Third Quarter 2022 Financial Highlights
- Revenues of $30.4 million during third quarter 2022, an
increase of 51% over third quarter 2021
- GAAP net loss of $96.6 million, as compared to third quarter
2021 net loss of $1.3 million driven by a $102.0 million non-cash
loss from fair value remeasurement of both warrants and alignment
shares
- Adjusted EBITDA* of $19.4 million, an increase of 66% over
third quarter 2021
- Adjusted EBITDA margin* of 64%
- Ending unrestricted cash balance of $290.9 million
Recent Business Highlights
- Increased portfolio by approximately 100 MW since second
quarter including 88 MW acquired from D.E. Shaw Renewable
Investments (DESRI)
- Operating portfolio now serving customers across 22 states
- Obtained commitments for revolving credit facility of up to
$200 million
- Completed redemption of all outstanding public and private
warrants
- Generated 139 thousand megawatt hours of clean, locally sited
electricity during third quarter
- Avoided over 300,000 metric tons of CO2 equivalent over the
last twelve months when compared to utility power1
Altus Power, Inc. (NYSE: AMPS) (“Altus Power” or the “Company”),
a premier commercial-scale clean electrification company, today
announced its financial results for the third quarter of 2022.
“We are thrilled to be reporting our best quarter ever in terms
of revenue and adjusted EBITDA. During the third quarter we took
steps to significantly expand our operating portfolio of
commercial-scale solar assets, which contribute to our profitable
growth," commented Gregg Felton, Co-CEO of Altus Power. "We are
pleased to welcome all of these new long-term customers to Altus
Power and look forward to expanding our relationships."
"This quarter's performance illustrates our determination to
grow profitably in a challenging market environment," added Lars
Norell, Co-CEO of Altus Power. "Our construction team is working in
close collaboration with CBRE Project Management to move additional
assets into construction throughout the United States.”
Third Quarter Financial Results
Operating revenues during the third quarter of 2022 totaled
$30.4 million, compared to $20.1 million during the same period of
2021, an increase of 51%. The increase reflects the growth of
megawatts installed over the past twelve months. Third quarter 2022
GAAP net loss totaled $96.6 million, compared to net loss of $1.3
million for the same period last year. The increase in net loss
during the quarter was driven by the $102.0 million loss from
remeasurement of both warrants and alignment shares. This
remeasurement is non-cash and is driven by the appreciation of
Altus Power common share price between June 30, 2022, and September
30, 2022. Both the warrants and alignment shares are revalued
quarterly according to our share price at the end of each
quarter.
Adjusted EBITDA* during the third quarter of 2022 was $19.4
million, compared to $11.7 million for the third quarter of 2021, a
66% increase. The quarter over quarter growth in adjusted EBITDA*
is primarily the result of increased revenue from additional solar
energy facilities, partially offset by an increase in our general
and administrative expenses. Adjusted EBITDA margin* during the
third quarter of 2022 was 64%.
Closing of DESRI Portfolios
Altus Power announced today that the company has closed on the
purchase of approximately 88 MWs of operating solar assets from
D.E. Shaw Renewable Investments, L.L.C. (DESRI) which were
previously under definitive agreements as announced on September
27, 2022.
Balance Sheet and Liquidity
Altus Power ended the third quarter of 2022 with $290.9 million
in unrestricted cash and cash equivalents, and $545.0 million of
total debt. The Company expects to fund its operations using
available cash, additional borrowings under its debt facilities and
third-party tax equity financing.
New Revolving Credit Facility
Today Altus Power announced it has obtained commitments with a
syndicate of banks for up to $200 million revolving credit
facility. This facility is expected to maximize the Company's
financial flexibility and enhance its liquidity. The company is
currently in the process of definitive documentation and will
update the market if and when completed.
Completed Warrant Redemption
As announced on October 20, 2022 the Company completed
redemption of all of its outstanding public and private warrants in
exchange for a total of 4,058,845 shares of Class A Common Stock
and net cash proceeds of $83,061. In connection with the
redemption, the Public Warrants ceased trading on the New York
Stock Exchange on October 14, 2022 and were delisted. Please refer
to the Companies press releases announcing the offering on
September 15, 2022, completion of the offering on October 20, 2022
as well as our Warrant Holder redemption notice and Warrant Holder
FAQ documents for additional information.
