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EnerNOC Reports Fourth Quarter And Full Year 2012 Results

Stocks in this article: ENOC

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 (loss) income, non-GAAP net (loss) income 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 defines "non-GAAP net (loss) income" as net (loss) income before expenses related to stock-based compensation and amortization expenses related to acquisition-related intangible assets, net of related tax effects.  
  • EnerNOC defines "Adjusted EBITDA" as net loss, excluding depreciation, amortization, stock-based compensation, interest, income taxes and other income (expense). Adjusted EBITDA eliminates items that are either not part of the Company's core operations or do not require a cash outlay, such as stock-based compensation. Adjusted EBITDA also excludes depreciation and amortization expense, which is based on the Company's estimate of the useful life of tangible and intangible assets. These estimates could vary from actual performance of the asset, are based on historic cost incurred to build out the Company's deployed network, and may not be indicative of current or future capital expenditures.  
  • EnerNOC defines "free cash flow" as net cash provided by operating activities less capital expenditures. EnerNOC defines "capital expenditures" as purchases of property and equipment, which includes capitalization of internal-use software development costs.

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 loss or income to be an important indicator of the overall performance of the Company because it eliminates certain of the more significant effects of its acquisitions and related activities and 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 share and per share data)
         
EnerNOC, Inc.
Consolidated Statements of Operations
(Unaudited)
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2012 2011 2012 2011
         
Revenues        
DemandSMART  $ 31,266  $ 18,882  $ 244,852  $ 259,150
EfficiencySMART, SupplySMART and other  11,048  7,877  33,132  27,458
Total Revenues  42,314  26,759  277,984  286,608
Cost of revenues  28,103  21,132  154,540  163,211
Gross profit  14,212  5,627  123,444  123,397
         
Operating expenses:        
Selling and marketing  14,621  12,109  55,963  51,907
General and administrative  18,763  18,601  71,643  66,773
Research and development  4,690  4,362  16,226  14,254
Total operating expenses  38,074  35,072  143,832  132,934
(Loss) income from operations  (23,863)  (29,445)  (20,388)  (9,537)
Other income (expense)   141  1,498  1,457  (987)
Interest expense  (394)  (255)  (1,591)  (1,053)
(Loss) income before income tax  (24,116)  (28,202)  (20,522)  (11,577)
Benefit from (provision for) income tax  (1,676)  186  (1,771)  (1,806)
Net (loss) income  $ (25,792) $ (28,016) $ (22,293) $ (13,383)
         
(Loss) earnings per share:        
Basic $ (0.96) $ (1.08) $ (0.84) $ (0.52)
Diluted $ (0.96) $ (1.08) $ (0.84) $ (0.52)
         
Weighted average number of common shares outstanding        
Basic  26,791,280  26,001,088  26,551,234  25,799,494
Diluted  26,791,280  26,001,088  26,551,234  25,799,494
     
EnerNOC, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
     
  December 31,
  2012 2011
Assets    
Current assets    
Cash and cash equivalents  $ 115,041  $ 87,297
Restricted cash  9  158
Trade accounts receivable, net of allowance for doubtful accounts of $487 and $192 at December 31, 2012 and 2011, respectively  43,250  23,977
Unbilled revenue  45,269  64,448
Capitalized incremental direct customer contract costs  10,226  5,416
Deposits  2,296  14,050
Prepaid expenses and other current assets  4,640  7,257
Total current assets  220,731  202,603
Long-term assets    
Property and equipment, net of accumulated depreciation of $67,909 and $51,400 at December 31, 2012 and 2011, respectively  32,592  36,636
Goodwill  79,505  79,213
Customer relationship intangible assets, net  21,709  26,993
Other definite-lived intangible assets, net  3,915  5,524
Capitalized incremental direct customer contract costs, long-term  3,929  3,056
Deposits and other assets  826  1,235
Total assets  $ 363,207  $ 355,260
Liabilities and Stockholders' Equity    
Current liabilities    
Accounts payable  $ 3,976  $ 3,799
Accrued capacity payments  49,258  58,332
Accrued payroll and related expenses  13,044  11,937
Accrued expenses and other current liabilities  8,978  6,107
Accrued performance adjustments  685  6,045
Deferred revenue  28,105  10,544
Total current liabilities  104,046  96,764
Deferred acquisition consideration  533  500
Accrued acquisition contingent consideration  431  336
Deferred tax liability  4,222  2,646
Deferred revenue  11,837  6,810
Other liabilities  2,116  464
Total long-term liabilities  19,139  10,756
Commitments and contingencies (Note 12)  --   -- 
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, 29,019,923 and 27,306,548 shares issued and outstanding at December 31, 2012 and 2011, respectively  29  27
Additional paid-in capital  344,137  329,817
Accumulated other comprehensive loss  (702)  (955)
Accumulated deficit  (103,442)  (81,149)
Total stockholders' equity  240,022  247,740
Total liabilities and stockholders' equity  $ 363,207  $ 355,260
     
