World Energy Announces Fourth Quarter and 2006 Year-end Results



    WORCESTER, MA, March 21 /CNW/ - World Energy Solutions, Inc. (TSX: XWE)
today announced its financial results for the fourth quarter and fiscal year
ended December 31, 2006. All figures are in U.S. dollars unless stated
otherwise.

    2006 Highlights
    ---------------

    
    -  Completed initial public offering for net proceeds to the Company of
       approximately $17.5 million
    -  Revenue increased 23% over the prior year to $5.8 million
    -  Annualized backlog(*) increased 44% to $5.2 million at
       December 31, 2006
    -  Number of channel partners grew to 29 from 16 at the end of 2005
    -  Subsequent to year end, appointed highly accomplished executive
       David Bat to the position of senior vice president of sales
    

    "Fiscal 2006 was a watershed year for the Company, highlighted by our
initial public offering, which gave us financial resources to pursue our
objective of becoming the pre-eminent exchange for executing transactions in
energy and energy-related products," said Richard Domaleski, President and
CEO, World Energy Solutions. "In addition to the solid increase in revenue,
2006 saw us make strong gains with other important measures, including channel
partners and government procurements. Our backlog reflected these gains,
increasing to $5.2 million from $3.6 million at the end of 2005. In the near
term, we are focused on investing in our business and strategic growth
initiatives as we aim to capture a significant share of the rapidly emerging
market for the online exchange of energy and related products."
    "In 2007, we are pursuing several strategic objectives, including
expanding our community of channel partners, energy consumers and energy
suppliers on the exchange, strengthening and extending our long-term
relationships with government agencies, broadening our exchange to include
other geographic markets and other energy-related markets, wholesale
transactions with utilities and emerging green credits market, making
strategic acquisitions and growing our sales force. Our balance sheet is
strong with approximately $17.5 million in cash and no bank debt and our
annualized backlog of $5.2 million gives us a solid foundation to pursue these
initiatives. We are excited with our prospects and are confident that we will
meet our stated objective of achieving a pre-eminent position as the exchange
for executing transactions in energy and energy-related products," added Mr.
Domaleski.
    Revenue for the three and twelve months ended December 31, 2006 increased
26% and 23%, respectively, due mainly to higher energy use by energy
consumers. This primarily reflects the addition of new government procurements
and the increase in the number of channel partners driving activity on the
Company's auction platform.
    Total operating expenses increased to $5.1 million from $3.6 million for
the twelve months ended December 31, 2006 and 2005, respectively, and to
$1.6 million from $1.0 million for the three months ended December 31, 2006
and 2005, respectively. This change mainly reflects higher personnel costs
related to increased staffing levels in all functional areas and, to a lesser
extent, increased compliance and recruiting costs. The Company expects
operating expenses to significantly increase in 2007 as it continues to expand
its brokerage capabilities to offer additional energy-related products,
increases its sales and marketing efforts and continues to expand its
back-office operation.
    Net loss for 2006 was $0.5 million, or $0.01 per share, compared with net
income of $1.0 million, or $0.02 per share, in 2005. The year-over-year change
is due primarily to the increases in operating expenses and net interest
expense, which were partially offset by the increase in revenue. Net loss for
the fourth quarter of 2006 was $0.3 million, or $0.01 per share, compared with
net income of $0.8 million, or $0.02 per share ($0.01 per diluted share), in
the same period last year. The year-over-year change is due primarily to a
$0.6 million decrease in the income tax benefit in 2006 versus 2005, increases
in operating expenses and, to a lesser extent, a $0.1 million increase in net
interest expense. These factors were partially offset by the increase in
revenue.

    (*)Annualized backlog represents the revenue that we would derive within
    the twelve 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.

    Conference Call & Webcast
    World Energy will hold a conference call today, March 21, 2007, at
10:00 a.m. (ET) to discuss its financial results and other corporate
developments. To access the conference call by telephone, dial 416-644-3418 or
1-800-731-6941. A live audio webcast of the call will be available at
www.worldenergy.com. The webcast will be archived for 90 days.

    About World Energy
    World Energy is an energy brokerage company that has developed an online
auction platform, the World Energy Exchange, through which energy consumers in
the United States are able to purchase electricity and other energy resources
from competing energy suppliers. To date the company has brokered over 31
billion kilowatt hours of electricity and 64 million decatherms of natural
gas.

    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: that 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;
factors outside our control affect transaction volume in the electricity
market; and other factors identified in our Registration Statement on Form S-1
and subsequent reports filed with the Securities and Exchange Commission.


    
                   SUMMARY OF WORLD ENERGY SOLUTIONS, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                Three Months Ended
                                    December 31,      Year Ended December 31,
                              ----------------------- -----------------------
                                 2006        2005        2006        2005
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    Revenue                   $1,596,000  $1,266,000  $5,763,000  $4,674,000
    -------                   ----------- ----------- ----------- -----------

    Operating income
    ----------------
     (loss)                     (305,000)     52,000    (493,000)    380,000
     ------

    Interest expense, net       (157,000)    (44,000)   (312,000)    (87,000)
                              ----------- ----------- ----------- -----------

    Income (loss) before
     income taxes               (462,000)      8,000    (805,000)    293,000
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    Net income (loss)         $ (294,000) $  762,000  $ (501,000) $1,047,000
    -----------------         ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    Net income (loss)
    -----------------
     available to common
     -------------------
     stockholders             $ (295,000) $  761,000  $ (507,000) $1,040,000
     ------------             ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    Earnings (loss) per share:
    --------------------------
      Net income (loss) per
      ---------------------
       voting and non-voting
       ---------------------
       common share - basic   $    (0.01) $     0.02  $    (0.01) $     0.02
       --------------------   ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------
      Net income (loss) per
      ---------------------
       share available to
       ------------------
       common stockholders
       -------------------
       - diluted              $    (0.01) $     0.01  $    (0.01) $     0.02
       ---------              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------


    Weighted average shares
     outstanding - basic      58,322,662  39,841,607  45,576,477  39,827,799
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------

    Weighted average shares
     outstanding - diluted    58,322,662  54,676,404  45,576,477  54,506,566
                              ----------- ----------- ----------- -----------
                              ----------- ----------- ----------- -----------


               SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET

                                                  December 31, 2006
                                                  -----------------
                                                  -----------------

          Assets
          ------
            Current assets                          $  19,398,000
            Property and equipment, net                   226,000
            Other assets                                1,167,000
                                                  -----------------
              Total assets                          $  20,791,000
                                                  -----------------
                                                  -----------------

          Liabilities, series A redeemable preferred
          ------------------------------------------
           stock and stockholders' deficit
           -------------------------------
            Accrued Commissions                     $   1,021,000
            Accounts payable and accrued
             liabilities                                1,385,000
            Other current liabilities                     352,000
                                                  -----------------
              Total current liabilities                 2,758,000
            Total long-term liabilities                    88,000
            Series A redeemable preferred stock                 -
            Stockholders' equity                       17,945,000
                                                  -----------------
              Total liabilities, series A
               preferred and stockholders' equity   $  20,791,000
                                                  -----------------
                                                  -----------------
    





For further information:

For further information: Investor Relations: Jim Parslow, World Energy
Solutions Inc., (508) 459-8100, jparslow@worldenergy.com

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