2022 Guidance
Altus Power's 2022 adjusted EBITDA* is expected to be near the
low-end of its previous guidance. The primary driver for the
revision to the company's adjusted EBITDA* outlook was the extended
time to close its previously announced acquisition, which has now
been completed. The Company's expectation for 2022 adjusted EBITDA
margin* remains unchanged in the mid-50% range.
Use of Non-GAAP Financial Information
*Denotes Non-GAAP financial measure. We present our operating
results in accordance with accounting principles generally accepted
in the U.S. (“GAAP”). We believe certain financial measures, such
as adjusted EBITDA and adjusted EBITDA margin provide users of our
financial statements with supplemental information that may be
useful in evaluating our business. The presentation of non-GAAP
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP.
We define adjusted EBITDA as net income (loss) plus net interest
expense, depreciation, amortization and accretion expense, income
tax expense, acquisition and entity formation costs, non-cash
compensation expense, and excluding the effect of certain
non-recurring items we do not consider to be indicative of our
ongoing operating performance such as, but not limited to, gain on
fair value remeasurement of contingent consideration, gain on
disposal of property, plant and equipment, change in fair value of
redeemable warrant liability, change in fair value of alignment
shares, loss on extinguishment of debt, and other miscellaneous
items of other income and expenses.
We define adjusted EBITDA margin as adjusted EBITDA divided by
operating revenues.
Adjusted EBITDA and adjusted EBITDA margin are non-GAAP
financial measures that we use to measure our performance. We
believe that investors and analysts also use adjusted EBITDA in
evaluating our operating performance. This measurement is not
recognized in accordance with GAAP and should not be viewed as an
alternative to GAAP measures of performance. The GAAP measure most
directly comparable to adjusted EBITDA is net income and to
adjusted EBITDA margin is net income over operating revenues. The
presentation of adjusted EBITDA and adjusted EBITDA margin should
not be construed to suggest that our future results will be
unaffected by non-cash or non-recurring items. In addition, our
calculation of adjusted EBITDA and adjusted EBITDA margin are not
necessarily comparable to adjusted EBITDA as calculated by other
companies and investors and analysts should read carefully the
components of our calculations of these non-GAAP financial
measures.
We believe adjusted EBITDA is useful to management, investors
and analysts in providing a measure of core financial performance
adjusted to allow for comparisons of results of operations across
reporting periods on a consistent basis. These adjustments are
intended to exclude items that are not indicative of the ongoing
operating performance of the business. Adjusted EBITDA is also used
by our management for internal planning purposes, including our
consolidated operating budget, and by our board of directors in
setting performance-based compensation targets. Adjusted EBITDA
should not be considered an alternative to but viewed in
conjunction with GAAP results, as we believe it provides a more
complete understanding of ongoing business performance and trends
than GAAP measures alone. Adjusted EBITDA has limitations as an
analytical tool, and you should not consider it in isolation or as
a substitute for analysis of our results as reported under
GAAP.
Altus Power does not provide GAAP financial measures on a
forward-looking basis because the Company is unable to predict with
reasonable certainty and without unreasonable effort, items such as
acquisition and entity formation costs, gain on fair value
remeasurement of contingent consideration, change in fair value of
redeemable warrant liability, change in fair value of alignment
shares. These items are uncertain, depend on various factors, and
could be material to Altus Power’s results computed in accordance
with GAAP.
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements may be identified by the use of words
such as "aims," "believes," "expects," "intends," "aims", "may,"
“could,” "will," "should," "plans," “projects,” “forecasts,”
“seeks,” “anticipates,” “goal,” “objective,” “target,” “estimate,”
“future,” “outlook,” "strategy," “vision,” or variations of such
words or similar terminology that predict or indicate future events
or trends or that are not statements of historical matters. These
statements, which involve risks and uncertainties, relate to
analyses and other information that are based on forecasts of
future results and estimates of amounts not yet determinable and
may also relate to Altus Power’s future prospects, developments and
business strategies. These statements are based on Altus Power’s
management’s current expectations and beliefs, as well as a number
of assumptions concerning future events.
