EnerNOC, Inc.
Aug 8, 2011

EnerNOC Reports Second Quarter 2011 Financial Results

Market Expansion Enhances Long-Term Visibility

BOSTON, MA -- (MARKET WIRE) -- 08/08/11 -- EnerNOC, Inc. (NASDAQ: ENOC), a leading provider of clean and intelligent energy management applications and services, today announced financial results for the second quarter ended June 30, 2011.

"EnerNOC's second quarter was highlighted by our successful efforts to expand our market opportunities through organic growth and strategic acquisitions," said Tim Healy, EnerNOC's Chairman and Chief Executive Officer. "We believe the investments we are making now will, in the long term, provide enhanced shareholder value. For the current quarter, we are announcing a net loss, and we are also revising projections for 2011 and 2012 downward. For 2013, we are expecting to achieve the same results previously projected, and believe that this three-year plan will help us maximize earnings in the long run."

Revenues for the second quarter of 2011 were $58.9 million, compared to $66.5 million for the same period in 2010. Gross profit for the second quarter of 2011 was $20.4 million, or 34.6% of revenue.

GAAP net loss for the second quarter of 2011 was $13.0 million, or $0.51 per diluted share, compared to GAAP net income for the second quarter of 2010 of $1.1 million, or $0.04 per diluted share. Non-GAAP net loss* for the second quarter of 2011 was $7.8 million, or $0.31 per diluted share, compared to non-GAAP net income for the second quarter of 2010 of $4.3 million, or $0.17 per diluted share.

Adjusted EBITDA* for the second quarter of 2011 was negative $3.5 million, compared to positive $9.2 million in the second quarter of 2010.

Cash flow from operating activities for the second quarter of 2011 was $13.7 million, compared to $7.9 million in the second quarter of 2010. The Company generated $5.1 million of free cash flow* for the quarter ended June 30, 2011, compared to $1.4 million for the quarter ended June 30, 2010.

As of June 30, 2011, the Company had cash and cash equivalents totaling $79.2 million, a decrease of $74.2 million from cash and cash equivalents as of December 31, 2010. The majority of this change in cash and cash equivalents was due to acquisitions completed during calendar year 2011, including $28.1 million that was transferred to a third-party prior to June 30, 2011, related to the acquisition of Energy Response Pty Ltd, which the Company acquired in July 2011.

Healy added, "With new growth opportunities secured, $1.3 billion in contracted revenues, and a strong balance sheet, we believe we are well positioned to turn our near-term investments into long-term growth for the company."

(*Please refer to the section below titled "Use of Non-GAAP Financial Measures" for non-GAAP definitions and the financial schedules attached to this press release for a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.)

Second Quarter 2011 Highlights

Other Recent Highlights

Financial Outlook

The Company currently expects to deliver the following financial results for the quarter ending September 30, 2011 and the years ending December 31, 2011, December 31, 2012, and December 31, 2013, respectively:

Third quarter 2011: The Company expects third quarter revenue to be in the range of $155 million to $170 million. The Company also expects third quarter GAAP net income per share to be in the range of $1.45 to $1.70 and Non-GAAP net income per share to be in the range of $1.68 to $1.94 based on weighted-average diluted shares outstanding of 27.0 million. Non-GAAP net income reflects adjustments for an estimated stock-based compensation expense of $4.0 million and an estimated amortization of acquisition-related intangibles expense of $2.4 million, which are included in GAAP net income. The Company notes that there is significant variability in the provision for income taxes that could be recorded in accordance with GAAP for the third quarter of 2011. The Company was unable to make a reliable estimate of its annual effective tax rate as of June 30, 2011 due to unusual sensitivity to the rate as it relates to the current forecasted fiscal 2011 U.S. ordinary income. As a result, the Company recorded a tax provision for the six months ended June 30, 2011 based on its actual effective tax rate for the six months ended June 30, 2011. If the Company continues to be unable to make a reliable estimate of its annual effective tax rate as of September 30, 2011, which the Company has assumed in providing the GAAP income per share guidance above, the Company will follow a consistent methodology as applied for the three and six months ended June 30, 2011. The Company has forecasted a provision for income taxes of $0.6 million to $0.9 million in its GAAP income per share guidance above. If the Company is able to make a reliable estimate of its annual effective tax rate as of September 30, 2011, the Company will be required to utilize that rate to provide for income taxes on a current year-to-date basis, which could result in a significant provision from income taxes being recorded during the three months ended September 30, 2011, which would be predominantly offset by a significant benefit recorded during the three months ending December 31, 2011. The Company now anticipates that its provision for income taxes for the full year 2011 to be in the range of $1.8 million to $2.2 million.

