Good day, ladies and gentlemen and welcome to the Q1 2013 Ameresco Incorporated Earnings Conference Call. My name is Jo and I will be your operator for today. [Operator Instructions] As a reminder, the call is being recorded for training purposes. Now I'd like to turn the call over to Suzanne Messere, Director, Investor Relations. Please proceed.

Thank you, Jo, and good morning, everyone. Thank you for joining us today for Ameresco's First Quarter 2013 Earnings Conference Call. I'm joined today by George Sakellaris, Ameresco's Chairman, President and Chief Executive Officer; and Andrew Spence, the company's Chief Financial Officer. On today's call management will share brief highlights from the prepared remarks we published this morning. Please note that the prepared remarks include information pertaining to the previously restated financial results for 2012. Following the brief highlights from the quarter, management will take questions from the audience. Before I turn the call over to George and Andrew, I would like to make a brief statement regarding forward-looking remarks. Today's call contains forward-looking information regarding future events and the future financial performance of the company. Ameresco cautions you that such statements are just predictions and actual results may differ materially as a result of risks and uncertainties that pertain to our business. Ameresco refers you to the company's press release issued this morning and its annual report on Form 10-K, filed with the SEC on March 18, which discusses important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. Ameresco assumes no obligation to revise any forward-looking statements made on today's call. In addition, the company will be referring to non-GAAP financial measures during this call. These non-GAAP financial measures are not prepared in accordance with Generally Accepted Accounting Principles. A GAAP to non-GAAP Reconciliation, as well as an explanation behind the use of non-GAAP financial measures, is available in our press release as well as our prepared remarks. I will now turn the call over to George Sakellaris. George?

Thank you, Suzanne, and good morning, everyone. We had expected a more challenging quarter than the typical first quarter. While revenue was below our expeditions, stronger than anticipated gross profit and better management of operating expenses led to bottom line results ahead of our plan. We remain encouraged by the continued demand of our energy efficiency solutions as shown by a 34% increase in awarded projects. We believe the continued increase in awarded projects indicates that we are gaining market share. This leads us to remain confident about our leadership position within the industry, as well as the long-term fundamentals of our business. We are reaffirming our 2013 guidance. Our continued expectations for 2013 assume that the first half of 2013 remains challenging from the revenue and profitability perspective, with only a small profit in the second quarter. We also assume that our seasonal backlog, along with the continued focus on converting awarded projects to signed contracts, should start to yield results later in the second quarter, with a more meaningful improvement in the second half of the year. In addition, our guidance expectations also include the following assumptions: modest revenue growth in the central region; strong revenue growth in Canada and the Northwest region; a revenue decline in the Eastern and Southwest regions; a gradual improvement in the market conditions; also, a 10% year-over-year revenue growth from our all other offerings; and that we maintain operating expenses at the current run rate. We feel confident that we can still maintain our 2013 guidance range even if few of the above assumptions do not come to fruition. As for the ongoing initiatives, we're fine-tuning our offering and approach mentioned in our last call. We have begun to realign our goals to position the company for future growth. For example, we have included business units' goals for cross-selling a wider range of products and services that emphasize our overall comprehensive solutions. We expect to implement additional initiatives going forward as we continue to focus on behavior that creates shareholder value. And now, I do like to turn the call over to Andrew, our Chief Financial Officer, who can provide more details about our financial results.

Thank you very much, George, and good morning. The financial highlights from the quarter are as follows. We had expected a decline in energy efficiency revenue related to the continued effects of lengthening conversion times from awarded projects to signed contracts in all segments. The impact was slightly more than anticipated in the U.S. federal segment. We experienced strong growth in renewable energy due to increased revenue from small-scale infrastructure and O&M, as well as a very strong increase in renewable energy projects. The increases were partially offset by a greater-than-expected decline in integrated PV and a few unexpected delays in the Southwest region. Energy efficiency gross margin decreased slightly from 21% to 20.6% in 2013. A mix of lower margin projects across several regions compared to last year was partially offset by project closeouts within our U.S. federal segment. Renewable energy gross margin increased from 16.5% to 17.7%. The margin improvement was primarily due to a renewable energy project closeout. Operating expenses decreased 9% year-over-year. Salary and benefit expenses decreased 23%. Lower salary and benefit expenses reflect better utilization rates and a fine-tuning of the organization during 2012. Project development costs were flat compared to a year ago and G&A expenses increased 15%. Higher G&A expenses reflect acquisition expenses, including amortization of intangible assets, as well as higher professional fees and development costs. Due to the loss for the first quarter, we had an income tax benefit as opposed to a provision. However, as we expect our profitability to improve sequentially as we progress through the fiscal year, we expect full year effective tax rate of approximately 25%. Moving on to cash flow. We used approximately $26 million in cash for operations during the quarter compared to approximately $33 million of cash provided by operations last year. We do not typically generate positive operating cash flow during the first quarter of a fiscal year due to the seasonality of our business. Cash provided by operations in the first quarter of 2012 was an unusual event related in part to receipt of retainage related to the Savannah River Project in the amount of $20 million. We invested approximately $13 million during the quarter in renewable energy project assets that we will own and operate. Our balance sheet remains strong. Total corporate debt on our balance sheet was $30 million. In addition, the Federal ESPC receivable financing liability was $90.8 million. And we currently have -- do not have any amounts drawn on our revolver. And with that, I will turn the discussion back to George.

