World Energy Solutions Reports Fourth Quarter and Year End 2009 Financial Results
- Posts record bookings and record revenues in all product lines
- Exits year with record annual and total backlog
- Narrows loss; achieves cash flow positive in Q4
- Strengthens balance sheet with new investment
WORCESTER, MA, March 4 /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 fourth quarter and fiscal year ended December 31, 2009.
Highlights
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All figures below are in U.S. dollars; growth percentages compare the results of the 12 months ended December 31, 2009 to the prior year, unless stated otherwise.
Record Annual Revenue and Backlog
- Increased revenue 17% to $14.6 million
- Decreased net loss 66% to $2.3 million
- Increased total backlog 16% to $22.1 million
- Grew annualized backlog 25% to $11.4 million
Continued Improvement in Quarterly Results
- Recorded cash provided by operations of $507,000 in Q4 2009
- Improved gross margin to 79% in Q4 2009; narrowed operating loss
to $237,000
Strengthened Balance Sheet
- Entered into financing agreement with a strategic partner, which
resulted in total proceeds of $1.4 million
Solid Performance in All Product Lines
- Generated record Retail bookings, capitalizing on newly opened
markets, and grew channel partner network 59% over 2008 to 94
- Grew Wholesale revenue by 58% over 2008 and increased client base
by 38% to 54
- Increased Green revenue 194%, reflecting continued execution in
supporting the Regional Greenhouse Gas Initiatives' (RGGI) program
- Short-listed (one of six firms) for Australian cap-and-trade
program consideration
Subsequent to Year End
- Launched World DR Exchange(TM) to capitalize on opportunities in
the fast-growing demand response market (see World Energy press
release dated February 24, 2010)
"In 2009 we overcame a second consecutive year of dramatically reduced energy consumption due to the recession to post record revenues in each of our product lines, record bookings and backlog," said Richard Domaleski, Chief Executive Officer, World Energy Solutions, Inc. "We accomplished all this while decreasing our operating costs and strengthening our balance sheet in the fourth quarter with new investment and cash from operations, which gives us a strong foundation for future growth and profitability.
"I couldn't be prouder of how we executed this past year. Hard work, agility, customer focus, innovation and financial discipline have all helped us succeed in one of the toughest markets in memory, and we are well positioned for a breakout 2010."
Financial Review
----------------
Full-Year 2009
For the year ended December 31, 2009, revenue increased by 17% to $14.6 million, which reflects increased auction activity in all product lines, including new customer wins in the newly competitive Ohio market and significant increases in revenue from the Company's Wholesale and Green product lines.
Total operating expenses for 2009 decreased by 10% over the prior year to $13.2 million, primarily reflecting decreases in compensation and travel costs as well as decreases in compliance and other operating costs. The Company's fixed operating cost structure has decreased since the second half of 2008 as the Company realized operating efficiencies created by the integration of the EnergyGateway operation and adjustments to its staffing and cost structure. Net loss for 2009 decreased to $2.3 million, or $(0.27) per share, compared with a net loss of $6.8 million, or $(0.82) per share, in 2008. This decrease mainly reflects lower operating expenses and the 17% increase in revenue.
Q4 2009
Revenue for the fourth quarter ended December 31, 2009 rose by 7% over the same period last year to $3.5 million, which reflects increases in all of the Company's product lines.
Total operating expenses for Q4 2009 were $3.0 million, compared with $3.4 million in the prior year, reflecting decreases in compliance, commissions and marketing expenses. Net loss for Q4 2009 was $0.2 million, or $(0.03) per share, compared with a net loss of $1.0 million, or $(0.12) per share, in Q4 2008. This decrease was due to the cost reductions discussed above and the 7% increase in revenue.
At December 31, 2009, the Company had no bank debt and cash and cash equivalents of $2.0 million, compared with $1.7 million at December 31, 2008 and $0.6 million at September 30, 2009. The $1.4 million increase in cash and cash equivalents during the fourth quarter was primarily due to cash flow from operations of $0.5 million and $0.9 million in net proceeds from the sale of common stock. The $0.5 million from cash provided by operating activities was attributable to $0.3 million from operations as non-cash expense items exceeded the net loss for the fourth quarter and $0.2 million from changes in operating assets and liabilities.
Note: Backlog relates to contracts in force on a given date representing transactions between bidders and listers on our platform related to commodity brokerage assuming listers 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 December 31, 2009 included commodity backlog of $21.1 million and $10.4 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 $1.0 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, March 4, 2009, at 10:00 a.m. (ET) to discuss its financial results and other corporate developments. To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. 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 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, demand response, and green-energy assets, 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 the following: 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; and there are factors outside our control that affect transaction volume in the electricity market. Additional risk factors are 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
(All share and per share related information has been restated to
reflect the Company's 1-for-10 reverse stock split on March 27, 2009)
Three Months Ended Year Ended
December 31, December 31,
------------------------- -------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Revenue $ 3,499,758 $ 3,279,965 $14,618,275 $12,444,692
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Cost of revenue 741,441 925,978 3,709,957 4,552,215
------------ ------------ ------------ ------------
Gross profit 2,758,317 2,353,987 10,908,318 7,892,477
Sales and marketing 2,166,469 2,286,794 9,714,900 10,057,361
General and
administrative 827,090 1,106,861 3,520,886 4,669,807
------------ ------------ ------------ ------------
Operating loss (235,242) (1,039,668) (2,327,468) (6,834,691)
Interest income, net (1,397) 587 (6,051) 39,531
------------ ------------ ------------ ------------
Loss before income
taxes (236,639) (1,039,081) (2,333,519) (6,795,160)
Income tax expense - - - -
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net loss $ (236,639) $(1,039,081) $(2,333,519) $(6,795,160)
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Net loss per common
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share - basic
-------------
& diluted $ (0.03) $ (0.12) $ (0.27) $ (0.82)
--------- ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average
shares outstanding
- basic & diluted 8,710,305 8,378,173 8,512,060 8,310,315
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 2009
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Assets
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Cash and cash equivalents $ 2,046,909
Accounts receivable 2,909,024
Other current assets 213,033
Property and equipment, net 371,033
Goodwill 3,178,701
Other assets 5,175,425
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Total assets $ 13,894,125
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Liabilities and stockholders' equity
------------------------------------
Accrued commissions $ 835,342
Accounts payable and accrued liabilities 1,894,711
Other current liabilities 889,927
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Total current liabilities 3,619,980
Total long-term liabilities 16,003
Stockholders' equity 10,258,142
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Total liabilities and stockholders' equity $ 13,894,125
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SOURCE World Energy Solutions, Inc.
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