AMRC - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen thank you for standing by. And welcome to the Ameresco Inc.

Second Quarter 2019 Earnings Call. At this time, all participants are I a listen-only mode. Later, we will conduct a question-and-answer session [Operator Instructions] As a reminder, this conference call is being recorded.

to conference like host to now Ms. would turn over the our I President and Dillon, Marketing Leila Vice Communications. Mr. may you Dillon, begin.

Leila Dillon

Thank you, for us appreciate you and good morning, today's everyone. call. We joining

Executive Ameresco's Joining and Controller Chief Officer; Senior President me Financial George Hole, Accounting Chiplock Sakellaris, Doran President here and President, are Chief Chief Vice Officer; and Corporate Officer. Mark Vice Chairman, and

and remarks. statements Before the you regarding a brief make would like I to information of performance turn the financial based or that forward-looking regarding future call management's This forward-looking the over future caution beliefs. contains to expectations current events are George I We upon call statement company. predictions such

the any results discuss differ obligation projections forward-looking important differ pertain issued this statements. company's and materially to may We SEC result the today's a morning materially uncertainties from and revise results statements to to cause of These that no We company's could that contained business. in our documents call. risks to press or forward-looking Actual our factors filings. assume release as made you on refer actual those to

In financial addition, prepared are referring we accordance measures non-GAAP principles. in accounting generally measures with accepted not These call. will during this financial be non-GAAP to

which behind slides non-GAAP can well to appendix release be press reconciliation is from Our GAAP available our the of as downloaded the website. an as non-GAAP explanation use in measures the financial and of our in

George. to I'll over George? now the turn call

George Sakellaris

everyone. morning good and Leila Hey,

recurring beyond. strong to businesses. Further outstanding half on have quarter Ameresco are second comparisons Our were for and of long-term in strategy execute for our solid results second continues XXXX growing its visibility we with revenue and on track line expectations. and

geographic institutional by our this innovative leveraging doing footprint. of and knowledge are We our technology broad

the a technology our we this offset is succeeded from compete a and The revenue higher-margin of needed increase than businesses developing second adjusted year's quarter the in the strong markets. increase and shift growth. talent these O&M in EBITDA net This more modest result continued investments income to XX% and energy the a X% in In revenues. assets to advanced contribution acquiring towards in posting

continues show assets in than quarter's equivalent second XXXX Total Our quarter reaching development end. impressive to pipeline megawatts XXX of asset the from by energy business doubled more growth.

development to the pipeline of have continued Our assets in will number this pipeline we in lead growth. currently and exceed executing now megawatts visibility excluding this – operation,

company's During continues and XX the to an technology quarter, XX we of megawatts. a our megawatts placed to operation year-to-date geography in business. additional energy Diversification asset for the be bringing priority totaled

concentration assets historic assets of the England-based New our our balanced with have biogas country. solar We spread throughout

all with are We other energy now this supplementing resources distributed in regions. and base solar

RNG our we ribbon-cutting QX, operational the substantial in at treatment to plant sustainability is RNG helps plant in the In facility asset largest have began biogas economic This and provides wastewater benefits ceremony achieve a ambitious U.S. its goals. the QX. with It Phoenix city commercial us to on we the and

continue RNG country. to pursue opportunities the actively around We large

as green in the spoken We both to earlier-stage assets metric have well five gas development reported good our calls. have about projects in a six as of we projects in pipeline previous

We actively of clients see We many their biogas allow our increased addition, government renewable landfill energy grow and institutional In looking market by plants gas, resource share with fed and sewerage is that awareness in leading biogas to to of expertise a other facilities and mix. this relationships add will data healthy client available market market indicates feedstocks. treatment to us our market there space. believe technical this

As in with have any variability energy project green some projects pricing. gas priority

approach to asset to a renewable disciplined fuels for class. continue take outlook positive a maintain we this developing However, and

