Ameresco Reports Fourth Quarter and Full Year 2021 Financial Results

– Strong Q4 Performance Caps Another Year of Robust Growth and Profitability –

– Record Total Backlog and Recurring Revenue Streams Provide Multi-Year Revenue Visibility of Over $5 Billion –

– Guiding 2022 for Accelerated Revenue and Profitability Growth –

Fourth Quarter 2021 Financial Highlights:

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

• Revenues of $415.9 million, up 32%
• Net income attributable to common shareholders of $28.2 million, up 20%
• GAAP EPS of $0.53, up 13%
• Non-GAAP EPS of $0.50, up 6%
• Adjusted EBITDA of $48.5 million, up 36%

Full Year 2021 Financial Highlights:

• Revenues of $1.2 billion, up 18%
• Net income attributable to common shareholders of $70.5 million, up 30%
• GAAP EPS of $1.35, up 23%
• Non-GAAP EPS of $1.51, up 28%
• Adjusted EBITDA of $152.7 million, up 30%

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, 2021. The Company has 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 “Investor Relations” section of the Company’s website at www.ameresco.com. Reconciliations of Non-GAAP measures to the appropriate GAAP measures are included herein.

“Fourth quarter results capped a year of outstanding performance for Ameresco, demonstrating the strength of our diversified business model. Revenue growth was led by our Projects business strengthened by the Southern California Edison (SCE) design/build contract and was complemented by strong performance from our recurring revenue Energy Asset and O&M businesses. We ended the year with 343MWe of operating assets representing 22% year-over-year growth while continuing to expand our assets in development to 414MWe. Ameresco exited 2021 with total project backlog of over $3 billion and more than $2 billion in estimated contracted revenue and incentives from our recurring revenue O&M and Energy Asset businesses. This record multi-year revenue visibility sets the stage for robust long term profit growth. In addition, Ameresco released it’s 2021 ESG report, centering on the theme of Doing Well by Doing Good: Innovation. Action. Integrity. This report highlights Ameresco’s practices pertaining to business and operations, environmental advocacy and impact, employee engagement, giving back, health and safety, and corporate responsibility,” said George P. Sakellaris, President and Chief Executive Officer.

“In 2021 Ameresco was awarded the largest contract in its history providing utility scale battery energy storage systems (BESS) at three sites for SCE. Despite the well-publicized global supply chain challenges, we are pleased to report that the design/build project is proceeding as expected. Importantly this contract is representative of the types of the projects that are emerging as the power industry addresses grid stability and reliability. Our track record of execution on projects of increasing size and complexity puts Ameresco in a distinct competitive advantage to capture similar opportunities in the periods ahead. This project is also an excellent example of our ever expanding addressable market.”

Fourth Quarter Financial Results

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

Total revenue was up 32% with broad based growth across all our business lines. The Company began executing on and recognizing revenue related to the SCE BESS project leading to a 36% increase in Project revenue. The growth in our operating asset base, increased performance of existing assets and strong RIN prices drove a 35% growth in Energy Asset revenue. Gross margin was 17.1%, in line with our expectations given the impact from the lower gross margin profile of the SCE design/build project.

(in millions)	4Q 2021			4Q 2020
	Revenue	Net Income (1)	Adj. EBITDA	Revenue	Net Income (Loss) (1)	Adj. EBITDA
Projects	$333.0	$11.4	$19.4	$244.8	$13.9	$15.7
Energy Assets	$41.8	$13.9	$24.7	$30.9	$7.6	$16.4
O&M	$20.5	$2.6	$3.9	$19.1	$2.3	$3.2
Other	$20.6	$0.3	$0.5	$19.5	$(0.3)	$0.4
Total (2)	$415.9	$28.2	$48.5	$314.3	$23.5	$35.7
(1) Net Income (Loss) represents net income (loss) attributable to common shareholders
(2) Numbers in table may not foot due to rounding.
($ in millions)				At December 31, 2021
Awarded Project Backlog *				$1,543
Contracted Project Backlog				$1,509
Total Project Backlog				$3,052
O&M Revenue Backlog				$1,132
Energy Asset Visibility **				$1,050
Operating Energy Assets				343 MWe
Assets in Development				414 MWe

* customer contracts that have not been signed yet

** estimated contracted revenue and incentives on our operating Energy Assets, which may vary with actual production and future values of certain environmental attributes

Project Highlights

In the fourth quarter of 2021:

• We entered into the largest contract in our history with SCE to design and build three grid scale BESSs for a total of 537.5 MW / 2.15 GWH.
• Our Federal Solutions Group won a $43 million Energy Savings Performance Contract with the United States Coast Guard at its Petaluma training center, which includes a fully integrated microgrid with solar power generation and a BESS.

