WORCESTER, MA, Nov. 6 /PRNewswire-FirstCall/ - World Energy Solutions, Inc. (TSX: XWE), a leading operator of online exchanges for energy and green commodities, today announced its financial results for the three and nine months ended September 30, 2008. All figures below are in U.S. dollars and growth percentages compare the results of Q3 2008 with Q3 2007, unless stated otherwise.

    Q3 2008 Highlights
    ------------------

    -   All-time highs in revenue and backlog
        -  Revenue increased by 23% to a record $3.3 million
        -  Annualized backlog* grew 16% to $8.8 million
        -  Total backlog rose 20% to $14.9 million
    -   Improvement in operating results and cash flow
        -  Quarterly cash usage decreased 70% compared to Q2 2008
        -  Net loss decreased 33%
        -  Secured a credit facility for up to $3 million from Silicon
           Valley Bank
    -   Administered the US' first compliance auction for CO2 emissions
        allowances
    -   Strong growth in other key metrics
        -  Channel partner network increased to 54, growing 50%
        -  Wholesale client base rose to 38, increasing five-fold in the
           past year
        -  Multiple green transactions

"It was a strong quarter for the company as we delivered record revenue and backlog, narrowed our loss and significantly reduced cash usage," said Richard Domaleski, Chief Executive Officer, World Energy Solutions. "The quarter was highlighted by robust performance across all our product lines, underlining the increasing diversification of our business. Our retail group experienced record bookings, wholesale grew both revenue and the number of customers, and we executed auctions for several environmental commodity types, highlighted by our successful administration of the Regional Greenhouse Gas Initiative's first auction event."

"With a strong backlog and deal pipeline, growing traction of our platform in multiple markets, and a well-defined strategy, our outlook for continued growth remains positive," Mr. Domaleski added.

    Financial Review
    ----------------

For the quarter ended September 30, 2008, revenue increased by 23% over the same period in the prior year to $3.3 million due to increased auction activity in all of the Company's product lines and new customer wins. The year-over-year growth in revenue reflects the growth of the Company's wholesale customer base to 38 at September 30, 2008 as compared to 7 at September 30, 2007, record commercial and industrial bookings generated by the Company's internal sales force, strong renewal rates and the addition of 18 new channel partners in Q3 2008 compared with the same period in the prior year.

Total operating expenses for Q3 2008 were $3.4 million, a decrease of 31% compared with $4.9 million in Q3 2007, driven by a 22% decrease in sales and marketing expenses, which reflects decreases in share-based compensation, marketing and travel costs. Reduced operating expenses also reflect a 45% decline in general and administrative expenses as a result of lower legal, accounting and consulting fees, and a reduction in payroll and payroll related costs. Following significant planned infrastructure investments in 2007, the Company's fixed operating cost structure has remained stable since the fourth quarter of 2007 and declined in Q3 2008.

Net loss for the third quarter of 2008 was $1.2 million, or $(0.01) per share, a decrease of 33% compared with a net loss of $1.8 million, or $(0.02) per share, reported in the third quarter of 2007. The lower year-over-year net loss reflects increased revenue and reduced operating expenses.

Revenue for the nine months ended September 30, 2008 rose 50% over the same period last year to $9.2 million, reflecting organic growth in multiple product lines, new customer wins and the inclusion of the EnergyGateway operation for a full nine months (compared with four months during the first nine months of 2007).

Total operating expenses for the nine months ended September 30, 2008 increased by 11% over the prior year to $11.3 million, primarily due to general salary increases and the addition of EnergyGateway for a full nine months in 2008. Net loss for the year-to-date period was $5.8 million, or $(0.07) per share, compared with $3.4 million, or $(0.04) per share, in the first nine months of 2007. This increase is primarily due to higher operating expenses and decreases in interest income and income tax benefit, all partially offset by the increase in revenue.

At September 30, 2008, the Company had no bank debt, and had cash and cash equivalents of $1.8 million, compared with $2.3 million at June 30, 2008. During the third quarter, the Company secured a credit facility with Silicon Valley Bank that allows for advances up to $3.0 million, which provides the Company with increased financial strength and flexibility to continue to execute its growth strategy.

