(Wake Forest, N.C.) PowerSecure International, Inc. (Nasdaq: POWR) today reported strong revenue and profit results for its fourth quarter of 2009. Fourth quarter revenues were $30.0 million, increasing 13.7% compared to the fourth quarter of 2008, and diluted earnings per share (“E.P.S.”) were $0.09, increasing 80.0% compared to the fourth quarter of 2008. Additionally, the Company’s fourth quarter gross margin was 37.2%, 3.1 percentage points higher than the fourth quarter of 2008, and an all-time high for any quarter in the Company’s history. The Company’s revenue backlog stands at $120 million (revenue expected to be recognized after December 31, 2009), compared to a backlog of $90 million reported in conjunction with its third quarter earnings results on November 5, 2009.

The Company’s strong fourth quarter year-over-year revenue and profit increases were driven by increases in the Company’s Energy Efficiency business, including a six-fold year-over-year increase in EfficientLights product revenues, and increases in Utility Infrastructure revenues. These increases were partially offset by decreases in revenues in its Interactive Distributed Generation and Southern Flow businesses. The Company’s record fourth quarter gross margin of 37.2% continued the consistent positive results in this statistic, as gross margin increased sequentially in each successive quarter of 2009. The Company’s sequential and year-over-year gross margin gains are driven by a combination of a favorable mix of projects period-to-period, and favorable cost of sales resulting from a focus on project cost management.

Sidney Hinton, CEO of PowerSecure, said, “We are very pleased to finish 2009 on such a strong note. The PowerSecure team delivered improving results with each successive quarter in 2009. These terrific fourth quarter results, combined with our strong start to 2010 sales and our resulting $120 million of revenue backlog, puts us in a great position for 2010. We are seeing signs of an improving economy and increasing business investment, and these factors combine to make us optimistic about the upcoming year.”

Mr. Hinton continued, “We are very excited about the strategic positions each of our businesses has in the marketplace, the strong value they deliver our utility partners and business customers, and their growth opportunities and promise. We will continue to look for opportunities to develop new business lines and technologies to bring to market to complement our existing portfolio of products and services – with a focus on areas that we believe will enhance and sustain our growth well into the future.”

For the fourth quarter of 2009, the Company’s Energy and Smart Grid Solutions segment revenues were $26.0 million, increasing $4.8 million, or 22.9% compared to the fourth quarter of 2008. This segment includes the strategic business areas of Interactive Distributed Generation, Energy Efficiency, and Utility Infrastructure. These three business areas realized the following revenue variances in the fourth quarter of 2009 as compared to the fourth quarter of 2008 (“year-over-year” variances) and the third quarter of 2009 (“sequential” variances):

1) Interactive Distributed Generation: On a year-over-year basis, Interactive Distributed Generation revenues were 11% lower than the fourth quarter of 2008. On a sequential basis, Interactive Distributed Generation revenues increased 27% compared to the third quarter of 2009.

2) Energy Efficiency: On a year-over-year basis, Energy Efficiency revenues increased 303% compared to the fourth quarter of 2008. This was driven by growth in the Company’s EfficientLights LED lighting product, which posted revenues of $7.0 million, increasing 644% over the prior year period. On a sequential basis, Energy Efficiency revenues were down 18%, as expected, reflecting a lower number of EfficientLights installations due to lower levels of in-store refurbishing activity traditionally performed by retailers during the holiday season.

3) Utility Infrastructure: On a year-over-year basis, Utility Infrastructure revenues increased 31% compared to the fourth quarter of 2008. On a sequential basis, Utility Infrastructure revenues increased 23% compared to the third quarter of 2009.

For the fourth quarter of 2009, the Company’s Energy Services segment realized a 23% year-over-year decrease in revenues from its Southern Flow business. On a sequential basis, Southern Flow revenues were down 3% from the third quarter of 2009. Southern Flow’s revenues were negatively impacted by low natural gas prices and their negative effect on industry production and investment. The Company’s WaterSecure business posted pre-tax income of $1.0 million, up 76% on a year-over-year basis, and up 87% on a sequential basis compared to the third quarter of 2009. These WaterSecure results were positively impacted by increases in oil prices, partially offset by the negative effects of low natural gas prices on industry production and investment.

Fourth quarter 2009 operating expenses were $9.4 million, up 11% on a year-over-year basis, and up 16% on a sequential basis compared to the third quarter of 2009. These increases were primarily due to increases in compensation expense, increases in selling expense due to higher revenues, and increases in depreciation from capital deployed to support the Company’s growing recurring revenue business. Additionally, the Company’s operating expenses reflect continuing investments in operating infrastructure, including personnel, vehicles and facilities, to support business growth and new product development activities.

The Company’s fourth quarter ending cash balance was $20.2 million, and its $50 million revolving credit facility remained undrawn.

For the full year 2009, revenue was $102.5 million, operating income was $3.1 million, net income was $2.8 million, and diluted E.P.S. was $0.16 per share.