World Energy Solutions to Restate Prior Financial Results
Decision Impacts Timing of ~$3.7M in Historical Revenue and Net Income;
Company to Restate Results for Fiscal Year 2011 and First Three Quarters of
WORCESTER, Mass., April 2, 2013 (GLOBE NEWSWIRE) -- World Energy Solutions,
Inc. (Nasdaq:XWES) today announced that its Board of Directors, based on the
recommendation of the Audit Committee and in consultation with management and
the Company's independent registered public accounting firm, Marcum LLP, has
concluded it will restate its previously issued audited financial statements
for the year ended December 31, 2011 included in the Company's Annual Report
on Form 10-K, and its unaudited financial statements for the quarterly periods
ended March 31, 2012, June 30, 2012, and September 30, 2012 included in the
Company's Quarterly Reports on Form 10-Q and the unaudited pro forma
disclosures included in its Form 8-K/A filed on December 17, 2012 (the
"Relevant Periods"). Accordingly, investors should no longer rely upon the
Company's previously released financial statements for the Relevant Periods
and other financial data released related to the Relevant Periods.
The Company has concluded that the timing of revenue recognition for certain
commission payments was recorded incorrectly during the Relevant Periods. This
incorrect treatment related to the Company's revenue recognition policy for
its mid-market product line, an area the Company entered with its acquisition
of GSE Consulting on October 31, 2011. Under its accounting policies in effect
at the time, the Company recognized revenue from up-front commission payments
as cash was received from the energy supplier, beginning with the quarter
ended December 31, 2011. As a result of its review, the Company has determined
that it was required to record these revenues upon contract completion, or
earlier to the extent actual energy usage data is received from the energy
supplier or can be reliably estimated.
At this time, the Company believes that the adjustments necessary to make
these amendments to the Relevant Periods will have no effect on previously
reported cash and cash equivalents or cash flow from operations. The estimated
impact of the restatements for the Relevant Periods is expected to decrease
revenue and net income by approximately $0.6 million for the year ended
December 31, 2011 and approximately $3.1 million through the first nine months
of 2012. The Company expects to recognize these amounts of revenue and net
income in subsequent periods.
In addition, the Company has requested a 15-day filing extension from the
Securities and Exchange Commission for the filing of its 2012 Annual Report.
The Company continues to work diligently with its auditors to complete the
audit and intends to file its Annual Report and restatements for the Relevant
Periods by April 16, 2013. Once the Company has completed its audit, it also
expects to announce a date to host a conference call for shareholders in
conjunction with the filing of these documents.
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 $30 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 Regional Greenhouse Gas
Initiative (RGGI), the first mandatory market-based regulatory program in the
U.S. to reduce greenhouse gas emissions. For more information, please visit
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: the Company's revenue and
backlog are dependent on actual future energy purchases pursuant to completed
procurements; the demand for the Company's services is affected by changes in
regulated prices or cyclicality or volatility in competitive market prices for
energy; the potential impact on the Company's historical and prospective
financial results of a change in accounting policy may negatively impact its
stock price; and other factors outside the Company's control that may affect
transaction volume in the electricity market as well as the Company's overall
business. Therefore, actual outcomes and results may differ materially from
what is expressed or forecasted in the forward-looking statements due to
numerous factors, including those risks discussed in the Company's Annual
Report on Form 10-K and in other documents that the Company files from time to
time with the SEC. Any forward-looking statements speak only as of the date on
which they are made, and the Company does not undertake any obligation to
update any forward-looking statement to reflect events or circumstances after
the date of this report, except as required by law.
CONTACT: Dan Mees
World Energy Solutions, Inc.
Dian Griesel, Inc.
World Energy Solutions, Inc. logo
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