Ameresco (AMRC) 3 May 222022 Q1 Earnings call transcript

Good day and welcome to the Q1 2022 Ameresco, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. to President call of like Dillon, to now Vice Senior Marketing. would turn over the Leila I

You may begin.

Thank you, us joining We appreciate Michelle, and good for afternoon, today’s everyone. you call.

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

the regarding remarks. Please those harbor Before our of and statements, refer to in our a cause brief our make today's would earnings SEC like I to could forward-looking statements forward-looking a that on turn the materials, All our uncertainties. contain X, regarding expectations. forward-looking call discussion statements. Today's forward-looking are filings actual factors for over safe and results including from risks materials to Slide differ risk statements George, I to major earnings statement the language to subject

our In when measures addition, presenting results. use several we financial non-GAAP

financial have included will reconciliations measures the to now these We our the over George. George? information. turn I call to supplemental in

of Its and Thank own customers booking performance and our lines together everyone. quarterly XXXX supply excellent challenges executed with team all across the were business. our more with as chain backlog, inflationary afternoon, you, opportunities all future the the by we of well-publicized are contracted good significant execution We industry. also given by started Leila, our our our employees, on impressive faced

about time some talk take our California to to want I Edison Southern Now, project.

procurement completion California which we are it First, individual comes when Edison is contracts items schedules. reminder, separate executing as project and a the budgets, actually Southern independently three to

we and energy in nowhere of battery some actual our industry. other plant a of have since ability our as been I remain complex various has have plants, proven are for engineering constructing or in Ameresco track Savannah such successfully green our achieved and the confident XXXX. three our projects customer manner. most these Biomass our battery projects, as projects gas in well operating completing complex projects a and as to the profitable as Second, construction satisfactory near to these River The deliver which record we in

we when COVID a risk much supply potential going of like do in in as with were as last operating chain signed year, Third, the our challenging projects, we environment before disruptions. we labor for a materials knew And contract possible to contract. all and we

we contingency for delays given contract However, scale California took budget. of negotiated COVID the Edison projects, in precautions. our potential the appropriate an included protections We Southern battery extra and

battery priority is shipment for, been very we the supply, have factory of terms already go these majority batteries of the constructed, on firm this of pre-negotiated supply a call. customer as with and the for paid terms bid. In slots our at The first

remaining are that are have been to China delays us. not experiencing the we manufactured Importantly, for of which battery related the COVID batteries already the in cells, for all

working We impact Edison are the the Southern actively with COVID regarding -- the related delays. COVID California of

discussions with allows our as for into in contingencies Based materially impacted with to the California we and and Southern these majeure force Our margin relief for by delays. be events contract expect we not together such them with projects, Edison. COVID, this, do financial on are the delayed built

all QX projects aspects sites been milestones expectations. currently expect the of ports that has the equipment our delays, quarter, preparation April transit. our the significant container included ship the XX or proceeding As on Southern with from are at driving we many heavily. Ameresco delivery. battery battery noted the to with results, the three August and Coast and of work revenue working construction-related avoid in construction progressed in press complete activities of continues during in Edison West ahead for in shown and the including Edison the suppliers batteries to release, quarterly deadline, all are as Apart projects installation on sourced deliveries, in California and actively Southern by the the potential X other original, Major the California mitigate expediated to

of We expect to XXXX to upto be online remainder XXX year. online megawatt be capacity the and August in this

guidance. While recent our we events confident of core shifting remain might our expected in cause a revenue cadence, annual

execution Lastly, have California Southern to true been I State They would very recognize the design like overall to helpful We partner. them the and wish project. of as for to their take and a cooperation. a of Edison the with thank minute California

revenue the was Southern highlights; the business to lines quarter growth our contracts. and a O&M we And quarterly our all also have of California good only battery but XX achieved over projects our added $XXX contracts. new opportunity, business. of as QX by [ph] a first megawatts we our million in of multi-year important, great to growth continue We profitability development, we But build upon Edison our not to led back through across strong visibility. business and strong Turning execute in results including continue while a R&D XX-megawatt assets multi-year additional equally booked asset energy

needs, over quarter, in awards new and the carbon as added $XXX During project to seek their energy to customers million increasing also costs, reduction address solutions continue we resiliency goals.

