World Energy Solutions Reports Financial Results for Q2 2009



    Company Posts Record Backlog

    WORCESTER, MA, Aug. 6 /CNW/ - World Energy Solutions, Inc. (NASDAQ:   XWES;
TSX: XWE), an operator of online exchanges for energy and green commodities,
today announced its financial results for the second quarter ended June 30,
2009. All figures below are in U.S. dollars, and growth percentages compare
the results of the three months ended June 30, 2009 with the three months
ended June 30, 2008, unless stated otherwise.

    
    Q2 2009 Highlights
    ------------------

    -   Revenue increased by 33% to $3.7 million
    -   Backlog at record levels
         -  Annualized: $9.5 million
         -  Total: $19.5 million
    -   Net loss decreased 67% to $0.8 million, or $(0.09) per share
    -   Listed on NASDAQ
    -   Key product line highlights
         -  Capitalized on FirstEnergy's newly competitive Ohio retail power
            market
         -  Completed key government renewals with Maryland and Massachusetts
         -  Wholesale continued strong contribution
             -  Year-to-date revenue at 96% of 2008 total
             -  Customer base grew from 30 to 46
         -  Solid performance from Green
             -  Executed the fourth RGGI compliance auction
             -  Made major advancements to the World Green Exchange for the
                carbon offset market
    

    "Despite a challenging economic environment, we continue to post strong
numbers," said Richard Domaleski, Chief Executive Officer, World Energy
Solutions. "The quarter was marked by solid performance across all of our
product lines, resulting in record backlog. The Wholesale product line's
performance was particularly noteworthy as utilities are facing lower demand
due to the recession. Additionally, our Retail group was able to react nimbly
to the newly competitive northern Ohio electric territories and secure several
deals at the end of Q2, adding to our record backlog.
    "I am also pleased to note the passage of the American Clean Energy and
Security Act by the U.S. House of Representatives, which outlines a cap-and
trade framework that calls for auctioning a portion of the government
allowances and creates significant added demand for carbon offsets. We see
these as positive steps forward for the environment and our business."

    
    Financial Review
    ----------------
    
    Revenue for the quarter ended June 30, 2009 rose by 33% over the same
period last year to $3.7 million, which reflects increases in all of the
Company's product lines, including Wholesale, Green and strong auction and
natural gas bookings in Retail.
    The improvements made to the Company's cost structure in 2008 and
resulting efficiencies continued during the second quarter of 2009. Cost of
revenue decreased $0.3 million and gross profit margin increased to 73%
compared to 54% in the same period the prior year. Total operating expenses
decreased 10% to $3.5 million primarily reflecting general payroll and benefit
decreases as well as decreases in compliance costs. Operating expenses as a
percentage of revenue decreased more than 45% over the prior year as the
Company was able to lower its operating cost structure while delivering the
33% increase in revenue.
    Net loss for the second quarter of 2009 was $0.8 million, or $(0.09) per
share, compared with a net loss of $2.4 million, or $(0.29) per share, in the
second quarter of 2008. This decrease was primarily due to the 33% increase in
revenue and an overall decline in cost of revenue and operating expenses.
    Revenue for the six months ended June 30, 2009 rose 30% over the same
period last year to $7.7 million due to increased auction activity in all of
the Company's product lines.
    Cost of revenue decreased $0.4 million and gross profit margin increased
to 73% compared to 57% in the first six months of 2008. Total operating
expenses for the six months ended June 30, 2009 decreased to $7.0 million from
$7.9 million in the same period last year primarily due to decreases in
payroll and benefit costs as well as lower compliance, travel and consulting.
Net loss for the year-to-date period was $1.5 million, or $(0.17) per share,
compared with $4.5 million, or $(0.55) per share, in the first six months of
2008.
    At June 30, 2009, the Company had no bank debt and cash and cash
equivalents of $0.8 million. Net cash used in operations for the six-months
ended June 30, 2009 was $0.8 million resulting primarily from an increase in
trade accounts receivable of $0.6 million and a $0.2 million decrease in
current liabilities. Non-cash expense items, including depreciation,
amortization and share-based compensation, were $1.3 million, substantially
offsetting the $1.5 million net loss for the first six months of 2009. The
Company believes it has the financial resources to execute its growth plans
and reach cash flow positive in 2009.

