Ameresco Reports Fourth Quarter and Full Year 2022 Financial Results

Record Year for Revenue and Profit

Fourth Quarter Results Reflected Revenue Push-Outs due to Scheduling Changes

Continued European Expansion

Guiding to Increased Adjusted EBITDA in 2023

Reiterating 2024 $300 Million Adjusted EBITDA Target

Full Year 2022 Financial Highlights:

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

• Revenues of $1,824.4 million, up 50%
• Net income attributable to common shareholders of $94.9 million, up 35%
• GAAP EPS of $1.78, up 32%
• Non-GAAP EPS of $1.87, up 24%
• Adjusted EBITDA of $204.5 million, up 34%
• Fifth consecutive year of record revenue and profit
• Visibility from Projects, Assets and O&M is $6+ billion

Fourth Quarter 2022 Financial Highlights:

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

• Revenues of $331.7 million, down 20%
• Net income attributable to common shareholders of $17.9 million, down 36%
• GAAP EPS of $0.34, down 36%
• Non-GAAP EPS of $0.35, down 34%
• Adjusted EBITDA of $41.3 million, down 15%

FRAMINGHAM, Mass.–(BUSINESS WIRE)–#carbonreduction–Ameresco, Inc. (NYSE:AMRC), a leading cleantech integrator specializing in energy efficiency and renewable energy, today announced financial results for the fiscal quarter ended December 31, 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 www.ameresco.com. Reconciliations of Non-GAAP measures to the appropriate GAAP measures are included herein.

“2022 was a great year and it marked Ameresco’s fifth consecutive year of record revenue and profit, growing revenue and adjusted EBITDA by 50% and 34%, respectively. This growth underscores the importance of our advanced clean technology portfolio, the strong fundamentals of our expanding markets, and our ability to consistently execute and capture additional market share. We ended the year with over $6 billion in visibility from the combination of our total project backlog, Energy Assets and O&M revenue backlog.

We made great strides in expanding our European footprint by winning of the transformative Bristol City Council decarbonization contract and acquiring a wind farm in Ireland. In addition, today we announced an agreement to acquire Enerqos Solutions S.r.l., a small but meaningful acquisition of an energy services company in Italy to further expand our European footprint. We anticipate further activity in Europe in 2023 as we continue to strategically extend our presence to take advantage of this large and growing market opportunity.

While execution remains strong, fourth quarter results reflected the push-out of revenue related to short term scheduling changes in implementation, supply chain issues and unplanned maintenance at two of our RNG facilities. In addition, utility and permitting delays impacted the timing of assets coming on-line. Despite the delays, we were able to place 24 MWe of Energy Assets in service during the quarter. We also added 32 MWe of new assets to our Assets in Development bringing the total to 470 net MWe.

Market demand conditions remain robust. In addition, we believe the recently enacted Inflation Reduction Act (IRA) will be the most transformational piece of legislation affecting our industry, further expanding our addressable market opportunities. We continue the dialogue with our customers as they assess how to prioritize and time their projects to optimize its impact.

The SCE projects progressed further in the quarter. We are continuing discussions regarding the applicability and scope of any force majeure relief resulting from COVID-19 and weather related delays. Our relationship with SCE continues to be cooperative, and we anticipate the projects to be in service and to achieve substantial completion milestones prior to the summer of 2023.

In the fourth quarter we were honored to be named a finalist in the S&P Global Platts 2022 Global Energy Awards for the Infrastructure Project of the Year and the Corporate Impact and Sustained Commitment categories. Platts highlighted our work at Fort Bragg, in collaboration with Duke Energy, to install the largest floating solar array in the Southeast,” concluded George P. Sakellaris, President and Chief Executive Officer.

Fourth Quarter Financial Results

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

Total revenue was 20% lower, driven by a 26% decrease in Project revenue. This decline primarily reflects the difficult comparisons to prior periods when we recognized significant revenue from the SCE projects. Energy Asset revenue declined 6% due to unscheduled maintenance at two of our RNG facilities, combined with lower RIN prices. O&M revenue increased 5% as the company continued to add long-term O&M contracts, especially on larger Federal government projects. Other revenue increased 16% primarily due to strength in integrated PV sales for remote power applications.

