EnerNOC Reports Results For Second Quarter Of 2015

EnerNOC Reports Results For Second Quarter Of 2015

August 6, 2015

 

BOSTON, MA, Aug. 06, 2015 (GLOBE NEWSWIRE)—EnerNOC, Inc. (Nasdaq:ENOC), a leading provider of energy intelligence software (EIS), today announced results for the second quarter ended June 30, 2015.

"The accelerating pace of change in global energy markets is creating unprecedented complexity for energy decision makers, and we are positioned to lead enterprises into a new era of energy management," said Tim Healy, Chairman and CEO of EnerNOC. "We are seeing increased interest in EIS as an energy decision support system and are excited to capitalize on this tremendous growth opportunity."

Summary Financial Results        
In Thousands, Except Per Share Amounts        
  Q2 2015 Q2 2014 H1 2015 H1 2014
Revenue   72,500       44,055        $ 123,051       96,563    
Net Loss        
 GAAP   $ (18,780     $ (27,385     $ (69,082     $ (57,798  
 Non-GAAP1   $ (8,943     $ (20,694     $ (48,544     $ (44,051  
Net Loss Per Basic and Diluted Share        
 GAAP   $ (0.66     $ (0.96     $ (2.45     $ (2.05  
 Non-GAAP1   $ (0.32     $ (0.73     $ (1.72     $ (1.57  
Cash Flow (Used in) Provided by Operations   $ (5,216     $ 17,292       $ (23,668     $ 5,726    
Free Cash Flow1   $ (8,309     $ 17,265       $ (31,967     $ (414  
Adjusted EBITDA1   $ (3,204     $ (15,940     $ (33,217     $ (34,364  

(1)  Refer to "Statement of Use of Non-GAAP Measures" for non-GAAP definitions and refer to the financial schedules attached to this press release for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

Recent Highlights

  • The Company grew its enterprise ARR by $3 million quarter-over-quarter to $58 million at the end of the second quarter. The Company expanded relationships with existing customers such as commercial real estate firm Equity Office Properties, and added new customers in key verticals such as Diamond Foods in food processing and Adelphi University in education.
  • The Company made two leadership announcements, promoting Eric Erston to Vice President of Global Sales and appointing Gary Haroian to its Board of Directors. Erston joined the Company in January to lead the enterprise sales team after spending 15 years in sales leadership positions at RSA, the Security Division of EMC. Haroian, a 30-year veteran of the software industry, has held executive and board positions at several companies, including Aspen Technology, Inc.
  • The Company reached a key product milestone in its partnership with SunPower, enabling SunPower to begin bundling EnerNOC EIS with all solar systems it sells to commercial and industrial customers in North America.
  • The Company increased its international revenue by 55% year-over-year, driven by strong performance in the Asia-Pacific region, including the South Korean market the Company entered last year.

Company Issues Third Quarter Guidance and Reaffirms Full Year Guidance

The Company today issued guidance for the third quarter of 2015 and reaffirmed its previously issued guidance for the full year. The Company's guidance is based on current trends and management's current expectations for the Company's business, which may change at any time.

  Guidance for Quarter Ending
September 30, 2015
Total Revenue (in millions) $224-$239
GAAP Net Income Per Diluted Share $0.47-$0.57
Non-GAAP Net Income Per Diluted Share1 $0.80-$0.91
Adjusted EBITDA1 (in millions) $33-$37

(1) Refer to "Statement of Use of Non-GAAP Measures" for non-GAAP definitions and refer to the financial schedules attached to this press release for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

  Reaffirmed Guidance for
Year Ending December 31,
2015
Total Revenue (in millions) $410-$430
Grid Operator Revenue $270-$280
Utility Revenue $70-$75
Enterprise Revenue $70-$75
GAAP Net Loss Per Diluted Share $(3.12)-$(3.02)
Non-GAAP Net Loss Per Diluted Share1 $(1.72)-$(1.61)
Adjusted EBITDA1 (in millions) $(14)-$(10)

