PowerSecure Reports Third Quarter 2013 Results

  PowerSecure Reports Third Quarter 2013 Results

      —Record revenues of $81.5 million reflect 84 percent growth y-o-y—

           —225 percent y-o-y growth in energy efficiency revenues—

         —72 percent y-o-y growth in utility infrastructure revenues—

         —62 percent y-o-y growth in distributed generation revenues—

                  —55 percent y-o-y organic revenue growth—

             —37 percent y-o-y growth in backlog to $240 million—

Business Wire

WAKE FOREST, N.C. -- November 6, 2013

PowerSecure International, Inc. (NYSE:POWR) today reported its third quarter
2013 results. Highlights include:

  *Revenues increase 84.3 percent y-o-y to $81.5 million
  *Operating margin expands 6.2 percentage points y-o-y to 7.3 percent
  *Operating margin expands 2.7 percentage points y-o-y on non-GAAP basis
    (see non-GAAP discussion and reconciliation, below)
  *EPS increases by $0.14 y-o-y from $0.03 to $0.17
  *EPS increases by $0.09 y-o-y from $0.08 to $0.17 on non-GAAP basis (see
    non-GAAP discussion and reconciliation, below)
  *Adjusted EBITDA increases 122 percent y-o-y to $8.0 million (see non-GAAP
    discussion and reconciliation below)

“We saw strong top and bottom line growth across our business in the 3^rd
quarter as our robust organic growth was enhanced by our successful
acquisitions, and we continue to execute in delivering best-in-class solutions
and service to customers,” said Sidney Hinton, chief executive officer of
PowerSecure.

“Our record revenues and further operating margin expansion highlight our
execution and, combined with our strong revenue backlog of $240 million,
provide us with confidence that PowerSecure is exceptionally positioned for
continued success,” Hinton added.

Third Quarter 2013:

PowerSecure’s third quarter 2013 (3Q 2013) revenues of $81.5 million increased
$37.3 million, or 84.3 percent, over revenues in the third quarter of 2012 (3Q
2012). This increase was driven by a 62.2 percent year-over-year (y-o-y)
increase in revenues from distributed generation products, a 72.1 percent
y-o-y increase in revenues from utility infrastructure products and services,
and a 225 percent y-o-y increase in revenues from energy efficiency products
and services.

In total, $24.5 million of the y-o-y revenue growth was organic growth from
our existing operations, representing a 55.5 percent increase, and the
remaining $12.7 million of the y-o-y revenue growth was related to our
recently acquired Solais and ESCO operations (for which no revenues were
recognized in the prior year period).

                                             Variance
($ in 000's)               3Q13     3Q12     $        %
Revenue by Product/Service                               
Distributed Generation     40,648     25,060     15,588     62.2%
                                                            
Utility Infrastructure     24,166     14,038     10,128     72.1%
                                                            
Energy Efficiency          16,696   5,138    11,558   225.0%
Total Revenue              81,510     44,236     37,274     84.3%

Gross margin as a percentage of revenue was 26.3 percent in 3Q 2013 compared
to 31.4 percent in 3Q 2012. The y-o-y gross margin decrease was due to the
growth of our utility infrastructure, solar and ESCO revenues in 3Q 2013,
which are generally our lowest gross margin product and service categories. In
addition, we realized inefficiencies in our utility infrastructure unit
related to the advanced deployment of crews in anticipation of being selected
for a significant long-term revenue opportunity with a major new utility
partner. We anticipate some continued inefficiencies from these excess crews
to negatively impact our gross margins during the fourth quarter of 2013 and
the first quarter of 2014. A separate press release announcing our selection
for this opportunity was issued today in conjunction with this earnings
release.

Non-GAAP financial measures for 3Q 2012 exclude a $1.5 million pre-tax charge
related to a Restructuring and Cost Reduction Plan that was initiated during
3Q 2012, to position the company for enhanced operating margins in future
periods (see non-GAAP discussion and reconciliation).

