World Energy Announces 2007 Third Quarter Results



    Results highlighted by record quarterly revenue

    WORCESTER, MA, Nov. 13 /CNW/ - World Energy Solutions, Inc. (TSX: XWE),
the operator of leading online exchanges for energy and energy-related
products, today announced its financial results for the three- and nine-month
periods ended September 30, 2007. All figures are in U.S. dollars unless
stated otherwise.

    
    Q3 2007 Highlights
    ------------------

    -   Revenue increased 59% to $2.7 million from $1.7 million in the third
        quarter of 2006
    -   Annualized Backlog of $7.6 million at September 30, 2007:(*)
        -   Contracted backlog of $6.2 million;
        -   Expected management fees of $1.4 million.
    -   Awarded five-year contract to procure certain energy commodities for
        the State of Connecticut, and executed first procurement under
        contract
    -   Executed transactions for 13 Fortune 1000 companies, including
        Lockheed Martin, Nestlé and Weyerhaeuser
    -   Increased wholesale client base to 7
    -   Grew channel partner network to 36
    -   Increased staff to 56, including top talent from across the industry
    

    "The third quarter saw our revenue growth rate accelerate to 59% over the
same period in the prior year as we continue to execute our growth strategies
in each of the three product lines - retail, wholesale and green credits,"
said Richard Domaleski, Chief Executive Officer, World Energy Solutions. "Key
achievements in our base retail product line included a new, five-year
contract with the State of Connecticut, which represented our third state
award this year and underscored our position as a leading on-line exchange for
energy and energy-related products to government entities. We continued to
expand our commercial and industrial business, with wins at some of the
largest companies in the country, and continued to increase our channel
partner network. Integration of the EnergyGateway business has proceeded
smoothly, and we are seeing results from initial cross-selling efforts."
    "In the wholesale product line, we added our seventh client - fifth this
year - and executed follow-on transactions at two existing clients. We have
seen the revenue from this product line more than double during the first
nine months of 2007 compared to the same period in 2006," Domaleski continued.
"Our Connecticut procurement had a significant green component, highlighting
our expertise in supporting entities seeking to voluntarily green energy
portfolios. Connecticut is the 5th of the 10 Regional Greenhouse Gas
Initiative (RGGI) states that have successfully procured with World Energy."
    Revenue for the three months ended September 30, 2007 rose 59% compared
with the third quarter of 2006 to $2.7 million due to the addition of the
EnergyGateway business and increased energy consumption by energy consumers.
This growth reflects increases in the Company's wholesale and commercial and
industrial energy procurement markets.
    Total operating expenses for the third quarter of 2007 increased to $4.9
 million, which includes non-cash stock-based compensation of approximately
$634,700, from $1.3 million in the same period last year primarily due to
increases in salary, benefit and recruiting costs resulting from the Company's
increased employee base, as well as higher legal, audit and compliance costs
and the addition of the EnergyGateway business. World Energy had 56 employees
at September 30, 2007 compared with 20 at September 30, 2006. This change
reflects the addition of the former EnergyGateway employees and increased
staffing levels in all functional areas, including the Company's first
dedicated full-time employees to pursue the wholesale and green markets. The
Company expects operating expenses to rise moderately for the remainder of
2007 as it builds out the infrastructure required to support its growth plans.
    Net loss for the third quarter of 2007 was $1.8 million, or
$0.02 per share, compared with net income of $12,000 in the third quarter of
2006. The year-over-year change is due to higher operating expenses, which
were partially offset by increases in revenue, interest income and income tax
benefit.
    "It is gratifying to see us implement the strategies we set out one year
ago. Since that time, we have attracted extremely high quality individuals to
the management ranks of the company, built a strong sales team, acquired one
of the industry leading on-line brokerage companies, and launched two new
lines of business," concluded Mr. Domaleski.
    Revenue for the nine months ended September 30, 2007 rose 46% over the
same period last year to $6.1 million due to the acquisition of the
EnergyGateway business and increased energy consumption by energy consumers.
This growth reflects increases in all of the Company's base energy procurement
markets, including wholesale, government and C&I.
    Total operating expenses for the nine months ended September 30, 2007
increased to $10.2 million from $3.5 million in the same period last year
primarily due to increases in salary, benefit and recruiting costs resulting
from the Company's increased employee base, higher legal, audit and compliance
costs and the addition of the EnergyGateway business.

