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EAST HANOVER, N.J., Aug 06, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- Comverge, Inc. (Nasdaq: COMV), a leading provider of comprehensive smart grid, demand management, and energy efficiency solutions, today announced second quarter financial and operating results for 2009.
"Our second quarter performance kept us firmly on track to meet or exceed our targets for annual megawatt growth and future contracted revenue," said Michael D. Picchi, Interim President and CEO of Comverge. "We obtained regulatory approval of our Arizona Public Service VPC contract, the largest C&I VPC contract to date in the industry, and we secured more than 680 megawatts in the 2012/2013 PJM base residual capacity auction."
Picchi continued, "Our operational execution was solid as we realized 39% year-over-year revenue growth, built out 49 megawatts of capacity in our VPC programs and generated record cash from operations during the second quarter. We remain confident about the outlook for our performance in the remainder of this year."
Financial Summary
Second quarter revenues for 2009 were $13.3 million compared to $9.5 million in the second quarter of 2008, a 39% increase. Revenues for both periods exclude revenues from residential VPC contracts, which are deferred and recognized in the fourth quarter. Deferred revenue on the balance sheet from the VPC contracts was $20.2 million as of June 30, 2009 compared to $4.3 million at year-end 2008, an increase of $15.9 million during the first half of 2009. The $15.9 million increase during the first half of 2009 is compared to a $10.8 million increase in VPC deferred revenue during the first half of 2008, a 47% increase.
Adjusted EBITDA for the second quarter of 2009 was a negative $6.3 million compared to a negative $6.8 million for the second quarter of 2008. Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization and non-cash stock compensation expense (see Schedule 5 - Reconciliation of Non-GAAP Financial Measure to the Most Directly Comparable GAAP Financial Measure).
Net loss for the second quarter of 2009 was $9.1 million, or $0.43 per share basic and diluted, compared to a net loss of $9.6 million, or $0.45 per share basic and diluted for the second quarter of 2008.
Business Highlights
Comverge second quarter 2009 business highlights include:
-- Received regulatory approval of the Arizona Public Service contract,
marking the largest commercial and industrial (C&I) Virtual Peaking
Capacity(R) (VPC) demand response contract in the industry to date;
-- Secured more than 680 megawatts of demand response capacity in the
PJM Interconnection (PJM) market as a result of the 2012/13 Economic
Load Response Program Base Residual Auction; and
-- Increased total megawatts under management by 192 megawatts during the
second quarter of 2009. As of June 30, 2009 total megawatts under
management were:
- Megawatts under long-term contracts, with
regulatory approval 879
- Megawatts under open market programs 1158
- Megawatts to be provided under turnkey programs 320
- Megawatts managed for a fee 437
- Total megawatts 2794
Recent Developments and Current Outlook
Comverge entered into a 5-year agreement with a major Virginia-based energy provider to provide 117 megawatts of contracted demand side management capacity from commercial and industrial consumers, supply more than 150,000 advanced metering infrastructure compatible energy management devices for residential customers and provide our Apollo((R)) Demand Response Management System software.
Comverge's management and Board of Directors use three metrics to measure the company's operational progress: (i) megawatts owned under long-term contracts, (ii) megawatts managed under open market programs, and (iii) estimated future revenues from long-term contracts. We believe these metrics are the most important to the growth and long-term success of the company.
Our 2009 targets for growth in these metrics and our progress towards these metrics in the first half of 2009 are:
-- Add a net 275 megawatts of capacity under long-term contracts. 178 megawatts of capacity under long-term contracts were added during the first half of 2009;
-- Add a net 225 megawatts in open market programs. 264 megawatts were added in open market programs during the first half of 2009; and
-- Add a net $150 million increase in the amount of estimated future revenues from long-term contracts. A net $177 million in estimated future revenues were added in the first half of 2009.
As of the date of this release, we have 1036 megawatts under long-term capacity contracts which represents approximately $570 million of contracted future revenues. Of these amounts, 157 megawatts of capacity under long-term contracts representing an expected $46 million in contracted future revenues, are still awaiting regulatory approval. Furthermore, we have been awarded 683 megawatts of capacity in the 2012 - 2013 PJM Economic Load Response Program, or ELRP. In the event we receive regulatory approval on these 157 megawatts and we secure adequate load capacity to meet our obligations under the 2012-2013 PJM ELRP, we will exceed 3,300 in total megawatts managed.
The above statements are based on current expectations. These statements are forward-looking and actual results may differ materially. The Company assumes no obligation to publicly update or revise its outlook. Investors are reminded that actual results may differ from these estimates for the reasons described below under the caption "Caution Regarding Forward Looking Statements" and in our filings with the Securities and Exchange Commission.
