FORM 8-K |
EnerNOC, Inc. (Exact Name of Registrant as Specified in Charter) |
Delaware | 001-33471 | 87-0698303 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
One Marina Park Drive, Suite 400, Boston, Massachusetts | 02210 | |||
(Address of Principal Executive Offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit No. | Description | |||||
99.1 | Press Release issued by the Company on | May 9, 2017 |
ENERNOC, INC. | ||||
Date: | May 9, 2017 | By: | /s/ William G. Sorenson | |
Name: | William G. Sorenson | |||
Title: | Chief Financial Officer (principal financial and principal accounting officer) |
Exhibit No. | Description | |||||
99.1 | Press Release issued by the Company on | May 9, 2017 |
EnerNOC Media Relations: Sarah McAuley 617.532.8195 | Investor Relations: |
Summary Financial Results | |||||||
In Thousands, Except Per Share Amounts | |||||||
Q1 2017 | Q1 2016 | ||||||
Revenue | |||||||
Demand Response | $ | 34,484 | $ | 36,347 | |||
Software | 13,625 | 17,033 | |||||
Total Revenue | $ | 48,109 | $ | 53,380 | |||
Net Loss | $ | (32,010 | ) | $ | (40,538 | ) | |
Net Loss Per Diluted Share | $ | (1.08 | ) | $ | (1.41 | ) | |
Cash Used in Operations | $ | (24,639 | ) | $ | (30,392 | ) | |
Free Cash Flow 1 | $ | (28,066 | ) | $ | (34,783 | ) | |
Adjusted EBITDA1 | |||||||
Demand Response adjusted EBITDA | $ | (3,456 | ) | $ | (3,484 | ) | |
Software adjusted EBITDA | (5,038 | ) | (18,007 | ) | |||
Corporate unallocated expenses | (5,817 | ) | (5,671 | ) | |||
Consolidated adjusted EBITDA1 | $ | (14,311 | ) | $ | (27,162 | ) |
Three Months Ended March 31, 2017 | |||||||
As reported | Pro forma as if the previous accounting guidance was in effect | ||||||
Revenue | |||||||
Demand Response | $ | 34,484 | $ | 33,196 | |||
Software | 13,625 | 15,128 | |||||
Total Revenues | 48,109 | 48,324 | |||||
Cost of revenues | 33,403 | 32,668 | |||||
Total operating expense, net | 43,056 | 43,099 | |||||
Loss from operations | $ | (28,350 | ) | $ | (27,443 | ) |
• | Reduced year over year first quarter operating expenses by 36%1 while delivering similar revenues, excluding the revenue contribution from business lines divested in 2016. |
• | Improved first quarter net loss by $8.5 million compared to the same period in 2016, representing a 21% year over year improvement, and improved adjusted EBITDA by $13.0 million compared to the same period in 2016, representing a 47% year over year improvement. |
• | Developed a new demand response resource to fulfill our commitment to Kyushu Electric Power Company in Japan, highlighting the speed and effectiveness of EnerNOC’s go to market capabilities. |
• | Cleared 165 megawatts of demand response capacity in the United Kingdom, doubling the size of our UK network since the prior delivery year. |
• | Signed a six-figure utility bill management deal with a large, European bank initiated through a channel arrangement with Carbon Clear. |
• | Adopted ASC 606, which will more closely align revenue recognition of our demand response programs with the service delivery period. |
Reaffirmed Guidance for Year Ending December 31, 2017 | |
Total Revenue (in millions) | $310-$340 |
Demand Response Revenue | $260-$280 |
Software Revenue | $50-$60 |
GAAP Net Loss Per Diluted Share | ($2.57)-($2.07) |
Consolidated adjusted EBITDA1 (in millions) | ($20)-($5) |
Demand Response adjusted EBITDA1 (in millions) | $20-$30 |
Software adjusted EBITDA1 (in millions) | ($20)-($15) |
Corporate unallocated expenses1 (in millions) | ~($20) |
EnerNOC, Inc. | |||||||
Condensed Consolidated Statements of Operations | |||||||
(in thousands, except share and per share data) | |||||||
(unaudited) | |||||||
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Revenues: | |||||||
Demand Response | $ | 34,484 | $ | 36,347 | |||
Software | 13,625 | 17,033 | |||||
Total revenues | 48,109 | 53,380 | |||||
