EnerNOC, Inc.
Feb 25, 2016

EnerNOC Reports Fourth Quarter and Full Year 2015 Results

BOSTON, Feb. 25, 2016 (GLOBE NEWSWIRE) -- EnerNOC, Inc. (Nasdaq:ENOC), a leading provider of energy intelligence software (EIS) and demand response, today announced results for the fourth quarter and full year ended December 31, 2015, and issued management's outlook for 2016.

"We continued to build momentum and enhance our leadership position in the EIS market during 2015," said Tim Healy, Chairman and CEO of EnerNOC. "And following our recent landmark victory at the Supreme Court, we begin 2016 with the clarity and focus needed to drive significant growth in our software business and maximize the cash flow generation of our demand response business."

Summary Financial Results  
In Thousands, Except Per Share Amounts  
     
 Q4 2015Q4 2014YTD 2015YTD 2014
     
Revenue$59,209 $45,963 $399,584 $471,948 
Net (Loss) Income    
GAAP$(128,980)$(26,781)$(185,075)$12,094 
Non-GAAP 1$(29,193)$(16,324)$(56,319)$39,947 
Net (Loss) Income Per Diluted Share    
GAAP$(4.51)$(0.98)$(6.51)$0.42 
Non-GAAP 1$(1.02)$(0.60)$(1.98)$1.39 
     
Cash Provided by Operations$21,706 $30,727 $3,480 $60,439 
Free Cash Flow 1$16,747 $26,022 $(16,212)$42,932 
Adjusted EBITDA 1$(19,559)$(14,089)$(21,068)$76,370 
     
1 Refer to "Statement of Use of Non-GAAP 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

-- The United States Supreme Court upheld Order No. 745 of the Federal Energy Regulatory Commission (FERC), affirming FERC's jurisdiction over the participation of demand response in U.S. wholesale electricity (grid operator) markets. The Supreme Court's ruling is a major win for EnerNOC and all distributed energy resource providers.

-- The Company grew its fourth quarter enterprise Annual Recurring Revenue (ARR) by $3 million sequentially to $61 million. During 2015, the Company grew its enterprise ARR from $20 million at year end 2014 to $61 million at year end 2015, including 50% organic growth.

-- Consolidated Edison (Con Ed) utilized the Company's online auction platform to procure approximately $1 billion in energy and capacity for its regulated utility subsidiaries.

-- The Company released new functionality in its enterprise EIS platform, enabling users to track energy projects in detail including owner, status, and estimated financial impact.  The new capabilities allow for a single system of record for all energy-related initiatives across an enterprise, providing visibility to every authorized user to increase efficiency and accountability.

Commentary on Fourth Quarter and Full Year 2015 Results and Initial 2016 Outlook

The Company's Form 8-K filed with the Securities and Exchange Commission in conjunction with this release includes an exhibit that contains management's commentary on the fourth quarter and full year 2015 financial results, which can be accessed at www.sec.gov.

Company Issues First Quarter and Full Year 2016 Guidance

The Company today issued guidance for the first quarter and full year 2016. In addition to consolidated financial guidance, the Company is providing revenue and adjusted EBITDA guidance for its Demand Response and Software businesses. The Company intends to report both revenue and adjusted EBITDA for these businesses beginning in 2016. The Company's guidance is based on the current indications for its business, which may change at any time.

 Guidance for Quarter Ending
March 31, 2016
Total Revenue (in millions)$46-$52
Demand Response Revenue$33-$37
Software Revenue$13-$15
GAAP Net Loss Per Diluted Share($1.82)-($1.72)
Adjusted EBITDA1 (in millions)($34)-($31)
 
1 Refer to "Statement of Use of Non-GAAP 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.
 Guidance for Year Ending
December 31, 2016
Total Revenue (in millions)$365-$395
Demand Response Revenue$285-$310
Software Revenue$80-$85
GAAP Net Loss Per Diluted Share($3.85)-($3.50)
Total Adjusted EBITDA1 (in millions)($45)-($35)
Demand Response Adjusted EBITDA1 (in millions)$40-$45
Software Adjusted EBITDA1 (in millions)($65)-($60)
Corporate Adjusted EBITDA1 (in millions)~($20)
 
1 Refer to "Statement of Use of Non-GAAP 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.


Company to Host Analyst Day and Webcast

The Company's management team plans to host an Analyst Day from 10:00 a.m. to 2:30 p.m. eastern time today to discuss management's outlook for the business. The Analyst Day will be webcast live, and archived thereafter, on the Company's investor relations website, which can be accessed at http://investor.enernoc.com.

