World Energy Hits Revenue Mark, But Loses $1M
World Energy Solutions of Worcester saw a 27-percent increase in revenue during the first quarter of this year, but lost nearly $1 million after an accounting change that defers some revenue recognition after reporting sales and commission expenses, the company said.
In its quarterly filing, the energy procurement and services provider said it took in $8.7 million during the quarter, up from $6.8 million in the first quarter of 2012. But it also reported a 23-percent rise in annualized backlog, to $23.8 million. Altogether, total backlog and deferred revenue totaled $50.2 million as of March 31, up 27 percent.
“We delivered strong results in the first quarter, despite the challenges of rising commodity prices and … previously announced changes to our mid-market business,” CEO Phil Adams said. “World Energy’s fundamentals and long-term outlook remain strong, and our results continue to validate our transition from an auction-based, procurement-only company to one offering a broader range of energy management services.”
The management services line saw 57-percent revenue growth during the quarter. The energy procurement side, meanwhile, saw a 24-percent increase, which the company said reflected its acquisition of Northeast Energy Partners LLC (NEP) of Connecticut last year.
As of the end of the quarter, World Energy had $2.1 million in cash and cash equivalents, down from $3.3 million at the end of 2012 and $2.4 million at the end of the first quarter of 2012. The company attributed the decrease to $1.4 million in contingent consideration payments and $500,000 in principal payments on long-term debt, offset by $700,000 from operational cash flow.
Last month, World Energy said it was delaying its annual report for 2012 due to the change in revenue recognition. It said there were questions about when certain commission payments it received as a result of its acquisition of GSE Consulting in 2011 should be applied to the company's revenue. World Energy said it concluded that the timing of recognizing the revenue was recorded incorrectly.
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