Operating expenses for 3Q 2013 as a percentage of our revenues were 19.0
percent, a decrease of 11.2 percentage points on a GAAP basis, compared to
30.3 percent in 3Q 2012, and a decrease of 7.8 percentage points excluding the
$1.5 million 3Q 2012 charge, as the company leveraged operating expenses
against a greater level of revenues.

Operating expenses for 3Q 2013 were $15.5 million, compared to $13.4 million
in 3Q 2012. Excluding the $1.5 million charge in 3Q 2012, operating expenses
in 3Q 2012 were $11.8 million. The $3.7 million y-o-y increase in operating
expenses consists primarily of $2.8 million of incremental operating expenses
in 3Q 2013 related to our recent ESCO and Solais acquisitions. The remaining
y-o-y increase in our operating expenses is primarily due to an increase in
selling expenses related to our significantly higher revenues and backlog,
depreciation from our investments in company-owned distributed generation
systems and utility infrastructure equipment, and increases in personnel and
equipment to drive and support our growth.

Operating margin as a percentage of revenue increased 6.2 percentage points to
7.3 percent in 3Q 2013 from 1.1 percent in 3Q 2012. Excluding the 3Q 2012
charge, operating margin increased 2.7 percentage points. The increase in
operating margin was a result of the significant revenue growth achieved with
substantially lower growth in operating expenses.

Our recent acquisitions have provided additional opportunities to restructure
and realign our operations to increase operating margins in our energy
efficiency product and service lines in particular, as well as other cost
reduction opportunities. This includes manufacturing and sourcing synergies
that our Solais acquisition is expected to bring to our existing LED lighting
operations, and other cost reduction opportunities. In contemplation of these
opportunities, we commenced developing plans to integrate and streamline the
operations and product offerings within our energy efficiency product area
primarily, and to a lesser extent other areas of the company. Our intention is
to eliminate certain duplicative facilities, re-source certain of our energy
efficiency inventory suppliers, reduce the number of energy efficiency product
offerings, and reduce personnel levels. We currently expect that this
restructuring will result in a total charge of between $4 million and $6
million during the fourth quarter 2013 and the first quarter of 2014. In
addition, these actions may result in additional charges related to goodwill
or intangible impairment, the amount of which, if any, is not determinable at
this time.

Diluted GAAP earnings per share (EPS) from continuing operations increased to
$0.17 in 3Q 2013, compared to $0.03 in 3Q 2012. Non-GAAP EPS from continuing
operations increased to $0.17 in 3Q 2013, compared to $0.08 in 3Q 2012.

The company completed the third quarter of 2013 with $54.1 million in cash and
cash equivalents, zero drawn on its $20 million revolving credit facility and
$26.2 million of term debt outstanding.

The company’s capital expenditures during Q3 2013 were $0.9 million, with $0.6
million of this capital invested to deploy systems to support
PowerSecure-owned long-term recurring revenue distributed generation projects,
and the remaining $0.3 million primarily invested in the purchase of equipment
for its growing utility infrastructure business.

The company’s revenue backlog stands at $240 million, as of the date of this
release. This includes new business from awards announced on September 19,
2013 and October 2, 2013, and an additional $17 million of new business the
company has been awarded since October 2, 2013. The company’s revenue backlog
represents revenue expected to be recognized after September 30, 2013, for
periods including the fourth quarter of 2013 onward.

This backlog figure compares to the revenue backlog of $245 million announced
in the company’s second quarter 2013 earnings release issued on August 7,
2013, which represented revenue expected to be recognized after June 30, 2013,
and $175 in revenue backlog announced in the company’s 3Q 2012 earnings
release issued on November 7, 2012.

