EnerNOC, Inc.
May 5, 2010

EnerNOC Reports First Quarter Financial Results and Raises 2010 Guidance

Record Quarterly Growth Strengthens 2010 Outlook

BOSTON, May 5, 2010 (GLOBE NEWSWIRE) -- EnerNOC, Inc. (Nasdaq:ENOC), a leading provider of clean and intelligent energy management applications and services, today announced financial results for the first quarter ended March 31, 2010.

"The first quarter of 2010 was highlighted by high growth and key strategic wins for EnerNOC," said Tim Healy, EnerNOC's Chairman and CEO. "We delivered the highest quarterly megawatt additions in our company's history, entered into key agreements for our energy management applications, and drove financial results beyond our expectations. These developments are indicative of the strong, increasing traction of EnerNOC's capital-efficient demand response and energy management applications aimed at helping businesses and institutions manage and reduce energy costs."

Financial Summary

The following financial results are reported on a U.S. GAAP-basis, unless otherwise noted:

Revenues – Revenues for the first quarter of 2010 were $28.1 million, compared to $18.4 million for the same period in 2009, an increase of $9.7 million, or 53%.

Cost of Revenues – Cost of revenues for the first quarter of 2010 was $18.5 million, compared to $10.5 million for the same period in 2009, an increase of $8.0 million, or 76%.

Gross Profit/Gross Margin – Gross profit for the first quarter of 2010 was $9.6 million, compared to $7.9 million for the same period in 2009, an increase of $1.7 million, or 21%. Gross margin was 34.0% for the first quarter of 2010, compared to 42.9% for the same period in 2009.

Operating Expenses – Operating expenses for the first quarter of 2010 were $24.9 million, compared to $19.9 million for the same period in 2009, an increase of $5.0 million, or 25%.

Net Loss

GAAP Results

GAAP net loss for the first quarter of 2010 was $14.2 million, or $0.59 per basic and diluted share, compared to a net loss of $12.5 million, or $0.63 per basic and diluted share, for the same period in 2009.

Non-GAAP Results

Excluding stock-based compensation charges and amortization of expenses related to acquisition-related assets, non-GAAP net loss for the first quarter of 2010 was $9.8 million, or $0.41 per basic and diluted share, compared to a non-GAAP net loss of $9.5 million, or $0.48 per basic and diluted share, for the same period in 2009.

Please refer to the financial schedules attached to this press release for reconciliation of GAAP to non-GAAP net loss and net loss per share.

Cash and Cash Equivalents – As of March 31, 2010, the Company had cash and cash equivalents totaling $117.4 million, a decrease of $2.4 million from cash and cash equivalents as of December 31, 2009. In addition, for the third consecutive quarter, the Company generated positive cash flows from operating activities. 

Business Update

EnerNOC's first quarter 2010 business highlights included:

Company Update

Subsequent to the end of the first quarter of 2010, the Company:

Financial Outlook

The Company currently expects to deliver the following financial results for the quarter ending June 30, 2010 and the year ending December 31, 2010:

 Q2 2010FY 2010
Revenue $67-$70 million $270-$282 million
GAAP Diluted EPS ($0.08) – $0.04 $0.30 – $0.38
Non-GAAP Diluted EPS             $0.06 – $0.18 $0.89 – $0.97

The above statements are based on current expectations. These statements are forward-looking and actual results may differ materially. The Company assumes no obligation to publicly update or revise its financial outlook. Investors are reminded that actual results may differ from these estimates for the reasons described below and in the Company's filings with the Securities and Exchange Commission.

Webcast Reminder

The Company will host a conference call today, May 5, 2010 at 5:00 p.m., Eastern Time, to discuss the Company's first quarter 2010 operating results, as well as other forward-looking information about the Company's business. Domestic callers may access the earnings conference call by dialing 877-837-3911 (International callers, dial 973-796-5063). Investors and other interested parties may also go to the Investor Relations section of EnerNOC's website at http://investor.enernoc.com/webcasts.cfm for a live webcast of the conference call. Please access the website at least 15 minutes prior to the call to register, download, and install any necessary audio software. A replay of the conference call will be available on the Company's website noted above or by phone (dial (800) 642-1687 and enter the pass code 68997948) until May 15, 2010.