XXX-megawatt We were milestone grow, to for quarter. Ameresco's passed our solar the during energy operating rapidly important an to remains While to business. solar assets RNG continue asset contributor have the operations pleased

We to continue expand America business. this existing across aggressively to leverage footprint North our

of growth our as our the regions our strong At project driven the second great business. performance $XXX our quarter, million. business. This was Moving well contracted U.S. energy XX% by execution as backlog smart in federal to end in year-over-year was to up

demand Our people win money, our provide comprehensive to resiliency solutions not These execute to greater environmental that Multiple water technically existing with a difficult add resiliency for continue projects. benefits. they pipeline, and measurable projects only along percentage and are new also security save projects of our factors and or and projects. include customers' comprise these energy driving but or

energy days and at of for Defense minimum quote bases". military for and of I security supports continuity a energy operations resiliency Department "Pursing XX The of

municipalities, In such projects are course, as hospitals storage. microgrids, more advanced resiliency investing we and winning common addition the programs, institutional this technologies trend battery and clients are in technical many and in core CHP competency. becoming universities, executing. into very These of Ameresco's other well And are plays

Corps' even other project grid. electricity or our and Marine the the facility generation, savings and contract recently in ensure gives battery million The This at $XX price microgrid will of secure commodity local combines is secure the a to ability reliable, Island. trend continue system this from supply project related highlights energy while cycle reducing perfectly event managing the to life installation storage loss storm which distributed completed costs project, its energy the This Parris a controls. base of performance One future volatility. at the operations operating

XX-year costs under reduce savings water save will annual utility and $X.X be to this customers. in energy of by and considerations environmental contract. Ameresco and and XX% benefits renewable by continue XX%. consumption million energy important Cost operate that our project demand for And will the operational project utility a The maintain

million in $X.X our annually. by infrastructure Wallops project will Island, earlier energy a footprint metric efficiency combination NASA's carbon project, A example, Virginia, of project facility over year. and at additional recent reduced facility's the per tons solar the we new For upgrades X,XXX by lower our spending solar

for the the In execution in of second healthy period ahead. solid the periods a was summary, Ameresco quarter growth for stage setting

search our turn a I call CFO Interim Chief to Controller review him like key Corporate the over and work Ameresco part Accounting Officer. his financials, Mark during would President, to I the team of Mark the remains process. as Vice tireless as to our thank for Before

welcome Executive held of like financial Hole. President would Chief joined I and renewable us energy most to a Financial global Previously, new recently Officer, throughout career his history roles also from Doran our industry. formally has Group company Doran the Chief a and Doran in he where energy America served has renewable many as Vice Officer, Strategy. North ReneSola, long

words. a to would say Doran like few Doran?

Doran Hole

the happy to here. team I'm the and right is execute phase just it capitalize joining on has near very all with I new energy that I look the really say you growth Thanks, can to it platform this and a that future. well-positioned meeting to George be and good has want in morning, everyone. forward Clean market conviction. is ambitions because a quickly to Ameresco entering

George Sakellaris

Thanks Doran.

Now Mark will financial review Mark? our quarter results. second

Mark Chiplock

we George, All you, Please release pleased good supports for company's otherwise. had the performance, everyone. year. more morning, review XXXX information. numbers press supplemental financial full earlier to which second I'm to slides this financial unless the Thank state guidance year refer quarter and our to we when QX and relate providing complete expectations

slightly in our in up business other positive included reflecting was year-over-year, sales momentum asset category. and our PV energy Revenue integrated

which segment and Recurring revenue, operating of helped year-over-year being We issues EBITDA total from generated offset by assets. lower our was energy see the due to geographies. represented of XXX approximately and to growth revenue our portfolio federal project revenue, year. continue basis in same growth our certain period revenues up timing last points to XX% This in in primarily

margin million, ahead XX.X% Operating to Gross were of expenses similar X% year's last last level. of was year. $XX

projects continue invest the end in country. ensure strategic support streams. stated we future growth year, the as well to in investments recurring as ability that will to we we As These technical throughout to last increasingly our the implement have revenue will at of resources complex

