EnerNOC, Inc.
Aug 2, 2016

EnerNOC Reports Results for Second Quarter of 2016

BOSTON, Aug. 02, 2016 (GLOBE NEWSWIRE) -- EnerNOC, Inc. (Nasdaq:ENOC), a leading provider of energy intelligence software (EIS) and demand response solutions, today announced results for the second quarter ended June 30, 2016.

"We posted strong financial results for the quarter and we are increasing our full year outlook for the second consecutive period," said Tim Healy, Chairman and CEO of EnerNOC. "With continued solid execution in demand response and a sharper focus in software as we divest non-core assets, we are well positioned as the trusted technology partner of enterprises to manage their comprehensive energy strategy."

Summary Financial Results    
In thousands       
 Q2 2016 Q2 2015 YTD 2016 YTD 2015
Revenue       
Software$16,232  $19,908  $33,265  $37,325 
Demand Response116,462  52,592  152,809  85,726 
Total Revenue$132,694  $72,500  $186,074  $123,051 
        
Net Income (Loss)$102  $(18,780) $(40,436) $(69,082)
Net Income (Loss) Per Diluted Share$0.00  $(0.66) $(1.40) $(2.45)
        
Cash Used in Operations$(16,403) $(5,216) $(46,150) $(23,668)
Free Cash Flow 1, 2$(21,123) $(11,300) $(55,261) $(34,958)
Adjusted EBITDA1       
Software adjusted EBITDA$(20,030) $(15,000) $(38,037) $(35,246)
Demand Response adjusted EBITDA27,965  13,613  24,481  7,197 
Corporate unallocated expenses(4,536) (4,808) (10,207) (8,159)
Consolidated adjusted EBITDA1, 3$3,399  $(6,195) $(23,763) $(36,208)
                
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.
2 Free cash flow does not include cash received for the sale of service lines and assets. Prior period results have been updated to conform with
current period presentation.
Consolidated adjusted EBITDA excludes gain on the sale of service lines and assets. Prior period results have been updated to conform with
current period presentation.
 

Recent Highlights

Company Issues Third Quarter Guidance and Updates Full Year 2016 Guidance

The Company today issued guidance for the third quarter of 2016 and updated its previously issued guidance for the full year. The Company's guidance is based on the current indications for its business, which may change at any time.

 Guidance for Quarter Ending
September 30, 2016
Total Revenue (in millions)$141-$161
Software Revenue$16-$19
Demand Response Revenue$125-$142
GAAP Net Income Per Diluted Share$0.00-$0.24
Consolidated adjusted EBITDA1 (in millions)$15-$22
  
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 the Year Ending December 31, 2016
 Issued on May 5, 2016 Issued on Aug 2, 2016
Total Revenue (in millions)$365-$395 $370-$400
Software Revenue$72-$77 $67-$72
Demand Response Revenue$293-$318 $303-$328
GAAP Net Loss Per Diluted Share($3.25)-($2.90) ($2.95)-($2.60)
Consolidated adjusted EBITDA1 (in millions)($40)-($30) ($35)-($25)
Software adjusted EBITDA1 (in millions)($65)-($60) ($65)-($60)
Demand Response adjusted EBITDA1 (in millions)$45-$50 $50-$55
Corporate unallocated expenses1 (in millions)~($20) ~($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 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 +1.800.230.1059 and using access code "ENOC". The conference call may be accessed outside of the United States by dialing +1.612.332.0226 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. 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 397874 or by accessing the webcast replay on the Company's investor relations website.

