WORCESTER, MA--(Marketwire - May 5, 2011) - World Energy Solutions, Inc. (NASDAQ: XWES),
a leading energy management services firm, today announced financial
results for the first quarter ended March 31, 2011. In Q1 2011, World
Energy delivered record quarterly revenue, its third consecutive quarter of
net income, and its sixth straight of positive adjusted EBITDA.
Financial Highlights (All figures are in US dollars and compare Q1 2011
results to Q1 2010.)
Revenue and Backlog
-- Quarterly revenue increased 12% to $4.9 million
-- Annualized backlog increased 22% to $13.8 million
-- Total backlog rose 18% to $25.1 million
Operating Results
-- Net income was $0.3 million, or $0.03 per share
-- Adjusted EBITDA* grew 71% to $0.7 million
-- Gross margins were 80%, up from 78%
Liquidity and Balance Sheet
-- Cash and cash equivalents were $2.7 million, up 92%
-- The Company renewed its $3.0 million credit facility with Silicon
Valley Bank
-- Subsequent to quarter end, the Company raised $5.3 million through a
registered equity offering
Product Line Highlights
-- Robust revenue and significant customer wins across product lines
-- Wholesale customers increased 27% to 71; channel partners grew 39%
to 143
-- The Company successfully launched its Seven Levers of Energy
Management(TM) strategic framework and Virtual Energy Audit(TM)
efficiency product
"Our core business continues to perform very well, as evidenced by our
first quarter results and gains we are making in the market, including
taking significant customers from our competitors," said Richard Domaleski,
CEO of World Energy Solutions. "In addition, we formally launched our new
strategic framework -- the Seven Levers of Energy Management -- that
provides customers a clear and comprehensive approach to manage their
energy costs.
"This framework not only differentiates us in the energy management space,
it also provides a compelling context for future investments and new
product development at the Company. A good example of this is our new
Virtual Energy Audit™ product, which helps customers meet government
mandates for greener commercial buildings at a fraction of the time and
cost of traditional manual audits. And with our recently completed raise of
$5.3 million, World Energy now has over $8M in cash to pursue acquisitions
and accelerate growth."
Financial Review
For the three months ended March 31, 2011, revenue increased by 12% over Q1
2010 to $4.9 million. This growth mainly reflects increased auction
activity in the Company's Retail product line, including new customer wins
with a concentration in the Pennsylvania electricity market, as well as
further growth in its channel partner network.
Gross margin improved 2% to 80% compared to Q1 2010, and operating expenses
as a percentage of sales decreased to 75% as the Company continued to
benefit from the operating leverage in its business model. As a result, the
Company's operating margin jumped eight basis points to a positive 5%, up
from a negative 3% in the prior period. Net income increased $0.4 million
to $0.3 million, or $0.03 per share, compared with a net loss of $(0.1)
million, or $(0.01) per share, in Q1 2010.
At March 31, 2011, the Company had no bank debt and cash and cash
equivalents of $2.7 million, compared with $1.4 million at March 31, 2010.
The increase in cash and cash equivalents was primarily due to cash
generated from adjusted EBITDA* of $2.3 million over the past four
quarters. The Company also renewed its $3.0 million credit facility with
Silicon Valley Bank for 12 months through March 6, 2012. The Company has
not taken any advances against this credit facility to date.
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 March 31, 2011 included commodity backlog of $24.1 million and $12.8
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, May 5, 2011, at 10:00 a.m.
(ET) to discuss its financial results and other corporate developments. To
access the conference call by telephone, dial 1-877-407-9210 (domestic) or
1-201-689-8049 (international). A replay will be available two hours after
the completion of the call, and for one month following the call, by
dialing 1-877-660-6853 for domestic participants or 1-201-612-7415 for
international participants, and entering account #286 and conference ID
#371617 when prompted. Participants may also access a live webcast of the
conference call through the investor relations section of World Energy's
website, www.worldenergy.com. 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.
* Non-GAAP Financial Measures
World Energy continues to provide all information required in accordance
with GAAP and also provides certain non-GAAP financial measures. A
"non-GAAP financial measure" refers to a numerical measure of the Company's
historical performance, financial position, or cash flows that excludes (or
includes) amounts that are included in (or excluded from) the most directly
comparable financial measure calculated and presented in accordance with
GAAP in the Company's financial statements. World Energy provides adjusted
EBITDA as additional information relating to our operating results. This
non-GAAP measure excludes expenses related to share-based compensation,
depreciation related to our fixed assets, amortization expenses associated
with acquisition-related assets and capitalized software, net interest and
income tax expense.
