EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

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Comverge Announces 2007 Second Quarter Results – 1000 Megawatts of

Demand Response Added

East Hanover, NJ: August 14, 2007: Comverge, Inc. (NASDAQ: COMV) (“Comverge”) today announced its operational and financial results for the second quarter, ended June 30, 2007. Highlights from the quarter include:

 

   

Announced the acquisition of Enerwise Global Technologies, Inc., which closed on July 23, 2007, dramatically expanding Comverge’s commercial and industrial solution offering;

 

   

220% increase in demand response megawatts managed from 456 to 1460 megawatts during the quarter, which gives effect to the acquisition of Enerwise as if the transaction had closed on June 30, 2007;

 

   

34% increase in megawatts under long term VPC contracts from 369 to 495 megawatts, during the quarter;

 

   

47% increase in Enerwise megawatt capacity from 331 to 485 megawatts, during the quarter;

 

   

126 megawatt long term VPC contract entered into with Nevada Power Company; and

 

   

Future payments (including Enerwise, acquired in July 2007) totaled $249 million through 2017.

Robert M. Chiste, Chairman, CEO and President of Comverge said: “With our IPO in April, Comverge launched the demand response business as a recognized industry, and we have every intention to continue to lead it. Our strong second quarter operational and financial results, and our recently being named one of the ‘20 Top Sustainable Public Companies’ in the world by an independent research firm, along with notable companies such as Nike, Canon and Royal Philips Electronics, adds credibility to this leadership role. Demand for Comverge’s environmentally friendly clean capacity solutions continues to grow dramatically. Our momentum is accelerating as we prove repeatedly that we are a key component to any utility’s clean energy initiatives.”

Mr. Chiste further stated “our successful acquisition of Enerwise makes Comverge the largest demand response company in North America. Our continued growth in all our critical operational and financial metrics demonstrates the need and strong economic drivers for our clean capacity technology, services and solutions by all customer classes.”

Including Enerwise, megawatts (MWs) managed as of June 30, 2007 consisted of:

 

    

As of

March 31, 2007

  

As of

June 30, 2007

    

Total

Comverge

  

Alternative

Energy

Resources

Group

   Enerwise*   

Total

Comverge*

MWs owned under long term VPC contracts

   369    495    —      495

MWs provided for sale in a capacity market program

   9    9    485    494

MWs managed for a fee

   78    88    383    471
                   

Total MWs of Capacity Owned or Managed

   456    592    868    1460

* Includes data from Enerwise Global Technologies, Inc., which was acquired on July 23, 2007, giving effect to the transaction as if it had closed on June 30, 2007


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Second quarter revenues for 2007 were $4.6 million, a 26% increase compared to $3.7 million in the second quarter of 2006. Revenues for both periods do not include revenues from our VPC contracts which are deferred and recognized in the fourth calendar quarter each year. Net loss for the second quarter of 2007 was $4.4 million or $0.29 per share, compared to a net loss of $5.2 million for the second quarter of 2006, or $1.61 per share. Net loss per share on a pro forma basis was $0.26 for the second quarter of 2007 compared to a net loss of $0.44 for the second quarter of 2006 (see Schedule 4 – Reconciliation of Pro Forma to GAAP Earnings Per Share). Adjusted EBITDA loss for the second quarter of 2007 decreased to $4.4 million compared to a loss of $4.9 million for the second quarter of 2006 primarily as a result of an increase in revenue. 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). All share and per share amounts reflect the one-for-two reverse stock split effected as part of our initial public offering.

Pro forma earnings per share have been adjusted for the three months ended June 30, 2007 and June 30, 2006, to give effect to the Company’s conversion, on a one-for-one basis as of the beginning of 2006, of all the outstanding convertible preferred shares. The Company believes the pro forma earnings per share presentation represents a meaningful basis for the comparison of its current results to results during fiscal periods occurring prior to the Company’s initial public offering. A pro forma vs. GAAP earnings per share reconciliation is provided in Schedule 4 below.

In July 2007, the Company completed its acquisition of Enerwise Global Technologies creating the largest Demand Response provider in North America with over 1400 megawatts of managed capacity. Enerwise is a leading provider of clean energy demand response solutions to commercial, institutional and industrial customers, as well as electric power grid operators. With the addition of Enerwise, Comverge now provides a comprehensive suite of demand response and energy management solutions for all utility customer classes including residential, small to large commercial, institutional, and industrial customers.

Mr. Chiste further stated, “Even though Enerwise wasn’t a part of our operating results for the second quarter, they had a very impressive quarter on a stand alone basis. Enerwise added 154 megawatts of capacity for sale in open market capacity programs, bringing total megawatts under management to 868 megawatts. We are working diligently on completing the integration of the two companies and are very excited by the much expanded market opportunities for Comverge in the future. Each of our operating groups – the Alternative Energy Resources Group, Smart Grid Solutions Group, and Enerwise Group – are experiencing significantly increased business activity because of the growing awareness of Demand Response and AMI by our large customer base.”