Cost of revenues | 33,403 | 32,594 | |||||
Gross profit | 14,706 | 20,786 | |||||
Operating expenses (income): | |||||||
Selling and marketing | 13,874 | 25,015 | |||||
General and administrative | 19,620 | 27,916 | |||||
Research and development | 5,402 | 8,043 | |||||
Gains on sale of businesses | (1,726 | ) | — | ||||
Goodwill impairment | 5,886 | — | |||||
Total operating expenses and income | 43,056 | 60,974 | |||||
Loss from operations | (28,350 | ) | (40,188 | ) | |||
Other expense, net | 1,975 | 3,087 | |||||
Interest expense | (1,926 | ) | (1,777 | ) | |||
Loss before income tax | (28,301 | ) | (38,878 | ) | |||
Provision for income tax | (3,838 | ) | (1,691 | ) | |||
Net loss | (32,139 | ) | (40,569 | ) | |||
Net loss attributable to noncontrolling interest | (129 | ) | (31 | ) | |||
Net loss attributable to EnerNOC, Inc. | $ | (32,010 | ) | $ | (40,538 | ) | |
Net loss attributable to EnerNOC, Inc. per common share | |||||||
Basic | $ | (1.08 | ) | $ | (1.41 | ) | |
Diluted | $ | (1.08 | ) | $ | (1.41 | ) | |
Weighted average number of common shares used in computing net loss per share attributable to EnerNOC, Inc. | |||||||
Basic | 29,671,109 | 28,806,810 | |||||
Diluted | 29,671,109 | 28,806,810 |
EnerNOC, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 73,980 | $ | 97,993 | |||
Restricted Cash | 387 | 1,062 | |||||
Trade accounts receivable, net | 31,075 | 36,722 | |||||
Unbilled revenue | 18,952 | 45,430 | |||||
Contract assets | 27,580 | — | |||||
Capitalized fulfillment costs | 989 | 2,290 | |||||
Prepaid expenses and other current assets | 14,582 | 10,906 | |||||
Assets held for sale | — | 3,415 | |||||
Total current assets | 167,545 | 197,818 | |||||
Contract assets, net of current portion | 15,962 | — | |||||
Property and equipment, net | 36,600 | 38,828 | |||||
Goodwill and intangible assets, net | 65,029 | 72,433 | |||||
Deposits and other assets | 5,573 | 3,223 | |||||
Total assets | $ | 290,709 | $ | 312,302 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,036 | $ | 4,748 | |||
Accrued capacity payments | 45,732 | 63,943 | |||||
Accrued expenses and other current liabilities | 27,077 | 28,318 | |||||
Deferred revenue | 6,329 | 8,193 | |||||
Liabilities held for sale | — | 1,780 | |||||
Total current liabilities | 80,174 | 106,982 | |||||
Deferred revenue | 3,420 | 2,665 | |||||
Other liabilities | 8,931 | 7,521 | |||||
Convertible senior notes | 116,248 | 115,223 | |||||
Total long-term liabilities | 128,599 | 125,409 | |||||
Total EnerNOC, Inc. stockholders' equity | 80,661 | 79,680 | |||||
Non-controlling interest | 1,275 | 231 | |||||
Total stockholders' equity | 81,936 | 79,911 | |||||
Total liabilities and stockholders' equity | $ | 290,709 | $ | 312,302 |
EnerNOC, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flow Data | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
Condensed Consolidated Statements of Cash Flow Data | 2017 | 2016 | ||||||
Cash used in operating activities | $ | (24,639 | ) | $ | (30,392 | ) | ||
Cash used in investing activities | (1,949 | ) | (3,711 | ) | ||||
Cash provided by (used in) financing activities | 711 | (867 | ) | |||||
Effects of exchange rate changes on cash and cash equivalents | 1,189 | 1,307 | ||||||
Net change in cash, cash equivalents and restricted cash | (24,688 | ) | (33,663 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 99,055 | 138,584 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 74,367 | $ | 104,921 |
• | Management defines consolidated adjusted EBITDA as net income (loss) attributable to EnerNOC, Inc., excluding depreciation, amortization and asset impairments; stock-based compensation; gains on the sale of businesses; direct and incremental expenses associated with acquisitions, divestitures, reorganizations; impairment of goodwill and intangible assets; restructuring charges; interest and other income (expense), net; and benefit from (provision for) income tax. |
