WORCESTER, Mass., March 13, 2013 (GLOBE NEWSWIRE) -- In follow up to its recent announcement postponing its fourth quarter and fiscal 2012 financial results and conference call, World Energy Solutions, Inc. (Nasdaq:XWES) today provided additional details on the cause of the delay.
The Company is currently evaluating its revenue recognition policy for its mid-market product line, an area the Company entered with its acquisition of GSE Consulting (GSE) on October 31, 2011.
The review is primarily focused on the timing of revenue recognized from up-front commissions received from mid-market energy suppliers. As currently reported, such commissions represent approximately 10 percent of World Energy's consolidated revenues for the nine months ended September 30, 2012 and approximately 3 percent of consolidated revenues for the year ended December 31, 2011.Under its accounting policies in effect at the time, World Energy recognized revenue from these up-front commissions as cash was received from the energy supplier. As a result of this review, the Company is in the process of determining the appropriate periods in which such commissions should be recorded. The Company believes it may be appropriate to record these revenues over the energy flow period similar to its other Retail electricity product lines, to the extent that actual energy usage is available or can be reliably estimated. If not, the recognition of revenue may be deferred to the end of the contract period. Regardless of the timing of revenue recognition, there would be no impact on the cash received by the Company. The impact of the contemplated adjustments would be to defer the recording of revenue from historic periods to future periods. As part of this process, the Company is conducting, but has not completed, an analysis of the materiality of the potential revenue recognition adjustments on its previously reported financial results.