Thank you, Andrew. Revenue from our all other offerings increased 3% year-over-year. We continue to expect revenue to increase by more than 10% in 2013. Revenue from small-scale infrastructure increased approximately 7% year-over-year. The increase was primarily due to a new LFG plant that went into operation last year, as well as the sale of RESCs related to an existing LFG plant. We are in the process of designing, permitting and constructing 5 more renewable energy plants, which we expect to begin generating meaningful revenue in late 2013. As a result, we continue to expect small-scale infrastructure revenue to increase by approximately 10% in 2013. Revenue from integrated PV decreased by approximately 8% year-over-year. However, the sequential improvement of 15% lead us to believe that market conditions are showing signs of stabilizing. Assuming current trends continue, we expect integrated PV revenue to increase in the range of 5% to 10% in 2013. Revenue from O&M increased 8% year-over-year, primarily due to Federal O&M projects. We continue to expect revenue increase of more than 10% in 2013. We are encouraged that our pipeline increased by 17% year-over-year to $2.8 billion at the end of the first quarter. Also, our total construction backlog increased 18% year-over-year to more than $1.5 billion, driven by the 34% increase in awarded projects. Again, based on our assumptions for the remainder of the year, we are reaffirming our 2013 guidance as follows: revenue, $620 million to $670 million and net income of $18 million to $22 million. In closing, we are very confident about the improving market conditions in few of our regions, as well as continued growth in our all other offerings. These are expected to be the growth drivers for the near-term. We are also very confident about the medium to long-term pipeline development, as shown by the continued increase in awarded projects. Where we are cautiously optimistic near term, is the select areas where we continue to see softness in the awarded project conversion rates. The varying conversion rates at the local level lead us to believe that overall market conditions will improve gradually over time. We continue to believe, however, that energy efficiency represents a large growth opportunity over the long-term. We are excited about our own growth or potential within this market opportunity, given our leadership role, as well as our current pipeline development. As a result, we are very optimistic about the long-term fundamentals of our business. And now, we do like to answer your questions and I will turn the call back over to our coordinator, Jo.

[Operator Instructions] The first question comes from the line of John Quealy from Canaccord Genuity.

So first question, can you quantify the benefit from closeouts on the quarter?

We haven't disclosed that. It does have a measurable impact on the margin but we generally don't describe which projects are necessarily effective or what the actual amount is.

If you can give us some color, Andrew, renewable energy versus efficiency. Was there a bigger impact on -- what one has the bigger impact?

Right now, I think the larger impact was on renewable energy. We had a pretty sizable closeout on a project in that region. And again, what happens there is these are the contingencies that we build into our construction budgets. And if they're not utilized when the project is substantially complete, then the revenue gets recognized without the corresponding cost and increases the margin that's recognized. So this happens at the end of projects when we are in fact able to recover the contingency contained within virtually every budget that we put together for a project.

Okay, and my second question. With regards to the reiteration of guidance, revenues were decently below your expectations, or at least the Street's expectations. So how do you balance off confirmation and confidence in the full year number and yet the short-term seems murky? Help us bridge that, if you would?

Well, I think it's really a question of timing and it relates to the -- first of all the conversion of projects and then the implementation of the projects. And where we fell short this quarter was specifically on projects that are being implemented and that we believe will be completed before the end of the year. So what we didn't -- what we weren't able to recognize and what we had planned on recognizing in quarter 1, we would expect to recognize in quarters 2, 3 and 4.

And what I might add, too, that our plan versus to what was the Street, it was much smaller. I would say we were more much lower than what the Street was, our plan. So we are already missing [indiscernible] less than -- about $10 million, what our plan was. And that has to do with a handful of projects that, as Andrew pointed out, we had a timing delay.

Okay, and then my last question, I'll turn it back. So in terms of contract to backlog, that number continues to bounce around a little bit. It looks seasonally in line given the movement from Q4. When should we expect that number to start growing again? In the back half, once some of the P&L hits? Or what should we think about that?