Comverge will discuss these results in a conference call scheduled for today at 10:00 a.m. EDT. To participate in the conference call, please dial (800) 665-0430 or (913) 312-1300. The public is invited to listen to a live web cast of Comverge’s conference call on the Investor Relations section of the company’s website at www.comverge.com. An audio replay of the conference call will also be made available approximately two hours after the conclusion of the call. The audio replay will remain available until August 21, 2007 at 11:59 p.m. EDT and can be accessed by dialing (888) 203-1112 or (719) 457-0820 and entering passcode 6548410.

Additional financial information can be found in the Company’s Form 10-Q for the second quarter of 2007, which will be filed today with the Securities and Exchange Commission.


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About Comverge:

Comverge, Inc. (NASDAQ: COMV) (“Comverge”) is a leading clean capacity provider of energy solutions that enhance grid reliability and enable utilities to increase available electric capacity during periods of peak energy demand. Our solutions support national efforts toward nationwide carbon reductions while providing peak capacity on a more cost-effective basis than conventional alternatives. For more information, visit www.comverge.com. “Virtual Peaking Capacity” and “VPC” are trademarks of Comverge, Inc.

For Comverge Investors:

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, including Comverge’s expectations regarding the amount of revenue and the amount of megawatts that will be generated by certain long-term contracts and certain assumptions upon which such forward-looking statements are in part based. The forward-looking statements in this release do not constitute guarantees of future performance. Those statements involve a number of factors that could cause actual results to differ materially, including risks associated with the company’s business involving the company’s products, their development and distribution, economic and competitive factors and the company’s key strategic relationships, and other risks more fully described our most recently Quarterly Report on Form 10-Q. 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.

The use of non-GAAP financial measures is subject to inherent limitations because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment of which charges should be properly excluded from the non-GAAP financial measure. Management accounts for these limitations by not relying exclusively on non-GAAP financial measures, but only using such information to supplement GAAP financial measures. Our non-GAAP financial measures may be different from such measures used by other companies.

Contact:

Investor Relations: Michael Picchi, Chief Financial Officer, 770.696.7660, invest@comverge.com

Media Relations: Chris Neff, Director of Marketing, 973.947.6064, cneff@comverge.com


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SCHEDULE 1

COMVERGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share data and per share amounts)

(Unaudited)

 

    

Three Months Ended

June 30,

   

Six Months Ended

June 30,

 
     2007     2006     2007     2006  

Revenue

        

Product

   $ 3,058     $ 2,746     $ 7,137     $ 9,538  

Service

     1,561       925       3,217       0  
                                

Total revenue

     4,619       3,671       10,354       9,538  

Cost of revenue

        

Product

     1,907       1,602       4,684       5,403  

Service

     639       565       1,456       0  
                                

Total cost of revenue

     2,546       2,167       6,140       5,403  
                                

Gross profit

     2,073       1,504       4,214       4,135  

Operating expenses

        

General and administrative expenses

     4,518       3,864       8,763       7,029  

Marketing and selling expenses

     2,163       2,394       4,062       4,355  

Research and development expenses

     356       258       629       471  
                                

Operating loss

     (4,964 )     (5,012 )     (9,240 )     (7,720 )

Interest and other (income) expense, net

     (600 )     105       (368 )     180  
                                

Loss before income taxes

     (4,364 )     (5,117 )     (8,872 )     (7,900 )

Provision for income taxes

     7       33       14       33  
                                

Net loss

   $ (4,371 )   $ (5,150 )   $ (8,886 )   $ (7,933 )
                                

Net loss per share

        

Basic and diluted

   $ (0.29 )   $ (1.61 )   $ (0.94 )   $ (2.50 )
                                

Weighted average number of shares

     15,267,773       3,195,970       9,466,726       3,168,366  
                                

Pro forma net loss per share

        

Basic and diluted

   $ (0.26 )   $ (0.44 )   $ (0.61 )   $ (0.67 )
                                

Weighted average number of shares

     16,966,706       11,785,020       14,591,684       11,757,415  
                                


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SCHEDULE 2

COMVERGE, INC.