Additional Information
Comverge will discuss these results for the second quarter as well as its expectations for the future in a conference call scheduled today at 4:30 p.m. EDT. To participate in the call, dial 800-239-9838 or 913-312-1270 for international participants.
An audio replay of the call will be available beginning August 6, 2009 at 8:00 p.m. and will be available until August 13, 2009 12:00 a.m. EDT, (midnight) by dialing in 888-203-1112 (719-457-0820 for international participants) and using conference code number 2884208.
Additionally, the results will be reported by webcast and available online in the Comverge investor relations section at http://ir.comverge.com. This webcast will be available online and archived on Comverge's website until November 5, 2009 12:00 a.m. EDT.
Additional financial information can be found in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, which has been filed today with the Securities and Exchange Commission.
About Comverge
Comverge, with over 3300 megawatts of clean energy capacity under management, is a leading provider of clean energy solutions that improve grid reliability and supply electric capacity on a more cost effective basis than conventional alternatives by reducing base load and peak load energy consumption. For more information, visit www.comverge.com. Virtual Peaking Capacity is a registered trademark of Comverge, Inc. Apollo is a trademark of Comverge, Inc.
Caution Regarding Forward Looking Statements
This release contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release are not and do not constitute historical facts, do not constitute guarantees of future performance and are based on numerous assumptions which, while believed to be reasonable, may not prove to be accurate. These forward looking statements include projected revenue guidance, projected contracted revenues, projected regulatory changes or approvals, the amount of revenue and megawatts that will be generated by long-term contracts or open market programs and certain assumptions upon which such forward-looking statements are based. The forward-looking statements in this release do not constitute guarantees of future performance and involve a number of factors that could cause actual results to differ materially, including risks associated with Comverge's business involving our products, the development and distribution of our products and related services, regulatory changes or grid operator rule changes, regulatory approval of our contracts, economic and competitive factors, our key strategic relationships, and other risks more fully described in our most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Comverge assumes no obligation to update any forward-looking information contained in this press release or with respect to the announcements described herein.
Regulation G Disclosure - Non-GAAP Financial Information
Non-GAAP financial measures are based upon our unaudited consolidated statements of operations for the periods shown, giving effect to the adjustments shown in the reconciliations set forth below. This presentation is not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information presented herein should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. However, Comverge believes that non-GAAP reporting, giving effect to the adjustments shown in the reconciliation below, provides meaningful information and therefore uses it to supplement its GAAP reporting and internally in evaluating operations, managing and benchmarking performance. The Company has chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the reconciliations below, and to provide an additional measure of performance.
SCHEDULE 1
COMVERGE, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ --------------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue
Product $5,077 $4,249 $9,913 $7,451
Service 8,188 5,272 14,932 12,523
----- ----- ------ ------
Total revenue 13,265 9,521 24,845 19,974
Cost of revenue
Product 2,982 2,659 6,086 4,699
Service 4,445 3,037 8,503 7,042
----- ----- ----- -----
Total cost of
revenue 7,427 5,696 14,589 11,741
----- ----- ------ ------
Gross profit 5,838 3,825 10,256 8,233
Operating expenses
General and
administrative
expenses 8,101 8,615 15,990 16,916
Marketing and
selling expenses 4,683 3,856 8,442 7,880
Research and
development
expenses 1,209 168 2,325 536
Amortization of
intangible assets 552 656 1,104 1,312
--- --- ----- -----
Operating loss (8,707) (9,470) (17,605) (18,411)
Interest and other
expense (income),
net 369 67 564 (144)
--- -- --- ----
Loss before income
taxes (9,076) (9,537) (18,169) (18,267)
Provision for
income taxes 65 78 107 170
-- -- --- ---
Net loss $(9,141) $(9,615) $(18,276) $(18,437)
======= ======= ======== ========
Net loss per share
Basic and diluted $(0.43) $(0.45) $(0.85) $(0.88)
====== ====== ====== ======
Weighted average
shares used in
computation 21,403,508 21,175,224 21,385,061 21,022,739
SCHEDULE 2
COMVERGE, INC.