That is correct. In the back half of the year, and that's what I tried to make clear in my comments. Maybe you will see a stable level for this quarter and maybe a slight gain, but I would expect very, very small, if any. But I will be happy even to stay stable. And then pretty good pick up for the rest of the year. And to give you a little bit more color, there are 2, 3 projects I would say in each region that we're going to be doing business and they are critical for us to have at least them executed before the summer ends to be able to complete the projects in a timely fashion to make the numbers for the end of the year.

Your next question comes from the line of Chris Godby from Stephens.

So I guess -- and we've talked about this a bit but, as you craft your outlook, what gives you confidence that some of the project delays that we've been seeing will start to ease and start moving forward? Do you see a particular catalyst out there that you think will influence customers to start moving forward?

We do not see other than the Federal government mandate that, by the end of this year, that they will have this $2 billion of energy performance contracts executed. The rest of them, it's just what I said before. It's the infrastructural update that they need but they are a little bit reluctant in signing to the bottom line of -- because they incur additional debt. And if you remember, all the softness in our markets started going back to 2011 when we had the debt ceiling issue in Washington and then it spill over to states and so on and so forth. But I would say this much to everyone out there, that we are seeing some good things happening around the company and around the regions. That's why we say we are cautiously optimistic. And they are encouraging, the signs that we see out there. So that's why we felt very good in the long term and it's only a handful of projects that we need to close over the next few months that they will put us in pretty good shape. And we see in those particular projects, some very good movement. And going back to the earlier question from John, it makes us a little bit optimistic that the projects will close in a timely fashion to have a pretty decent year.

Okay, great, thanks for the color. Turning to the G&A line, it was a bit higher than we had anticipated in the quarter and you hit on the reasons for that. Do you expect G&A to ease a bit in the second quarter? Or is this kind of a reasonable run rate for the year?

No, this was in line with what we had anticipated and this is the run rate that we would like to see throughout the year. So no, it was in line and a little bit of an improvement. So no, we're pleased with the direction that it's going and we'd like to see this continue through the year. And the other thing that we have said before, on net operating expenditures, because that's the one that we focus a lot, and we did not want it -- to cut it more than we could possibly have because we wanted to make sure we invest in growth. And the fact that we did not fine tune the company more than what we have done, I think it's paying off by building our awarded projects. And that's why I feel pretty good about where we are as a company right now, that those awarded projects will turn to executed contracts in the future and we will be in very good shape.

The next question comes from the line of Craig Irwin of Wedbush Securities.

George, I was hoping you might be able to give us a little bit of color on the impact of sequestration on your business. Maybe if you have any specific stories or projects that should have gone forward without this unfortunate sort of political environment? And maybe...

I'm glad you brought it up. Actually, it did impact about 5 projects, and pretty good-sized projects. And those are what I said, the handful -- and those are primarily in the Eastern region and some of the federal projects, that they were impacted. But the good thing, and especially on the better part of those projects, we see that the adversity or you say the delay is behind us. And those projects are moving ahead. Especially 2 of the larger projects that they were impacted, we got the okay to move ahead. But we were impacted. And this is what happens in this business, things that you don't think that will trip you that much, they end up tripping you on the projects that they're ready to move forward. But -- so we are impacted. And actually, I was talking to, this morning, about that question, because I thought we might get it, to the person that was impacted the most. And I asked him where you stand and he says 2 of the critical projects now, we are moving ahead. Actually we did get the customer approvals.

Excellent, excellent, that's good to hear. The second question I wanted to ask is recently, in the public markets, there was an IPO of a company that does contract financing for energy efficiency projects, performance projects that had previously been involved in financing your Savannah River Project. I guess one of the -- well, the largest project you've done to date. Can you comment whether or not this potentially impacts your outlook, maybe facilitates the future financing of projects where financing may have been the issue? And if that might help support your confidence in the guidance that you've reiterated today?

I think it's a good thing, what's happened and I know who you're talking about. They financed, along with Bank of America, the largest energy savings performance contract on the Street in this business. And look, the financing right now of energy efficiency projects is very, very good. But them being public and hopefully, expanding the financing that I said before on the holy grail [indiscernible], market on the commercial and industrial. And if that were to happen, whether they do it or we might do it or somebody else might do it, I think it's going to be a great thing that's going to happen for their industry. It will bring us back to what happened in the early '90s when we, I would say, fine tuned the financing mechanism of energy efficiency projects. So it's very good. Bottom line, it's very good. And I think that probably it's a precedent to more financing mechanisms being available in the marketplace.