The company’s $240 million revenue backlog and the estimated timing of revenue
recognition are outlined below, including “project-based revenues” expected to
be recognized as projects are completed, and “recurring revenues” expected to
be recognized over the life of the underlying contracts:

Revenue Backlog expected to be recognized after September 30, 2013
                                   Anticipated      Estimated Primary
Description                        Revenue          Recognition Period
                                                            
Project-based Revenue -- Near          $116 million         4Q13 through 2Q14
term
Project-based Revenue -- Long          $48 million          3Q14 through 2016
term
Recurring Revenue                      $76 million          4Q13 through 2020
Revenue Backlog expected to be
recognized after September 30,         $240 million
2013
                                                            
Note: Anticipated revenue and estimated primary recognition periods are
subject to risks and uncertanities
as indicated in the Company's safe harbor statement, below. Consistent with
past practice, these figures
are not intended to constitute the Company's total revenue over the indicated
time periods, as the Company
has additional, regular on-going revenues. Examples of additional, regular
recurring revenues include
revenues from engineering fees, and service revenue, among others. Numbers may
not add due to rounding.

Orders in the company’s revenue backlog are subject to delay, deferral,
acceleration, resizing or cancellation from time to time, and estimates are
utilized in the determination of the backlog amounts. Given the irregular
sales cycle of customer orders, and especially of large orders, the revenue
backlog at any given time is not necessarily an accurate indication of our
future revenues.

Conference Call Information

The company will host a conference call commencing today at 8:30 a.m. Eastern
time. The conference call will be webcast live and can be accessed from the
Investor Relations section of the company's website at
http://www.powersecure.com.

The call can also be accessed by dialing 888-713-4217 (or 617-213-4869 if
dialing internationally) and providing pass code 26350745. If you are unable
to participate during the live webcast, a replay of the conference call will
be available approximately two hours after the completion of the call through
midnight on November 20, 2013. To listen to the replay, dial 888-286-8010 (or
617-801-6888 if dialing internationally), and enter passcode 68896264. In
addition, the webcast will be archived on the company's website.

About PowerSecure

PowerSecure International, Inc. is a leading provider of utility and energy
technologies to electric utilities, and their industrial, institutional and
commercial customers. PowerSecure provides products and services in the areas
of Interactive Distributed Generation ^® (IDG^®), energy efficiency and
utility infrastructure. The company is a pioneer in developing IDG^® power
systems with sophisticated smart grid capabilities, including the ability to
1) forecast electricity demand and electronically deploy the systems to
deliver more efficient, and environmentally friendly, power at peak power
times, 2) provide utilities with dedicated electric power generation capacity
to utilize for demand response purposes and 3) provide customers with the most
dependable standby power in the industry. Its proprietary distributed
generation system designs utilize a range of technologies to deliver power,
including renewables. The company’s energy efficiency business develops energy
efficient lighting technologies that improve the quality of light, including
its proprietary EfficientLights^® LED lighting products for grocery, drug and
convenience stores, and its SecureLite area light and PowerLite street lights
for utilities and municipalities. PowerSecure also provides electric utilities
with transmission and distribution infrastructure maintenance and construction
services, and engineering and regulatory consulting services. Additional
information is available at www.powersecure.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
and made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are all statements
other than statements of historical facts, including but not limited to
statements concerning the outlook for the company's future revenues, earnings,
margins, cash resources and cash flow and other financial and operating
information and data; the company's future business operations, strategies and
prospects; the company’s cost reduction plan; and all other statements
concerning the plans, intentions, expectations, projections, hopes, beliefs,
objectives, goals and strategies of management, including statements about
other future financial and non-financial items, performance or events and
about present and future products, services, technologies and businesses; and
statements of assumptions underlying the foregoing.

