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August 14, 2007
Worcester, MA, Aug. 14, 2007 - World Energy Solutions, Inc. (TSX: XWE) today announced its financial results for the second quarter ended June 30, 2007. All figures are in U.S. dollars unless stated otherwise.
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Q2 2007 Highlights
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- Revenue increased 51% to $1.9 million from $1.3 million in the second
quarter of 2006
- Annualized backlog* reached $6.0 million at June 30, 2007
- Completed the acquisition of EnergyGateway LLC, a leading online
broker of natural gas and electricity for commercial and industrial
(C&I) consumers in the United States
- Signed a referral agreement with U.K.-based Utilyx Holdings Limited
- Increased channel partner network to 34
- Recorded highest volume quarter in company history for Commercial and
Industrial (C&I) business
- Executed electricity procurements for the States of Delaware and New
Jersey
- Added three new wholesale customers, including first auction for a
retail natural gas supplier
- Received a task order from the Commonwealth of Massachusetts
(for 12-15 years) to assist them in greening their energy portfolio
- Continued to build team with new hires in sales, marketing, and
operations including Rick Adcock as Senior Vice President of
Environmental Markets
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"The second quarter saw us continue to execute the strategy we set forth during our initial public offering, deploying the capital to support organic growth and make acquisitions. We recorded strong top-line growth in our base retail business, while gaining tangible traction in our new markets - wholesale and green," said Richard Domaleski, President and CEO, World Energy Solutions. "Among our achievements, in our base business, we had a record quarter for C&I auction activity, extended our leadership position in the government space, grew our channel partner network, completed our first acquisition and extended our reach internationally. We also saw significant traction in our new markets, running several auctions in the wholesale space and receiving a task order from the Commonwealth of Massachusetts' Division of Energy Resources to green their energy portfolio. We continued to build our sales, marketing and operations teams in all our business lines including our emerging green business where we hired Rick Adcock as Senior Vice President and others with significant green experience."
Revenue for the three months ended June 30, 2007 rose 51% compared with the first quarter of 2006 to $1.9 million due to organic growth based on increased auction activity and energy consumption and the addition of the EnergyGateway business. 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 second quarter of 2007 increased to $3.3 million from $1.2 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 and audit costs and the addition of EnergyGateway. World Energy had 54 employees at June 30, 2007 compared with 19 at June 30, 2006. This change reflects 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 second quarter of 2007 was $1.2 million, or $0.02 per share, compared with a net loss of $179,000 in the second 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.
Revenue for the six months ended June 30, 2007 rose 38% over the same period last year to $3.4 million due to organic growth based on increased auction activity and energy consumption and the addition of EnergyGateway. 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 six months ended June 30, 2007 increased to $5.3 million from $2.3 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, higher legal and audit costs and the addition of the EnergyGateway business.
* Annualized backlog represents the revenue that the Company 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, August 14, 2007, at 10:00 a.m. (ET) to discuss its financial results and other corporate developments. To access the conference call by telephone, dial 416-915-5762 or 1-800-590-1817. The conference call will be archived for replay until Tuesday, August 21, 2007 at midnight. To access the archived conference call, please dial 416-640-1917 or 1-877-289-8525 and enter the reservation code 21243125.
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 brokered over 32 billion kwh of electricity, 500 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: 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.
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SUMMARY OF WORLD ENERGY SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
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2007 2006 2007 2006
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Revenue $ 1,927,192 $ 1,274,839 $ 3,428,329 $ 2,479,770
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Operating loss (2,061,708) (240,524) (2,971,960) (262,427)
Interest income
(expense), net 170,219 (50,762) 374,243 (101,182)
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Loss before income
taxes (1,891,489) (291,286) (2,597,717) (363,609)
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Net loss $ (1,177,570) $ (179,389) $ (1,617,006) $ (219,812)
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Net loss available
to common
stockholders $ (1,177,570) $ (181,189) $ (1,617,006) $ (223,412)
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Loss per share:
Net loss per
voting common
share - basic $ ( 0.02) $ - $ (0.02) $ (0.01)
------------- ------------- ------------- -------------
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Net loss per
non-voting
common share
- basic $ - $ - $ - $ (0.01)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net loss per
share available
to common
stockholders
- diluted $ (0.02) $ - $ (0.02) $ (0.01)
------------- ------------- ------------- -------------
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Weighted average
shares outstanding
- basic 78,283,719 40,607,953 77,402,625 40,737,861
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Weighted average
shares outstanding
- diluted 78,283,719 40,607,953 77,402,625 40,737,861
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SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2007
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Assets
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Current assets $ 12,410,231
Property and equipment, net 399,804
Goodwill 2,528,552
Other assets 10,932,698
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Total assets $ 26,271,285
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Liabilities and stockholders' equity
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Accrued commissions $ 676,456
Accounts payable and accrued
liabilities 2,216,283
Other current liabilities 289,313
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Total current liabilities 3,182,052
Total long-term liabilities 66,208
Stockholders' equity 23,023,025
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Total liabilities and
stockholders' equity $ 26,271,285
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SOURCE: World Energy Solutions, Inc.
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