Yes, I think it helps the overall tone of the market by having them go through that exercise. I guess I would want to add to what George said that I don't see the delays that we've been dealing with necessarily relating to financing. I think the financing market remains very good for our core businesses, the municipalities, the federal business and lenders are anxious to finance these projects. So I don't see that as a barrier or part of the issue that we've been dealing with in getting projects converted.

Excellent, last question, if I may. There's been some legislation introduced that would alter the $80 billion IDIQ financing vehicle, where it's been broadcast that the senators, or I should say the congressmen that have introduced the legislation aim to make it easier to get these projects done. Can you maybe give us an update on where you see that stand? And what's changed or what would they change that would facilitate the release of projects using their different proposed mechanism?

Look, anything that they can do, I think additional legislation, it will help because we still see that Federal markets, even though they have mandates, it would be great to have a specific requirement that each and every facility achieves, let's say, 20% savings reduction or some target, whether it's 15% or 20% or 25% by a certain date. And that will induce the various people associated with particular facilities to get the projects executed rather than waive [indiscernible] from the site. Having a particular time schedule, it will help.

The next question comes from the line of Jim Giannakouros from Oppenheimer. James Giannakouros - Oppenheimer & Co. Inc., Research Division: To ask the question that you've been asked several times on the call already slightly differently, can you quantify how much of your awarded backlog you're dubbing as seasoned? I guess what percent of that $1.2 billion is -- has a high percent chance of converting to contracted in the next few months?

Well a couple things. First, let me say the overall -- what we have said before, over 90% of those contracts, of those awards, we expect them to get -- move into executed contracts. And over the next few months, I will say probably a couple hundred million dollars by the middle of the summer?

By the end of the year.

By the end of the year, yes. James Giannakouros - Oppenheimer & Co. Inc., Research Division: Okay, that is helpful. And is there anything that you can do to incentivize customers to move forward? That's part one of this question. And just -- if let's say these seasoned awards don't move in the coming months, are you hearing from them that well, if it's not going to happen in the second half it will more than likely happen in the first half of next year? Just trying to understand how those conversations go.

No, what we're trying to make them aware of the fact that everyday that goes by, and I can tell you some projects that we say, look if you don't build this project, let's say you lose another year, you're losing $5 million worth of savings and some of the projects they have it. So what we try to educate them more and more is that, every day that's going by, they are losing the savings that they could use -- utilize in order to pay back the amount of money that they raise in order to implement the project. The other thing that we thought sometimes, maybe we give them some kind of a discount and a construction price then we start cannibalizing our business. And we stayed away from that. So it's more of a push, the particular customer and articulating what the benefits would be of the project going ahead in a timely fashion. And the conversation goes more like, look, we are going to do these projects but we need this particular approval or I have to get the Board this particular financial person to help me with or let's say have approval in some particular projects that had been delayed.

And I think to reiterate George's point, that not -- over 90% of our projects are converting and we're just pushing very hard to get them converted so that we're able to build them out this year and recognize the benefit of those projects this year. To the extent that it doesn't happen in 2013, then it pushes into 2014. James Giannakouros - Oppenheimer & Co. Inc., Research Division: Okay, thanks. And on the earlier point on sequestration, I believe you've made comments in the past that there has been a little bit of a pushback, particularly in Federal, correct me if I'm wrong, on maybe a reduction of scope of some of these projects. Are you still seeing that?

No, I'm sorry, not reduction on the scope of the project's. The delay. Actually there were, like I said, a handful of projects and 2 of them, they were in states, state projects.

Many states rely on subsidies or payments from the Federal government. And so in a few cases we did see where the decision to move forward with a project was held up temporarily while they assessed what the impact of sequestration would be on their funding from the Federal government and whether they had the resources internally to finance the debt going forward. And I can think of a couple of cases where that did hold us up but we are back on track to get those closed in the second quarter.

Sir, you have no questions at this time. [Operator Instructions] We do have another question and that comes from the line of Ram Tsu [ph] from Electron Capital.

Just quickly, could you make some comment about the recent proposed efficiency bill, Energy Efficiency Bill?

The efficiency -- we didn't -- you're going to have to say that again.

We didn't get the question, please.

Oh, sorry, just on the Portman Energy Efficiency Bill. I think it cleared Senate panel already, so can you just comment on that?

Sorry, Ram [ph], that's -- aren't we scheduling a conference call to discuss the legislation? That...

Okay.

Yes, so I'll get back to you on that.

There are no further questions. I'd now like to turn the call over to George Sakellaris for closing remarks.

And with that, I do like to thank you for joining us at today's call and I'm sure we'll talk to you soon, again. Thanks.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.