and with Edison series, they U.S. project is encompass own We [indiscernible]. technologies, project as award the across campuses partner in Europe will blueprint zero largest Leap U.K. actually could work, other to California initiatives. service designed O&M, awards their GBPX of that inward and currently goal history, an our range The ambitious billion Once energy the neutrality targeting will renewable project XX-year highlight City of be is investment cost-savings announced ownership. Southern This well to involving project a as is solutions contract. I is City of second us anticipate the carbon between as Bristol partnership the behind advanced full that approximately and in these contracted, of corporations for the partnership Ameresco's and that attract and XXXX Bristol and One our energy wanted develop shared efficiency only asset unique this net a

prices Europe and zero. opportunities the the particularly there, in excited net energy risks, elevated We about given to drive geopolitical similar other ongoing are

one I the transformative well largest U.K., comments some our the performance. services now and call such very winning financial will projects. in Ameresco executing to is on to positioned As provide turn of companies energy Doran continue over to the on Doran?

you, Thank good afternoon, George, and everyone.

the to today. release additional please website posted supplemental financial slides were closed information, that to For press the our after market refer and

growth, continued to four note quarter. And business top nicely projects the of during lines while the of is that overcame As excellent George results. business industry-wide to led noted, it our deliver important supply all and our very Ameresco impressive line pressures team inflationary chain grew to

total grow to record Just as robust important, new converting business a project during activity allowed while of even backlog our continued quarter. backlog to amount us our the revenue

the our QX businesses project energy O&M assets expected $X.X backlog us with projects our total The led future and total by revenue visibility. along revenues billion over in gives revenue growth was our business. in from Our impressive

Ameresco's we I'm to had from our the stronger SoCalEd invoiced. project's custom quarter-end, previously amended facility our the impacted announce needs procurement continue construction revenue our quarter, contract, uses the by SoCalEd lower credit of adjusted demonstrating financial impressive our in million. cash from the pleased our The resulted that operating amendment SoCalEd due $XXX improve though anticipated $XX ability subsequent prime that in gross working Not more dollars to existing EBITDA and these contract short-term to performance we of RIN temporary to example we of from practice, the senior credit add strong growth. by of the anticipated, cash Despite provide project; a quickly in the of assets quarter. Aspects flexibility and our Adjusted the capital onset had without in Overall, year-over-year we prices. facility collected incremental we driven needs scale million driving expenses. the during more was assets, was operating achieved to and to milestones liquidity project, during operations gross bringing progressed of the business. direct than increase energy margins operating business leverage total an the increase, recent a our overall improved strength growth $XXX service profit year-over-year placed and quarters, is unlike in still asset new million to revenue adding This of to

Now, increased City and activity winning XX% collaboration and total complex We're have I'll backlog to a large to and our are our the very sequentially bidding record $X.X our recently we pleased backlog. move interest including many to U.K. projects, Bristol project project announced pursuing remains strong, in increasing X% year-over-year. in billion, Customer

the around the at to operation industry-wide During some Ameresco development, the while that megawatts I'd which has issues, like provide commentary to and we backfilling of assets of challenges. inflation placed also chain in supply assets our able stands these into quarter, been megawatts. XXX now XX and many ways overcome high-profile

First and our foremost flexibility tremendous inherent diversified business model. is the in

As any to or the know, advanced one across the manufacturer each our to exposure needs leverages our investors meet technologies unique Ameresco suppliers this all customer; most reduces technology. of

dozens are technologies different given more projects Our incorporating also or any installation. comprehensive, in

finally, provide any us products on contract, there if securing protects of to opportunistically award of of a disruptions, cost a products Likewise, of Europe So around able generally around human move country, force our generally the the project, many so quarter overruns. the other type itself majeure we're Shanghai. type because unanticipated capital needed are shutdowns we into plus given significant one project. Ameresco to face and well by execution mitigate a is COVID-related product, contracts in like the for every and we And projects contracting efficiency. from in proactively Canada, aspects on caused advance delay work the working delays if protections can maximize helping to in continue receiving labor also moving delivery an and portion by and

and purchase balance leverage volume and to sheet components also scale projects assets. our We our for critical

to we supply purchased a have panels still previous in panels near-term needs. and supply For example, our Ameresco these U.S. of in of a years, the solar large meet proactively

recurring model. the approximately overall lines to EBITDA XX% our our as comes contracted resiliency of XX% a revenue generally business business Lastly, in inherent reminder, from demonstrating

COVID, discussed George here. at delivery issue sites. as the clear, we hand arising China events be from above, are apply the delays is force impacting batteries and the in restrictions As have To majeure which we certain for timing, believe the such protections to COVID contractual SoCalEd of

the of the not anticipate observed margin projects. material Importantly, SoCalEd the pricing batteries in impact cells battery recent again, we, the on And raw for widely our project. of these prices in materials not the used did on have impacted increase any

