy
price and risk management; and CarbonSMART™, enterprise carbon
management. Our Network Operations Center (NOC) continuously supports these
applications across thousands of C&I customer sites throughout the world.
Working with more than 100 utilities and grid operators globally, we
deliver energy, ancillary services, and carbon mitigation resources that
provide cost-effective alternatives to investments in traditional power
generation, transmission, and distribution. For more information, visit
www.enernoc.com.
Safe Harbor Statement
Statements in this press release regarding management's future
expectations, beliefs, intentions, goals, strategies, plans or prospects,
including, without limitation, statements relating to the Company's future
financial performance on both a GAAP and non-GAAP basis, demand for the
Company's offerings, projected megawatt growth in the Company's portfolio,
and the future growth and success of the Company's clean and intelligent
energy management applications and services in general, may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and other federal securities laws.
Forward-looking statements can be identified by terminology such as
"anticipate," "believe," "could," "could increase the likelihood,"
"estimate," "expect," "intend," "is planned," "may," "should," "will,"
"will enable," "would be expected," "look forward," "may provide," "would"
or similar terms, variations of such terms or the negative of those terms.
Such
forward-looking statements involve known and unknown risks, uncertainties
and other factors including those risks, uncertainties and factors referred
to under the section "Risk Factors" in EnerNOC's most recent Annual Report
on Form 10-K and subsequent Quarterly Reports on Form 10-Q, as well as
other documents that may be filed by EnerNOC from time to time with the
Securities and Exchange Commission. As a result of such risks,
uncertainties and factors, the Company's actual results may differ
materially from any future results, performance or achievements discussed
in or implied by the forward-looking statements contained herein. EnerNOC
is providing the information in this press release as of this date and
assumes no obligations to update the information included in this press
release or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Use of Non-GAAP Financial Measures
To supplement the financial measures presented in EnerNOC's press release
and related conference call or webcast in accordance with accounting
principles generally accepted in the United States ("GAAP"), EnerNOC also
presents non-GAAP financial measures relating to non-GAAP net income or
loss, non-GAAP net income or loss per share, adjusted EBITDA and free cash
flow.
A "non-GAAP financial measure" refers to a numerical measure of the
Company's historical or future financial performance, financial position,
or cash flows that excludes (or includes) amounts that are included in (or
excluded from) the most directly comparable measure calculated and
presented in accordance with GAAP in the Company's financial statements.
EnerNOC provides the non-GAAP measures listed above as additional
information relating to EnerNOC's operating results as a complement to
results provided in accordance with GAAP. The non-GAAP financial
information presented here should be considered in conjunction with, and
not as a substitute for or superior to, the financial information presented
in accordance with GAAP and should not be considered measures of the
Company's liquidity. There are significant limitations associated with the
use of non-GAAP financial measures. Further, these measures may differ
from the non-GAAP information, even where similarly titled, used by other
companies and therefore should not be used to compare the Company's
performance to that of other companies.
The non-GAAP measures used in this press release and related conference
call or webcast differ from GAAP in that they exclude expenses related to
stock-based compensation, amortization expense related to
acquisition-related intangible assets, as well as in certain measures, the
related impact of these adjustments on the provision for income taxes. In
addition, investors should note the following:
-- EnerNOC defines "non-GAAP net income (loss)" as net income (loss)
before expenses related to stock-based compensation and amortization
expenses related to acquisition-related intangible assets, net of
related tax effects.
-- EnerNOC defines "Adjusted EBITDA" as net income (loss), excluding
depreciation, amortization, stock-based compensation, interest, income
taxes and other income (expense). Adjusted EBITDA eliminates items
that are either not part of the Company's core operations or do not
require a cash outlay, such as stock-based compensation. Adjusted
EBITDA also excludes depreciation and amortization expense, which is
based on the Company's estimate of the useful life of tangible and
intangible assets. These estimates could vary from actual performance
of the asset, are based on historic cost incurred to build out the
Company's deployed network, and may not be indicative of current or
future capital expenditures.
-- EnerNOC defines "free cash flow" as net cash provided by (used in)
operating activities less capital expenditures. EnerNOC defines
"capital expenditures" as purchases of property and equipment, which
includes capitalization of internal-use software development costs.
