EnerNOC, Inc.
May 9, 2017

EnerNOC Reports First Quarter 2017 Results

BOSTON, May 09, 2017 (GLOBE NEWSWIRE) -- EnerNOC, Inc. (Nasdaq:ENOC), a leading provider of demand response solutions and energy intelligence software (EIS), today announced results for the quarter ended March 31, 2017.

"We are pleased by our strong start to the year for both our demand response and software businesses, with a number of key customer wins and first quarter top and bottom line results above plan," said Tim Healy, Chairman and CEO of EnerNOC.

Summary Financial Results
In Thousands, Except Per Share Amounts     
 Q1 2017 Q1 2016
Revenue   
Demand Response$34,484  $36,347 
Software13,625  17,033 
Total Revenue$48,109  $53,380 
    
Net Loss$(32,010) $(40,538)
Net Loss Per Diluted Share$(1.08) $(1.41)
    
Cash Used in Operations$(24,639) $(30,392)
Free Cash Flow 1$(28,066) $(34,783)
Adjusted EBITDA1   
Demand Response adjusted EBITDA$(3,456) $(3,484)
Software adjusted EBITDA(5,038) (18,007)
Corporate unallocated expenses(5,817) (5,671)
Consolidated adjusted EBITDA1$(14,311) $(27,162)

We adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASC 606) on January 1, 2017 using the modified retrospective method. The reported results for 2017 reflect the application of ASC 606, while the reported results for 2016 were prepared under the previous revenue recognition guidance. Please refer to the schedule below for a comparison of Q1 2017 activity as reported versus pro forma, as if the previous accounting guidance was in effect. The adoption of ASC 606 had no impact on cash used in operations or free cash flow.

 Three Months Ended March 31, 2017
 As reported   Pro forma as if the
previous accounting
guidance was in effect
Revenue   
Demand Response$34,484  $33,196 
Software13,625  15,128 
Total Revenues48,109  48,324 
Cost of revenues33,403  32,668 
Total operating expense, net          43,056  43,099 
Loss from operations$(28,350) $(27,443)


1 Please refer to "Statement on Use of Non-GAAP Financial 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

_________________________
1 Excluding one-time impairments of goodwill and gains on sales of businesses

Strategic Review Process 
As part of the strategic review process currently underway the Board of Directors has established a special committee to evaluate all strategic alternatives with the goal of maximizing value for all shareholders. The Company will not be discussing the status of that process on today's conference call, but will provide updates at the appropriate time.

Company Reaffirms Full Year 2017 Guidance
The Company today reaffirmed its guidance for the full year 2017. The Company's guidance is based on the current indications for its business, which may change at any time.

 Reaffirmed Guidance for
Year Ending December 31, 2017
                 
Total Revenue (in millions)$310-$340 
Demand Response Revenue$260-$280 
Software Revenue$50-$60 
GAAP Net Loss Per Diluted Share($2.57)-($2.07) 
Consolidated adjusted EBITDA1 (in millions)($20)-($5) 
Demand Response adjusted EBITDA1 (in millions)$20-$30 
Software adjusted EBITDA1 (in millions)($20)-($15) 
Corporate unallocated expenses1 (in millions)~($20) 
 
1 Refer to "Statement on Use of Non-GAAP Financial Measures" for non-GAAP definitions and refer to the financial schedules attached to this press release and the management presentation posted to http://investor.enernoc.com 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 +1.800.230.1074 and using access code "ENOC." The conference call may be accessed outside of the United States by dialing +1.612.332.0107 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, along with a presentation from management on operating results. A replay of the conference call will be available approximately one hour after the call by dialing +1.800.475.6701 or +1.320.365.3844 and using access code 422069 or by accessing the webcast replay on the Company's investor relations website.

