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8-K - FORM 8-K - ENERNOC INCd722925d8k.htm

Exhibit 99.1

 

LOGO

 

Investor Relations Contact:

Brian Norris

EnerNOC, Inc.

+1.617.532.8104

bnorris@enernoc.com

  

Media and Analyst Contact:

Robin Deliso

EnerNOC, Inc.

+1.617.692.2601

rdeliso@enernoc.com

  

EnerNOC Reports Results for First Quarter of 2014

– Company Posts Record First Quarter Revenue of $52.5 Million, Up 60% Year-Over-Year –

– Company Updates 2014 Guidance to Reflect Strong Q1 Revenue Growth and Recent M&A Activity –

Boston, MA. – May 8, 2014 — EnerNOC, Inc. (Nasdaq: ENOC), a leading provider of energy intelligence software (EIS), today announced results for the first quarter ended March 31, 2014 and updated management’s guidance for 2014.

Summary Financial Results

 

In Thousands, Except Per Share Amounts    Q1 2014     Q1 2013     % Change  

Revenue

   $ 52,508      $ 32,850        59.8

Net Loss Attributable to EnerNOC, Inc.

      

GAAP

   $ (30,413   $ (30,537     0.4

Non-GAAP1

   $ (24,303   $ (24,039     -1.1

Net Loss Per Diluted Share Attributable to EnerNOC, Inc.

      

GAAP

   $ (1.09   $ (1.12     2.7

Non-GAAP1

   $ (0.87   $ (0.88     1.1

Cash Flow From Operations

   $ (11,566   $ 6,780        N/A   

Free Cash Flow1

   $ (17,679   $ (2,158     -719.2

Adjusted EBITDA1

   $ (18,424   $ (18,507     0.4

 

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.

“Our first quarter results were highlighted by strong revenue growth, key product advances, and several strategic acquisitions that extend the capabilities of our software platform and expand our reach internationally,” said Tim Healy, Chairman and Chief Executive Officer of EnerNOC, Inc. “We are focused on delivering another strong year and extending our leadership position in the rapidly growing market for energy intelligence software and related solutions.”


Company Issues Second Quarter Guidance and Updates Full Year Guidance

The Company today issued guidance for the second quarter of 2014 and updated its previously issued guidance for the full year. The Company’s guidance is based on the current indications for its business, which may change at any time.

 

     Guidance for Quarter Ending
June 30, 2014

Estimate

   Issued on
May 8, 2014

Total Revenue (in millions)

   $40.0-$45.0

GAAP Net Loss Per Diluted Share Attributable to EnerNOC, Inc.

   ($1.30)-($1.25)

Non-GAAP Net Loss Per Diluted Share Attributable to EnerNOC, Inc.1

   ($1.07)-($1.01)

Adjusted EBITDA1 (in millions)

   ($24.0)-($22.0)

 

(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.

 

     Guidance for Year Ending
December 31, 2014

Estimate

   Issued on
February 13, 2014
   Issued on
May 8, 2014

Total Revenue (in millions)

   $435.0-$460.0    $450.0-$465.0

GAAP Net Income per Diluted Share Attributable to EnerNOC, Inc.

   $0.40-$0.50    $0.40-$0.50

Non-GAAP Net Income per Diluted Share Attributable to EnerNOC, Inc.1

   $1.25-$1.35    $1.28-$1.40

Adjusted EBITDA1 (in millions)

   $74.0-$78.0    $72.0-$76.0

 

(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 Operational Highlights

 

    The Company announced the acquisition of EnTech, the leading provider of global utility bill management (UBM) software. EnTech’s software is the global UBM solution for 8 of the Fortune 50. It is currently deployed in over 100 countries and processes over one million utility bills per year, making billing data accessible to key decision makers in finance, operations, and the C-suite. The combination of real-time energy data, utility tariffs, and monthly utility bill data on EnerNOC’s EIS platform now enables real-time visibility and forecasting of energy costs, and empowers better energy management decisions across global enterprises.


    The Company announced its expansion into continental Europe through its acquisition of Entelios AG, a leading provider of demand response solutions headquartered in Germany. Entelios is pre-qualified to offer demand response solutions by all four transmission system operators in Germany as well as major utilities with significant presence outside of Germany.

 

    The Company announced its acquisition of Activation Energy, the leading provider of demand response software and services in Ireland. This acquisition gives the Company an immediate presence in the Irish capacity market and further strengthens EnerNOC’s ability to deliver its full suite of energy intelligence software applications throughout Europe.