Gross margin of 18.6% reflects an increase from 17.1% in the previous year given the reduced contribution from the lower margin SCE projects. Net income attributable to common shareholders and adjusted EBITDA were $17.9 million and $41.3 million, respectively. The company ended the quarter with approximately $116 million of available cash. During the quarter, the Company also secured $137 million in project financing bringing the year’s total financing to over $468 million to continue supporting our growth.

(in millions)	4Q 2022			4Q 2021
	Revenue	Net Income (1)	Adj. EBITDA	Revenue	Net Income (1)	Adj. EBITDA
Projects	$247.2	$7.8	$15.5	$333.0	$11.4	$19.4
Energy Assets	$39.1	$7.0	$20.1	$41.8	$13.9	$24.7
O&M	$21.6	$2.0	$3.3	$20.5	$2.6	$3.9
Other	$23.8	$1.1	$2.3	$20.6	$0.3	$0.5
Total (2)	$331.7	$17.9	$41.2	$415.9	$28.2	$48.5
(1) Net Income represents net income attributable to common shareholders
(2) Numbers in table may not sum due to rounding.

($ in millions)		At December 31, 2022
Awarded Project Backlog (1)		$1,639
Contracted Project Backlog		$1,001
Total Project Backlog		$2,640
O&M Revenue Backlog		$1,231
Energy Asset Visibility (2)		$2,300
Operating Energy Assets		389 MWe
Ameresco’s Net Assets in Development (3)		470 MWe

(1) Customer contracts that have not been signed yet

(2) Estimated contracted revenue and incentives during PPA period plus estimated additional revenue from operating RNG assets over a 20-year period, assuming RINs at $1.50/gallon and brown gas at $3.50/MMBtu with $3.00/MMBtu for LCFS on certain projects.

(3) Net MWe capacity includes only our share of any jointly owned assets

Project Highlights

In the Fourth Quarter of 2022:

• The Company continued to expand its streetlight portfolio by signing new contracts in Philadelphia, PA, Memphis, TN, and Chandler, AZ. The Philly Streetlight Improvement Project is a comprehensive 120,000 LED streetlight, controls, and networking project. The street light modernization project in Chandler will replace their high-pressure sodium fixtures across the city with state-of-the-art LED fixtures and provide control and monitoring on these fixtures.
• Ameresco continued to expand its K-12 footprint across New York, adding more energy efficiency and solar projects to schools in Lakeland and Ossining. These schools will benefit with optimized learning environments for their students and teachers while saving money and reducing their carbon footprint.
• Ameresco’s team in Canada continued to expand its federal footprint with an 8.8MW solar project with the CFB Gagetown, and a 40+ facility energy efficiency project with CBSA and Transport Canada National.
• Ameresco continued to expand its C&I footprint with a new solar carport project in Buckeye, AZ. This project contracted with H&M Company will build solar carports for shaded parking and energy offset for a new distribution center for Ross Stores, Inc.

Asset Highlights

In the Fourth Quarter of 2022:

• Ameresco’s Assets in Development ended the quarter at 530 MWe. After subtracting Ameresco’s partners’ minority interests, Ameresco’s owned capacity of Assets in Development at quarter end was 470 MWe.
• The Company acquired an operating three-turbine 5MW wind farm in West County Cork, Ireland.
• The County of Maui awarded Ameresco the rights to the landfill gas at the County’s Central Maui Landfill. Ameresco will build a landfill gas electric generating facility using 100% of the landfill gas available. Ameresco will design, engineer, construct, operate and maintain the 3.2 MW facility, which Ameresco will own.
• The Company and Bright Canyon Energy broke ground on the Kūpono Solar Project at Joint Base Pearl Harbor-Hickam. The 131-Acre 42MW solar plant and 42MW/168MWh battery storage project is designed to deliver clean, renewable energy to Hawaiian Electric’s (HECO) grid on the island of O‘ahu.