About EnerNOC
EnerNOC is a leading provider of demand response solutions and energy intelligence software (EIS). EnerNOC offers access to more demand response programs worldwide than any other provider, providing enterprises a valuable payment stream to further enhance bottom line results and utilities and grid operators a reliable, cost-effective demand-side resource. Also, with capabilities to better address budgets and procurement, utility bill management, facility analysis and optimization, sustainability and reporting, project tracking, and demand management, EnerNOC's SaaS platform helps enterprises control energy costs, mitigate risk, and streamline compliance and sustainability reporting. 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 strategic review process and future financial performance on both a GAAP and non-GAAP basis, and the future growth and success of the Company's demand response solutions and energy intelligence software, 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,
 2017 2016
Revenues:   
Demand Response$34,484  $36,347 
Software13,625  17,033 
Total revenues48,109  53,380 
Cost of revenues33,403  32,594 
Gross profit14,706  20,786 
Operating expenses (income):   
Selling and marketing13,874  25,015 
General and administrative19,620  27,916 
Research and development5,402  8,043 
Gains on sale of businesses(1,726)  
Goodwill impairment5,886   
Total operating expenses and income43,056  60,974 
Loss from operations(28,350) (40,188)
Other expense, net1,975  3,087 
Interest expense(1,926) (1,777)
Loss before income tax(28,301) (38,878)
Provision for income tax(3,838) (1,691)
Net loss(32,139) (40,569)
Net loss attributable to noncontrolling interest(129) (31)
Net loss attributable to EnerNOC, Inc.$(32,010) $(40,538)
    
Net loss attributable to EnerNOC, Inc. per common share   
Basic$(1.08) $(1.41)
Diluted$(1.08) $(1.41)
    
Weighted average number of common shares used in computing net loss per share attributable to EnerNOC, Inc.     
Basic29,671,109 28,806,810
Diluted29,671,109 28,806,810


EnerNOC, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 
 March 31, 2017 December 31, 2016
ASSETS   
Current assets:   
Cash and cash equivalents$73,980  $97,993 
Restricted Cash387  1,062 
Trade accounts receivable, net31,075  36,722 
Unbilled revenue18,952  45,430 
Contract assets27,580   
Capitalized fulfillment costs989  2,290 
Prepaid expenses and other current assets14,582  10,906 
Assets held for sale  3,415 
Total current assets167,545  197,818 
    
Contract assets, net of current portion15,962   
Property and equipment, net36,600  38,828 
Goodwill and intangible assets, net65,029  72,433 
Deposits and other assets5,573  3,223 
Total assets$290,709  $312,302 
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$1,036  $4,748 
Accrued capacity payments45,732  63,943 
Accrued expenses and other current liabilities27,077  28,318 
Deferred revenue6,329  8,193 
Liabilities held for sale  1,780 
Total current liabilities80,174  106,982 
    
Deferred revenue3,420  2,665 
Other liabilities8,931  7,521 
Convertible senior notes116,248  115,223 
Total long-term liabilities128,599  125,409 
    
Total EnerNOC, Inc. stockholders' equity80,661  79,680 
Non-controlling interest1,275  231 
Total stockholders' equity81,936  79,911 
Total liabilities and stockholders' equity$290,709  $312,302 


EnerNOC, Inc.
Condensed Consolidated Statements of Cash Flow Data
(in thousands)
(unaudited)
 
  Three Months Ended
March 31,
Condensed Consolidated Statements of Cash Flow Data 2017 2016
Cash used in operating activities $(24,639) $(30,392)
Cash used in investing activities (1,949) (3,711)
Cash provided by (used in) financing activities 711  (867)
Effects of exchange rate changes on cash and cash equivalents 1,189  1,307 
Net change in cash, cash equivalents and restricted cash (24,688) (33,663)
Cash, cash equivalents and restricted cash at beginning of period   99,055  138,584 
Cash, cash equivalents and restricted cash at end of period $74,367  $104,921 


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

Use and Economic Substance of Non-GAAP Financial Measures
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 consolidated 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. In addition, management considers free cash flow to be an indicator of the Company's liquidity trend and performance of the business.