Asset Highlights

In the fourth quarter of 2021:

• Ameresco brought 26MWe into operation while adding 33MWe (gross) to our Assets in Development, bringing our total to 414MWe.
• Entered into a 15-year Energy as a Service agreement with Kauai Beach Resort.
• Reached commercial operations for a comprehensive microgrid and facility renewal project at the London District Catholic School Board’s John Paul II Catholic Secondary School.

Summary and Outlook

“We are pleased to provide guidance for what we expect to be another year of strong growth in 2022. Specifically, we expect revenues in the range of $1.83 billion to $1.87 billion, Adjusted EBITDA of $200 million to $210 million and Non-GAAP EPS to range from $1.85 to $1.95, representing year-over-year growth of 52%, 34% and 26% at the midpoints. During 2022, we anticipate placing between 60 and 80 MWe of energy assets in service, while investing approximately $225 million to $275 million in capital in 2022, the majority of which we expect to fund with non-recourse debt.

“2022 quarterly cadence will be meaningfully impacted by the timing of the SCE BESS contract. We anticipate first quarter revenue will be sequentially flat with our strong 2021 fourth quarter with total gross margin at approximately 14.5%. Revenue from the SCE BESS project is expected to peak during the second quarter, driving an approximately 40% sequential total revenue increase, with total gross margin for the quarter expected to be closer to 14.0%. Third quarter total revenue is expected to look similar to the first quarter, but total gross margin is expected to be approximately 17.5% due to project mix.”

“We expect that 2022 will be another record year for Ameresco. Our addressable markets continue to expand, driven by strong long term industry growth trends. These trends, together with the breadth of our technological expertise and proven track record position Ameresco to benefit from the growing number of opportunities in front of us. I have never been more excited about the prospects for Ameresco,” Mr. Sakellaris concluded.

FY 2022 Guidance Ranges
Revenue	$1.83 billion	$1.87 billion
Gross Margin	15.5%	16.5%
Adjusted EBITDA	$200 million	$210 million
Interest Expense & Other	$25 million	$27 million
Effective Tax Rate	13%	17%
Non-GAAP EPS	$1.85	$1.95

The Company’s guidance excludes the impact of any non-controlling interest activity, one-time charges, asset impairment charges, restructuring activities, as well as any related tax impact.

Conference Call/Webcast Information

The Company will host a conference call today at 4:30 p.m. ET to discuss results. The conference call will be available via the following dial in numbers:

• U.S. Participants: Dial +1 (877) 359-9508 (Access Code: 7944909)
• International Participants: Dial +1 (224) 357-2393 (Access Code: 7944909)

Participants are advised to dial into the call at least ten minutes prior to register. 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 “Investor Relations” section of the Company’s website at www.ameresco.com. 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 the United Kingdom. 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 and backlog, as well as estimated future revenues, net income, adjusted EBITDA, Non-GAAP EPS, capital investments, other financial guidance, statements about our agreement with SCE, 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 recently signed contracts without delay; demand for our energy efficiency and renewable energy solutions; 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 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 costs of labor and equipment particularly given global supply chain challenges; our reliance on third parties for our construction and installation work; the addition of new customers or the loss of existing customers including our reliance on the agreement with SCE for a significant portion of our revenues in 2022; the impact from Covid-19 on our business; 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 Annual Report on Form 10-K for the year ended December 31, 2021, filed with the U.S. Securities and Exchange Commission (SEC) on March 1, 2022. 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,
		2021				2020
ASSETS
Current assets:
Cash and cash equivalents	$	50,450			$	66,422
Restricted cash		24,267				22,063
Accounts receivable, net		161,970				125,010
Accounts receivable retainage		43,067				30,189
Costs and estimated earnings in excess of billings		306,172				185,960
Inventory, net		8,807				8,575
Prepaid expenses and other current assets		25,377				26,854
Income tax receivable		5,261				9,803
Project development costs, net		13,214				15,839
Total current assets		638,585				490,715
Federal ESPC receivable		557,669				396,725
Property and equipment, net		13,117				8,982
Energy assets, net		856,531				729,378
Goodwill, net		71,157				58,714
Intangible assets, net		6,961				927
Operating lease assets		41,982				39,151
Restricted cash, non-current portion		12,337				10,352
Deferred income tax assets, net		3,703				3,864
Other assets		22,779				15,307
Total assets	$	2,224,821			$	1,754,115
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portions of long-term debt and financing lease liabilities	$	78,934			$	69,362
Accounts payable		308,963				230,916
Accrued expenses and other current liabilities		43,311				41,748
Current portion of operating lease liabilities		6,276				6,106
Billings in excess of cost and estimated earnings		35,918				33,984
Income taxes payable		822				981
Total current liabilities		474,224				383,097
Long-term debt and financing lease liabilities, net of current portion, unamortized discount and debt issuance costs		377,184				311,674
Federal ESPC liabilities		532,287				440,223
Deferred income tax liabilities, net		3,871				6,227
Deferred grant income		8,498				8,271
Long-term operating lease liabilities, net of current portion		35,135				35,300
Other liabilities		43,176				37,660
Commitments and contingencies
Redeemable non-controlling interests	$	46,182			$	38,850
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding at December 31, 2021 and 2020		—				—
Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 35,818,104 shares issued and 33,716,309 shares outstanding at December 31, 2021, 32,326,449 shares issued and 30,224,654 shares outstanding at December 31, 2020		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, 2021 and 2020		2				2
Additional paid-in capital		283,982				145,496
Retained earnings		438,732				368,390
Accumulated other comprehensive loss, net		(6,667	)			(9,290	)
Treasury stock, at cost, 2,101,795 shares at December 31, 2021 and 2020		(11,788	)			(11,788	)
Total stockholder’s equity		704,264				492,813
Total liabilities, redeemable non-controlling interests and stockholders’ equity	$	2,224,821			$	1,754,115