About EnerNOC

EnerNOC is a leading provider of energy intelligence software (EIS) and demand response solutions. 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. EnerNOC also 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. 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 future growth and success of the Company's energy intelligence software and demand response solutions, 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
June 30,
 Six Months Ended
June 30,
 2016 2015 2016 2015
Revenues:       
Software$16,232  $19,908  $33,265  $37,325 
Demand Response116,462  52,592  152,809  85,726 
Total revenues132,694  72,500  186,074  123,051 
Cost of revenues81,531  33,543  114,125  65,499 
Gross profit51,163  38,957  71,949  57,552 
Operating expenses:       
Selling and marketing25,517  23,670  50,532  52,166 
General and administrative27,441  28,453  55,357  56,743 
Research and development7,634  7,735  15,677  15,186 
Gain on sale of service lines and assets(17,376) (2,991) (17,376) (2,991)
Restructuring charges3,694    3,694   
Total operating expenses46,910  56,867  107,884  121,104 
Income (loss) from operations4,253  (17,910) (35,935) (63,552)
Other income (expense), net(3,421) 1,705  (334) (2,952)
Interest expense(1,844) (2,240) (3,621) (4,532)
Loss before income tax(1,012) (18,445) (39,890) (71,036)
Benefit from (provision for) income tax1,109  (345) (582) 1,940 
Net income (loss)97  (18,790) (40,472) (69,096)
Net loss attributable to noncontrolling interest(5) (10) (36) (14)
Net income (loss) attributable to EnerNOC, Inc.$102  $(18,780) $(40,436) $(69,082)
        
Net income (loss) attributable to EnerNOC, Inc. per
common share
       
Basic$0.00  $(0.66) $(1.40) $(2.45)
Diluted$0.00  $(0.66) $(1.40) $(2.45)
        
Weighted average number of common shares used in
computing net income (loss) per share attributable
to EnerNOC, Inc.
       
Basic29,114,200 28,327,867 28,962,021 28,172,398
Diluted29,569,321 28,327,867 28,962,021 28,172,398


EnerNOC, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value and share data)
(unaudited)
 June 30, 2016 December 31, 2015
ASSETS   
Current assets:   
Cash and cash equivalents$95,123  $138,120 
Trade accounts receivable, net33,301  43,355 
Unbilled revenue10,341  70,101 
Capitalized incremental direct customer contract costs6,857  33,917 
Prepaid expenses and other current assets14,225  8,118 
Assets held for sale7,470   
Total current assets167,317  293,611 
    
Property and equipment, net44,009  49,653 
Goodwill and intangible assets, net80,696  94,099 
Deposits, other assets, and deferred tax assets5,979  6,351 
Total assets$298,001  $443,714 
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$1,405  $6,002 
Accrued capacity payments47,299  104,278 
Accrued payroll and related expenses13,273  18,058 
Accrued expenses and other current liabilities15,086  20,734 
Deferred revenue14,269  55,631 
Liabilities held for sale915   
Total current liabilities92,247  204,703 
    
Deferred revenue3,448  3,696 
Other liabilities and deferred tax liabilities7,591  9,118 
Convertible senior notes113,203  111,254 
Total long-term liabilities124,242  124,068 
    
Stockholders' equity:   
Common stock31  30 
Additional paid-in capital382,757  377,473 
Accumulated other comprehensive loss(6,768) (8,524)
Accumulated deficit(294,771) (254,335)
Total EnerNOC, Inc. stockholders' equity81,249  114,644 
Non-controlling interest263  299 
Total stockholders' equity81,512  114,943 
Total liabilities and stockholders' equity$298,001  $443,714 
    


EnerNOC, Inc.
Condensed Consolidated Statements of Cash Flow Data
(in thousands)
(unaudited)
  Three Months Ended
June 30,
 Six Months Ended
June 30,
Condensed Consolidated Statements of Cash Flow Data 2016 2015 2016 2015
Cash used in operating activities $(16,403) $(5,216) $(46,150) $(23,668)
Cash provided by (used in) investing activities 8,099  (2,969) 3,490  (83,535)
Cash used in financing activities (824) (1,119) (1,496) (2,130)
Effects of exchange rate changes on cash and cash equivalents(148) 431  1,159  (1,463)
Net change in cash and cash equivalents (9,276) (8,873) (42,997) (110,796)
Cash and cash equivalents at beginning of period 104,399  152,428  138,120  254,351 
Cash and cash equivalents at end of period $95,123  $143,555  $95,123  $143,555 


 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, that exclude certain amounts. 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 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 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 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:

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, 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 Free Cash Flow 
(in thousands) 
(unaudited) 
 Three Months Ended Six Months Ended 
 
 June 30,June 30, 
 2016 2015 2016 2015 
Net cash used in operating activities$(16,403) $(5,216) $(46,150) $(23,668) 
Subtract: Purchases of property and equipment(4,720) (6,084)  (9,111)  (11,290) 
Free cash flow 1$(21,123) $(11,300) (55,261) $(34,958) 
  
1 Free cash flow does not include cash received for the sale of service lines and assets. Prior period results have been updated to conform with
current period presentation.
 