Forward-looking statements are not guarantees of future performance or events
and are subject to a number of known and unknown risks, uncertainties and
other factors that are difficult to predict and could cause actual results to
differ materially from those expressed, projected or implied by such
forward-looking statements. Important risks, uncertainties and other factors
include, but are not limited to, the on-going volatility in the economy,
financial markets and business markets and impact of fiscal and budgetary
deadlines, and the effects thereof on the company's markets and customers, the
demand for its products and services, and the company's access to capital; the
size, timing and terms of sales and orders, including the company's revenue
backlog discussed in this press release, and the risk of customers delaying,
deferring or canceling purchase orders or making smaller purchases than
expected; the potential adverse financial and reputational consequences that
can result from safety risks and hazards such as accidents inherent in the
company’s operations; the impact of the company’s recent acquisitions of the
ESCO, Solais and Encari businesses; the company’s ability to reduce and
control its costs and expenses; the timely and successful development,
production and market acceptance of new and enhanced products, services and
technologies of the company; the ability of the company to obtain adequate
supplies of key components and materials of sufficient reliability and quality
for its products and technologies on a timely and cost-effective basis and the
effects of related warranty claims and disputes; the ability of the company to
successfully expand its core distributed generation products and services, to
successfully develop and achieve market acceptance of its new energy-related
businesses, to successfully expand its recurring revenue projects, to manage
its growth and to address the effects of any future changes in utility tariff
structures and environmental requirements on its business solutions; the
effects of competition; changes in customer and industry demand and
preferences; the ability of the company to continue the growth and
diversification of its customer base; the ability of the company to attract,
retain, and motivate its executives and key personnel; changes in the energy
industry in general and the electricity, oil, and natural gas markets in
particular, including price levels; the effects of competition; the ability of
the company to secure and maintain key contracts and relationships; the
effects of pending and future litigation, claims and disputes; and other
risks, uncertainties and other factors identified from time to time in its
reports filed with or furnished to the Securities and Exchange Commission,
including the company's most recent Annual Report on Form 10-K, as well as
subsequently filed reports on Form 10-Q and Form 8-K, copies of which may be
obtained by visiting the investor relations page of the company’s website at
www.powersecure.com or the SEC’s website at www.sec.gov.

Accordingly, there is no assurance that the results expressed, projected or
implied by any forward-looking statements will be achieved, and readers are
cautioned not to place undue reliance on any forward-looking statements. The
forward-looking statements in this press release speak only as of the date
hereof and are based on the current plans, goals, objectives, strategies,
intentions, expectations and assumptions of, and the information currently
available to, management. The company assumes no duty or obligation to update
or revise any forward-looking statements for any reason, whether as the result
of changes in expectations, new information, future events, conditions or
circumstances or otherwise.

PowerSecure International, Inc.
Consolidated Statements of Income (unaudited)
($000's except per share data)
                                                                  
                                     Three Months Ended    Nine Months Ended
                                     Sept 30,   Sept 30,   Sept 30,   Sept 30,
                                     2013       2012       2013       2012
                                                                      
Revenue                              81,510     44,236     196,654    115,288
Cost of sales                        60,060     30,360     141,581    79,653
Gross Profit (excluding depreciation 21,450     13,876     55,073     35,635
and amortization)
                                                                      
Operating expenses
General and administrative           11,511     9,012      33,854     26,750
Selling, marketing, and service      2,073      1,615      5,563      4,039
Depreciation and amortization        1,925      1,211      5,190      3,432
Restructuring and cost reduction     0          1,548      0          1,548
charges
Total operating expenses             15,509     13,386     44,607     35,769
                                                                      
Operating income (loss)              5,941      490        10,466     (134)
                                                                      
Other income (expense)
Gain on sale of unconsolidated       0          0          0          1,439
affiliate
Interest income and other income     21         22         61         67
Interest expense                     (262)      (114)      (497)      (338)
                                                                      
Income (loss) before income taxes    5,700      398        10,030     1,034
Income tax expense (benefit)         2,227      119        3,906      347
                                                                      
Net income (loss) from continuing    3,473      279        6,124      687
operations
                                                                      
Discontinued operations - income     0          11         0          78
(loss) from operations (net of tax)
Discontinued operations - gain on    0          0          0          0
sale (net of tax)
Net income (loss)                    3,473      290        6,124      765
Net loss attributable to             0          192        181        757
noncontrolling interest
                                                                      