Full Year 2011: The Company expects full year 2011 revenues to be in the range of $280 million to $300 million. The Company now expects a GAAP net loss per share in the range of $0.00 to $0.50 based on basic and diluted weighted average shares outstanding of 25.6 million shares and Non-GAAP net income per share in the range of $0.26 to $0.82 based on a diluted weighted average shares outstanding of 27.5 million shares. Non-GAAP net income reflects adjustments for an estimated stock-based compensation expense of $15.0 million and an estimated amortization of acquisition-related intangibles expense of $7.3 million, which are included in GAAP net income.

Full year 2012: The Company expects full year 2012 revenues to be in the range of $280 million to $300 million. The Company now expects a GAAP net loss per share in the range of $0.65 to $1.15.

Full year 2013: The Company expects full year 2013 revenues to be in the range of $400 million to $450 million. The Company expects a GAAP net income per share in the range of $0.80 to $1.00.

These statements are forward-looking and actual results may differ materially. These statements are based on information available as of August 8, 2011, and 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 live webcast and conference call today, August 8, 2011 at 5:00 p.m., Eastern Time, to discuss the Company's second quarter 2011 operating results, as well as other forward-looking information about the Company's business. Visit the Investor Relations section of EnerNOC's website at http://investor.enernoc.com/webcasts.cfm for a live webcast of the conference call. Domestic callers may access the earnings conference call by dialing 877-837-3911 (International callers, dial 973-796-5063). 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 855-859-2056 and enter the pass code 87158559) until August 15, 2011 and the webcast will be archived on EnerNOC's website for a period of three months.

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; EfficiencySMART™, data-driven energy efficiency; SupplySMART™, energy price and risk management; and CarbonSMART™, enterprise carbon management. Our Network Operations Center (NOC) continuously supports these applications across thousands of C&I customer sites throughout the world. Working with more than 100 utilities and grid operators globally, we deliver energy, ancillary services, and carbon mitigation resources that provide cost-effective alternatives to investments in traditional power generation, transmission, and distribution. For more information, visit www.enernoc.com.

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, contracted revenues that the Company expects to earn, the Company's ability to enhance shareholder value, and the future growth and success of the Company's clean and intelligent energy management applications and services in general, 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.

Contracted Revenues

Contracted Revenues represent EnerNOC's estimate of total payments that it currently expects to earn in connection with providing demand response services to grid operators and utilities under long-term contracts and pursuant to open market bidding programs, as well as providing energy management services to its commercial, institutional and industrial customers. As of the date of this press release, EnerNOC expects approximately 85% of this Contracted Revenue to be earned by May 31, 2015.

Assumptions Regarding Contracted Revenues:

The Contracted Revenues estimated from EnerNOC's long-term contracts, accepted bids in open market bidding programs and its provision of energy management services have been prepared by management and are based upon contractual terms, open market bidding program rules and a number of assumptions, including:

-- EnerNOC's ability to provide to its utility and grid operator customers the capacity that it has committed to provide under long-term contracts and pursuant to accepted bids in open market bidding programs. The Company's expectations are based on its experience to date in building out its existing load management systems;

-- EnerNOC's contracts with its utility and grid operator and commercial, institutional and industrial customers not being terminated, modified or delayed or becoming subject to governmental regulation that could materially and adversely affect EnerNOC's interests;

-- the rules and assumed pricing of the various open market bidding programs in which EnerNOC participates remaining unchanged in all material respects;

-- the rate of termination of EnerNOC's commercial, institutional and industrial customers under its long-term contracts remaining consistent with EnerNOC's historical average;

-- the electricity consumption of EnerNOC's commercial, institutional and industrial customers remaining consistent with historical use throughout the term of its contracts with such customers; and

-- EnerNOC's ability to obtain regulatory approval for its long-term contracts with certain utility and grid operator customers where such approval is required. Less than 1% of the contracted revenue referenced in this release is subject to such regulatory approval as of the date of this release.