Management believes it is useful to exclude depreciation, amortization, net
interest and income tax expense as these are essentially fixed amounts that
cannot be influenced by management in the short term. In addition,
management believes it is useful to exclude share-based compensation as
this is not a cash expense.
Management uses this non-GAAP measure for internal reporting and bank
reporting purposes. World Energy provides this non-GAAP financial measure
in addition to GAAP financial results, because management believes that
this non-GAAP financial measure provides useful information to certain
investors and financial analysts in helping them to better understand the
Company's operating results and underlying operational trends. It also
provides a consistent basis for comparison across accounting periods.
This non-GAAP financial measure is not prepared in accordance with GAAP.
This measure may differ from the GAAP information, even where similarly
titled, used by other companies and therefore should not be used to compare
the Company's performance to that of other companies. There are significant
limitations associated with the use of non-GAAP financial measures. The
presentation of this additional information is not meant to be considered
in isolation or as a substitute for net income (loss) prepared in
accordance with GAAP.
Whenever World Energy reports non-GAAP financial measures, a reconciliation
of the non-GAAP financial measure to the most closely applicable GAAP
financial measure will be made available. Investors are encouraged to
review these reconciliations to ensure they have a thorough understanding
of the reported non-GAAP financial measures and their most directly
comparable GAAP financial measures. Reconciliation of GAAP net income
(loss) to adjusted EBITDA is shown below:
Three Months Ended
--------------------------------
March 31, 2011 March 31, 2010
--------------- ---------------
GAAP net income (loss) $ 250,089 $ (128,444)
Add: Interest (income) expense, net (13,443) 1,260
Add: Income tax expense 7,250 -
Add: Share-based compensation 141,192 144,638
Add: Amortization 279,473 360,524
Add: Depreciation 35,480 30,720
--------------- ---------------
Non-GAAP adjusted EBITDA $ 700,041 $ 408,698
=============== ===============
About World Energy Solutions, Inc.
World Energy Solutions, Inc. (NASDAQ: XWES) is an energy management
services firm that brings together the passion, processes and technologies
to take the complexity out of energy management and turn it into
bottom-line impact for the businesses, institutions and governments we
serve. To date, the Company has transacted more than $20 billion in energy,
demand response and environmental commodities on behalf of its customers,
creating more than $1 billion in value for them. World Energy is also a
leader in the global carbon market, where its World Energy Exchange®
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
and backlog are 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
Three Months Ended
March 31,
--------------------------
2011 2010
------------- ------------
Revenue $ 4,918,388 $ 4,408,106
Cost of revenue 1,000,532 949,565
------------- ------------
Gross profit 3,917,856 3,458,541
Sales and marketing 2,456,221 2,500,722
General and administrative 1,217,739 1,085,003
------------- ------------
Operating income (loss) 243,896 (127,184)
Interest income (expense), net 13,443 (1,260)
------------- ------------
Income (loss) before income taxes 257,339 (128,444)
Income tax expense 7,250 -
============= ============
Net income (loss) $ 250,089 $ (128,444)
============= ============
Net income (loss) per common share - basic &
diluted $ 0.03 $ (0.01)
============= ============
Weighted average shares outstanding - basic 9,199,205 9,016,711
============= ============
Weighted average shares outstanding - diluted 9,224,744 9,016,711
============= ============
SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 2011
----------------
Assets
Cash and cash equivalents $ 2,729,395
Trade accounts receivable, net 3,358,535
Other current assets 305,921
Property and equipment, net 256,631
Goodwill 3,178,701
Other assets 4,316,048
----------------
Total assets $ 14,145,231
================
Liabilities and stockholders' equity
Accrued commissions $ 1,019,951
Accounts payable and accrued liabilities 1,326,536
Other current liabilities 151,464
----------------
Total current liabilities 2,497,951
Total long-term liabilities -
Stockholders' equity 11,647,280
----------------
Total liabilities and stockholders' equity $ 14,145,231
================