Net income (loss) attributable to    3,473      482        6,305      1,522
PowerSecure International, Inc.
                                                                      
Summary of Amounts Attributable to PowerSecure International, Inc.
shareholders
Income (loss) from continuing        3,473      471        6,305      1,444
operations (net of tax)
Income (loss) from discontinued      0          11         0          78
operations (net of tax)
                                                                      
Net income (loss) attributable to    3,473      482        6,305      1,522
PowerSecure International, Inc.
                                                                      
EARNINGS PER SHARE AMOUNTS ("E.P.S") ATTRIBUTABLE TO
POWERSECURE INTERNATIONAL, INC. SHAREHOLDERS:
Continuing Operations
Basic                                0.17       0.03       0.33       0.08
Diluted                              0.17       0.03       0.32       0.08
                                                                      
Discontinued Operations
Basic                                0.00       0.00       0.00       0.00
Diluted                              0.00       0.00       0.00       0.00
                                                                      
Net Income
Basic                                0.17       0.03       0.33       0.08
Diluted                              0.17       0.03       0.32       0.08
                                                                      
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic                                20,325     18,676     19,205     18,807
Diluted                              20,654     18,793     19,528     18,925
                                                                      

PowerSecure International, Inc.
Condensed Consolidated Balance Sheets (unaudited)
($000's)
                                                          
                                                   Sept 30,       December 31,
ASSETS                                            2013           2012
CURRENT ASSETS:
Cash and cash equivalents                          54,132         19,122
Trade receivables, net of allowance for            79,997         57,147
doubtful accounts
Inventories                                        25,741         20,327
Income taxes receivable                            0              592
Deferred tax asset, net                            803            803
Prepaid expenses and other current assets         1,703          1,285
Total current assets                              162,376        99,276
                                                                  
PROPERTY, PLANT, AND EQUIPMENT:
Equipment                                          53,339         48,447
Furniture and fixtures                             530            375
Land, building, and improvements                  6,021          5,907
Total property, plant, and equipment at            59,890         54,729
cost
Less accumulated depreciation and                 16,436         12,152
amortization
Property, plant, and equipment, net               43,454         42,577
                                                                  
OTHER ASSETS:
Goodwill                                           28,162         12,884
Restricted annuity contract                        2,502          2,447
Intangible rights and capitalized                  6,567          1,328
software, net of accum amort
Deferred tax asset, net                            43             0
Other assets                                      1,195          635
Total other assets                                 38,469         17,294
                                                                
TOTAL ASSETS                                      244,299        159,147
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                  
CURRENT LIABILITIES:
Accounts payable                                   24,095         14,150
Accrued and other liabilities                      23,783         23,887
Accrued restructuring and cost reduction           265            709
liabilities
Income taxes payable                               2,890          0
Current unrecognized tax benefit                   247            242
Current portion of long-term debt                  3,731          160
Current portion of capital lease                  922            886
obligation
Total current liabilities                         55,933         40,034
                                                                  
LONG-TERM LIABILITIES:
Revolving Line of Credit                           0              0
Long-term debt, net of current portion             22,496         2,080
Capital lease obligation, net of current           1,225          1,921
portion
Deferred tax liability, net                        0              955
Unrecognized tax benefit                           647            640
Other long-term liabilities                       2,938          2,518
Total long-term liabilities                       27,306         8,114
                                                                  
STOCKHOLDERS' EQUITY:
Preferred stock - undesignated                     0              0
Preferred stock - Series C                         0              0
Common stock                                       216            182
Additional paid-in-capital                         157,057        112,738
Accumulated other comprehensive earnings           (157)          0
(loss)
Retained earnings (deficit)                       3,944          (2,361)
Total PowerSecure International, Inc.              161,060        110,559
stockholders' equity
Noncontrolling Interest                           0              440
Total stockholders' equity                        161,060        110,999
                                                                  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        244,299        159,147
                                                                  