Capital expenditures are disclosed in the Company's Statement of Cash
Flows in the Company's most recent Annual Report on Form 10-K filed
with the Securities and Exchange Commission.
EnerNOC's management uses these non-GAAP measures when evaluating the
Company's operating performance and for internal planning and forecasting
purposes. EnerNOC's management believes that such measures help indicate
underlying trends in the Company's business, are important in comparing
current results with prior period results, and are useful to investors and
financial analysts in assessing the Company's operating performance. For
example, EnerNOC's management considers non-GAAP net income (loss) to be an
important indicator of the overall performance of the Company because it
eliminates the effects of events that are either not part of the Company's
core operations or are non-cash compensation expenses. In addition,
EnerNOC's management considers adjusted EBITDA to be an important indicator
of the Company's operational strength and performance of its business and a
good measure of the Company's historical operating trend. Moreover,
EnerNOC's management considers free cash flow to be an indicator of the
Company's operating trend and performance of its business.
EnerNOC, Inc.
SELECTED FINANCIAL INFORMATION
(in thousands, except for share and per share data)
EnerNOC, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Revenues $ 22,690 $ 26,733 $ 280,157 $ 190,675
Cost of revenues 18,668 17,983 159,832 104,215
---------- ---------- ---------- ----------
Gross profit 4,022 8,750 120,325 86,460
Operating expenses:
Selling and marketing 11,263 10,021 45,436 39,502
General and administrative 13,462 11,155 53,576 44,407
Research and development 2,349 2,077 10,097 7,601
---------- ---------- ---------- ----------
Total operating expenses 27,074 23,253 109,109 91,510
---------- ---------- ---------- ----------
(Loss) income from
operations (23,052) (14,503) 11,216 (5,050)
Other (expense) income (116) 104 (85) 98
Interest expense (32) (33) (718) (1,544)
---------- ---------- ---------- ----------
(Loss) income before
income tax (23,200) (14,432) 10,413 (6,496)
Benefit from (provision
for) income tax 2,033 (771) (836) (333)
---------- ---------- ---------- ----------
Net (loss) income $ (21,167) $ (15,203) $ 9,577 $ (6,829)
========== ========== ========== ==========
(Loss) income per share:
Basic $ (0.86) $ (0.64) $ 0.39 $ (0.32)
========== ========== ========== ==========
Diluted $ (0.86) $ (0.64) $ 0.37 $ (0.32)
========== ========== ========== ==========
Weighted average number of
common shares outstanding
Basic 24,688,865 23,727,647 24,611,729 21,466,813
========== ========== ========== ==========
Diluted 24,688,865 23,727,647 26,054,162 21,466,813
========== ========== ========== ==========
EnerNOC, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
December 31,
------------------------------
2010 2009
-------------- --------------
Assets
Current assets
Cash and cash equivalents $ 153,416 $ 119,739
Restricted cash 1,537 -
Trade accounts receivable, net of
allowance for doubtful accounts of $150
and $57 at December 31, 2010 and
2009, respectively 22,137 17,421
Unbilled revenue 73,144 40,388
Prepaid expenses, deposits and other
current assets 6,707 4,725
-------------- --------------
Total current assets 256,941 182,273
Property and equipment, net of
accumulated depreciation of $36,309
and $22,420 at December 31, 2010 and
2009, respectively 34,690 31,344
Goodwill 24,653 22,553
Definite-lived intangible assets, net of
accumulated amortization of $3,111
and $1,659 at December 31, 2010 and
2009, respectively 5,823 7,075
Indefinite-lived intangible assets 920 -
Deposits and other assets 2,872 3,903
Restricted cash - 7,874
-------------- --------------
Total assets $ 325,899 $ 255,022
============== ==============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 111 $ 55
Accrued capacity payments 65,792 40,534
Accrued payroll and related expenses 11,135 9,688
Accrued expenses and other current
liabilities 9,307 3,706
Accrued acquisition contingent
consideration 1,500 1,455
Deferred revenue 5,540 2,119
Current portion of long-term debt 37 36
-------------- --------------
Total current liabilities 93,422 57,593
Long-term liabilities
Long-term debt, net of current portion - 37
Deferred tax liability 1,141 654
Deferred revenue, long-term 4,696 1,200
Other liabilities 514 563
-------------- --------------
Total long-term liabilities 6,351 2,454
Stockholders' equity
Common stock 25 24
Additional paid-in capital 293,942 272,350
Accumulated other comprehensive loss (75) (56)
Accumulated deficit (67,766) (77,343)
-------------- --------------
Total stockholders' equity 226,126 194,975
-------------- --------------
Total liabilities and stockholders'
equity $ 325,899 $ 255,022
============== ==============
EnerNOC, Inc.