Net attributable EBITDA million increased million, outpaced year shareholders $X.X of common to $X.XX $XX.X million. while last increasing EPS income flat. to growth was from X% revenue Adjusted XX% significantly of $X.X

XX% this and second of for adjusted EBITDA accounted year's year-to-date. business revenue quarter recurring Our XX%

$X.X quarter. in business strong projects project of of with Visibility at the our approximately billion levels backlog end second remained awarded the

our projects We continue contracted to with awards. new backfill

XX% project million. Our backlog to $XXX increased contracted

gross are our to not in complexity both higher increasing we will as are and seeing and of replaced progress to awards. increase contracts margins embedded believe with projects lower-margin the institutional backlog lead Importantly, an contracts. We only in but government margin margin higher larger continue

us over $X.X the megawatt XXX provide Our XXX billion of of last business years. At the in energy equivalent weighted same operating XX visibility. of At the QX, a with more these was our represented at in end our almost pipeline double assets quarter, with business contracted and of of revenue multiyear average megawatt year. lines O&M the than the life second equivalent XXX megawatt development time asset end of

majority in comprise the Solar of assets assets development. energy

Ameresco's liquidity to ample pipeline remains our cash strong and available with asset execute plans. development credit

credit we senior larger During credit the improved quarter, more to support facility our and growth. a line and now our flexible have

outlook. Turning to

of We guidance, $XXX adjusted and revenue in are million reaffirming, our million, $X.XX. to range to $XXX to for $XX EPS of of $X.XX be XXXX EBITDA year million full namely the to million $XXX

call Now for to I George back to would comments. turn the like closing

George Sakellaris

platform and advanced on would for to resources a technical demand comments. storage, distributed great advantage technology market. and In battery the questions, CHP growing. a energy solutions Ameresco make the move has expanding has I we few closing know-how Before microgrids, like to to including corporate added of rapidly the is take your resiliency, built other with particular,

technologies these tend Projects incorporating be larger more and profitable. to

rolled time, just for revenues. on business penetration. be long-term are As continue out will our execute to At technologies and beginning advanced increase same the continued declines recurring familiarity growing to their model cost we greater

growth contracted We energy and The are earnings increased doubled and development support than provide namely year-on-year growth. a revenue first more and to second excellent strong year our in metrics from ahead ago outlook half levels half long-term assets key looking XX% visibility year-over-year. backlog on

And now we the to over turn operator the your questions. for call

Operator

the first with Riley. Our comes B. Instructions] from Chris line Van of Horn [Operator question

is open. line Your

Chris Van Horn

my the Thanks for quarter. taking call. congrats on And

Mark Chiplock

Thanks Chris.

Chris Van Horn

into if to the some dig of projects? -- wondering adjusted of your and range? the Is little it I was it on any just revenue and clarity the a puts on mix? EBITDA dependent you of Is bit, guidance Just some of recurring the sort timing takes there could of range.

Mark Chiplock

we to pretty year full second that reaffirmed so we we be so Coming knew we feel -- have portion we was good back-end mean visibility. year a outlook. large the about into half-weighted. that strong But I the weighted really Yes. going

contracted expect of We come our backlog. in with sources rest awarded about the from that the XX% the second revenues half coming of out

in got triggers to the real first come both about good so range on feel expected in the and we've pretty strong EBITDA. of again, we There the about as no and move pretty pretty were feel We've half range. good where So anything EBITDA we visibility kind revenue we've the well.

Chris Van Horn

the Got wondering And around mix, on is I'm further said might recurring in more to XX even you think then how some can XX there? that or the I months if give out look Okay. next maybe it. you visibility it XX%.