PowerSecure International, Inc.
Condensed Consolidated Statement of Cash Flows (unaudited)
($000's)
                                                             
                                                        Nine Months Ended
                                                        Sept 30,      Sept 30,
                                                        2013          2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                       6,124         765
Adjustments to reconcile net income (loss)
to net cash provided by
(used in) operating activities:
Gain on sale of unconsolidated affiliate                0             (1,439)
Income from discontinued operations                     0             (78)
Depreciation and amortization                           5,190         3,432
Stock compensation expense                              438           755
Loss on disposal of miscellaneous assets                (21)          68
Changes in operating assets and
liabilities, net of
effect of acquisitions:
Trade receivables, net                                  (16,496)      900
Inventories                                             (4,607)       (903)
Other current assets and liabilities                    3,129         659
Other noncurrent assets and liabilities                 (446)         (302)
Accounts payable                                        8,022         2,125
Accrued and other liabilities                           (9,967)       (1,884)
Accrued restructuring and cost reduction                (444)         1,318
liabilities
Net cash provided by (used in) continuing               (9,078)       5,416
operations
Net cash provided by (used in) discontinued             0             334
operations
Net cash provided by (used in) operating                (9,078)       5,750
activities
                                                                      
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired                      (9,542)       (3,523)
Purchases of property, plant and equipment              (4,744)       (4,367)
Additions to intangible rights and software             (469)         (267)
development
Proceeds from sale of property, plant and               158           15
equipment
Proceeds from sale of unconsolidated                    0             1,445
affiliate
Net cash provided by (used in) investing                (14,597)      (6,697)
activities
                                                                      
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from stock offering                        34,447        0
Net borrowings (payments) on revolving line             0             0
of credit
Proceeds from long-term borrowings                      25,000        2,400
Principal payments on long-term debt                    (1,013)       (120)
Principal payments on capital lease                     (660)         (626)
obligations
Repurchases of common stock                             (88)          (2,786)
Proceeds from stock option exercises                    999           23
Net cash provided by (used in) financing                58,685        (1,109)
activities
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS                                    35,010        (2,056)
                                                                      
CASH AND CASH EQUIVALENTS AT BEGINNING OF               19,122        24,606
YEAR
                                                                      
CASH AND CASH EQUIVALENTS AT END OF PERIOD              54,132        22,550

Non-GAAP Pro forma Financial Measures Discussion:

Our references to our third quarter 2012 “Non-GAAP Pro forma” financial
measures of net income from continuing operations, net income, net income
attributable to PowerSecure International, Inc., diluted EPS from continuing
operations, diluted EPS from discontinued operations and diluted EPS discussed
and shown in this report constitute non-GAAP financial measures. They refer to
our GAAP results, adjusted to show the results without the restructuring and
cost reduction charge of $1.5 million recorded in the third quarter of 2012.

We believe providing non-GAAP measures which show our pro forma results with
these items adjusted is valuable and useful as it allows our management and
our board of directors to measure, monitor and evaluate our operating
performance with the same consistent financial context. These non-GAAP pro
forma measures also correspond with the way we expect Wall Street analysts to
compare our results. Our non-GAAP pro forma measures should be considered only
as supplements to, and not as substitutes for or in isolation from, our other
measures of financial information prepared in accordance with GAAP, such as
GAAP revenue, operating income, net income from continuing operations, net
income, net income attributable to PowerSecure International, Inc., diluted
EPS from continuing operations, diluted EPS from discontinued operations, and
diluted EPS.

References to our third quarter and year-to-date 2012 and 2013 Adjusted
EBITDA, which we define as our earnings before interest, taxes, depreciation
and amortization, as discussed and shown in this release, constitutes a
non-GAAP “pro forma” financial measure.