(1) Refer to "Statement of Use of Non-GAAP Measures" for non-GAAP definitions and refer to the financial schedules attached to this press release for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

Company to Host Live Conference Call and Webcast

The Company's management team plans to host a live conference call and webcast at 9:00 a.m. eastern time today to discuss financial results and management's outlook for the business. The conference call may be accessed in the United States by dialing (800) 230-1093 (domestic) or (612) 234-9960 (international) and using access code "ENOC". The conference call will be simultaneously webcast on the Company's investor relations website, which can be accessed at http://investor.enernoc.com. A replay of the conference call will be available approximately two hours after the call by dialing (800) 475-6701 or (320) 365-3844 and using access code 365046, or by accessing the webcast replay on the Company's investor relations website.

About EnerNOC

EnerNOC is a leading provider of cloud-based energy intelligence software (EIS) and services to thousands of enterprise customers and utilities globally. EnerNOC's EIS solutions for enterprise customers improve energy productivity by optimizing how they buy, how much they use, and when they use energy. EIS for enterprise includes budgeting and procurement, utility bill management, facility optimization, visibility and reporting, project tracking, demand management, and demand response. EnerNOC's EIS solutions for utilities help maximize customer engagement and the value of demand-side resources, including demand response and energy efficiency. EnerNOC supports customer success with its world-class professional services team and a Network Operations Center (NOC) staffed 24x7x365. For more information, visit www.enernoc.com.

The EnerNOC, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5804

EnerNOC, Inc. 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 and the future growth and success of the Company's energy intelligence software and related solutions, 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.

 

EnerNOC, Inc. 
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data) 
(unaudited) 
               
  Three Months Ended    Six Months Ended 
June 30,   June 30,
      2015           2014           2015           2014    
Revenues:              
Grid operator     $ 41,545         22,974         65,258         58,744    
Utility      12,557           11,961           23,338           22,270    
Enterprise      18,398           9,120           34,455           15,549    
Total revenues      72,500           44,055           123,051           96,563    
Cost of revenues     33,543           27,802           65,499           63,941    
Gross profit      38,957           16,253           57,552           32,622    
Operating expenses:              
Selling and marketing      23,670           19,526           52,166           38,025    
General and administrative      28,453           24,191           56,743           47,868    
Research and development      7,735           4,997           15,186           10,172    
Gain on sale of service line       -           (3,378           -           (3,378  
Gain on sale of assets     (2,991         (2,171         (2,991         (2,171  
Total operating expenses     56,867           43,165           121,104           90,516    
Loss from operations      (17,910         (26,912         (63,552         (57,894  
Other income (expense), net      1,705           374           (2,952         948    
Interest expense      (2,240         (603         (4,532         (1,053  
Loss before income tax      (18,445         (27,141         (71,036         (57,999  
(Provision for) benefit from income tax      (345         (264         1,940           161    
Net loss     (18,790         (27,405         (69,096         (57,838  
Net loss attributable to noncontrolling interest       (10           (20           (14           (40  
Net loss attributable to EnerNOC, Inc.    $ (18,780       $ (27,385       $ (69,082       $ (57,798  
               
Net loss per common share attributable to EnerNOC, Inc.              
Basic and diluted   $ (0.66 )        $ (0.96       $ (2.45 )        $ (2.05  
               
Weighted average number of common shares used in computing net loss per share attributable to EnerNOC, Inc.              
Basic and diluted     28,327,867           28,461,111           28,172,398           28,225,518    

 

EnerNOC, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value and share data)
(unaudited)
  June 30,
2015
  December 31,
2014
       
ASSETS      
Current assets:      
Cash and cash equivalents  $ 143,555     $ 254,351  
Trade accounts receivable, net     38,729         40,875  
Unbilled revenue      19,131         97,512  
Capitalized incremental direct customer contract costs      19,356         7,633  
Prepaid expenses and other current assets      24,454         19,950  
Total current assets  $ 245,225     $ 420,321  
       