Such forward-looking statements are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside Altus Power’s control, that could cause actual
results to differ materially from the results discussed in the
forward-looking statements. These risks, uncertainties, assumptions
and other important factors include, but are not limited to: (1)
the risk that pending acquisitions may not close in the anticipated
timeframe or at all due to a closing condition not being met; (2)
failure to obtain required consents or regulatory approvals in a
timely manner or otherwise; (3) the ability of Altus Power to
successfully integrate the acquisition of solar assets into its
business and generate profit from their operations; (4) the ability
of Altus Power to retain customers and maintain and expand
relationships with business partners, suppliers and customers; (5)
the risk of litigation and/or regulatory actions related to the
proposed acquisition of solar assets; (6) the possibility that
Altus Power may be adversely affected by other economic, business,
regulatory and/or competitive factors; and (7) the impact of
COVID-19, inflationary pressures, and supply chain issues on Altus
Power's business.
Additional factors that could cause actual results to differ
materially from those expressed or implied in forward-looking
statements can be found under the heading “Risk Factors” in Altus
Power’s Form 10-K filed with the Securities and Exchange Commission
on March 24th, 2022, as well as the other information we file with
the Securities and Exchange Commission. New risks and uncertainties
arise from time to time, and it is impossible for us to predict
these events or how they may affect us. You are cautioned not to
place undue reliance upon any forward-looking statements, which
speak only as of the date made and the information and assumptions
underlying such statement as we know it and on the date such
statement was made, and Altus Power undertakes no obligation to
update or revise the forward-looking statements, whether as a
result of new information, changes in expectations, future events
or otherwise.
This press release is not intended to be all-inclusive or to
contain all the information that a person may desire in considering
an investment in Altus Power and is not intended to form the basis
of an investment decision in Altus Power. All subsequent written
and oral forward-looking statements concerning Altus Power or other
matters and attributable to Altus Power or any person acting on its
behalf are expressly qualified in their entirety by the cautionary
statements above.
Conference Call Information
The Altus Power management team will host a conference call to
discuss its third quarter 2022 financial results later this morning
at 8:30 a.m. Eastern Time. The call can be accessed via a live
webcast accessible on the Events & Presentations page in the
Investor Relations section of Altus Power's website at
https://investors.altuspower.com/overview/default.aspx. An archive
of the webcast will be available after the call on the Investor
Relations section of Altus Power's website as well.
About Altus Power, Inc.
Altus Power, based in Stamford, Connecticut, is a premier
commercial-scale clean electrification company serving commercial,
industrial, public sector and community solar customers with
end-to-end solutions. Altus Power originates, develops, owns and
operates locally-sited solar generation, energy storage and
charging infrastructure across the nation. Visit www.altuspower.com
to learn more.
Altus Power, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except share
and per share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Operating revenues, net
$
30,438
$
20,138
$
74,399
$
50,222
Operating expenses
Cost of operations (exclusive of
depreciation and amortization shown separately below)
4,488
3,849
12,842
10,005
General and administrative
6,560
4,630
19,502
12,073
Depreciation, amortization and accretion
expense
7,134
5,309
20,819
14,167
Acquisition and entity formation costs
237
954
583
1,186
Loss (gain) on fair value remeasurement of
contingent consideration, net
825
(350
)
(146
)
(2,400
)
Gain on disposal of property, plant and
equipment
(2,222
)
—
(2,222
)
—
Stock-based compensation
2,708
34
6,670
111
Total operating expenses
$
19,730
$
14,426
$
58,048
$
35,142
Operating income
10,708
5,712
16,351
15,080
Other (income) expense
Change in fair value of redeemable warrant
liability
29,564
—
6,447
—
Change in fair value of alignment shares
liability
72,418
—
9,367
—
Other (income) expense, net
(2,267
)
1,087
(2,860
)
838
Interest expense, net
5,657
5,223
15,768
13,962
Loss on extinguishment of debt
—
3,245
—
3,245
Total other expense
$
105,372
$
9,555
$
28,722
$
18,045
Loss before income tax expense
$
(94,664
)
$
(3,843
)
$
(12,371
)
$
(2,965
)
Income tax (expense) benefit
(1,964
)
2,552
(2,548
)
1,497
Net loss
$
(96,628
)
$
(1,291
)
$
(14,919
)
$
(1,468
)
Net income (loss) attributable to
noncontrolling interests and redeemable noncontrolling
interests
352
(236
)
(2,473
)
(186
)
Net loss attributable to Altus Power,
Inc.