 

    The Company announced the general availability of its latest software platform release, which provides enterprise users improved visibility into the three main drivers of energy cost: how it is purchased, how it is used, and when it is used. The Company’s latest platform enhancements included a number of new features designed to accelerate implementation, which is critical to support the Company’s plans to bring thousands of new buildings online in the coming year. In addition, the release provides electric utilities, grid operators, and competitive energy suppliers more options and flexibility in dispatching the Company’s demand response network, including the ability to use the OpenADR 2.0 standard. With these enhancements, the Company further extended its technology lead and ability to scale in the most technologically-advanced automated demand response programs in the world.

 

    The Company announced that Chief Financial Officer Neil Moses has been appointed to the dual role of Chief Operating Officer and Chief Financial Officer. Under this expanded role, Mr. Moses will assume responsibility for the Company’s global operations, including the management of recently acquired EnTech. The Company’s President and Co-Founder, David Brewster, will continue to lead the Company’s domestic and international market development efforts, in addition to overseeing the Company’s global regulatory affairs function, while Mr. Moses will assume responsibility for the day-to-day business operations in the Company’s established markets.

 

   

The Company announced that Phil Pergola has joined the Company as Vice President of Professional Services and will be responsible for driving customer success and adoption of the Company’s software. Mr. Pergola brings nearly 20 years of software industry experience to the Company, including six years as a professional services leader at BMC Software, where he most recently served as Area Vice President. Mr. Pergola also worked at


 

BladeLogic for six years, where he held multiple leadership positions across services, support, sales, and product management. Earlier in his career, he worked at Accenture and held leadership roles at several smaller SaaS and web-hosting companies.

Company to Host Live Conference Call and Webcast

The Company’s management team plans to host a live conference call and webcast at 5:00 p.m. Eastern time today to discuss the financial results as well as management’s outlook for the business. The conference call may be accessed in the United States by dialing 1.800.230.1074 and using access code “ENOC”. The conference call may be accessed outside of the United States by dialing +1.612.234.9960 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 1.800.475.6701 or +1.320.365.3844 and using access code 324498 or by accessing the webcast replay on the Company’s investor relations website.

About EnerNOC

EnerNOC (Nasdaq:ENOC) is a leading provider of energy intelligence software (EIS). Thousands of enterprises worldwide use EnerNOC applications and professional services to bring new clarity to how they buy energy, how much they consume, and when they use it to drive operational efficiency, improve productivity, and manage energy expenses. EnerNOC’s suite of EIS applications for the enterprise include: SupplySMART™, energy supply and utility bill management applications; EfficiencySMART™, energy consumption and energy project management applications; and DemandSMART™, demand response and demand management applications. Hundreds of utilities and grid operators worldwide rely on EnerNOC applications to meet demand-side management objectives, enhance grid reliability, and provide cost-effective alternatives to traditional power supply resources. EnerNOC’s applications for utilities include EnerNOC Demand Resource™, a capacity-based agreement that provides utilities an assured level of load reduction delivered by EnerNOC on a turnkey, fully outsourced basis, and EnerNOC Demand Manager™, software-as-a-service (SaaS) that provides utilities and retailers with the tools to manage their demand response programs. EnerNOC’s Network Operations Center (NOC) offers 24x7x365 customer support. For more information, visit www.enernoc.com.

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 March 31,  
     2014     2013  

Revenues2:

    

Grid operator

   $ 35,770      $ 15,063   

Utility

     10,309        11,769   

Enterprise

     6,429        6,018   
  

 

 

   

 

 

 

Total revenues

     52,508        32,850   

Cost of revenues

     36,139        22,197   
  

 

 

   

 

 

 

Gross profit

     16,369        10,653   

Operating expenses:

    

Selling and marketing

     18,499        15,653   

General and administrative

     23,677        20,121   

Research and development

     5,175        4,820   
  

 

 

   

 

 

 

Total operating expenses

     47,351        40,594   
  

 

 

   

 

 

 

Loss from operations

     (30,982     (29,941

Other income, net

     574        67   

Interest expense

     (450     (313
  

 

 

   

 

 

 

Loss before income tax

     (30,858     (30,187

Benefit from (provision for) income tax

     425        (350
  

 

 

   

 

 

 

Net loss

     (30,433     (30,537

Net loss attributable to non controlling interest

     (20     —     
  

 

 

   

 

 

 

Net loss attributable to EnerNOC, Inc.

