World Energy Reports Record Quarterly Revenue in Q4 2007; 93% Increase over Prior Year



    - Fiscal 2007 Revenue Increases by 59% -

    WORCESTER, MA, March 13 /CNW/ - World Energy Solutions, Inc. (TSX: XWE),
operator of leading online exchanges for energy and environmental commodities,
today announced its financial results for the fourth quarter and fiscal year
ended December 31, 2007. All figures below are in U.S. dollars, unless stated
otherwise.

    
    Fiscal 2007 Highlights
    ----------------------
    -   Revenue for Q4 2007 rose by 93% over Q4 2006 to $3.1 million.
    -   Full-year revenue increased by 59% over 2006 to $9.2 million.
    -   Annualized retail backlog(*) increased by 46% to $7.6 million at
        December 31, 2007.
    -   Expanded government franchise with state government agency wins in
        Delaware, New Jersey and Connecticut and several local government
        procurements.
    -   Increased channel partner network from 29 to 42 and sales force from
        6 to 29.
    -   Attracted top talent and established infrastructure to drive and
        support growth.
    -   Achieved certain strategic objectives outlined at the time of our
        IPO.
        -  Executed acquisition of EnergyGateway.
        -  Developed wholesale product line into significant, fast-growing
           business.
        -  Created World Green Exchange and conducted pioneering auctions.
    

    "Overall, 2007 was an eventful and successful first year as a public
company as we delivered on our IPO strategic objectives and positioned the
Company to take advantage of substantial market opportunities," said Richard
Domaleski, Chief Executive Officer, World Energy Solutions. "We grew our
retail product line with a strong acquisition, developed a new product line by
expanding into the wholesale market and launched the World Green Exchange to
position us as a leader in the evolving environmental markets. Consistent with
our strategic plan, we also made important investments last year to bring on
top talent and build a scalable infrastructure. With this major investment
period behind us, we believe we have the capabilities to support substantially
higher business levels."
    "Twenty-three of the 29 people in our sales and account management teams
joined us in the last nine months of the year, and we are now beginning to see
accelerating results from this sales force investment," added Domaleski.
"Looking ahead, we believe we now have a sales force in place to support
strong revenue growth in 2008, as our sales team gains more experience with
our product lines and the market for environmental commodities continues to
develop."

    Financial Review
    ----------------
    For the year ended December 31, 2007, revenue increased by 59% to
$9.2 million, which reflects increased auction activity in multiple product
lines, new customer wins and the acquisition of the assets of EnergyGateway.
These increases reflect the growth of the Company's wholesale customer base to
12 in 2007 from 2 in 2006, as well as the continued expansion of the Company's
channel partner network to 42 at year end, from 29 at December 31, 2006. Of
those channel partners, 25 contributed to revenue during 2007, compared with
18 during 2006.
    During 2007, the Company made significant planned investments to build
the team and infrastructure required to drive future growth. Total operating
expenses for the year were $14.5 million, compared with $5.1 million in 2006.
The year-over-year change primarily reflects growth in the Company's employee
base, which tripled to 63 employees at December 31, 2007 from 20 at
December 31, 2006, as well as increased compliance costs related to being a
public company. While the Company will add resources selectively, management
believes that the core team is in place to execute on its organic growth plans
and drive higher sales in the future.
    Net loss for 2007 was $8.6 million, or $(0.11) per share, compared with a
net loss of $501,000, or $(0.01) per share, in 2006. Results for fiscal 2007
include a non-recurring, non-cash charge of $1.1 million due to a valuation
allowance against deferred tax assets in accordance with SFAS No. 109,
Accounting for Income Taxes. The Company's deferred tax assets are derived
primarily from net operating loss carryforwards (NOLs) ($10.8 million at
December 31, 2007), which begin to expire in 2022 for federal purposes and
2008 for state purposes. This valuation allowance does not affect the
characteristics of the Company's NOLs or the ability of the Company to use
them against future income.
    Revenue for the fourth quarter ended December 31, 2007 rose by 93% over
the same period last year to a record $3.1 million. This growth reflects
increases in the Company's wholesale energy and core retail energy product
lines, with wholesale representing approximately 20% of total revenue in the
fourth quarter of 2007.
    Selling and marketing expenses for the fourth quarter were $2.6 million,
compared with $856,000 in the prior year, reflecting the planned scale-up of
the Company's sales and account management teams. Fourth-quarter general and
administrative expenses were $1.6 million, compared with $721,000 in the
fourth quarter of 2006.
    Net loss for the fourth quarter of 2007 was $5.2 million, or $(0.06) per
share, compared with a net loss of $294,000, or $(0.01) per share, in the
fourth quarter of 2006. This increase was due to the tax impact of the
deferred tax valuation allowance discussed above, as well as increased
operating expenses, partially offset by the increase in revenue and interest
income.
    At December 31, 2007, the Company had cash and cash equivalents of
$7.0 million, compared with $17.5 million as at December 31, 2006. The
year-over-year change reflects the Company's execution of its strategic
initiatives, including the cash-portion paid for the acquisition of the assets
of EnergyGateway of approximately $5.0 million, funding of operations
requiring $4.6 million, and software development and capital expenditures of
$0.9 million.