About EnerNOC

EnerNOC is a leading provider of energy intelligence software (EIS) and demand response for enterprises, utilities and electric power grid operators. 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 EIS helps enterprises control energy costs, mitigate risk, and streamline sustainability and compliance reporting. EnerNOC's EIS solutions for utilities enable energy suppliers to forge deeper customer relationships, address regulatory mandates, and cost-effectively integrate demand-side resources to improve grid reliability through key capabilities, including customer engagement, demand response, energy efficiency, and wholesale procurement. EnerNOC also offers access to more demand response programs worldwide than any other provider, offering enterprises a valuable payment stream to further enhance bottom-line results. EnerNOC supports customer success with its world-class professional services team and a Network Operations Center (NOC) staffed 24x7x365. 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 future financial performance on both a GAAP and non-GAAP basis and the drive to significant growth in the Company's software business and the maximization of cash flow generation in the Company's demand response business, 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  Twelve Months Ended  
December 31, December 31, 
 2015
  2014   2015
    2014 
Revenues:                                 
Grid operator$20,670  $18,236  $259,302  $368,828  
Utility 12,706   12,015   63,204   62,026  
Enterprise 25,833   15,712   77,078   41,094  
Total revenues 59,209   45,963   399,584   471,948  
Cost of revenues 36,406   24,817   245,051   257,322  
Gross profit 22,803   21,146   154,533   214,626  
Operating expenses:        
Selling and marketing 22,612   19,963   97,175   76,960  
General and administrative 26,817   25,389   110,267   97,729  
Research and development 7,475   5,239   29,287   20,671  
Gain on sale of service line -   (1,054)  -   (4,791) 
Gain on sale of assets -   -   (2,991)  (2,171) 
Goodwill Impairment 108,763   -   108,763     -   
Total operating expenses 165,667   49,537   342,501   188,398  
(Loss) Income from operations (142,864)  (28,391)  (187,968)  26,228  
Other expense, net (1,678)  (2,423)  (7,444)  (3,699) 
Gain on extinguishment of debt 9,230     9,230    
Interest expense (2,161)  (2,080)  (8,946)  (4,656) 
(Loss) Income before income tax (137,473)  (32,894)  (195,128)  17,873  
Benefit from (Provision for) income tax 8,487   6,074   10,010   (5,876) 
Net (loss) income (128,986)  (26,820)  (185,118)  11,997  
Net loss attributable to noncontrolling interest (6)  (39)  (43)  (97) 
Net (loss) income attributable to EnerNOC, Inc.$(128,980) $(26,781) $(185,075) $12,094  
         
Net (loss) income per common share attributable to EnerNOC, Inc.       
Basic$(4.51) $(0.98) $(6.51) $0.43  
Diluted$(4.51) $(0.98) $(6.51) $0.42  
         
Weighted average number of common shares used in computing net (loss) income per share attributable to EnerNOC, Inc.        
Basic 28,587,413   27,406,087   28,432,974   27,857,026  
Diluted 28,587,413   27,406,087   28,432,974   28,790,665  


EnerNOC, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value and share data)
(unaudited)
 December 31, 2015 December 31, 2014 
ASSETS    
Current assets:    
Cash and cash equivalents$138,120  $254,351  
Trade accounts receivable, net 43,355   40,875  
Unbilled revenue 70,101   97,512  
Capitalized incremental direct customer contract costs 33,917   7,633  
Prepaid expenses and other current assets 8,118   19,263  
Total current assets$293,611  $419,634  
     
Property and equipment, net 49,653   50,458  
Goodwill and intangible assets, net 94,099   146,050  
Deposits and other assets 6,351   4,742  
Total assets$443,714  $620,884  
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable 6,002  $9,250  
Accrued capacity payments 104,278   92,332  
Accrued payroll and related expenses 18,058   18,446  
Accrued expenses and other current liabilities 20,734   28,724  
Deferred revenue 55,631   13,738  
Total current liabilities$204,703  $162,490  
     
Deferred tax liability 355   16,449  
Deferred revenue, long-term 3,696   5,816  
Other liabilities 8,763   8,919  
Convertible senior notes, net 111,254   135,090  
Total long-term liabilities 124,068   166,274  
     