   $ (30,413   $ (30,537
  

 

 

   

 

 

 

Net loss per common share attributable to EnerNOC, Inc. (basic and diluted)

   $ (1.09   $ (1.12
  

 

 

   

 

 

 

Weighted average number of common shares used in computing basic and diluted net loss per share attributable to EnerNOC, Inc.

     27,923,861        27,366,612   
  

 

 

   

 

 

 

 

2 The Company has reclassified certain amounts in its condensed consolidated statements of operations for the three month period ended March 31, 2013, to conform to the 2014 presentation. The reclassifications made related to the presentation of the Company’s revenues from DemandSMART revenues and EfficiencySMART, SupplySMART and other revenues to revenues from grid operators, revenues from utilities, and revenues from enterprise customers and was done in order to provide the users of its consolidated financial statements with additional insight into how the Company and its management views and evaluates its revenues and related growth. This reclassification within the condensed consolidated statements of operations for the three month period ended March 31, 2013 had no impact on previously reported total consolidated revenues or consolidated results of operations.


EnerNOC, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value and share data)

(unaudited)

 

     March 31, 2014     December 31, 2013  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 103,698      $ 149,189   

Trade accounts receivable, net

     46,528        35,933   

Unbilled revenue

     27,507        66,675   

Capitalized incremental direct customer contract costs

     16,267        9,509   

Prepaid expenses, deposits and other current assets

     12,061        9,377   
  

 

 

   

 

 

 

Total current assets

     206,061        270,683   

Property and equipment, net

     48,425        47,419   

Goodwill and intangible assets, net

     120,153        94,290   

Capitalized incremental direct customer contract costs

     1,910        1,995   

Deposits and other assets

     2,794        1,568   
  

 

 

   

 

 

 

Total assets

   $ 379,343      $ 415,955   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 1,532      $ 2,031   

Accrued capacity payments

     58,497        76,676   

Accrued payroll and related expenses

     10,978        13,370   

Accrued expenses and other current liabilities

     14,931        12,386   

Deferred revenue

     29,281        20,625   
  

 

 

   

 

 

 

Total current liabilities

     115,219        125,088   

Deferred tax liability

     6,938        6,211   

Deferred revenue

     7,997        6,819   

Other liabilities

     8,402        8,342   
  

 

 

   

 

 

 

Total long-term liabilities

     23,337        21,372   

Stockholders’ equity:

    

Common stock, $0.001 par value; 50,000,000 shares authorized, 30,249,264 and 29,920,807 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively

     30        30   

Additional paid-in capital

     354,140        353,354  

Accumulated other comprehensive loss

     (1,987     (2,535

Accumulated deficit

     (111,767     (81,354
  

 

 

   

 

 

 

Total EnerNOC, Inc. stockholders’ equity

     240,416        269,495   

Non controlling interest

     371          
  

 

 

   

 

 

 

Total stockholders’ equity

     240,787        269,495   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 379,343      $ 415,955   
  

 

 

   

 

 

 


EnerNOC, Inc.

Condensed Consolidated Statements of Cash Flow Data

(in thousands)

(unaudited)

 

     Three Months Ended  
     March 31,  
     2014     2013  

Cash (used in) provided by operating activities

   $ (11,566   $ 6,780   

Cash used in investing activities

     (30,950     (7,374

Cash (used in) provided by financing activities

     (3,119     489   

Effects of exchange rate changes on cash and cash equivalents

     144        (109
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (45,491     (214

Cash and cash equivalents at beginning of period

     149,189        115,041   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 103,698      $ 114,827   
  

 

 

   

 

 

 


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 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 for the three month periods ended March 31, 2014 and 2013, respectively, as well as reasons for excluding these individual items:

 

    Management defines non-GAAP net (loss) income attributable to EnerNOC, Inc. as net (loss) income attributable to EnerNOC, Inc. before expenses related to stock-based compensation and amortization expenses related to acquisition-related intangible assets, net of related tax effects.

 

    Management defines adjusted EBITDA as net (loss) income attributable to EnerNOC, Inc., excluding depreciation, amortization, stock-based compensation, direct and incremental expenses related to acquisitions or divestitures, interest, income taxes and other (expense) income, net. 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 management’s estimate of the useful life of tangible and intangible assets. These estimates could vary from actual performance of the asset, are based on historical cost incurred to build out the Company’s deployed network and may not be indicative of current or future capital expenditures.

