WORCESTER, MA Nov. 5 /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 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
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-   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
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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.