• | Management defines free cash flow as net cash provided by (used in) operating activities less capital expenditures. Management defines capital expenditures as purchases of property and equipment, which includes capitalization of internal-use software development costs. |
EnerNOC, Inc. | |||||||
Reconciliation of Net Cash Provided By (Used In) Operating Activities to Free Cash Flow | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net cash used in operating activities | $ | (24,639 | ) | $ | (30,392 | ) | |
Subtract: Purchases of property and equipment and capitalization of internal use software | (3,427 | ) | (4,391 | ) | |||
Free cash flow | $ | (28,066 | ) | $ | (34,783 | ) |
EnerNOC, Inc. | ||||||||
Condensed Schedule of Segment Results | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
Segment Information | 2017 | 2016 | ||||||
Revenues: | ||||||||
Demand Response | ||||||||
Grid operator | $ | 26,392 | $ | 26,812 | ||||
Utility | 8,092 | 9,535 | ||||||
Total Demand Response Revenues | 34,484 | 36,347 | ||||||
Software | ||||||||
Subscription software | 4,499 | 6,176 | ||||||
Procurement solutions | 6,757 | 8,933 | ||||||
Professional services | 2,369 | 1,924 | ||||||
Total Software Revenues | 13,625 | 17,033 | ||||||
Consolidated Revenues | $ | 48,109 | $ | 53,380 | ||||
Segment Adjusted EBITDA 1: | ||||||||
Demand Response adjusted EBITDA | $ | (3,456 | ) | $ | (3,484 | ) | ||
Software adjusted EBITDA | $ | (5,038 | ) | $ | (18,007 | ) |
EnerNOC, Inc. | |||||||
Reconciliation of Net Loss Attributable to EnerNOC, Inc. to Consolidated Adjusted EBITDA | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net loss attributable to EnerNOC, Inc. | $ | (32,010 | ) | $ | (40,538 | ) | |
Depreciation, amortization and asset impairments (1) | 7,541 | 9,687 | |||||
Stock-based compensation | 2,031 | 3,115 | |||||
Gains on sale of businesses | (1,726 | ) | — | ||||
Direct and incremental expenses associated with divestitures(2) | 178 | 193 | |||||
Impairment of goodwill and intangible assets | 5,886 | — | |||||
Interest and other expense, net | (49 | ) | (1,310 | ) | |||
Provision for income tax | 3,838 | 1,691 | |||||
Consolidated adjusted EBITDA | $ | (14,311 | ) | $ | (27,162 | ) | |
Demand Response adjusted EBITDA | $ | (3,456 | ) | $ | (3,484 | ) | |
Software adjusted EBITDA | $ | (5,038 | ) | $ | (18,007 | ) | |
Corporate unallocated expenses | $ | (5,817 | ) | $ | (5,671 | ) |
1 | Includes impairments of production equipment no longer in operation. |
2 | Includes expenses that are direct and incremental to business divestitures, including third-party professional fees for legal, accounting and other services. |
Year Ending | ||||||||||||
December 31, 2017 | ||||||||||||
Per Diluted Share | ||||||||||||
In Millions, Except Per Share Amounts | Low | High | Low | High | ||||||||
Projected GAAP Net Loss | ($77 | ) | ($62 | ) | ($2.57 | ) | ($2.07 | ) | ||||
Reconciling Adjustments: | ||||||||||||
Depreciation, amortization and asset impairments | $27 | $27 | ||||||||||
Stock-based compensation | $12 | $12 | ||||||||||
Gains on sale of businesses | ($2 | ) | ($2 | ) | ||||||||
Impairment of goodwill and intangible assets | $6 | $6 | ||||||||||
Interest and other expense, net | $8 | $8 | ||||||||||
Provision for income taxes | $6 | $6 | ||||||||||
Consolidated adjusted EBITDA | ($20 | ) | ($5 | ) | ||||||||
Demand Response adjusted EBITDA | $20 | $30 | ||||||||||
Software adjusted EBITDA | ($20 | ) | ($15 | ) | ||||||||
Corporate unallocated expenses | ($20 | ) | ($20 | ) | ||||||||
Consolidated adjusted EBITDA | ($20 | ) | ($5 | ) | ||||||||
Weighted Average Number of Common Shares Outstanding-Diluted | 30.0 | 30.0 |
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