    
    (*) Annualized contracted backlog represents the revenue that the Company
        would derive within the 12 months following the date on which the
        backlog is calculated from contracts between consumer, industrial and
        government (CIG) energy consumers and energy suppliers that are in
        force on such date, assuming such CIG energy consumers use energy at
        their historical usage levels. Annualized expected management fees
        represent contracts for risk management services between World Energy
        and the energy consumer that are recognized on a monthly basis and
        are expected to be received over the following 12-months. These
        services can be terminated within 30-days per the terms in the
        contract.
    

    Conference Call & Webcast

    World Energy will hold a conference call today, November 13, 2007, at
10:00 a.m. (ET) to discuss its financial results and other corporate
developments. To access the conference call by telephone, dial 416-644-3422 or
1-800-731-6941.
    A live audio webcast of the conference call will be available
www.worldenergy.com and www.newswire.ca. Please connect at least 15 minutes
prior to the conference call to ensure adequate time for any software download
that may be required to join the webcast. An archived replay of the webcast
will be available for 360 days.

    About World Energy

    World Energy operates leading online exchanges for energy and
energy-related products. Our proven approach provides market intelligence,
promotes liquidity, and creates price transparency for all market
participants, enabling our customers to transact with confidence and to seek
the best possible price. To date, the company has transacted over 40 billion
kWh of electricity, 700 million kWh of green power and Renewable Energy
Certificates (RECs) and one trillion cubic feet of natural gas. For more
information, please visit www.worldenergy.com.

    This press release contains forward-looking statements that are subject
to risks and uncertainties that could cause actual results to differ from
those indicated in the forward looking statements. Such risks and
uncertainties include, but are not limited to: our revenue is dependent on
actual future energy purchases pursuant to completed procurements; the demand
for our services is affected by changes in regulated prices or cyclicality or
volatility in competitive market prices for energy; we depend on a small
number of key energy consumers, suppliers and channel partners; there are
factors outside our control that affect transaction volume in the electricity
market; and there are other factors identified in our Annual Report on Form
10-K and subsequent reports filed with the Securities and Exchange Commission.



    
                   SUMMARY OF WORLD ENERGY SOLUTIONS, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                             Three Months Ended         Nine Months Ended
                                September 30,              September 30,
                          ------------------------- -------------------------
                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------

    Revenue               $ 2,675,343  $ 1,686,993  $ 6,103,672  $ 4,166,763
                          ------------ ------------ ------------ ------------
    Operating income
     (loss)                (3,017,704)      74,207   (5,989,664)    (188,220)
    Interest income
     (expense), net           108,195      (53,606)     482,438     (154,788)
                          ------------ ------------ ------------ ------------
    Income (loss) before
     income taxes          (2,909,509)      20,601   (5,507,226)    (343,008)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Net income (loss)     $(1,810,384) $    12,361  $(3,427,390) $  (207,451)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Net income (loss)
     available to
     common stockholders  $(1,810,384) $    10,561  $(3,427,390) $  (212,851)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------

    Earnings (loss) per
     share:
      Net earnings (loss)
       per voting common
       share - basic      $    ( 0.02) $         -  $     (0.04) $     (0.01)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
      Net earnings (loss)
       per non-voting
       common share -
       basic              $         -  $         -  $         -  $     (0.01)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
      Net earnings (loss)
       per share avail-
       able to common
       stockholders -
       diluted            $     (0.02) $         -  $     (0.04) $     (0.01)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Weighted average
     shares outstanding
     - basic               81,943,263   42,349,744   78,932,803   41,281,059
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Weighted average
     shares outstanding
     - diluted             81,943,263   57,243,406   78,932,803   41,281,059
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------



               SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET

                                                          September 30, 2007
                                                         --------------------
    Assets
    ------
      Current assets                                      $       10,816,391
      Property and equipment, net                                    531,239
      Goodwill                                                     3,178,701
      Other assets                                                11,204,254
                                                         --------------------
        Total assets                                      $       25,730,585
                                                         --------------------
                                                         --------------------

    Liabilities and stockholders' equity
    ------------------------------------
      Accrued commissions                                 $          635,344
      Accounts payable and accrued liabilities                     2,773,771
      Other current liabilities                                      395,870
                                                         --------------------
          Total current liabilities                                3,804,985
      Total long-term liabilities                                     56,315
        Stockholders' equity                                      21,869,285
                                                         --------------------
          Total liabilities and stockholders' equity      $       25,730,585
                                                         --------------------
                                                         --------------------
    





For further information:

For further information: Jim Parslow, World Energy Solutions, Inc.,
(508) 459-8100, jparslow@worldenergy.com; Craig Armitage, The Equicom Group,
(416) 815-0700, x278, carmitage@equicomgroup.com

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