$
(96,980
)
$
(1,055
)
$
(12,446
)
$
(1,282
)
Net loss per share attributable to common
stockholders
Basic
$
(0.63
)
$
(0.01
)
$
(0.08
)
$
(0.01
)
Diluted
$
(0.63
)
$
(0.01
)
$
(0.08
)
$
(0.01
)
Weighted average shares used to compute
net loss per share attributable to common stockholders
Basic
154,455,228
88,741,089
153,482,503
88,741,089
Diluted
154,455,228
88,741,089
153,482,503
88,741,089
Altus Power, Inc.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited)
(In thousands, except share
and per share data)
As of September 30,
2022
As of December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
290,894
$
325,983
Current portion of restricted cash
2,477
2,544
Accounts receivable, net
15,725
9,218
Other current assets
6,406
6,659
Total current assets
315,502
344,404
Restricted cash, noncurrent portion
4,018
1,794
Property, plant and equipment, net
788,132
745,711
Intangible assets, net
19,571
16,702
Other assets
3,107
4,638
Total assets
$
1,130,330
$
1,113,249
Liabilities, redeemable noncontrolling
interests, and stockholders' equity
Current liabilities:
Accounts payable
$
2,382
$
3,591
Interest payable
4,459
4,494
Current portion of long-term debt, net
17,321
21,143
Due to related parties
47
—
Other current liabilities
8,455
3,663
Total current liabilities
32,664
32,891
Redeemable warrant liability
12,715
49,933
Alignment shares liability
136,826
127,474
Long-term debt, net of unamortized debt
issuance costs and current portion
527,709
524,837
Intangible liabilities, net
12,532
13,758
Asset retirement obligations
7,933
7,628
Deferred tax liabilities, net
11,973
9,603
Other long-term liabilities
8,316
5,587
Total liabilities
$
750,668
$
771,711
Commitments and contingent liabilities
(Note 10)
Redeemable noncontrolling interests
18,444
15,527
Stockholders' equity
Common stock $0.0001 par value;
988,591,250 shares authorized as of September 30, 2022, and
December 31, 2021; 157,696,560 and 153,648,830 shares issued and
outstanding as of September 30, 2022, and December 31, 2021,
respectively
16
15
Preferred stock $0.0001 par value;
10,000,000 shares authorized, zero shares issued and outstanding as
of September 30, 2022, and December 31, 2021
—
—
Additional paid-in capital
455,869
406,259
Accumulated deficit
(113,802
)
(101,356
)
Total stockholders' equity
$
342,083
$
304,918
Noncontrolling interests
19,135
21,093
Total equity
$
361,218
$
326,011
Total liabilities, redeemable
noncontrolling interests, and stockholders' equity
$
1,130,330
$
1,113,249
Altus Power, Inc.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
Nine Months Ended September
30,
2022
2021
Cash flows from operating
activities
Net loss
$
(14,919
)
$
(1,468
)
Adjustments to reconcile net loss to net
cash from operating activities:
Depreciation, amortization and
accretion
20,819
14,167
Unrealized gain on interest rate swaps
(2,387
)
(356
)
Deferred tax expense
2,370
(1,517
)
Loss on extinguishment of debt
—
3,245
Amortization of debt discount and
financing costs
2,151
2,165
Change in fair value of redeemable warrant
liability
6,447
—
Change in fair value of alignment shares
liability
9,367
—
Remeasurement of contingent
consideration
(146
)
(2,400
)
Gain on disposal of property, plant and
equipment
(2,222
)
—
Stock-based compensation
6,670
111
Other
(171
)
(232
)
Changes in assets and liabilities,
excluding the effect of acquisitions
Accounts receivable
(6,405
)
(2,384
)
Other assets
2,927
(148
)
Accounts payable
(1,209
)
6,221
Interest payable
(2
)
566
Other liabilities
1,549
278
Net cash provided by operating
activities
24,839
18,248
Cash flows used for investing
activities
Capital expenditures
(35,670
)
(10,255
)
Payments to acquire businesses, net of
cash and restricted cash acquired
—
(192,565
)
Payments to acquire renewable energy