    
    (*) Backlog relates to contracts in force on a given date representing
        transactions between buyers and sellers on our platform related to
        commodity brokerage assuming sellers consume energy at their
        historical usage levels or deliver credits at expected levels. Total
        backlog represents the revenue that the Company would derive over the
        remaining life of those contracts. Annualized backlog represents the
        revenue that the Company would derive from those contracts within the
        12 months following the date on which the backlog is calculated.
        Total and annualized backlog at June 30, 2009 included commodity
        backlog of $18.4 million and $8.4 million, respectively. In addition,
        total and annualized backlog include contracted management fees
        between World Energy and energy consumers for energy management and
        auction administration services of $1.1 million that are expected to
        be received over the following 12 month period. These management fees
        can be terminated within 30 days per the terms of the contracts.
    

    Conference Call & Webcast

    World Energy will hold a conference call today, August 6, 2009, at 10:00
a.m. ET to discuss its Q2 2009 financial results. To access the conference
call by telephone, dial 416-915-5761 or 1-866-249-5221. The conference call
will be archived for replay until Thursday, August 13, 2009 at midnight. To
access the archived conference call, please dial 416-640-1917 or
1-877-289-8525 and enter the reservation code 21311430 followed by the number
sign.
    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 secure a line and 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 365 days.

    About World Energy Solutions, Inc.

    World Energy (NASDAQ:   XWES; TSX: XWE) operates online exchanges for
energy and green commodities. For buyers and sellers of electricity, natural
gas, capacity, and green-energy assets who are impacted by today's volatile
markets, World Energy's proven approach has transformed the normally complex
procurement process into a powerful, streamlined vehicle for cost savings. In
addition to enabling customers to seek competitive pricing on traditional
energy commodities, World Energy is taking a leadership position in the
emerging environmental-commodities markets. Its award-winning World Green
Exchange(R) supports the ground-breaking Regional Greenhouse Gas Initiative's
(RGGI) cap and trade program for CO2 emissions. 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: we have a history of losses and
cannot provide any assurance we will be profitable in any given period; 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           Six Months Ended
                               June 30,                    June 30,
                      -------------------------------------------------------
                          2009          2008          2009          2008
                      ------------- ------------- ------------- -------------

    Revenue           $  3,682,476  $  2,760,695  $  7,660,255  $  5,875,212
    -------

    Cost of revenue        984,896     1,276,859     2,074,848     2,512,912
                      ------------- ------------- ------------- -------------

    Gross profit         2,697,580     1,483,836     5,585,407     3,362,300

    Sales and marketing  2,662,921     2,770,924     5,233,469     5,414,660

    General and
     administrative        827,719     1,100,642     1,808,955     2,521,625
                      ------------- ------------- ------------- -------------

    Operating loss        (793,060)   (2,387,730)   (1,457,017)   (4,573,985)
    --------------

    Interest income
     (expense), net         (2,044)        7,413        (3,161)       33,726
                      ------------- ------------- ------------- -------------

    Loss before income
     taxes                (795,104)   (2,380,317)   (1,460,178)   (4,540,259)

    Income tax benefit           -             -             -             -
                      ------------- ------------- ------------- -------------

    Net loss          $   (795,104) $ (2,380,317) $ (1,460,178) $ (4,540,259)
    --------          ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    Loss per share:
      Net loss per
       common share -
       basic and
       diluted        $      (0.09) $      (0.29) $      (0.17) $      (0.55)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    Weighted average
     shares
     outstanding -
     basic and
     diluted             8,446,999     8,288,673     8,433,436     8,270,310
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------



               SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET

                                                               June 30, 2009
                                                               --------------
    Assets
    ------
      Current assets                                            $  4,029,502
      Property and equipment, net                                    444,131
      Goodwill                                                     3,178,701
      Other assets                                                 5,851,265
                                                               --------------
        Total assets                                            $ 13,503,599
                                                               --------------
                                                               --------------
    Liabilities and stockholders' equity
    ------------------------------------
      Accrued commissions                                       $    893,140
      Accounts payable and accrued liabilities                     1,903,519
      Other current liabilities                                      732,402
                                                               --------------
        Total current liabilities                                  3,529,061
      Total long-term liabilities                                     24,222
      Stockholders' equity                                         9,950,316
                                                               --------------
        Total liabilities and stockholders' equity              $ 13,503,599
                                                               --------------
                                                               --------------
    





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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WORLD ENERGY SOLUTIONS, INC.

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