Stockholders' equity:    
Common stock, $0.001 par value; 50,000,000 shares authorized, 30,797,289 and 29,833,578 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively 30   30  
Additional paid-in capital 377,473   365,855  
Accumulated other comprehensive loss (8,524)  (4,752) 
Accumulated deficit (254,335)  (69,260) 
Total EnerNOC, Inc. stockholders' equity 114,644   291,873  
Non-controlling interest 299   247  
Total stockholders' equity 114,943   292,120  
Total liabilities and stockholders' equity$443,714  $620,884  
    


EnerNOC, Inc.
Condensed Consolidated Statements of Cash Flow Data
(in thousands)
(unaudited)
        
        
 Three Months Ended  Twelve Months Ended
 December 31, December 31,
  2015   2014   2015   2014 
Cash provided by operating activities$21,706  $30,727  $3,480  $60,439 
Cash used in investing activities   (5,028)  (20,962)    (93,909)  (74,422)
Cash (used in) provided by financing activities   (20,173)  (240)    (22,504)  120,865 
Effects of exchange rate changes on cash and cash equivalents   (325)  (1,389)    (3,298)  (1,720)
Net change in cash and cash equivalents$(3,820) $8,136  $(116,231) $105,162 
Cash and cash equivalents at beginning of period   141,940   246,215     254,351   149,189 
Cash and cash equivalents at end of period$138,120  $254,351  $138,120  $254,351 


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

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 non-GAAP net (loss) income attributable to EnerNOC, Inc. to be an important indicator of the overall performance 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, management considers 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. Moreover, management considers free cash flow to be an indicator of the Company's operating trend and performance of the business.

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

-- Management defines non-GAAP net (loss) income attributable to EnerNOC, Inc. as net (loss) income attributable to EnerNOC, Inc. before accretion expense related to the debt-discount portion of interest expense associated with the convertible note issuance, stock-based compensation, direct and incremental expenses related to acquisitions, divestitures and restructuring activities, impairment of goodwill and intangible assets, gains on early extinguishment of debt, and amortization expenses related to acquisition-related intangible assets, net of related tax effects.

-- Management defines adjusted EBITDA as net (loss) income attributable to EnerNOC, Inc., excluding depreciation, amortization, asset impairments, stock-based compensation, direct and incremental expenses related to acquisitions, divestitures and restructuring activities, impairment of goodwill and intangible assets, gains on early extinguishment of debt, interest expense, income taxes and other income (expense), net.

-- Management defines free cash flow as net cash provided by operating activities, less capital expenditures, plus net cash provided by the sale of assets or disposals of components of an entity. Management defines capital expenditures as purchases of property and equipment, which includes capitalization of internal-use software development costs.

Non-GAAP net (loss) income attributable to EnerNOC, Inc., non-GAAP net (loss) income per share attributable to EnerNOC, Inc., 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, 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.

EnerNOC, Inc.
Reconciliation Of Non-GAAP Measures To Nearest GAAP Measures
Reconciliation of Non-GAAP Net Loss Attributable to EnerNOC, Inc. And Net Loss Per Share Attributable to EnerNOC, Inc.
 
(in thousands, except share and per share data)
(Unaudited)
 Three Months Ended December 31,  
  2015   2014   
      
GAAP net loss attributable to EnerNOC, Inc.$(128,980) $(26,781)  
Adjustments to reconcile GAAP net loss to Non-GAAP net loss:     
Stock-based compensation expense 3,198   3,902   
Amortization of acquired intangible assets 3,645   2,499   
Direct and incremental expenses related to acquisitions, divestitures and restructuring 1 310   1,994   
Impairment of goodwill and intangible assets 108,763   -   
Debt discount portion of interest expense related to convertible notes   1,001   1,000   
Gain on early extinguishment of debt   (9,230)  -   
Tax impact of items listed above   (7,900)  1,062   
Non-GAAP net loss attributable to EnerNOC, Inc. $(29,193) $(16,324)  
      
Weighted average number of common shares outstanding - diluted (GAAP and Non-GAAP) 28,587,413   27,406,087   
GAAP net loss per diluted share$(4.51) $(0.98)  
Non-GAAP net loss per diluted share$(1.02) $(0.60)  
     
1 Includes costs for third party professional services (legal, accounting, valuation) and severance.


EnerNOC, Inc.
Reconciliation Of Non-GAAP Measures To Nearest GAAP Measures
Reconciliation of Non-GAAP Net (Loss) Income Attributable to EnerNOC, Inc. And Net (Loss) Income Per Share Attributable to EnerNOC, Inc.
 