Mark Chiplock

I continue become just projects. that mean, the more growth seeing assets also size currently as backlog operations I the development into think But some in pretty -- percent in has of we higher. are the the the could strong we and we Yes. put a that little pipeline we're to of that see

And so might balanced. it be somewhat again, think I

is we depend it'll operations before pipeline into that operations. I think the XX out of move we I quickly pipeline and we've the XX that think the into over next existing months. to put what development would And assets on said how

think the recurring dictate somewhat will the that in I that so, timing number. of And growth

Chris Van Horn

back you queue. I Okay. the Thank Got in so much. it. jump will

Operator

of Kaye line Oppenheimer. Our next the question Noah from with comes

open. is line Your

Noah Kaye

Thanks, good morning.

will mentioned still in you placed this year? megawatts the believe in How So this to I that we should place be to -- think solar Is service XX space. the about that? And in mostly outlook service XX XX you've quarter. megawatts

George Sakellaris

Yes.

Mark Chiplock

target pretty yes We good that all would And Yes. solar. that about feel Noah. from come

So…

Noah Kaye

risk? little a that terms pipeline to healthy also you're you a particularly how And fluctuations on Can price the then that RIN developing a you about taking very RNG of these all How development disciplined and market. the disciplined for go Okay. Certainly, approach seeing bit of expand you're this taking in to development. that we're projects mentioned approach? mitigate does in Ameresco some

George Sakellaris

those to the estimate potential we individuals prices now, of to developing we particular we see to might right rates look then quotes of time ones will If or hedging we return, aside. we been have be market And our every can if them Basically as will meet sometimes future them. that hedge we what not And talking execute output. and how then are various internal some get projects, the push that we in they we what the the prices. for develop

And in good gas they call outputs. some we institutional, output. couple gas the actually order very, I even about companies, to very and many A entities And business are are we some that working that what thing green government, to the some interested purchasing are interested that now -- in happening that's is talking gas encouraging. utility green long-term so contracts us is we with have to that hedge a on

Noah Kaye

that's back how complexity backlog. project And half improvement you the then size mix Okay, helpful. in about the the and partly on talked based contracted in

gross we sequentially on of So, should contemplating margin That's just that. about how the line? one much part be uplifts

you're the or is earlier-stage seeing of activity other you the part forward on? some in then that quoting have kind did into development carry projects of that And of

Mark Chiplock

a in the big margin in wouldn't half. Yes, second I uplift expect

I some the the projects positive the backlog of margins more are awarded think in complex come think trends that to with that as seeing larger we in. our -- some start I projects

progressing But the we we're still the backlog kind through still and have average than contracted margins somewhat through lower large of, backlog. margin, but some lower our progressing --

of second will that help balanced. will mix be kind I margin think that of half the that part gross to So, keep

increasing as see significant But wouldn't I in the second margin. contracted, again go-forward a the awarded progress gradual yes, and then expect some larger projects to on of these the basis we'd into we in uplift convert half. So, start think some a really I projects through backlog the

Noah Kaye

So, a and that's story. really beyond XXXX

here So, in margin real the sequential back in half. words no in gross change other

George Sakellaris

us about because The that outlook driven our in of second and pretty have right The in backlog. half is second million XX% good that pickup the good the And -- $XXX on the revenues. project a the backlog primarily in by project puts feel contracted half increase that's position. we we pretty

Noah Kaye

Thanks much. Okay. Good very color.

George Sakellaris

Thanks Noah.

Operator

further now Thank you. the CEO, this at call [Operator Instructions] would questions time. I to back turn no to over I'm Sakellaris. showing George like

George Sakellaris

thank look we'll We you. Thank you speaking call. Again, soon. forward today's for thank all the much very you you on throughout and you talk to And quarter. to participating with

Operator

for call. you participating. Ladies concludes that and today's gentlemen, Thank

You may now disconnect. have Everyone, day. a wonderful

Ameresco (AMRC) 9 Aug 192019 Q2 Earnings call transcript