* Annualized backlog represents the revenue that the Company would derive within the 12 months following the date on which the backlog is calculated from contracts in force on such date. These contracts relate to transactions between buyers and sellers on our platform related to commodity brokerage assuming sellers consume energy at their historical usage or deliver credits at expected levels. In addition, annualized backlog includes contracted management fees between World Energy and energy consumers for energy management and auction administration services 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. The annualized backlog at September 30, 2008 included commodity backlog of $7.1 million and contracted management fees of $1.7 million.

Conference Call & Webcast

World Energy will hold a conference call today, November 6, 2008, at 10:00 a.m. (ET) to discuss its financial results and other corporate developments. To access the conference call by telephone, dial 416-644-3431 or 1-800-814-4859. A live audio webcast of the conference call will be available through the Investor Relations/News & Events section of the Company's website at www.worldenergy.com and at 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 (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. To date, the company has transacted nearly one billion kWh of green power and Renewable Energy Certificates (RECs) as well as a variety of mandatory and voluntary carbon credits. Its award-winning World Green Exchange(R) powers 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: 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,
                   ----------------------------------------------------------
                        2008           2007           2008           2007
                   ------------   ------------   ------------   -------------
    Revenue        $  3,289,515   $  2,675,343   $  9,164,727   $  6,103,672
    -------
    Cost of revenue   1,113,325        787,517      3,626,237      1,853,660
                   ------------   ------------   ------------   -------------
    Gross profit      2,176,190      1,887,826      5,538,490      4,250,012
    Sales and
     marketing        2,355,907      3,028,912      7,770,567      5,965,261
    General and
     administrative   1,041,321      1,876,618      3,562,946      4,274,415
                   ------------   ------------   ------------   -------------
    Operating loss   (1,221,038)    (3,017,704)    (5,795,023)    (5,989,664)
    --------------
    Interest income,
     net                  5,218        108,195         38,944        482,438
                   ------------   ------------   ------------   -------------
    Loss before
     income taxes    (1,215,820)    (2,909,509)    (5,756,079)    (5,507,226)
    Income tax benefit        -      1,099,125              -      2,079,836
                   ------------   ------------   ------------   -------------
    Net loss       $ (1,215,820)  $ (1,810,384)  $ (5,756,079)  $ (3,427,390)
    --------       ------------   ------------   ------------   -------------
                   ------------   ------------   ------------   -------------
    Loss per share:
    ---------------
      Net loss
      --------
       per common
       ----------
       share -
       -------
       basic       $      (0.01)  $      (0.02)  $      (0.07)  $      (0.04)
       -----
                   ------------   ------------   ------------   -------------
                   ------------   ------------   ------------   -------------
      Net loss
      --------
       per common
       ----------
       share -
       -------
       diluted     $      (0.01)  $      (0.02)  $      (0.07)  $      (0.04)
       -------
                   ------------   ------------   ------------   -------------
                   ------------   ------------   ------------   -------------
    Weighted
     average
     shares
     outstanding -
     basic           83,215,951     81,943,263     82,875,299     78,932,803
                   ------------   ------------   ------------   -------------
                   ------------   ------------   ------------   -------------
    Weighted
     average
     shares
     outstanding -
     diluted         83,215,951     81,943,263     82,875,299     78,932,803
                   ------------   ------------   ------------   -------------
                   ------------   ------------   ------------   -------------



               SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET

                                                      September 30, 2008
                                                    ----------------------

            Assets
            ------
            Current assets                                  $  5,123,474
              Property and equipment, net                        524,275
              Capitalized Software, net                          587,183
              Intangibles, net                                 6,285,637
              Goodwill                                         3,178,701
              Other assets                                        27,594
                                                    ----------------------
                Total assets                                $ 15,726,864
                                                    ----------------------
                                                    ----------------------

            Liabilities and stockholders' equity
            ------------------------------------
              Accrued commissions                           $    669,801
              Accounts payable and accrued
               liabilities                                     2,329,330
              Other current liabilities                          892,867
                                                    ----------------------
                Total current liabilities                      3,891,998
              Total long-term liabilities                         14,686
               Stockholders' equity                           11,820,180
                                                    ----------------------
                Total liabilities and
                 stockholders' equity                       $ 15,726,864
                                                    ----------------------
                                                    ----------------------

SOURCE World Energy Solutions, Inc.