Property and equipment, net      49,656         50,458  
Goodwill and intangible assets, net    213,304         146,050  
Capitalized incremental direct customer contract costs, long-term     440         982  
Deposits and other assets      7,937         6,891  
Total assets  $ 516,562     $ 624,702  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Accounts payable  $ 2,255     $ 9,250  
Accrued capacity payments      46,243         92,332  
Accrued payroll and related expenses      20,685         18,446  
Accrued expenses and other current liabilities      25,245         28,724  
Deferred revenue      22,919         13,738  
Total current liabilities  $ 117,347     $ 162,490  
       
Deferred tax liability      16,857         16,449  
Deferred revenue, long-term     6,279         5,816  
Other liabilities      8,971         8,919  
Convertible senior notes, net   140,928         138,908  
Total long-term liabilities    173,035         170,092  
       
Stockholders' equity:      
Common stock, $0.001 par value; 50,000,000 shares authorized, 30,871,330 and 29,833,578 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively      31         30  
Additional paid-in capital    371,665         365,855  
Accumulated other comprehensive loss      (7,402 )       (4,752 )
Accumulated deficit    (138,342 )       (69,260 )
Total EnerNOC, Inc. stockholders' equity    225,952         291,873  
Non controlling interest      228         247  
Total stockholders' equity   226,180         292,120  
Total liabilities and stockholders' equity  $ 516,562     $ 624,702  

 

EnerNOC, Inc.
Condensed Consolidated Statements of Cash Flow Data
(in thousands)
(unaudited)
               
  Three Months Ended   Six Months Ended
  June 30,   June 30,
      2015         2014         2015           2014    
Cash (used in) provided by operating activities   $ (5,216     $ 17,292       $ (23,668       $ 5,726    
Cash used in investing activities       (2,969         (10,914 )         (83,535           (41,864  
Cash used in financing activities       (1,119         (1,329 )         (2,130           (4,448  
Effects of exchange rate changes on cash and cash equivalents       431           156           (1,463           300    
Net change in cash and cash equivalents   $ (8,873     $ 5,205       $ (110,796       $ (40,286  
Cash and cash equivalents at beginning of period       152,428           103,698           254,351             149,189    
Cash and cash equivalents at end of period   $ 143,555       $ 108,903       $ 143,555         $ 108,903    

 

EnerNOC, Inc.
Statement on Use of Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements presented on a GAAP basis, the Company discloses certain non-GAAP measures that exclude certain amounts, including non-GAAP net (loss) income attributable to EnerNOC, Inc., non-GAAP net (loss) income per share attributable to EnerNOC, Inc., adjusted EBITDA and free cash flow. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.

The GAAP measure most comparable to non-GAAP net (loss) income attributable to EnerNOC, Inc. is GAAP net (loss) income attributable to EnerNOC, Inc.; the GAAP measure most comparable to non-GAAP net (loss) income per share attributable to EnerNOC, Inc. is GAAP net (loss) income per share attributable to EnerNOC, Inc.; the GAAP measure most comparable to adjusted EBITDA is GAAP net (loss) income attributable to EnerNOC, Inc.; and the GAAP measure most comparable to free cash flow is cash flows provided by (used in) operating activities. Reconciliations of each of these non-GAAP financial measures to the corresponding GAAP measures are included below.

Management uses these non-GAAP measures when evaluating the Company's operating performance and for internal planning and forecasting purposes. Management believes that such measures help indicate underlying trends in the 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, management considers non-GAAP net (loss) income attributable to EnerNOC, Inc. to be an important indicator of the overall performance 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, management considers adjusted EBITDA to be an important indicator of the Company's operational strength and performance of the business and a good measure of the Company's historical operating trend. Moreover, management considers free cash flow to be an indicator of the Company's operating trend and performance of the business.