(in thousands, except share and per share data)
(Unaudited)
 Twelve Months Ended December 31, 
  2015   2014  
     
GAAP net (loss) income attributable to EnerNOC, Inc.$(185,075) $12,094  
Adjustments to reconcile GAAP net (loss) income to Non-GAAP net (loss) income:    
Stock-based compensation expense 14,585   16,063  
Amortization of acquired intangible assets 15,252   9,252  
Direct and incremental expenses related to acquisitions, divestitures and restructuring 1   3,222     3,550  
Impairment of goodwill and intangible assets   108,763     -   
Debt discount portion of interest expense related to convertible notes   4,064     1,474  
Gain on early extinguishment of debt   (9,230)    -   
Tax impact of items listed above   (7,900)    (2,486) 
Non-GAAP net (loss) income attributable to EnerNOC, Inc. $(56,319) $39,947  
     
Weighted average number of common shares outstanding - diluted (GAAP and Non-GAAP)  28,432,974   28,790,665  
GAAP net (loss) income per diluted share$(6.51) $0.42  
Non-GAAP net (loss) income per diluted share$(1.98) $1.39  
    
1 Includes costs for third party professional services (legal, accounting, valuation) and severance.


EnerNOC, Inc.
Reconciliation of Adjusted EBITDA
(in thousands)
(unaudited)
        
 Three Months Ended  Twelve Months Ended
 December 31, December 31,
  2015   2014   2015   2014 
Net (loss) income attributable to EnerNOC, Inc.$(128,980) $(26,781) $(185,075) $12,094 
Add back:       
Depreciation and amortization 1 11,028   8,250   40,287   31,417 
Stock-based compensation expense 3,198   3,902   14,585   16,063 
Direct and incremental expenses related to acquisitions, divestitures and restructuring 2 310   1,994   3,222   3,550 
Impairment of goodwill and intangible assets 108,763   -   108,763   - 
Gain on extinguishment of debt (9,230)  -   (9,230)  - 
Other expense, net 3 1,678   2,423   7,444   3,699 
Interest expense 2,161   2,080   8,946   4,656 
(Benefit from) Provision for income tax 4 (8,487)  (5,957)  (10,010)  4,891 
Adjusted EBITDA$(19,559) $(14,089) $(21,068) $76,370 
        
1 Includes impairments to fixed assets and other long-term assets recorded during the three and twelve month period ended December 31, 2015.
2 Includes costs for third party professional services (legal, accounting, valuation) and severance.
3 Other expense, net primarily relates to foreign currency (gains) losses.
4 Excludes discrete tax benefit of ($117) and discrete tax provision of $985 recorded during the three and twelve month periods ended December 31, 2014 related to the sale of the USC business component.
 


EnerNOC, Inc.
Reconciliation of Free Cash Flow
(in thousands)
(unaudited)
        
 Three Months Ended  Twelve Months Ended
 December 31, December 31,
  2015   2014   2015   2014 
Net cash provided by operating activities$21,706  $30,727  $3,480  $60,439 
Add: Net cash provided by the sale of assets or disposals of components of an entity   946   1,600   3,937   8,046 
Subtract: Purchases of property and equipment (5,905)  (6,305)  (23,629)  (25,553)
Free cash flow$16,747  $26,022  $(16,212) $42,932 


Non-GAAP Financial Guidance

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

 Three Months Ended Twelve Months Ended
 March 31, 2016 December 31, 2016
   Per Diluted Share   Per Diluted Share
In Millions, Except Per Share AmountsLowHighLowHigh LowHighLowHigh
          
Demand Response Adjusted EBITDA 1     $40 $45   
Software Adjusted EBITDA 1     $(65)$(60)  
Corporate Adjusted EBITDA 1     $(20)$(20)  
Total Adjusted EBITDA$(34)$(31)   $(45)$(35)  
          
Reconciling Adjustments:         
Depreciation and amortization$10 $10    $38 $38   
Stock-based compensation$4 $4    $15 $15   
Direct and incremental expenses 2$0 $0    $1 $1   
Interest and other expense$3 $3    $9 $9   
Provision for income taxes$1 $1    $3 $3   
          
Projected GAAP Net Loss$(52)$(49)$(1.82)$(1.72) $(111)$(101)$(3.85)$(3.50)
          
Weighted Average Number of Common Shares Outstanding-Diluted 28.5  28.5     28.8  28.8   
1 Only total adjusted EBITDA guidance provided for three months ended March 31, 2016.
2 Represents costs associated with reorganizing the business.


EnerNOC Media Relations:
Robin Woodcock
617.692.2601
news@enernoc.com 

Investor Relations: 
Christopher Sands 
617.692.2569 
ir@enernoc.com