 

    Management defines free cash flow as net cash provided by operating activities less capital expenditures. 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) Income Attributable to EnerNOC, Inc. And Net (Loss) Income Per Share Attributable to EnerNOC, Inc.

(in thousands, except share and per share data)

(Unaudited)

 

     Three Months Ended March 31,  
     2014     2013  

GAAP net loss attributable to EnerNOC, Inc.

   $ (30,413   $ (30,537

ADD: Stock-based compensation (1)

     4,227        4,704   

ADD: Amortization expense of acquired intangible assets (1)

     1,883        1,794   
  

 

 

   

 

 

 

Non-GAAP net loss attributable to EnerNOC, Inc.

   $ (24,303   $ (24,039
  

 

 

   

 

 

 

GAAP net loss per diluted share attributable to EnerNOC, Inc.

   $ (1.09   $ (1.12

ADD: Stock-based compensation (1)

     0.15        0.17   

ADD: Amortization expense of acquired intangible assets (1)

     0.07        0.07   
  

 

 

   

 

 

 

Non-GAAP net loss per diluted share attributable to EnerNOC, Inc.

   $ (0.87   $ (0.88
  

 

 

   

 

 

 

Weighted average number of diluted common shares outstanding

     27,923,861        27,366,612   
  

 

 

   

 

 

 

 

(1) The non-GAAP adjustments would have no impact on the provision for income taxes recorded during the three month periods ended March 31, 2014 or 2013, respectively.


EnerNOC, Inc.

Reconciliation of Adjusted EBITDA

(in thousands)

(unaudited)

 

     Three Months Ended March 31,  
     2014     2013  

Net loss attributable to EnerNOC, Inc.

   $ (30,413   $ (30,537

Add back:

    

Depreciation and amortization

     7,365        6,730   

Stock-based compensation expense

     4,227        4,704   

Direct and incremental expenses related to acquisitions or divestitures

     946        —     

Other income, net

     (574     (67

Interest expense

     450        313   

(Benefit from) provision for income tax

     (425     350   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ (18,424   $ (18,507
  

 

 

   

 

 

 

EnerNOC, Inc.

Reconciliation of Free Cash Flow

(in thousands)

(unaudited)

 

     Three Months Ended March 31,  
     2014     2013  

Net cash (used in) provided by operating activities

   $ (11,566   $ 6,780   

Subtract:

    

Purchases of property and equipment

     (6,113     (8,938
  

 

 

   

 

 

 

Free cash flow

   $ (17,679   $ (2,158
  

 

 

   

 

 

 


Non-GAAP Financial Guidance

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

 

     Three Months Ending     Twelve Months Ending  
     June 30, 2014     December 31, 2014  
                 Per Diluted Share                   Per Diluted Share  
In Millions, Except Per Share Amounts    Low     High     Low     High     Low      High      Low      High  

Projected GAAP Net (Loss) Income Attributable to EnerNOC, Inc.

   ($ 37.0   ($ 35.6   ($ 1.30   ($ 1.25   $ 12.0       $ 15.0       $ 0.40       $ 0.50   

Adjustments:

                   

Stock-based compensation

     4.1        4.2        0.14        0.15        16.2         16.5         0.54         0.55   

Amortization expense of acquired intangible assets

     2.5        2.6        0.09        0.09        10.2         10.5         0.34         0.35   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Projected Non-GAAP Net (Loss) Income Attributable to EnerNOC, Inc.

     (30.4     (28.8     (1.07     (1.01     38.4         42.0         1.28         1.40   

Adjustments:

                   

Depreciation

     5.6        5.7            23.6         24.0         

Direct and incremental expenses related to acquisitions or divestitures

     1.0        1.0            2.0         2.0         

Interest and other expense, net

     0.5        0.5            2.0         2.0         

(Benefit from) provision for income taxes

     (0.7     (0.4         6.0         6.0         
  

 

 

   

 

 

       

 

 

    

 

 

       

Adjusted EBITDA

   ($ 24.0   ($ 22.0       $ 72.0       $ 76.0         
  

 

 

   

 

 

       

 

 

    

 

 

       

Weighted Average Number of Common Shares Outstanding-Diluted

     28.5        28.5            30.0         30.0