I'm our model remaining experience our XX% and outlook to current therefore place, to pleased gross be minimize created, excellent have while XX% we to results. business the expect annual So the than can both see to QX higher be guidance we some be still is on provide margins QX, certainly our issues, for of approximately global have reaffirm the team and of the for and helped We margins and gross in now than to XXXX revenue expected quarterly expected to we these quarters. QX, the we that greater even XX%. diversified with XX% revenue impact QX processes company's expect be slightly approximately about to cadence. professionals

I'd back comments. George the over closing Now, to like turn call for to

want Ameresco execution. Thank the team to and to you, take the again, I moment entire outstanding dedication closing, Doran. thank a In for

ongoing We and customers also the want of to long-term our stockholders. support recognize

and growing Day, large discussed continue from addressable recent our we Investor we during to As a market. benefit

matched solutions preferred to call Our and technical makes to open innovate the Operator, complex tech like partner now Ameresco portfolio I our financial advanced solutions. of the a clean questions. most comprehensive for would with expertise and

with Partners. [Operator Instructions] first from Joseph Osha Our Guggenheim question comes

Your open. line is

some SCE's for you SCE. release taking these in the we thank wanted position regards issues? get refer press might that my talked continuing on I to When discussions to as and Hello your force to majeure about question. you. just line Thank with clarity

relief. will believe with And hard the very if do would we quarter. I situation likely it's when most to I a But provides we contract them, [ph], were discussions exactly say and say abetterment have in the completely resolve there. we get Well, for COVID third we are the situation

will to clear a -- We where get we indication of stand. know have we

Our next question Oppenheimer. comes Kaye from with Noah

open. is line Your

you. Thank

to and then related related, not it's SCE contract one takes the one and just and really guide. puts Just around of the

to battery associated the revenue margin keeping else into Is second XX%. of quarter anything but mix seasonality should different online, for the gross of terms some project we at with or there attentive guide be the storage to So revenue coming be streams of? XH, aware shifting any in

that still will margins. I nothing notable, that -- so. would have this think don't impact SoCalEd QX -- the No, Mark. will but of still substantially impacted that's I project, be is the mean would No, outside that by

about why kind So pretty good out giving that we guidance felt again. that's of back

question Our next from Stephen with Stifel. comes Gengaro

open. is line Your

afternoon, Good everybody. Thanks.

Good afternoon.

in of understand the little you but could if curious, a remarks, add talked of color I'm Bristol you amount sort if out? reflected curious point? bit contract bit and play help how us what at little and I'm And this backlog? also, a that the And about will curious by the City just in that agreement, this of relationship and prepared is so,

comes Yes. good system, we doing, would through have And a we so are with part -- have were reported press projects contract. the agreement, very that what carbon as will [ph] our neutrality. work they basically comes very and expertise [indiscernible] that those awards have we work a we concession release we would XX-year get the awards would reported. the scripts likely distribution that steam the them be we our and to mentioned about associated done that's that our in the of most say a are we we I where -- they they today from half projects we see be [ph] is identified will of And I great partners. them. and And -- them It's that and that identified doing as plan in we have will be basically

comes with question from Stine next Craig-Hallum. Our Eric

Your line is open.

Bristol; a with the what win. on could if about areas -- if or might you And other just this like? potentially as sticking just competitive you comment then, was Maybe about think everyone. in pipeline that think of whether to expanding just look you Europe, Hi, City maybe curious just about talking could

job Sure. had. It a did the they No, very years; it evaluating and various -- that hiring took competition us superb consultants was very, two there. proposals they competitive

for institutional much, time in because at see become prices, time on beginning. if the they going towns way it's and as been Europe, of they order now, cities, services this in just of the able fact those all have industry; the developed we concept I win, to -- of a end, said or And some Europe. of be Of rate one whether the look a focusing same a the holistic approach the at. don't think it take they we this people and I top but a helped the you one, only the the number world. only will exactly are all like you industrial blueprint the takes that energy that in us I the I It I to know U.K. projects my of we established the associated what on do think happen. out it it's with In efficiency, call, now Ameresco fact able of company it's depending the win part mentioned but couple energy going or momentum have in think tremendously [indiscernible] right said core We And two major energy project. we've are a loved as advanced that three renewables more in United particular what do as would move; for the not solutions, other the a States, but to coming I form, companies. technologies, that will to And this the analysis customer, will be commentary, particular but [ph]. lot what's the say members after for particular I the the is to to this as

concludes in for our -- this participating you today's you Thank session. conference. Thank question-and-answer Instructions] [Operator

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