facilities from third parties, net of cash and restricted cash
acquired
(13,342
)
(10,673
)
Proceeds from disposal of property, plant
and equipment
3,605
—
Other
496
—
Net cash used for investing activities
(44,911
)
(213,493
)
Cash flows used for financing
activities
Proceeds from issuance of long-term
debt
—
288,922
Repayment of long-term debt
(13,301
)
(148,790
)
Payment of debt issuance costs
(68
)
(2,247
)
Payment of debt extinguishment costs
—
(1,477
)
Payment of dividends and commitment fees
on Series A preferred stock
—
(17,748
)
Payment of deferred transaction costs
—
(4,254
)
Payment of contingent consideration
(72
)
(129
)
Payment of equity issuance costs
(744
)
—
Proceeds from issuance of Series A
preferred stock
—
82,000
Cash proceeds from public warrant
exercise
19
—
Contributions from noncontrolling
interests
3,220
2,708
Distributions to noncontrolling
interests
(1,914
)
(1,938
)
Redemption of noncontrolling interests
—
(831
)
Net cash used for financing activities
(12,860
)
196,216
Net decrease in cash, cash equivalents,
and restricted cash
(32,932
)
971
Cash, cash equivalents, and restricted
cash, beginning of period
330,321
38,206
Cash, cash equivalents, and restricted
cash, end of period
$
297,389
$
39,177
Nine Months Ended September
30,
2022
2021
Supplemental cash flow
disclosure
Cash paid for interest, net of amounts
capitalized
$
14,927
$
11,404
Cash paid for taxes
99
99
Non-cash investing and financing
activities
Asset retirement obligations
$
276
$
2,391
Debt assumed through acquisitions
11,948
—
Redeemable noncontrolling interest assumed
through acquisitions
2,125
—
Acquisitions of property and equipment
included in other current liabilities
4,004
622
Deferred transaction costs not yet
paid
—
2,801
Accrued dividends and commitment fees on
Series A preferred stock
—
13,584
Construction loan conversion
(4,186
)
—
Term loan conversion
4,186
—
Conversion of alignment shares into common
stock
15
—
Exchange of warrants into common stock
7,779
—
Warrants exercised on a cashless basis
35,858
—
Non-GAAP Financial Reconciliation
Reconciliation of GAAP reported Net Income to non-GAAP adjusted
EBITDA:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
(in thousands)
(in thousands)
Reconciliation of Net loss to Adjusted
EBITDA:
Net loss
$
(96,628
)
$
(1,291
)
$
(14,919
)
$
(1,468
)
Income tax expense (benefit)
1,964
(2,552
)
2,548
(1,497
)
Interest expense, net
5,657
5,223
15,768
13,962
Depreciation, amortization and accretion
expense
7,134
5,309
20,819
14,167
Stock-based compensation
2,708
34
6,670
111
Acquisition and entity formation costs
237
954
583
1,186
Loss (gain) on fair value of contingent
consideration, net
825
(350
)
(146
)
(2,400
)
Gain on disposal of property, plant and
equipment
(2,222
)
—
(2,222
)
—
Change in fair value of redeemable warrant
liability
29,564
—
6,447
—
Change in fair value of alignment shares
liability
72,418
—
9,367
—
Loss on extinguishment of debt
—
3,245
—
3,245
Other (income) expense, net
(2,267
)
1,087
(2,860
)
838
Adjusted EBITDA
$
19,390
$
11,659
$
42,055
$
28,144
Reconciliation of non-GAAP adjusted EBITDA margin:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
(in thousands)
Reconciliation of Adjusted EBITDA
margin:
Adjusted EBITDA
$
19,390
$
11,659
$
42,055
$
28,144
Operating revenues, net
30,438
20,138
74,399
50,222
Adjusted EBITDA margin
64
%
58
%
57
%
56
%
1 Conversion from megawatt hours according to EPA AVERT
Calculator
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version on businesswire.com: https://www.businesswire.com/news/home/20221114005391/en/
Altus Power for Investor or Media Inquiries: Chris
Shelton, Head of Investor Relations
InvestorRelations@altuspower.com
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