Summary and Outlook

“2022 was an outstanding year of record performance across key financial metrics. Our future opportunities remain compelling, and we expect the number and complexity of projects to continue to increase as the IRA’s incentives are expected to lead to an estimated $3.5 trillion in investment in new energy supply and infrastructure onto the grid, the majority of which will be renewable sources. Ameresco is well positioned to capture an increasing share of this opportunity given our proven track record of execution on these types of large and complex solutions as shown by our SCE and Bristol projects. These secular growth drivers, together with the breadth of our technological expertise and proven track record, underpin our confidence in Ameresco’s prospects. As we continue to position the company to capture the global growth opportunities on the horizon, we are pleased to reiterate our $300 million adjusted EBITDA target for 2024.

2023 guidance, included in the table below, anticipates adjusted EBITDA growth of 5% at the midpoint. We are pleased to be guiding to growth in adjusted EBITDA even as we face difficult revenue comparisons due to the large SCE projects. Our ability to continue to grow our adjusted EBITDA is a testament to our long term diversified business model, designed for our profitable and growing Energy Asset and O&M businesses to offset potential short-term timing-related volatility in the Projects business. We anticipate placing between 80 and 100 MWe of energy assets in service. This includes the three RNG plants we had expected to be mechanically complete by the end of 2022. Several additional RNG assets are in the late stages of development and we expect that 4 or 5 of these will come online during 2024. Our expected capex for 2023 is $325 million to $375 million, the majority of which we expect to fund with non-recourse debt.

We estimate first quarter revenue and adjusted EBITDA to be in the range of $220 million to $240 million and $20 million to $30 million, respectively and slightly positive non-GAAP EPS. We expect the remainder of the year to follow our normal cadence with progressive improvement throughout the year.

We look forward to welcoming analysts and institutional investors on May 11^th to our London Investor Day. This event will feature presentations and panels by key executives from our leadership team. The conversations will focus on main growth opportunities. We also will be discussing Ameresco’s existing European footprint and plans for expansion in that geography,” Mr. Sakellaris concluded.

FY 2023 Guidance Ranges
Revenue	$1.45 billion	$1.55 billion
Gross Margin	19.5%	20.0%
Adjusted EBITDA	$210 million	$220 million
Interest Expense & Other	$30 million	$35 million
Effective Tax Rate	10%	5%
Non-GAAP EPS	$1.80	$1.90

The Company’s guidance excludes the impact of any redeemable non-controlling interest activity related to tax-equity partnerships, one-time charges, asset impairment charges, changes in contingent consideration, restructuring activities, as well as any related tax impact.