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

Material Limitations Associated with the Use of Non-GAAP Financial Measures
Consolidated 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 used by other companies, even where similarly titled, and therefore should not be used to compare the Company's performance to that of other companies.

EnerNOC, Inc.
Reconciliation of Net Cash Provided By (Used In) Operating Activities to Free Cash Flow
(in thousands)
(unaudited)
 
 Three Months Ended
March 31,
 2017 2016
Net cash used in operating activities$(24,639) $(30,392)
Subtract: Purchases of property and equipment and capitalization of internal use software    (3,427) (4,391)
Free cash flow$(28,066) $(34,783)


EnerNOC, Inc.
Condensed Schedule of Segment Results
(in thousands)
(unaudited)
 Three Months Ended
March 31,
Segment Information                     2017 2016
Revenues:    
Demand Response   
Grid operator$26,392  $26,812 
Utility8,092  9,535 
Total Demand Response Revenues34,484  36,347 
    
Software   
Subscription software4,499  6,176 
Procurement solutions6,757  8,933 
Professional services2,369  1,924 
Total Software Revenues13,625  17,033 
    
Consolidated Revenues$48,109  $53,380 
    
Segment Adjusted EBITDA 1:   
Demand Response adjusted EBITDA$(3,456) $(3,484)
Software adjusted EBITDA$(5,038) $(18,007)
 
1 Please refer to the table, "Reconciliation of Net Loss Attributable to EnerNOC Inc. to Consolidated Adjusted EBITDA," for a reconciliation of segment adjusted EBITDA to net loss attributable to EnerNOC, Inc., which is the most directly comparable GAAP financial measure.


EnerNOC, Inc.
Reconciliation of Net Loss Attributable to EnerNOC, Inc. to Consolidated Adjusted EBITDA
(in thousands)
(unaudited)
 Three Months Ended
March 31,
 2017 2016
Net loss attributable to EnerNOC, Inc.$(32,010) $(40,538)
Depreciation, amortization and asset impairments (1)7,541  9,687 
Stock-based compensation2,031  3,115 
Gains on sale of businesses(1,726)  
Direct and incremental expenses associated with divestitures(2)178  193 
Impairment of goodwill and intangible assets5,886   
Interest and other expense, net(49) (1,310)
Provision for income tax3,838  1,691 
Consolidated adjusted EBITDA$(14,311) $(27,162)
    
Demand Response adjusted EBITDA$(3,456) $(3,484)
Software adjusted EBITDA$(5,038) $(18,007)
Corporate unallocated expenses$(5,817) $(5,671)
 
1 Includes impairments of production equipment no longer in operation.
2 Includes expenses that are direct and incremental to business divestitures, including third-party professional fees for legal, accounting and other services.
 

Non-GAAP Financial Guidance

This press release also includes estimates of future consolidated adjusted EBITDA. A reconciliation of these amounts to the nearest expected GAAP results is presented below:

 Year Ending
 December 31, 2017
   Per Diluted Share
In Millions, Except Per Share AmountsLowHighLowHigh
Projected GAAP Net Loss($77)($62)($2.57)($2.07)
     
Reconciling Adjustments:    
Depreciation, amortization and asset impairments$27 $27   
Stock-based compensation$12 $12   
Gains on sale of businesses$(2)$(2)  
Impairment of goodwill and intangible assets$6 $6   
Interest and other expense, net$8 $8   
Provision for income taxes$6 $6   
Consolidated adjusted EBITDA$(20)$(5)  
     
Demand Response adjusted EBITDA$20 $30   
Software adjusted EBITDA$(20)$(15)  
Corporate unallocated expenses$(20)$(20)  
Consolidated adjusted EBITDA$(20)$(5)  
     
Weighted Average Number of Common Shares Outstanding-Diluted 30.0  30.0   

 

EnerNOC Media Relations:
Sarah McAuley
617.532.8195
news@enernoc.com

Investor Relations:
ir@enernoc.com