EnerNOC, Inc.
Cash Flow Information
(Unaudited)
     
  Year Ended December 31,
  2012 2011
     
Cash provided by operating activities  $ 31,011  $ 27,637
Cash used in investing activities  (3,585)  (95,516)
Cash provided by financing activities  356  1,997
Effects of exchange rate changes on cash  (38)  (237)
Net change in cash and cash equivalents  $ 27,744 $ (66,119)
         
EnerNOC, Inc. 
RECONCILIATION OF NON-GAAP MEASURES TO NEAREST GAAP MEASURES
(Unaudited)
         
Reconciliation of Non-GAAP Net (Loss) Income and Net (Loss) Income per Share
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2012 2011 2012 2011
         
GAAP Net (loss) income $ (25,792) $ (28,016) $ (22,293) $ (13,383)
ADD: Stock-based compensation  3,598  2,976  13,616  13,464
ADD: Amortization expense of acquired intangible assets  1,803  1,323  7,241  5,856
LESS: Income tax effect of Non-GAAP adjustments (1)  --   --   --   -- 
Non-GAAP Net (loss) income $ (20,391) $ (23,717) $ (1,436) $ 5,937
         
GAAP Net (loss) earnings per basic share $ (0.96) $ (1.08) $ (0.84) $ (0.52)
ADD: Stock-based compensation  0.14  0.12  0.51  0.52
ADD: Amortization expense of acquired intangible assets  0.07  0.05  0.28  0.23
LESS: Income tax effect of Non-GAAP adjustments (1)  --   --   --   -- 
Non-GAAP Net (loss) income per basic share $ (0.75) $ (0.91) $ (0.05) $ 0.23
         
GAAP Net (loss) earnings per diluted share $ (0.96) $ (1.08) $ (0.84) $ (0.52)
ADD: Stock-based compensation  0.14  0.12  0.51  0.52
ADD: Amortization expense of acquired intangible assets  0.07  0.05  0.28  0.23
LESS: Income tax effect of Non-GAAP adjustments (1)  --   --   --   -- 
LESS: Dilutive impact on weighted average common stock equivalents  --   --   --   (0.01)
Non-GAAP Net (loss) income per diluted share $ (0.75) $ (0.91) $ (0.05) $ 0.22
         
Weighted average number of common shares outstanding        
Basic  26,791,280  26,001,088  26,551,234  25,799,494
Diluted  26,791,280  26,001,088  26,551,234  26,766,359
         
(1) The non-GAAP adjustments would have no impact on the (provision for) benefit from income taxes recorded for the three months or year ended December 31, 2012 or 2011, respectively.  
         
Reconciliation of Adjusted EBITDA
         
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2012 2011 2012 2011
         
Net (loss) income $ (25,792) $ (28,016) $ (22,293) $ (13,383)
Add back:        
Depreciation and amortization  6,366  5,534  25,218  22,043
Stock-based compensation expense  3,598  2,976  13,616  13,464
Other (expense) income  (141)  (1,498)  (1,457)  987
Interest expense  394  255  1,591  1,053
(Benefit from) provision for income tax  1,677  (186)  1,771  1,806
Adjusted EBITDA $ (13,898) $ (20,935) $ 18,446 $ 25,970
         
Reconciliation of Free Cash Flow
         
  Three Months Ended December 31, Year Ended December 31,
  2012  2011  2012  2011 
Net cash provided by operating activities   $ 18,145     $ 10,871    $ 31,011    $ 27,637  
Subtract:        
Purchases of property and equipment  (4,102) (2,441) (15,854) (17,613)
Free cash flow  $ 14,043  $ 8,430  $ 15,157  $ 10,024  
CONTACT: Media and Investor Relations: 
         Sarah McAuley
         (617) 532.8195
         news@enernoc.com
         ir@enernoc.com

EnerNOC, Inc. Logo

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