Conference Call/Webcast Information

The Company will host a conference call today at 4:30 p.m. ET to discuss fourth quarter and full year 2022 financial results, business and financial outlook and other business highlights. Participants may access the earnings conference call by pre-registering here at least fifteen minutes in advance. 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 “Investors” section of the Company’s website at www.ameresco.com. If you are unable to listen to the live call, 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 Europe. 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 1,200 employees providing local expertise in the United States, Canada, and Europe. 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, visibility and backlog, as well as estimated future revenues, net income, adjusted EBITDA, Non-GAAP EPS, gross margin, capital investments, other financial guidance, statements about our agreement with SCE including the impact of any delays, the closing of the Enerqos acquisition, and the impact of the IRA and macroeconomic conditions on our business, longer term outlook, 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 or at all; the timing of work we do on projects where we recognize revenue on a percentage of completion basis, including the ability to perform under signed contracts without delay and in accordance with their terms; demand for our energy efficiency and renewable energy solutions; our ability to complete and operate our projects on a profitable basis and as committed to our customers; our ability to arrange financing to fund our operations and projects and to comply with covenants in our existing debt agreements; changes in federal, state and local government policies and programs related to energy efficiency and renewable energy and the fiscal health of the government; the ability of customers to cancel or defer contracts included in our backlog; the output and performance of our energy plants and energy projects; the effects of our acquisitions and joint ventures; 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 cost of labor and equipment particularly given global supply chain challenges and global trade conflicts; our reliance on third parties for our construction and installation work; the addition of new customers or the loss of existing customers; the impact of macroeconomic challenges, weather related events and climate change on our business; global supply chain challenges, component shortages and inflationary pressures; 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; cybersecurity incidents and breaches; and other factors discussed in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. 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. CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts)
	December 31,
	2022				2021
ASSETS
Current assets:
Cash and cash equivalents	$	115,534			$	50,450
Restricted cash		20,782				24,267
Accounts receivable, net		174,009				161,970
Accounts receivable retainage		38,057				43,067
Costs and estimated earnings in excess of billings		576,363				306,172
Inventory, net		14,218				8,807
Prepaid expenses and other current assets		38,617				25,377
Income tax receivable		7,746				5,261
Project development costs, net		16,025				13,214
Total current assets		1,001,351				638,585
Federal ESPC receivable		509,507				557,669
Property and equipment, net		15,707				13,117
Energy assets, net		1,181,525				856,531
Goodwill, net		70,633				71,157
Intangible assets, net		4,693				6,961
Operating lease assets		38,224				41,982
Restricted cash, non-current portion		13,572				12,337
Deferred income tax assets, net		3,045				3,703
Other assets		38,564				22,779
Total assets	$	2,876,821			$	2,224,821
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portions of long-term debt and financing lease liabilities		331,479				78,934
Accounts payable		349,126				308,963
Accrued expenses and other current liabilities		89,166				43,311
Current portion of operating lease liabilities		5,829				6,276
Billings in excess of cost and estimated earnings		34,796				35,918
Income taxes payable		1,672				822
Total current liabilities		812,068				474,224
Long-term debt and financing lease liabilities, net of current portion, unamortized discount and debt issuance costs		568,635				377,184
Federal ESPC liabilities		478,497				532,287
Deferred income tax liabilities, net		9,181				3,871
Deferred grant income		7,590				8,498
Long-term operating lease liabilities, net of current portion		31,703				35,135
Other liabilities		49,493				43,176
Commitments and contingencies:
Redeemable non-controlling interests, net	$	46,623			$	46,182
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2022 and 2021		—				—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 36,050,157 shares issued and 33,948,362 shares outstanding at December 31, 2022, 35,818,104 shares issued and 33,716,309 shares outstanding at December 31, 2021		3				3
Class B common stock, $0.0001 par value, 144,000,000 shares authorized, 18,000,000 shares issued and outstanding at December 31, 2022 and 2021		2				2
Additional paid-in capital		306,314				283,982
Retained earnings		533,549				438,732
Accumulated other comprehensive loss, net		(4,051	)			(6,667	)
Treasury stock, at cost, 2,101,795 shares at December 31, 2022 and 2021		(11,788	)			(11,788	)
Stockholders’ equity before non-controlling interest		824,029				704,264
Non-controlling interests		49,002				—
Total stockholders’ equity		873,031				704,264
Total liabilities, redeemable non-controlling interests and stockholders’ equity	$	2,876,821			$	2,224,821

AMERESCO, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts)
	Three Months Ended December 31,								Year Ended December 31,
	2022				2021				2022				2021
	(Unaudited)				(Unaudited)
Revenues	$	331,727			$	415,893			$	1,824,422			$	1,215,697
Cost of revenues		270,131				344,580				1,533,589				985,340
Gross profit		61,596				71,313				290,833				230,357
Selling, general and administrative expenses		39,282				39,272				157,841				134,923
Operating income		22,314				32,041				132,992				95,434
Other expenses, net		7,397				3,611				27,273				17,290
Income before income taxes		14,917				28,430				105,719				78,144
Income tax expense (benefit)		(3,726	)			(1,164	)			7,170				(2,047	)
Net income		18,643				29,594				98,549				80,191
Net income attributable to non-controlling interest and redeemable non-controlling interest		(708	)			(1,388	)			(3,623	)			(9,733	)
Net income attributable to common shareholders	$	17,935			$	28,206			$	94,926			$	70,458
Net income per share attributable to common shareholders:
Basic	$	0.34			$	0.55			$	1.83			$	1.38
Diluted	$	0.34			$	0.53			$	1.78			$	1.35
Weighted average common shares outstanding:
Basic		51,925				51,644				51,841				50,855
Diluted		53,332				53,018				53,278				52,268

AMERESCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
	Year Ended December 31,
	2022				2021
Cash flows from operating activities:
Net income	$	98,549			$	80,191
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation of energy assets, net		49,755				43,113
Depreciation of property and equipment		2,665				3,143
Amortization of debt discount and debt issuance costs		4,211				2,849
Amortization of intangible assets		1,858				321
Net increase in fair value of contingent consideration		1,614				—
Accretion of ARO		146				123
(Recoveries of) provision for bad debts		(382	)			187
Impairment of long-lived assets / loss on disposal		937				1,901
Gain on sale of equity investments		—				(575	)
(Earnings) loss of unconsolidated entities		(1,647	)			118
Net (gain) loss from derivatives		(212	)			240
Stock-based compensation expense		15,046				8,716
Deferred income taxes, net		3,918				(4,760	)
Unrealized foreign exchange (gain) loss		(123	)			142
Changes in operating assets and liabilities:
Accounts receivable		3,477				(15,953	)
Accounts receivable retainage		4,716				(12,882	)
Federal ESPC receivable		(259,499	)			(249,728	)
Inventory, net		(5,411	)			(232	)
Costs and estimated earnings in excess of billings		(272,629	)			(113,192	)
Prepaid expenses and other current assets		(3,182	)			1,770
Project development costs		(685	)			1,949
Other assets		(11,327	)			(1,870	)
Accounts payable, accrued expenses, and other current liabilities		36,155				83,473
Billings in excess of cost and estimated earnings		449				(693	)
Other liabilities		(5,074	)			(5,036	)
Income taxes payable, net		(1,613	)			4,389
Cash flows from operating activities		(338,288	)			(172,296	)
Cash flows from investing activities:
Purchases of property and equipment		(5,296	)			(4,896	)
Capital investment in energy assets		(304,596	)			(170,277	)
Capital investment in major maintenance of energy assets		(18,007	)			(8,602	)
Grant award proceeds for energy assets		—				774
Proceeds from sale of equity investment		—				1,672
Acquisitions, net of cash received		—				(14,928	)
Contributions to equity investment		—				(9,000	)
Loans to joint venture investments		(459	)			—
Cash flows from investing activities	$	(328,358	)		$	(205,257	)
	Year Ended December 31,
	2022				2021
Cash flows from financing activities:
Proceeds from equity offering, net of offering costs	$	—			$	120,084
Payments of debt discount and debt issuance costs		(3,695	)			(2,919	)
Proceeds from exercises of options and ESPP		5,963				6,927
Proceeds from (payments on) senior secured revolving credit facility, net		137,900				(8,073	)
Proceeds from long-term debt financings		468,476				185,994
Proceeds from Federal ESPC projects		238,360				159,216
Net proceeds for customer energy asset projects		14,341				2,033
Investment fund call option exercise		(839	)			(1,000	)
Contributions from non-controlling interest		32,706				—
(Distributions to) proceeds from redeemable non-controlling interests, net		(1,128	)			1,399
Payments on long-term debt and financing leases		(161,857	)			(98,200	)
Cash flows from financing activities		730,227				365,461
Effect of exchange rate changes on cash		(747	)			309
Net increase (decrease) in cash, cash equivalents, and restricted cash		62,834				(11,783	)
Cash, cash equivalents, and restricted cash, beginning of year		87,054				98,837
Cash, cash equivalents, and restricted cash, end of year	$	149,888			$	87,054

Contacts

Media Relations

Leila Dillon, 508.661.2264, news@ameresco.com

Investor Relations

Eric Prouty, AdvisIRy Partners 212.750.5800,

eric.prouty@advisiry.com
Lynn Morgen, AdvisIRy Partners, 212.750.5800,

lynn.morgen@advisiry.com

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