    (*) Annualized retail 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. In
addition, contracted backlog includes annualized expected management fees,
which represent contracts for risk management services between World Energy
and energy consumers that are recognized on a monthly basis and are expected
to be received over the following 12 months. Management fees can be terminated
within 30 days per the terms of the contracts. The annualized backlog at
December 31, 2007 included contracted backlog of $6.2 million and expected
management fees of $1.4 million.

    Conference Call & Webcast

    World Energy will hold a conference call today, March 13, 2008, at
10:00 a.m. (ET) to discuss its financial results and other corporate
developments. To access the conference call by telephone, dial 416-644-3420 or
1-800-731-5319. A live audio webcast of the conference call will be available
at 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
environmental commodities. 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.


    
                         WORLD ENERGY SOLUTIONS, INC.

         SUMMARY OF CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                              Three Months Ended            Year Ended
                                 December 31,              December 31,
                          ------------------------- -------------------------
                              2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
    Revenue               $ 3,084,593  $ 1,596,335  $ 9,188,265  $ 5,763,098
    Cost of revenue         1,021,018      324,237    2,874,678    1,166,426
                          ------------ ------------ ------------ ------------
    Gross profit            2,063,575    1,272,098    6,313,587    4,596,672
    Sales and marketing     2,632,995      855,520    8,598,256    3,227,263
    General and
     administrative         1,584,395      721,399    5,858,810    1,862,450
                          ------------ ------------ ------------ ------------
    Operating loss         (2,153,815)    (304,821)  (8,143,479)    (493,041)
    Interest income
     (expense), net            80,856     (157,492)     563,294     (312,280)
                          ------------ ------------ ------------ ------------
    Loss before
     income taxes          (2,072,959)    (462,313)  (7,580,185)    (805,321)
    Income tax (expense)
     benefit               (3,141,556)     168,671   (1,061,720)     304,228
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Net loss              $(5,214,515) $  (293,642) $(8,641,905) $  (501,093)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Net loss to common
     stockholders         $(5,214,515) $  (294,541) $(8,641,905) $  (507,392)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Loss per share:
      Net loss per common
       share - basic      $     (0.06) $     (0.01) $     (0.11) $     (0.01)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
      Net loss per to
       common stockholders
       - diluted          $     (0.06) $     (0.01) $     (0.11) $     (0.01)
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Weighted average
     shares outstanding
     - basic               82,347,882   58,322,662   79,793,590   45,576,477
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    Weighted average
     shares outstanding
     - diluted             82,347,882   58,322,662   79,793,590   45,576,477
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------



               SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET

                                                  December 31, 2007
                                                  ------------------
          Assets
          ------
            Current assets                          $     9,218,166
            Property and equipment, net                     595,950
            Goodwill                                      3,178,701
            Other assets                                  7,807,748
                                                  ------------------
              Total assets                          $    20,800,565
                                                  ------------------
                                                  ------------------

          Liabilities and stockholders' equity
          ------------------------------------
            Accrued commissions                     $       712,919
            Accounts payable and accrued
             liabilities                                  2,776,068
            Other current liabilities                       405,557
                                                  ------------------
              Total current liabilities                   3,894,544
            Total long-term liabilities                      46,222
              Stockholders' equity                       16,859,799
                                                  ------------------
                Total liabilities and
                 stockholders' equity               $    20,800,565
                                                  ------------------
                                                  ------------------
    






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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