About EnerNOC

EnerNOC unlocks the full value of energy management for our utility and commercial, institutional, and industrial (C&I) customers by reducing real-time demand for electricity, increasing energy efficiency, improving energy supply transparency in competitive markets, and mitigating emissions. We accomplish this by delivering world-class energy management applications including DemandSMART™, comprehensive demand response; SiteSMART™, data-driven energy efficiency; SupplySMART™, energy price and risk management; and CarbonSMART™, enterprise carbon management. Our Energy Network Operations Center (EnerNOC) supports these applications across thousands of C&I customer sites throughout the world. Using our C&I customers' energy usage flexibility, we make capacity, energy, ancillary services, and carbon products available to grid operators and more than 100 utilities on demand as a cost-effective alternative to traditional power generation, transmission, and distribution. For more information visit www.enernoc.com.

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

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 clean and intelligent energy management applications and services, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, certain of the Company's contracts and expansion of existing contracts may be subject to approval of state or local regulatory agencies. There can be no assurance that such approvals will be obtained. 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.

Use of Non-GAAP Financial Measures

EnerNOC continues to provide all information required in accordance with GAAP and also provides certain non-GAAP financial measures. A "non-GAAP financial measure" refers to a numerical measure of the Company's historical or future financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. EnerNOC provides non-GAAP net income (loss) and non-GAAP net income (loss) per share data as additional information relating to EnerNOC's operating results. EnerNOC presents these non-GAAP financial measures as a complement to results provided in accordance with GAAP because management believes these non-GAAP financial measures help indicate underlying trends in the Company's business and are important in comparing current results with prior period results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income (loss) or net income (loss) per share prepared in accordance with GAAP.

EnerNOC's management uses certain non-GAAP financial information, namely operating results excluding the impact of stock-based compensation charges made in accordance with FASB ASC Topic 718 and amortization expense related to acquisition-related assets, to evaluate its ongoing operations and for internal planning and forecasting purposes. Accordingly, EnerNOC believes it is useful for its investors to review, as applicable, information that both includes and excludes stock-based compensation and amortization expense related to acquisition-related assets in order to assess the performance of EnerNOC's business and for planning and forecasting in future periods. Whenever EnerNOC reports non-GAAP financial measures, a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure will be made available. Investors are encouraged to review these reconciliations to ensure they have a thorough understanding of the reported non-GAAP financial measures and their most directly comparable GAAP financial measures.

In EnerNOC's earnings releases, conference calls, slide presentations or webcasts, it may use or discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure are included in this press release after the condensed consolidated financial statements and can be found on the Investor Relations page of the EnerNOC corporate Web site at http://investor.enernoc.com.

    
EnerNOC, Inc. 
SELECTED FINANCIAL INFORMATION
(in thousands, except for share and per share data)
  
EnerNOC, Inc.
Condensed Consolidated Statements of Operations
  
 Three Months Ended March 31,
 20102009 
    
Revenues $ 28,121 $ 18,423 
Cost of revenues 18,546 10,525 
Gross profit 9,575 7,898 
    
Operating expenses:   
Selling and marketing 9,851 8,667 
General and administrative 13,012 9,702 
Research and development 2,057 1,537 
Total operating expenses 24,920 19,906 
Loss from operations (15,345) (12,008) 
Interest and other income (expense), net (22) (345) 
Loss before income tax (15,367) (12,353) 
Benefit from (provision for) income tax 1,167 (181) 
Net loss $ (14,200) $ (12,534) 
    
Basic and diluted earnings per common share $ (0.59) $ (0.63) 
    