Any differences among these assumptions, other factors, and EnerNOC's actual experiences may result in actual revenues earned in future periods differing from management's current estimate of Contracted Revenues to be earned. In management's view, such information was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and, to the best of management's knowledge and belief, presents the assumptions and considerations on which EnerNOC bases its belief that it can earn such Contracted Revenues.

Use of Non-GAAP Financial Measures

To supplement the financial measures presented in EnerNOC's press release and related conference call or webcast in accordance with accounting principles generally accepted in the United States ("GAAP"), EnerNOC also presents non-GAAP financial measures relating to non-GAAP net income or loss, non-GAAP net income or loss per share, adjusted EBITDA, and free cash flow.

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 the non-GAAP measures listed above as additional information relating to EnerNOC's operating results as a complement to results provided in accordance with GAAP. 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.

The non-GAAP measures used in this press release and related conference call or webcast differ from GAAP in that they exclude expenses related to stock-based compensation, amortization expense related to acquisition-related intangible assets, as well as in certain measures, the related impact of these adjustments on the provision for income taxes. In addition, investors should note the following:

EnerNOC's management uses these non-GAAP measures when evaluating the Company's operating performance and for internal planning and forecasting purposes. EnerNOC's management believes that such measures help indicate underlying trends in the Company's 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, EnerNOC's management considers non-GAAP net income (loss) to be an important indicator of the overall performance of the Company 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, EnerNOC's management considers adjusted EBITDA to be an important indicator of the Company's operational strength and performance of its business and a good measure of the Company's historical operating trend. Moreover, EnerNOC's management considers free cash flow to be an indicator of the Company's operating trend and performance of its business.




                               EnerNOC, Inc.

                       SELECTED FINANCIAL INFORMATION

            (in thousands, except for share and per share data)



                               EnerNOC, Inc.

              Condensed Consolidated Statements of Operations

                                (Unaudited)



                   Three Months Ended June 30,   Six Months Ended June 30,

                   ----------------------------  --------------------------

                        2011           2010          2011          2010

                   -------------  -------------  ------------  ------------

Revenues           $      58,904  $      66,548  $     90,666  $     94,669

Cost of revenues          38,527         37,556        57,728        56,102

                   -------------  -------------  ------------  ------------

    Gross profit          20,377         28,992        32,938        38,567

Operating

 expenses:

  Selling and

   marketing              13,620         11,531        25,207        20,645

  General and

   administrative         15,899         13,152        32,212        26,901

  Research and

   development             3,350          2,494         6,582         4,551

                   -------------  -------------  ------------  ------------

    Total

     operating

     expenses             32,869         27,177        64,001        52,097

                   -------------  -------------  ------------  ------------

(Loss) income from

 operations              (12,492)         1,815       (31,063)      (13,530)

Other expense               (142)           (14)          (14)          (11)

Interest expense            (238)          (466)         (401)         (491)

                   -------------  -------------  ------------  ------------

    (Loss) income

     before income

     tax                 (12,872)         1,335       (31,478)      (14,032)

(Provision for)

 benefit from

 income tax                 (101)          (257)         (767)          910

                   -------------  -------------  ------------  ------------

    Net (loss)

     income        $     (12,973) $       1,078  $    (32,245) $    (13,122)

                   =============  =============  ============  ============



(Loss) income per

 common share

    Basic          $       (0.51) $        0.04  $      (1.27) $      (0.54)

                   =============  =============  ============  ============

    Diluted        $       (0.51) $        0.04  $      (1.27) $      (0.54)

                   =============  =============  ============  ============



Weighted average

 number of common

 shares

 outstanding

    Basic             25,537,483     24,371,125    25,393,864    24,212,004

    Diluted           25,537,483     25,861,957    25,393,864    24,212,004





                               EnerNOC, Inc.