SEGMENT INFORMATION

(In thousands)

(Unaudited)

 

    

Three Months Ended

June 30,

  

Six Months Ended

June 30,

     2007    2006    2007    2006

Revenue:

           

Smart Grid Solutions Group

   $ 3,956    $ 3,550    $ 8,868    $ 9,252

Alternative Energy Resources Group

     663      121      1,486      286
                           

Total Revenue

   $ 4,619    $ 3,671    $ 10,354    $ 9,538
                           

Cost of Revenue:

           

Smart Grid Solutions Group

     2,201      2,125      5,269      5,350

Alternative Energy Resources Group

     345      42      871      53
                           

Total Cost of Revenue

   $ 2,546    $ 2,167    $ 6,140    $ 5,403
                           

Gross Profit:

           

Smart Grid Solutions Group

     1,755      1,425      3,599      3,902

Alternative Energy Resources Group

     318      79      615      233
                           

Total Gross Profit

   $ 2,073    $ 1,504    $ 4,214    $ 4,135
                           


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SCHEDULE 3

COMVERGE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

     June 30,
2007
    December 31,
2006
 

Assets

    

Cash and cash equivalents

   $ 23,954     $ 3,774  

Short-term marketable securities

     58,277       —    

Accounts receivable

     5,674       5,736  

Inventory

     1,945       1,348  

Deferred Costs

     5,551       2,228  

Other current assets

     1,940       2,419  
                

Total current assets

     97,341       15,505  

Long-term marketable securities

     4,657       —    

Property and equipment, net

     12,209       12,405  

Goodwill and other intangible assets, net

     668       694  

Other assets

     1,073       232  
                

Total assets

   $ 115,948     $ 28,836  
                

Liabilities and Shareholders’ Deficit

    

Accounts payable

     1,723       3,046  

Deferred revenue

     14,375       6,092  

Accrued expenses

     3,062       4,369  

Other current liabilities

     1,728       914  
                

Total current liabilities

     20,888       14,421  

Long-term debt

     5,634       5,000  

Other liabilities

     1,137       1,016  
                

Total long-term liabilities

     6,771       6,016  

Stockholders’ Equity

    

Convertible preferred stock

    

Series A

     —         21,438  

Series A-2

     —         13,568  

Series B

     —         5,411  

Series C

     —         100  

Common stock

     18       3  

Additional paid-in capital

     149,395       20,099  

Accumulated deficit

     (61,106 )     (52,220 )

Accumulated other comprehensive loss

     (18 )     —    
                

Total shareholders’ equity

     88,289       8,399  
                

Total liabilities and shareholders’ equity

   $ 115,948     $ 28,836  
                


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SCHEDULE 4

COMVERGE, INC.

RECONCILIATION OF PRO FORMA TO GAAP EARNINGS PER SHARE

(In thousands, except share data and per share amounts)

(Unaudited)

 

    

Three Months Ended

June 30,

   

Six Months Ended

June 30,

 
     2007     2006     2007     2006  

Net loss

   $ (4,371 )   $ (5,150 )   $ (8,886 )   $ (7,933 )

Weighted average number of shares used in computation of basic and diluted earnings per share

     15,267,773       3,195,970       9,466,726       3,168,366  
                                

GAAP basic and diluted earnings per share

   $ (0.29 )   $ (1.61 )   $ (0.94 )   $ (2.50 )
                                

Weighted average number of shares used in computation of basic and diluted earnings per share

     15,267,773       3,195,970       9,466,726       3,168,366  

Conversion of all preferred shares into common shares

     1,698,933       8,589,050       5,124,958       8,589,050  
                                

Total pro forma shares giving effect to the conversion of preferred stock

     16,966,706       11,785,020       14,591,684       11,757,416  
                                

Pro forma basic and diluted earnings per share

   $ (0.26 )   $ (0.44 )   $ (0.61 )   $ (0.67 )
                                

Pro forma earnings per share have been adjusted for the three and six months ended June 30, 2007 and June 30, 2006, to give effect to the Company’s conversion, on a one-for-one basis, of all the outstanding shares of the Company’s convertible preferred shares as of the beginning of the period presented. The Company believes the pro forma earnings per share presentation represents a meaningful basis for the comparison of its current results to results during fiscal periods occurring prior to the Company’s initial public offering.


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SCHEDULE 5

COMVERGE, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO THE

MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURE

(In thousands)

(Unaudited)

 

    

Three months Ended

June 30,

   

Six months Ended

June 30,

 
     2007     2006     2007     2006  

Net loss

   $ (4,371 )   $ (5,150 )   $ (8,886 )   $ (7,933 )

Depreciation and amortization

     127       85       268       199  

Interest (income) expense, net

     (668 )     54       (439 )     135  

Provision for income taxes

     7       33       14       33  
                                

EBITDA

   $ (4,905 )   $ (4,978 )   $ (9,043 )   $ (7,566 )
                                

Non-cash stock compensation expense

     552       66       677       76  
                                

Adjusted EBITDA

   $ (4,353 )   $ (4,912 )   $ (8,366 )   $ (7,490 )
                                

See “Non-GAAP Financial Information” earlier in this earnings press release for information on the use of this Non-GAAP financial measure