AMERESCO, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
	Three Months Ended December 31,								Twelve Months Ended December 31,
		2021				2020				2021				2020
	(Unaudited)				(Unaudited)
Revenues	$	415,893			$	314,319			$	1,215,697			$	1,032,275
Cost of revenues		344,580				256,098				985,340				844,726
Gross profit		71,313				58,221				230,357				187,549
Selling, general and administrative expenses		39,272				33,647				134,923				116,050
Operating income		32,041				24,574				95,434				71,499
Other expenses, net		3,611				1,904				17,290				15,071
Income before income taxes		28,430				22,670				78,144				56,428
Income tax benefit		(1,164	)			(1,091	)			(2,047	)			(494	)
Net income		29,594				23,761				80,191				56,922
Net income attributable to redeemable non-controlling interest		(1,388	)			(276	)			(9,733	)			(2,870	)
Net income attributable to common shareholders	$	28,206			$	23,485			$	70,458			$	54,052
Net income per share attributable to common shareholders:
Basic	$	0.55			$	0.49			$	1.38			$	1.13
Diluted	$	0.53			$	0.47			$	1.35			$	1.10
Weighted average common shares outstanding:
Basic		51,644				48,015				50,855				47,702
Diluted		53,018				49,440				52,268				49,006

AMERESCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
	Year Ended December 31,
		2021				2020
Cash flows from operating activities:
Net income	$	80,191			$	56,922
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation of energy assets		43,113				38,039
Depreciation of property and equipment		3,143				3,317
Amortization of debt discount and debt issuance costs		2,849				2,686
Amortization of intangible assets		321				685
Accretion of ARO and contingent consideration		123				93
Provision for bad debts		187				282
Impairment of long-lived assets / loss on disposal		1,901				2,696
Gain on sale of equity investments		(575	)			—
Net loss (gain) from derivatives		240				(705	)
Stock-based compensation expense		8,716				1,933
Deferred income taxes, net		(4,760	)			3,401
Unrealized foreign exchange loss (gain), net		142				(306	)
Changes in operating assets and liabilities:
Accounts receivable		(15,953	)			(24,178	)
Accounts receivable retainage		(12,882	)			(13,113	)
Federal ESPC receivable		(249,728	)			(227,078	)
Inventory, net		(232	)			660
Costs and estimated earnings in excess of billings		(113,192	)			19,474
Prepaid expenses and other current assets		1,770				517
Project development costs		1,949				(3,085	)
Other assets		(1,752	)			536
Accounts payable, accrued expenses and other current liabilities		83,473				29,047
Billings in excess of cost and estimated earnings		(693	)			8,042
Other liabilities		(5,036	)			1,844
Income taxes payable, net		4,389				(4,292	)
Cash flows from operating activities		(172,296	)			(102,583	)
Cash flows from investing activities:
Purchases of property and equipment		(4,896	)			(2,211	)
Capital investment in energy assets		(178,879	)			(180,546	)
Grant award proceeds for energy assets		774				1,874
Proceeds from sale of equity investment		1,672				—
Acquisitions, net of cash received		(14,928	)			—
Contributions to equity investment		(9,000	)			(132	)
Cash flows from investing activities	$	(205,257	)		$	(181,015	)
	Year Ended December 31,
		2021				2020
Cash flows from financing activities:
Proceeds from equity offering, net of offering costs	$	120,084			$	—
Payments of debt discount and debt issuance costs		(2,919	)			(5,234	)
Proceeds from exercises of options and ESPP		6,927				9,875
Repurchase of common stock		—				(6	)
(Payments on) proceeds from senior secured credit facility, net		(8,073	)			3,000
Proceeds from long-term debt financings		185,994				116,067
Proceeds from Federal ESPC projects		159,216				248,917
Proceeds for energy assets from Federal ESPC		2,033				1,378
Investment fund call option exercise		(1,000	)			—
Proceeds from investments by redeemable non-controlling interests, net		1,399				4,805
Payments on long-term debt and financing leases		(98,200	)			(73,633	)
Cash flows from financing activities		365,461				305,169
Effect of exchange rate changes on cash		309				2
Net (decrease) increase in cash, cash equivalents, and restricted cash		(11,783	)			21,573
Cash, cash equivalents, and restricted cash, beginning of year		98,837				77,264
Cash, cash equivalents, and restricted cash, end of year	$	87,054			$	98,837