                   Condensed Consolidated Balance Sheets

                                (Unaudited)





                                                   June 30,    December 31,

                                                     2011          2010

                                                 ------------  ------------

ASSETS

  Current assets

  Cash and cash equivalents                      $     79,236  $    153,416

  Restricted cash                                          71         1,537

  Trade accounts receivable, net of allowance

   for doubtful accounts of $200 and $150 at

   June 30, 2011 and December 31, 2010,

   respectively                                        33,240        22,137

  Unbilled revenue                                     17,081        73,144

  Inventory                                               239             -

  Prepaid expenses, deposits and other current

   assets                                              12,602         6,707

  Cash held by third party for potential

   acquisition                                         28,082             -

                                                 ------------  ------------

    Total current assets                              170,551       256,941

  Property and equipment, net of accumulated

   depreciation of $42,934 and $36,309 at June

   30, 2011 and December 31, 2010, respectively        39,524        34,690

  Goodwill                                             63,895        24,653

  Definite-lived intangible assets, net                23,931         5,823

  Indefinite-lived intangible assets                      530           920

  Deposits and other assets                             6,392         2,872

                                                 ------------  ------------

    Total assets                                 $    304,823  $    325,899

                                                 ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities

  Accounts payable                               $        916  $        111

  Accrued capacity payments                            42,467        65,792

  Accrued payroll and related expenses                 11,816        11,135

  Accrued expenses and other current liabilities       10,403         9,307

  Accrued acquisition contingent consideration              -         1,500

  Deferred revenue                                      7,677         5,540

  Current portion of long-term debt                        17            37

                                                 ------------  ------------

    Total current liabilities                          73,296        93,422

Long-term liabilities

  Deferred acquisition consideration                    4,108             -

  Deferred tax liability                                1,842         1,141

  Deferred revenue, long-term                           6,609         4,696

  Other liabilities                                       482           514

                                                 ------------  ------------

    Total long-term liabilities                        13,041         6,351

Commitments and contingencies                               -             -

Stockholders' equity

Undesignated preferred stock, $0.001 par value;

 5,000,000 shares authorized; no shares issued              -             -

Common stock, $0.001 par value; 50,000,000

 shares authorized, 26,552,123 and 25,155,067

 shares issued and outstanding at June 30, 2011

 and December 31, 2010, respectively                       27            25

Additional paid-in capital                            318,516       293,942

Accumulated other comprehensive loss                      (46)          (75)

Accumulated deficit                                  (100,011)      (67,766)

                                                 ------------  ------------

    Total stockholders' equity                        218,486       226,126

                                                 ------------  ------------

    Total liabilities and stockholders' equity   $    304,823  $    325,899

                                                 ============  ============





                               EnerNOC, Inc.

                           Cash Flow Information

                                (Unaudited)





                                                 Six Months Ended June 30,

                                               ----------------------------

                                                    2011           2010

                                               -------------  -------------

    Cash flows provided by operating

     activities                                $       8,052  $      10,976

    Cash flows used in investing activities          (83,887)       (14,647)

    Cash flows provided by financing

     activities                                        1,717          2,455

    Effects of exchange rate changes on cash             (62)           (12)

                                                ------------   ------------

    Net change in cash and cash equivalents    $     (74,180) $      (1,228)

                                                ============   ============









                               EnerNOC, Inc.

          NON-GAAP NET LOSS AND NET LOSS PER SHARE RECONCILIATION

                                (Unaudited)



                                                Three Months Ended June 30,

                                               ----------------------------

                                                    2011           2010

                                               -------------  -------------

                                                (In thousands, except share

                                                    and per share data)



GAAP net (loss) income                         $     (12,973) $       1,078

ADD: Stock-based compensation                          3,785          3,658

ADD: Amortization expense of acquired

 intangible assets                                     1,373            368

LESS: Income tax effect on Non-GAAP

 adjustments(1)                                            -           (775)

                                                ------------   ------------

Non-GAAP net (loss) income                     $      (7,815) $       4,329

                                                ============   ============



GAAP net (loss) income per basic share         $       (0.51) $        0.04

ADD: Stock-based compensation                           0.15           0.15

ADD: Amortization expense of acquired

 intangible assets                                      0.05           0.02

LESS: Income tax effect on Non-GAAP

 adjustments(1)                                            -          (0.03)

                                                ------------   ------------

Non-GAAP net (loss) income per basic share     $       (0.31) $        0.18

                                                ============   ============



GAAP net (loss) income per diluted share       $       (0.51) $        0.04

ADD: Stock-based compensation                           0.15           0.14

ADD: Amortization expense of acquired

 intangible assets                                      0.05           0.02

LESS: Income tax effect on Non-GAAP

 adjustments(1)                                            -          (0.03)

