Ameresco(US:AMRC)2024-05-07 21:11PART I - FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Ameresco's unaudited Q1 2024 condensed consolidated financial statements report a $6.2 million net loss, a significant shift from prior-year net income Key Financial Statement Summary (Q1 2024 vs Q1 2023) | Financial Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Revenues | $298,406 | $271,042 | | Gross Profit | $46,993 | $49,948 | | Operating Income | $7,993 | $9,097 | | Net (Loss) Income | $(6,178) | $1,557 | | Net (Loss) Income Attributable to Common Shareholders | $(2,937) | $1,102 | | Diluted (Loss) Earnings Per Share | $(0.06) | $0.02 | | Cash from Operating Activities | $20,817 | $58,772 | Condensed Consolidated Balance Sheet Highlights | Balance Sheet Item | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $1,126,472 | $1,128,471 | | Total Assets | $3,803,266 | $3,713,776 | | Total Current Liabilities | $1,162,280 | $901,471 | | Total Liabilities | $2,829,195 | $2,741,014 | | Total Stockholders' Equity | $930,163 | $925,886 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, segment reorganization, Europe's revenue growth, $2.7 billion contracted backlog, acquisitions, debt, and an $89 million SCE project contingency - The company reorganized its internal structure on January 1, 2024, combining U.S. Regions and Canada into 'North America Regions' and reclassifying prior period amounts39133 - A significant contingency exists with Southern California Edison (SCE) for a BESS project, with potential liquidated damages up to $89 million due to delays, which Ameresco contests96158 Disaggregated Revenue by Segment (Three Months Ended March 31) | Segment | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | % Change | | :--- | :--- | :--- | :--- | | North America Regions | $138,285 | $140,542 | (1.6)% | | U.S. Federal | $60,890 | $59,556 | 2.2% | | Europe | $44,122 | $19,096 | 131.1% | | Alternative Fuels | $32,859 | $28,339 | 15.9% | | All Other | $22,250 | $23,509 | (5.4)% | | Total | $298,406 | $271,042 | 10.1% | - Contracted backlog reached $2.7 billion as of March 31, 2024, with approximately 32% expected to be recognized as revenue in the next twelve months49 - In Q1 2024, the company completed the second phase of the Bright Canyon Energy Corporation (BCE) acquisition for $48.0 million, financed with cash and a seller's note6589178 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 results, noting a 10.1% revenue increase to $298.4 million but a $6.2 million net loss due to project mix and supply chain issues, with backlog growing to $4.0 billion Q1 2024 vs Q1 2023 Performance Summary | Metric (in thousands) | Q1 2024 | Q1 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues | $298,406 | $271,042 | $27,364 | 10.1% | | Gross Profit | $46,993 | $49,948 | $(2,955) | (5.9)% | | Operating Income | $7,993 | $9,097 | $(1,104) | (12.1)% | | Net (Loss) Income | $(6,178) | $1,557 | $(7,735) | (496.8)% | - Key business trends include the Inflation Reduction Act (IRA)'s impact, creating both favorable climate and project delays, alongside persistent supply chain disruptions and inflation negatively impacting Q1 2024 results150151152 Backlog and Asset Development Growth (as of March 31) | Metric (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | Total Project Backlog | $4,020.1 | $2,971.4 | | O&M Backlog | $1,199.0 | $1,214.8 | | Assets in Development | $2,600.0 | $1,400.0 | - The company plans to invest an additional $235 million to $285 million in capital expenditures during 2024, primarily for new renewable energy plants, funded mostly with project finance debt188 Item 3. Quantitative and Qualitative Disclosures About Market Risk As of March 31, 2024, no significant changes in market risk exposures have occurred since the 2023 Annual Report on Form 10-K disclosures - No significant changes in market risk exposures have occurred since the 2023 Form 10-K disclosures194 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - Management concluded the company's disclosure controls and procedures were effective as of the report period end195 - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter196 PART II - OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various legal proceedings, not expecting material adverse effects, with a significant SCE project contingency detailed in Note 10 - The company is subject to ordinary course lawsuits, not expecting material adverse effects, with a material SCE project contingency detailed in Note 1096198 Item 1A. Risk Factors This section refers to the comprehensive risk factors discussed in the 2023 Form 10-K, emphasizing potential material adverse effects on business and financial results - The company's business is subject to numerous risks detailed in the 'Risk Factors' section of the 2023 Form 10-K199 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Ameresco did not repurchase Class A common stock in Q1 2024, with approximately $5.9 million remaining available under the repurchase program - No shares were repurchased in Q1 2024, with approximately $5.9 million remaining authorized under the stock repurchase program as of March 31, 2024200 Item 5. Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during Q1 2024201 Item 6. Exhibits This section indexes exhibits filed with Form 10-Q, including credit agreement amendments, CEO/CFO certifications, and Inline XBRL financial data - Exhibits include Amendment No. 5 to the Fifth Amended and Restated Credit Agreement, CEO/CFO certifications (Sections 302 and 906), and Inline XBRL data203204