The following is an explanation of the non-GAAP measures that management utilizes, including the adjustments that management excluded as part of the non-GAAP measures:

  • Management defines non-GAAP net income (loss) attributable to EnerNOC, Inc. as net income (loss) attributable to EnerNOC, Inc. before accretion expense related to the debt-discount portion of interest expense associated with the convertible note issuance, stock-based compensation, direct and incremental expenses related to acquisitions or divestitures, direct and incremental expenses related to restructuring, and amortization expenses related to acquisition-related intangible assets, net of related tax effects.
  • Management defines adjusted EBITDA as net income (loss) attributable to EnerNOC, Inc., excluding depreciation, amortization, stock-based compensation, direct and incremental expenses related to acquisitions or divestitures, direct and incremental expenses related to restructuring, interest, income taxes and other income (expense).
  • Management defines free cash flow as net cash provided by (used in) operating activities, less capital expenditures, plus net cash provided by (used in) the sale of assets or disposals of components of an entity. Management defines capital expenditures as purchases of property and equipment, which includes capitalization of internal-use software development costs.

Non-GAAP net (loss) income attributable to EnerNOC, Inc., non-GAAP net (loss) income per share attributable to EnerNOC, Inc., adjusted EBITDA and free cash flow may have limitations as analytical tools. 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.

 

EnerNOC, Inc.
Reconciliation Of Non-GAAP Measures To Nearest GAAP Measures
Reconciliation of Non-GAAP Net Loss Attributable to EnerNOC, Inc. And Net Loss Per Share Attributable to EnerNOC, Inc.
(in thousands, except share and per share data)
(unaudited)
 
  Three Months
Ended June 30,
  Six Months
Ended June 30,
      2015           2014           2015           2014    
               
GAAP net loss attributable to EnerNOC, Inc.    $ (18,780       $ (27,385       $ (69,082       $ (57,798  
ADD: Stock-based compensation expense     3,321           3,799           7,730           8,026    
ADD: Amortization expense of acquired intangible assets     4,027           2,479           7,945           4,362    
ADD: Direct and incremental expenses related to acquisitions or divestitures (1)     221           413           1,603           1,359    
ADD: Direct and incremental expenses related to restructuring (2)     1,240             -            1,240             -     
ADD: Debt discount portion of convertible debt       1,028             -              2,020             -     
Non-GAAP net loss attributable to EnerNOC, Inc.    $ (8,943       $ (20,694       $ (48,544       $ (44,051  
               
GAAP net loss per diluted share attributable to EnerNOC, Inc.    $ (0.66       $ (0.96       $ (2.45       $ (2.05  
ADD: Stock-based compensation expense     0.12           0.13           0.27           0.28    
ADD: Amortization expense of acquired intangible assets     0.14           0.09           0.28           0.15    
ADD: Direct and incremental expenses related to acquisitions or divestitures (1)     0.01           0.01           0.06           0.05    
ADD: Direct and incremental expenses related to restructuring (2)     0.04             -            0.04             -     
ADD: Debt discount portion of convertible debt       0.03             -              0.08             -     
Non-GAAP net loss per diluted share attributable to EnerNOC, Inc.    $ (0.32       $ (0.73       $ (1.72       $ (1.57  

(1) Represents costs primarily related to acquisitions for third party professional services (legal, accounting, valuation) and severance.

(2) Represents costs associated with reorganizing the business for our continued enterprise and utility focus.

EnerNOC, Inc.
Reconciliation of Adjusted EBITDA
(in thousands) 
(unaudited)
               
  Three Months Ended    Six Months Ended 
  June 30,   June 30,
      2015           2014           2015           2014    
Net loss attributable to EnerNOC, Inc.    $ (18,780 )        $ (27,385 )       $ (69,082 )        $ (57,798  
Add back:              
Depreciation and amortization      9,914           7,842           19,748           15,207    
Stock-based compensation expense      3,321           3,799           7,730           8,026    
Direct and incremental expenses related to acquisitions or divestitures (1)     221           413           1,603           1,359    
Direct and incremental expenses related to restructuring (2)     1,240             -           1,240             -    
Other (income) expense, net (3)     (1,705 )          (374         2,952           (948  
Interest expense     2,240           603           4,532           1,053    
Provision for (benefit from) income tax (4)     345           (838         (1,940         (1,263  
Adjusted EBITDA    $ (3,204 )        $ (15,940       $ (33,217       $ (34,364  

(1) Represents costs primarily related to acquisitions for third party professional services (legal, accounting, valuation) and severance. 