                                                ------------   ------------

Non-GAAP net (loss) income per diluted share   $       (0.31) $        0.17

                                                ============   ============



Weighted average number of common shares

 outstanding

Basic                                             25,537,483     24,371,125

Diluted                                           25,537,483     25,861,957






                                                 Six Months Ended June 30,

                                               ----------------------------

                                                    2011           2010

                                               -------------  -------------

                                                (In thousands, except share

                                                    and per share data)



GAAP net loss                                  $     (32,245) $     (13,122)

ADD: Stock-based compensation                          7,267          8,004

ADD: Amortization expense of acquired

 intangible assets                                     2,525            756

LESS: Income tax effect on Non-GAAP

 adjustments(2)                                            -           (568)

                                                ------------   ------------

Non-GAAP net loss                              $     (22,453) $      (4,930)

                                                ============   ============



GAAP net loss per basic share                  $       (1.27) $       (0.54)

ADD: Stock-based compensation                           0.29           0.33

ADD: Amortization expense of acquired

 intangible assets                                      0.10           0.03

LESS: Income tax effect on Non-GAAP

 adjustments(2)                                            -          (0.02)

                                                ------------   ------------

Non-GAAP net loss per basic share              $       (0.88) $       (0.20)

                                                ============   ============



GAAP net loss per diluted share                $       (1.27) $       (0.54)

ADD: Stock-based compensation                           0.29           0.33

ADD: Amortization expense of acquired

 intangible assets                                      0.10           0.03

LESS: Income tax effect on Non-GAAP

 adjustments(2)                                            -          (0.02)

                                                ------------   ------------

Non-GAAP net loss per diluted share            $       (0.88) $       (0.20)

                                                ============   ============



Weighted average number of common shares

 outstanding

Basic                                             25,393,864     24,212,004

Diluted                                           25,393,864     24,212,004



(1) Represents the increase in the income tax provision recorded for the

 three months ended June 30, 2010 based on our effective rate for the three

 months ended June 30, 2010, respectively. The non-GAAP adjustments would

 have no impact on the provision for income taxes recorded for the three

 months ended June 30, 2011







(2) Represents the reduction in the income tax benefit recorded for the six

 months ended June 30, 2010 based on our effective rate for the six months

 ended June 30, 2010, respectively. The non-GAAP adjustments would have no

 impact on the provision for income taxes recorded for the three months

 ended June 30, 2011









                               EnerNOC, Inc.

                     RECONCILIATION OF ADJUSTED EBITDA

                                (Unaudited)



                                   Three Months Ended     Six Months Ended

                                        June 30,              June 30,

                                  -------------------  --------------------

                                    2011       2010       2011       2010

                                  --------   --------   --------   --------

Net (loss) income                $ (12,973) $   1,078  $ (32,245) $ (13,122)

Add back:

  Depreciation and amortization      5,187      3,711      9,964      7,330

  Stock-based compensation

   expense                           3,785      3,658      7,267      8,004

  Other expense                        142         14         14         11

  Interest expense                     238        466        401        491

  Provision for (benefit from)

   income tax                          101        257        767       (910)

                                  --------   --------   --------   --------

Adjusted EBITDA                  $  (3,520) $   9,184  $ (13,832) $   1,804

                                  ========   ========   ========   ========





                               EnerNOC, Inc.

                      RECONCILIATION OF FREE CASH FLOW

                                (Unaudited)



                                   Three Months Ended     Six Months Ended

                                        June 30,              June 30,

                                  -------------------  --------------------

                                    2011       2010       2011       2010

                                  --------   --------   --------   --------

Net cash provided by operating

 activities                      $  13,740  $   7,854  $   8,052  $  10,976

Subtract:

  Purchases of property and

   equipment                        (8,680)    (6,443)   (12,144)   (12,039)

                                  --------   --------   --------   --------

Free cash flow                   $   5,060  $   1,411  $  (4,092) $  (1,063)

                                  ========   ========   ========   ========



Contact:

Investors

Will Lyons

(617) 532.8104

ir@enernoc.com



Media

Sarah McAuley

(617) 532.8195

news@enernoc.com



Source: EnerNOC, Inc.

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