Cash Flow Information
(in thousands)
(Unaudited)
Year Ended December 31,
------------------------------
2010 2009
-------------- --------------
Cash provided by operating activities $ 45,148 $ 8,086
Cash used in investing activities (15,424) (29,172)
Cash provided by financing activities 3,974 80,013
Effects of exchange rate changes on cash (21) 30
-------------- --------------
Net change in cash and cash equivalents $ 33,677 $ 58,957
============== ==============
EnerNOC, Inc.
NON-GAAP NET (LOSS) INCOME AND NET (LOSS) INCOME PER SHARE RECONCILIATION
(in thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
GAAP Net (loss) income $ (21,167) $ (15,203) $ 9,577 $ (6,829)
ADD: Stock-based
compensation 4,074 3,138 15,742 13,134
ADD: Amortization expense
of acquired intangible
assets 343 178 1,452 692
LESS: Income tax effect
of Non-GAAP adjustments (1) (387) - (1,380) -
---------- ---------- ---------- ----------
Non-GAAP Net (loss) income $ (17,137) $ (11,887) $ 25,391 $ 6,997
========== ========== ========== ==========
GAAP Net (loss) income
per basic share $ (0.86) $ (0.64) $ 0.39 $ (0.32)
ADD: Stock-based
compensation 0.17 0.13 0.64 0.61
ADD: Amortization expense
of acquired intangible
assets 0.01 0.01 0.06 0.04
LESS: Income tax effect
of Non-GAAP adjustments (1) (0.01) - (0.06) -
---------- ---------- ---------- ----------
Non-GAAP Net (loss) income
per basic share $ (0.69) $ (0.50) $ 1.03 $ 0.33
========== ========== ========== ==========
GAAP Net (loss) income
per diluted share $ (0.86) $ (0.64) $ 0.37 $ (0.32)
ADD: Stock-based
compensation 0.17 0.13 0.60 0.61
ADD: Amortization expense
of acquired intangible
assets 0.01 0.01 0.05 0.04
LESS: Income tax effect
of Non-GAAP adjustments (1) (0.01) - (0.05) -
LESS: Dilutive impact on
weighted average
common stock equivalents - - - (0.03)
---------- ---------- ---------- ----------
Non-GAAP Net (loss) income
per diluted share $ (0.69) $ (0.50) $ 0.97 $ 0.30
========== ========== ========== ==========
Weighted average number of
common shares outstanding
Basic 24,688,865 23,727,647 24,611,729 21,466,813
Diluted 24,688,865 23,727,647 26,054,162 23,021,435
(1) Represents the increase in the income tax provision recorded for the
three months and year ended December 31, 2010 based on our effective rate
for the three months and year ended December 31, 2010, respectively.
EnerNOC, Inc.
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Net (loss) income $ (21,167) $ (15,203) $ 9,577 $ (6,829)
Add back:
Depreciation and
amortization 4,073 3,476 15,866 12,049
Stock-based compensation 4,074 3,138 15,742 13,134
Other expense (income) 116 (104) 85 (98)
Interest expense 32 33 718 1,544
(Benefit from) provision
for income tax (2,033) 771 836 333
---------- ---------- ---------- ----------
Adjusted EBITDA $ (14,905) $ (7,889) $ 42,824 $ 20,133
========== ========== ========== ==========
EnerNOC, Inc.
RECONCILIATION OF FREE CASH FLOW
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
Net cash provided by
operating activities $ 16,486 $ 5,044 $ 45,148 $ 8,086
Subtract:
Purchases of property and
equipment (4,111) (3,665) (19,394) (16,901)
---------- ---------- ---------- ----------
Free cash flow $ 12,375 $ 1,379 $ 25,754 $ (8,815)
========== ========== ========== ==========