SEGMENT INFORMATION
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue:
Utility Products
& Services $7,939 $5,309 $14,600 $9,466
Residential
Business 3,019 1,778 6,971 5,104
Commercial &
Industrial
Business 2,307 2,434 3,274 5,404
----- --- --- ---
Total Revenue $13,265 $9,521 $24,845 $19,974
======= ====== ======= =======
Cost of Revenue:
Utility Products
& Services 4,362 3,006 8,239 5,417
Residential
Business 1,690 1,076 4,333 2,622
Commercial &
Industrial
Business 1,375 1,614 2,017 3,702
----- --- --- ---
Total Cost of
Revenue $7,427 $5,696 $14,589 $11,741
====== ====== ======= =======
Gross Profit:
Utility Products
& Services 3,577 2,303 6,361 4,049
Residential
Business 1,329 702 2,638 2,482
Commercial &
Industrial
Business 932 820 1,257 1,702
--- --- --- ---
Total Gross
Profit $5,838 $3,825 $10,256 $8,233
====== ====== ======= ======
SCHEDULE 3
COMVERGE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2009 2008
------- -------
Assets
Cash and cash equivalents $33,805 $19,571
Restricted cash 1,074 1,968
Marketable securities 21,448 28,276
Billed accounts receivable, net 9,603 18,877
Unbilled accounts receivable 5,403 5,908
Inventory, net 4,848 4,960
Deferred costs 8,937 2,197
Other current assets 1,270 1,273
----- -----
Total current assets 86,388 83,030
Restricted cash 2,094 2,089
Property and equipment, net 23,020 20,572
Intangible assets, net 9,070 10,251
Goodwill 8,179 8,179
Other assets 912 1,036
--- -----
Total assets $129,663 $125,157
======== ========
Liabilities and
Shareholders' Equity
Accounts payable $7,038 7,672
Accrued expenses 4,929 8,006
Deferred revenue 23,503 6,694
Current portion of long-term debt 3,763 3,226
Other current liabilities 3,433 2,400
----- -----
Total current liabilities 42,666 27,998
Deferred revenue 2,482 2,220
Long-term debt 30,099 24,888
Other liabilities 2,158 2,391
----- -----
Total long-term liabilities 34,739 29,499
Common stock 22 22
Additional paid-in capital 223,563 220,638
Common stock held in treasury (189) (119)
Accumulated deficit (171,206) (152,930)
Accumulated other comprehensive
income 68 49
-- --
Total shareholders' equity 52,258 67,660
------ ------
Total liabilities and shareholders'
equity $129,663 $125,157
======== ========
SCHEDULE 4
COMVERGE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------- ------------------
2009 2008 2009 2008
---- ---- ---- ----
Cash flows from operating
activities
Net loss $(9,141) $(9,615) $(18,276) $(18,437)
Adjustments to reconcile net
loss to net cash provided
by (used in) operating
activities
Depreciation 261 200 512 375
Amortization of intangible
assets 686 656 1,365 1,312
Stock-based compensation 1,429 1,899 2,817 3,752
Other 555 (53) 644 32
Changes in working capital 14,220 472 22,348 (1,725)
------ --- ------ -----
Net cash provided by (used
in) operating activities 8,010 (6,441) 9,410 (14,691)
Cash flows from investing
activities
Changes in restricted cash (4) 410 889 (2,512)
Purchases of marketable
securities (10,462) (12,465) (14,481) (22,845)
Maturities of marketable
securities 9,350 12,700 21,250 29,480
Purchases of property and
equipment (4,645) (2,038) (8,586) (4,432)
----- ----- ----- -----
Net cash used in investing
activities (5,761) (1,393) (928) (309)
Cash flows from financing
activities
Borrowings under debt
facilities, net 3,432 1,808 5,749 3,694
Other 33 (480) 3 (395)
-- --- -- ---
Net cash provided by
financing activities 3,465 1,328 5,752 3,299
Net change in cash and cash
equivalents 5,714 (6,506) 14,234 (11,701)
Cash and cash equivalents at
beginning of period 28,091 34,560 19,571 39,755
------ ------ ------ ------
Cash and cash equivalents at
end of period $33,805 $28,054 $33,805 $28,054
======= ======= ======= =======
SCHEDULE 5
COMVERGE, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO THE
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURE
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ --------------------
2009 2008 2009 2008
---- ---- ---- ----
Net loss $(9,141) $(9,615) $(18,276) $ (18,437)
Depreciation and
amortization 947 856 1,877 1,687
Interest
(income)
expense, net 358 7 548 (201)
Provision for
income taxes 65 78 107 170
-- -- --- ---
EBITDA (7,771) (8,674) (15,744) (16,781)
Non-cash stock
compensation
expense 1,429 1,899 2,817 3,752
----- ----- ----- -----
Adjusted EBITDA $(6,342) $(6,775) $(12,927) $(13,029)
======= ======= ======== ========
See "Non-GAAP Financial Information" above in this earnings press release for information on the use of this Non-GAAP financial measure.
Contact:
Investor Relations Media Relations
Dan Pfeffer Kristin Mastrandrea
VP, Treasurer-Investor Relations Communications Manager
678-802-8302, invest@comverge.com 973-434-7157, pr@comverge.com
SOURCE Comverge, Inc.
http://www.comverge.com
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