(2) Represents costs associated with reorganizing the business for our continued enterprise and utility focus.

(3) Other expense primarily relates to foreign currency (gains) losses.

(4) Excludes discrete tax provision of $1,102 recorded during the three and six month periods ended June 30, 2014 related to the sale of the USC business component.

EnerNOC, Inc.
Reconciliation of Free Cash Flow
(in thousands)
(unaudited)
               
  Three Months Ended    Six Months Ended 
  June 30,   June 30,
      2015         2014         2015           2014    
Net cash (used in) provided by operating activities    $ (5,216     $ 17,292       $ (23,668     $   5,726    
Add: Net cash provided by the sale of assets or disposals of components of an entity     2,991           6,446         2,991             6,446    
Subtract: Purchases of property and equipment      (6,084       (6,473 )       (11,290         (12,586  
Free cash flow    $ (8,309     $ 17,265       $ (31,967       $ (414  

 

Non-GAAP Financial Guidance

This press release also includes estimates of future adjusted EBITDA and non-GAAP net loss per diluted share attributable to EnerNOC, Inc. A reconciliation of these amounts to the nearest expected GAAP results, is presented below:

  Three Months Ended   Twelve Months Ended
  September 30, 2015   December 31, 2015
      Per Diluted Share       Per Diluted Share
In Millions, Except Per Share Amounts Low High Low High   Low High Low High
                   
Projected GAAP Net Income (Loss) $ 13.4   $ 16.4   $ 0.47   $ 0.57     $ (89.0 ) $ (86.0 ) $ (3.12 ) $ (3.02 )
                   
Adjustments:                  
Stock-based compensation $ 4.1   $ 4.3   $ 0.14   $ 0.15     $ 16.0   $ 16.2   $ 0.56   $ 0.57  
Amortization expense of acquired intangible assets $ 4.0   $ 4.0   $ 0.14   $ 0.14     $ 15.9   $ 15.9   $ 0.56   $ 0.56  
Direct and incremental expenses1 $ 0.6   $ 0.6   $ 0.02   $ 0.02     $ 4.0   $ 4.0   $ 0.14   $ 0.14  
Accretion expense related to the debt-discount portion of interest associated with convertible note issuance $ 1.0   $ 1.0   $ 0.03   $ 0.03     $ 4.1   $ 4.1   $ 0.14   $ 0.14  
Projected Non-GAAP Net Income (Loss) $ 23.1   $ 26.3   $ 0.80   $ 0.91     $ (49.0 ) $ (45.8 ) $ (1.72 ) $ (1.61 )
                   
Adjustments:                  
Depreciation $ 6.1   $ 6.1         $ 24.0   $ 24.0      
Interest and other expense, net2 $ 2.8   $ 3.6         $ 11.0   $ 11.8      
Provision for income taxes $ 1.0   $ 1.0         $ 0.0   $ 0.0      
Adjusted EBITDA $ 33.0   $ 37.0         $ (14.0 ) $ (10.0 )    
                   
Weighted Average Number of Common Shares Outstanding-Diluted   28.8     28.8           28.5     28.5      
                                   

 

(1) "Direct and incremental expenses" represent costs primarily related to acquisitions for third party professional services (legal, accounting, valuation), severance and restructuring activities. 

(2) "Interest and other expense, net" excludes "Accretion expense related to the debt-discount portion of interest associated with convertible note issuance".

 

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