We believe that Adjusted EBITDA, as a non-GAAP pro forma financial measure,
provides meaningful information to investors in terms of enhancing their
understanding of our operating performance and results, as it allows investors
to more easily compare our financial performance on a consistent basis
compared to the prior year periods. This non-GAAP financial measure also
corresponds with the way we expect investment analysts to evaluate and compare
our results. Any non-GAAP pro forma financial measures should be considered
only as supplements to, and not as substitutes for or in isolation from, or
superior to, our other measures of financial information prepared in
accordance with GAAP, such as net income attributable to PowerSecure
International, Inc.

We define and calculate Adjusted EBITDA as net income attributable to
PowerSecure International, Inc., minus: 1) the gain on the sale of our
unconsolidated affiliate, 2) discontinued operations and 3) interest income
and other income, plus: 4) restructuring charges, 5) acquisition expenses, 6)
income tax expense (or minus an income tax benefit), 7) interest expense, 8)
depreciation and amortization and 9) stock compensation expense. We disclose
Adjusted EBITDA because we believe it is a useful metric by which to compare
the performance of our business from period to period. We understand that
measures similar to Adjusted EBITDA are broadly used by analysts, rating
agencies, investors and financial institutions in assessing our performance.
Accordingly, we believe that the presentation of Adjusted EBITDA provides
useful information to investors. The table below provides a reconciliation of
Adjusted EBITDA to net income attributable to PowerSecure International, Inc.,
the most directly comparable GAAP financial measure.

PowerSecure International, Inc.
Non-GAAP Pro forma Measures
($000's except per share data, some rounding throughout)
                                                        
                                                                       
                                        Three Months Ended September 30, 2012
                                        As           Restructuring     Pro
                                        Reported                       forma
                                                     Charges
                                        3Q12                           3Q12
                                                                       
Operating expenses
General and                             9,012                          9,012
administrative
Selling, marketing,                     1,615                          1,615
and service
Depreciation and                        1,211                          1,211
amortization
Restructuring and
cost reduction                          1,548        (1,548)           0
charges
Total operating                         13,386       (1,548)           11,838
expenses
Total operating                         30.3%                          26.8%
expenses % revenue
                                                                       
Operating income                        490          1,548             2,038
Operating income %                      1.1%                           4.6%
revenue
                                                                       
                                                                       
Income (loss)                           398          1,548             1,946
before income taxes
Income tax expense                      119          463               582
(benefit)
                                                                       
Net income (loss)
from continuing                         279          1,085             1,364
operations
                                                                       
                                                                       
EARNINGS PER SHARE AMOUNTS ("E.P.S") ATTRIBUTABLE TO
POWERSECURE INTERNATIONAL, INC. SHAREHOLDERS:
Continuing
Operations
Diluted                                 0.03         0.06              0.08
                                                                       
                                                                       
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Diluted                                 18,793       18,793            18,793
                                                                       

PowerSecure                                                  
International, Inc.
Non-GAAP Pro forma
Measures
Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation and
Amortization, and Charges)
Calculations and
Reconciliation
($000's except per share data, some rounding
throughout)
                                                                      
                          Three Months Ended           Nine Months Ended
                          Sept 30,       Sept 30,      Sept 30,       Sept 30,
                          2013           2012          2013           2012
                                                                      
Adjusted EBITDA
Calculation/Reconciliation
Net income (loss)
attributable to
PowerSecure               3,473          482           6,305          1,522

International, Inc.
                                                                      
Items to Subtract from
Net Income
Gain on sale of           0              0             0              (1,439)
unconsolidated affiliate
Discontinued operations - 0              (11)          0              (78)
income
Interest income and other (21)           (22)          (61)           (67)
income
                                                                      
Items to Add to Net
Income
Restructuring Charges     0              1,548         0              1,548
Acquisition Expenses      30             0             560            128
Income tax expense        2,227          119           3,906          347
(benefit)
Interest expense          262            114           497            338
Depreciation and          1,925          1,211         5,190          3,432
Amortization
Stock compensation        149            179           438            755
expense
                                                                   
Adjusted EBITDA           8,045          3,620         16,835         6,486

Contact:

PowerSecure International, Inc.
John Bluth, 919-453-2103