Weighted average number of basic and diluted shares 24,051,114 19,993,981 
    
EnerNOC, Inc. 
Condensed Consolidated Balance Sheet 
  
 March 31,
2010
December 31,
2009
 
Assets   
 Cash and cash equivalents $ 117,384 $ 119,739 
 Restricted cash, including non-current 7,874 7,874 
 Accounts receivable, net 16,211 17,421 
 Unbilled revenue 16,374  40,388 
 Deposits, including non-current 3,590 3,297 
 Prepaid expenses and other current assets 4,958 4,350 
 Property and equipment, net 33,706 31,344 
 Goodwill and intangible assets, net 32,287 29,628 
 Other assets 970 981 
 Total assets $ 233,354 $ 255,022 
    
Liabilities and Stockholders' Equity   
 Accounts payable $ 290 $ 55 
 Accrued capacity payments 27,540  40,534 
 Accrued payroll and related expenses 6,610 9,688 
 Accrued expenses and other current liabilities 3,348 3,706 
 Contingent consideration liability 3,133 1,455 
 Deferred revenue 3,973 3,319 
 Long-term debt, including current portion  64 73 
 Other liabilities 774 1,217 
 Stockholders' equity 187,622 194,975 
 Total liabilities and stockholders' equity $ 233,354 $ 255,022 
    
EnerNOC, Inc.  
Condensed Consolidated Statements of Cash Flows 
  
 Three Months Ended March 31,
 20102009 
    
Cash provided by (used in) operating activities $ 3,122 $ (5,326) 
Cash used in investing activities (6,978) (1,040) 
Cash provided by financing activities 1,506 53 
Effects of exchange rate changes on cash (5) -- 
Net decrease in cash and cash equivalents $ (2,355) $ (6,313) 
    

Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures
(Unaudited)

Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of each non-GAAP financial measure used in this earnings release and related conference call or webcast to the most directly comparable financial measure prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The reconciliation for historic non-GAAP measures is provided herein on a quantitative basis and for non-GAAP measures that are forward-looking is provided herein on a qualitative basis.

The non-GAAP measures used in this earnings release and related conference call differ from GAAP in that they exclude expenses related to stock-based compensation and amortization expense related to acquisition-related assets. The Company's basis for these adjustments is described below. Management uses these non-GAAP measures for internal reporting and forecasting purposes. The Company has provided these non-GAAP financial measures in addition to GAAP financial results because it believes that these non-GAAP financial measures provide useful information to certain investors and financial analysts for comparison across accounting periods not influenced by certain non-cash items that are not used by management when evaluating the Company's historical and prospective financial performance. 

Management uses these non-GAAP financial measures when evaluating the Company's operating performance and believes that such measures are useful to investors and financial analysts in assessing the Company's operating performance due to the following factors:

These non-GAAP financial measures are not prepared in accordance with GAAP. 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. There are significant limitations associated with the use of non-GAAP financial measures. The additional 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 (such as net income and loss per share) and should not be considered measures of the Company's liquidity.

EnerNOC, Inc. 
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(in thousands, except share and per share data)
(Unaudited)
  
 Three Months Ended March 31,
 20102009
   
GAAP Net loss $ (14,200) $ (12,534)
ADD: Stock-based compensation 4,346 2,819
ADD: Amortization expense of acquired intangible assets 388 169
LESS: Income tax effect of Non-GAAP adjustments (1) (360) -- 
Non-GAAP Net loss $ (9,826) $ (9,546)
   
GAAP Net loss per basic and diluted share $ (0.59) $ (0.63)
ADD: Stock-based compensation 0.18 0.14
ADD: Amortization expense of acquired intangible assets 0.01 0.01
LESS: Income tax effect of Non-GAAP adjustments (0.01) -- 
Non-GAAP Net loss per basic and diluted share $ (0.41) $ (0.48)
   
Weighted average number of basic and diluted shares 24,051,114 19,993,981
   
(1) Represents the reduction in the income tax benefit recorded for the three months ended March 31, 2010
based on the Company's effective tax rate for the three months ended March 31, 2010
CONTACT:  EnerNOC, Inc.
          Investors
          Will Lyons
            (617) 532.8104
            ir@enernoc.com
          Media
          Sarah McAuley
            (617) 532.8195
            news@enernoc.com

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