 
EnerNOC, Inc.
Supplemental Financial Schedule of Segment Results
(in thousands)
(unaudited)
 Three Months Ended Six Months Ended
 
 June 30,
 June 30, 
Segment Information2016 2015 2016 2015 
Revenues:          
Software        
Subscription software$5,569  $4,831  $11,745  $9,318  
Procurement solutions 8,795   8,855   17,728   17,476  
Professional services 1,868   6,222   3,792   10,531  
Total Software Revenues 16,232   19,908   33,265   37,325  
           
Demand Response          
Grid operator 104,673   41,545   131,485   65,291  
Utility 11,789   11,047   21,324   20,435  
Total Demand Response Revenues 116,462   52,592   152,809   85,726  
                 
Consolidated Revenues$132,694  $72,500  $186,074  $123,051  
                 
Segment Adjusted EBITDA:        
Software adjusted EBITDA$(20,030) $(15,000) $(38,037) $(35,246) 
Demand Response adjusted EBITDA 27,965   13,613   24,481   7,197  
                 

 

EnerNOC, Inc.
Reconciliation of Consolidated Adjusted EBITDA
(in thousands)
(unaudited)
 Three Months Ended
June 30,
 Six Months Ended
June 30,
 2016 2015 2016 2015
        
Software adjusted EBITDA$(20,030) $(15,000) $(38,037) $(35,246)
Demand Response adjusted EBITDA27,965  13,613  24,481  7,197 
Corporate unallocated expenses(4,536) (4,808) (10,207) (8,159)
Consolidated adjusted EBITDA 13,399  (6,195) (23,763) (36,208)
Depreciation, asset impairment, and amortization(8,783) (9,914) (18,470) (19,748)
Stock-based compensation expense(3,669) (3,321) (6,784) (7,730)
Gain on sale of service lines and assets17,376  2,991  17,376  2,991 
Restructuring charges(3,694)   (3,694)  
Direct and incremental expenses of acquisitions and divestitures 2(371) (1,461) (564) (2,843)
Interest and other income (expense), net(5,265) (535) (3,955) (7,484)
Benefit from (provision for) income tax1,109  (345) (582) 1,940 
Net income (loss) attributable to EnerNOC, Inc.$102  $(18,780) $(40,436) $(69,082)
 
1 Consolidated adjusted EBITDA excludes gain on the sale of service lines and assets. Prior period results have been updated to conform with
current period presentation.
2 Includes costs that are direct and incremental to business acquisitions and divestitures, including third party professional fees for legal,
accounting and valuation 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:

 Three Months Ended Twelve Months Ended
 September 30, 2016 December 31, 2016
   Per Diluted Share   Per Diluted Share
In Millions, Except Per Share AmountsLowHighLowHigh LowHighLowHigh
Adjusted EBITDA:         
Software adjusted EBITDA     ($65)($60)  
Demand Response adjusted EBITDA     $50 $55   
Corporate unallocated expenses     ($20)($20)  
Consolidated adjusted EBITDA$15  $22     ($35)($25)  
              
Reconciling Adjustments:             
Depreciation and asset impairments$6  $6     $26 $26   
Amortization$3  $3     $11 $11   
Stock-based compensation expense$3  $3     $14 $14   
Direct and incremental expenses of acquisitions,
divestitures and restructuring
$1  $1     $6 $6   
Net gain on sale of assets or service lines$0  $0     ($17)($17)  
Interest and other income (expense), net$2  $2     $9 $9   
Provision for income taxes$0  $0     $2 $2   
              
Projected GAAP Net Income (Loss) attributable to
EnerNOC, Inc
$0  $7  $0.00  $0.24   ($86)($76)($2.95)($2.60)
          
Weighted Average Number of Common Shares
Outstanding-Diluted
29.529.5   29.229.2  

 

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

Investor Relations: 
Christopher Sands 
617.692.2569 
ir@enernoc.com