Company Backlog Rises Over 40% on Record Bookings WORCESTER, MA
Nov. 5 /PRNewswire-FirstCall/ -- 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 third quarter ended September 30, 2009. All figures below
are in U.S. dollars, and growth percentages compare the results of
the three months ended September 30, 2009 with the three months
ended September 30, 2008, unless stated otherwise. Q3 2009
Highlights ------------------ - Revenue increased - Quarter: 5% to
$3.5 million - Year To Date: 21% to $11.1 million - Backlog reached
record levels - Annualized: $10.4 million, up 18% - Total: $21.1
million, up 41% - Net loss decreased - Quarter: 48% to $0.6 million
- Year To Date: 64% to $2.1 million - The Company renewed its $3
million credit facility with Silicon Valley Bank - Key product line
highlights - Retail: Record bookings spurred by Ohio power market
openings - Government: Successful auctions conducted on behalf of
Rhode Island (natural gas) and GSA Great Lakes Region (electricity)
- Wholesale: TransAlta announced successful first long-term power
auction and plans for second event in Q4 - Green: Executed fifth
RGGI compliance auction - Subsequent to quarter's end - Entered
into financing agreement for up to US$2.5 million with Bond
Capital, Ltd. (see separate press release dated November 5, 2009) -
Announced breakthrough transaction for 1.4 million CERs "In the
face of a tough economy, we saw our backlog reach record levels as
we delivered substantial bookings in our Retail product line,
driven primarily by success in the newly opened Ohio market," said
Richard Domaleski, Chief Executive Officer, World Energy Solutions.
"This new business and a general increase in transaction activity
both in Retail and Wholesale will positively impact our results in
Q4 and into 2010. Overall, World Energy remains on a solid growth
trajectory for 2009, and on track to reach cash flow positive in
the fourth quarter." Financial Review ---------------- Revenue for
the quarter ended September 30, 2009 rose by 5% over the same
period last year to $3.5 million, which reflects increases in the
Company's Retail product line driven by strong auction and natural
gas bookings, specifically new customer wins in the Ohio market.
The results also reflect the continued success of the Green product
line with the completion of the fifth RGGI auction. World Energy's
third-quarter results reflect continued improvements in the
Company's cost structure. Cost of revenue decreased $0.2 million
and gross profit margin increased to 74%, compared to 66% in the
same period in the prior year. Total operating expenses decreased
by 6% to $3.2 million, primarily reflecting decreased compliance
costs as well as reduced payroll, travel and benefit costs.
Operating expenses as a percentage of revenue declined by more than
10% over the prior year as the Company was able to lower its
operating cost structure while delivering the 5% increase in
revenue. Net loss for the third quarter of 2009 was $0.6 million,
or $(0.08) per share, compared with a net loss of $1.2 million, or
$(0.15) per share, in the third quarter of 2008. This decrease was
primarily due to an overall decline in cost of revenue and
operating expenses and the year-over-year increase in revenue.
Revenue for the nine months ended September 30, 2009 rose 21% over
the same period in the prior year to $11.1 million due to increased
auction activity in all the Company's product lines and new
customer wins. Cost of revenue decreased $0.7 million and gross
profit margin increased to 73%, compared to 60% in the first nine
months of 2008. Total operating expenses for the nine months ended
September 30, 2009 decreased 10% to $10.2 million from $11.3
million in the same period last year primarily due to decreases in
payroll and benefit costs, as well as lower compliance and travel
costs. Net loss for the year-to-date period was $2.1 million, or
$(0.25) per share, compared with $5.8 million, or $(0.69) per
share, in the first nine months of 2008. At September 30, 2009, the
Company had no bank debt and cash and cash equivalents of $0.7
million. Net cash used in operations for the nine months ended
September 30, 2009 was $0.9 million, resulting primarily from a
$0.7 million increase in trade accounts receivable and the net loss
for the period, excluding the effects of non-cash expense items.
Non-cash expense items, including depreciation, amortization and
share-based compensation, were $1.8 million, substantially
offsetting the $2.1 million net loss for the first nine months of
2009. The Company also renewed its credit facility with Silicon
Valley Bank for 18 months through March 7, 2011. The Company did
not take any advances against the credit facility during the
original 12-month term and does not plan to draw against the
facility. The Company continues to believe it has the financial
resources to execute its growth plans and reach cash flow positive
in the fourth quarter. * 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
September 30, 2009 included commodity backlog of $20.0 million and
$9.3 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,
November 5, 2009, at 10:00 a.m. ET to discuss its Q3 2009 financial
results. To access the conference call by telephone, dial
416-644-3419 or 1-800-814-4860. The conference call will be
archived for replay until Thursday, November 12, 2009 at midnight.
To access the archived conference call, please dial 416-640-1917 or
1-877-289-8525 and enter the reservation code 4169818 followed by
the number sign. A live audio webcast of the conference call will
be available at http://www.worldenergy.com/ and
http://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
http://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 Nine Months Ended September 30,
September 30,
-------------------------------------------------------- 2009 2008
2009 2008 -------------- ------------- ------------- -------------
Revenue $ 3,458,262 $ 3,289,515 $ 11,118,517 $ 9,164,727 -------
Cost of revenue 893,668 1,113,325 2,968,516 3,626,237
-------------- ------------- ------------- ------------- Gross
profit 2,564,594 2,176,190 8,150,001 5,538,490 Sales and marketing
2,314,962 2,355,907 7,548,431 7,770,567 General and administrative
884,841 1,041,321 2,693,796 3,562,946 -------------- -------------
------------- ------------- Operating loss (635,209) (1,221,038)
(2,092,226) (5,795,023) -------------- Interest income (expense),
net (1,493) 5,218 (4,654) 38,944 -------------- -------------
------------- ------------- Loss before income taxes (636,702)
(1,215,820) (2,096,880) (5,756,079) Income tax benefit - - - -
-------------- ------------- ------------- ------------- Net loss
-------- $ (636,702) $ (1,215,820) $ (2,096,880) $ (5,756,079)
-------------- ------------- ------------- -------------
-------------- ------------- ------------- ------------- Loss per
share: Net loss per common share - basic and diluted $ (0.08) $
(0.15) $ (0.25) $ (0.69) -------------- ------------- -------------
------------- -------------- ------------- -------------
------------- Weighted average shares outstanding - basic and
diluted 8,468,500 8,321,595 8,445,252 8,287,530 --------------
------------- ------------- ------------- --------------
------------- ------------- ------------- SUMMARY OF CONDENSED
CONSOLIDATED BALANCE SHEET September 30, 2009 --------------------
Assets ------ Current assets $ 3,986,665 Property and equipment,
net 406,910 Goodwill 3,178,701 Other assets 5,492,632
-------------------- Total assets $ 13,064,908 --------------------
-------------------- Liabilities and stockholders' equity
------------------------------------ Accrued commissions $ 818,579
Accounts payable and accrued liabilities 2,160,867 Other current
liabilities 636,984 -------------------- Total current liabilities
3,616,430 Total long-term liabilities 20,146 Stockholders' equity
9,428,332 -------------------- Total liabilities and stockholders'
equity $ 13,064,908 -------------------- --------------------
DATASOURCE: World Energy Solutions, Inc. CONTACT: Jim Parslow,
World Energy Solutions, Inc., (508) 459-8100, ; Craig Armitage, The
Equicom Group, (416) 815-0700 x278,
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