Non-GAAP Financial Measures (Unaudited, in thousands)
	Three Months Ended December 31, 2021
Adjusted EBITDA:	Projects			Energy Assets			O&M			Other			Consolidated
Net income attributable to common shareholders	$	11,434		$	13,911		$	2,593		$	268		$	28,206
Impact from redeemable non-controlling interests		—			1,388			—			—			1,388
Plus (less): Income tax provision (benefit)		3,431			(5,429	)		663			171			(1,164	)
Plus: Other expenses, net		264			3,260			(3	)		90			3,611
Plus: Depreciation and amortization		634			11,144			405			307			12,490
Plus: Stock-based compensation		3,551			446			219			219			4,435
Plus: Restructuring and other charges		81			6			1			1			89
Less: Gain on sale of equity investment		—			—			—			(571	)		(571	)
Adjusted EBITDA	$	19,395		$	24,726		$	3,878		$	485		$	48,484
Adjusted EBITDA margin		5.8	%		59.2	%		18.9	%		2.4	%		11.7	%
	Three Months Ended December 31, 2020
Adjusted EBITDA:	Projects			Energy Assets			O&M			Other			Consolidated
Net income (loss) attributable to common shareholders	$	13,911		$	7,636		$	2,251		$	(313	)	$	23,485
Impact from redeemable non-controlling interests		—			276			—			—			276
Plus (less): Income tax provision (benefit)		898			(2,145	)		64			92			(1,091	)
(Less) plus: Other (income) expenses, net		(414	)		2,110			138			70			1,904
Plus: Depreciation and amortization		857			8,490			709			469			10,525
Plus: Stock-based compensation		431			54			34			34			553
Plus: Restructuring and other charges		34			9			20			3			66
Adjusted EBITDA	$	15,717		$	16,430		$	3,216		$	355		$	35,718
Adjusted EBITDA margin		6.4	%		53.1	%		16.9	%		1.8	%		11.4	%
	Year Ended December 31, 2021
Adjusted EBITDA:	Projects			Energy Assets			O&M			Other			Consolidated
Net income attributable to common shareholders	$	35,515		$	26,197		$	8,353		$	393		$	70,458
Impact from redeemable non-controlling interests		—			9,733			—			—			9,733
Plus (less): Income tax provision (benefit)		3,482			(7,774	)		1,547			698			(2,047	)
Plus: Other expenses, net		2,117			14,794			41			338			17,290
Plus: Depreciation and amortization		2,414			41,122			1,710			1,331			46,577
Plus: Stock-based compensation		6,607			1,031			530			548			8,716
Plus: Energy asset impairment		—			1,901			—			—			1,901
Plus: Restructuring and other charges		260			43			37			318			658
Less: Gain on sale of equity investment		—			—			—			(571	)		(571	)
Adjusted EBITDA	$	50,395		$	87,047		$	12,218		$	3,055		$	152,715
Adjusted EBITDA margin		5.6	%		57.6	%		15.5	%		3.7	%		12.6	%
	Year Ended December 31, 2020
Adjusted EBITDA:	Projects			Energy Assets			O&M			Other			Consolidated
Net income attributable to common shareholders	$	28,971		$	19,084		$	5,513		$	484		$	54,052
Impact from redeemable non-controlling interests		—			2,870			—			—			2,870
Plus (less): Income tax provision (benefit)		2,195			(4,806	)		1,145			972			(494	)
Plus: Other expenses, net		2,868			11,025			987			191			15,071
Plus: Depreciation and amortization		3,412			33,922			2,864			1,843			42,041
Plus: Stock-based compensation		1,430			222			136			145			1,933
Plus: Energy asset impairment		—			1,028			—			—			1,028
Plus: Restructuring and other charges		929			176			85			186			1,376
Adjusted EBITDA	$	39,805		$	63,521		$	10,730		$	3,821		$	117,877
Adjusted EBITDA margin		5.2	%		53.7	%		14.8	%		5.0	%		11.4	%

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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