SatCon Technology Corporation(C) (Nasdaq NM: SATC), a developer and
manufacturer of power electronics and motors, today reported
financial results for its fiscal 2005 third quarter, which ended
July 2, 2005. "Our revenue for the quarter was $8.2 million dollars
compared to $8.6 million in 2004," said David Eisenhaure, SatCon
Chairman and Chief Executive Officer. "However, we have an
additional $1.3 million in deferred revenue related to the shipment
of a Rotary UPS made during the quarter, and $1.5 million in
revenue deferred from Q2 for the EDO program. Our operating loss
for the third quarter was $2.2 million, compared to $0.7 million in
2004. That loss was primarily due to higher costs of manufacturing
as we ramp up our support in the Power Systems Division for planned
increased production in the Alternative Energy, HEV and Grid
Support market sector." "Our first nine months of fiscal 2005
showed revenue increasing from $25.0 million to $25.6 million,
excluding $2.8 million in deferrals noted above. The operating loss
for the first nine months of fiscal 2005 was $5.6 million, which
was an increase over 2004's operating loss of $2.5 million,
primarily due to manufacturing costs, as noted above, and corporate
legal and other costs." On August 15, 2005, the Company consummated
an equity financing transaction with several unrelated accredited
investors involving the sale of approximately 4.7 million shares of
common stock and warrants to purchase 1.2 million additional shares
of common stock. The Company received proceeds from the sale of
these shares and warrants equal to approximately $5.8 million less
the Company's expenses relating to the sale. The stated use of
proceeds is to expand the Company's sales and marketing efforts to
exploit the opportunity for significant growth within the Solar,
Hybrid Electric Vehicles, Wind, Stationary Power and Grid Support
sectors. SatCon President and Chief Operating Officer, Millard
Firebaugh stated, "The proceeds from this sale of common stock and
warrants will allow SatCon to continue aggressive growth in the
Alternative Energy, Hybrid-Electric Vehicle and Grid Support
markets. These markets are growing at accelerating rates. The
Energy Policy Act further reinforces the future market potential.
SatCon already has successful products in these markets from which
we are experiencing our most rapid growth in product revenue. We
are positioning for success with appropriate investment." Ardour
Capital Investments, LLC has been retained to act as the Company's
financial advisor in connection with these capital raising
activities, including introducing potential investors and
negotiations regarding pricing and structure of the shares of
common stock and warrants issued in the financing transaction. The
shares of common stock and warrants issued in the equity financing
transaction have not been registered under the Securities Act of
1933, as amended, and may not be offered or sold in the United
States absent registration or an applicable exemption from
registration requirements. However, as part of the transaction, the
Company has agreed to use its best efforts to prepare and file a
registration statement with the Securities and Exchange Commission
to enable the resale of the shares issued and sold in the
transaction. About SatCon Technology Corporation SatCon Technology
Corporation is a developer and manufacturer of electronics and
motors for the Alternative Energy, Hybrid-Electric Vehicle, Grid
Support, High Reliability Electronics and Advanced Power Technology
markets. For further information, please visit the SatCon website
at www.satcon.com. Statements made in this document that are not
historical facts or which apply prospectively are forward-looking
statements that involve risks and uncertainties. These
forward-looking statements are identified by the use of terms and
phrases such as "believes," "expects," "plans," "anticipates" and
similar expressions. Investors should not rely on forward looking
statements because they are subject to a variety of risks and
uncertainties and other factors that could cause actual results to
differ materially from the Company's expectation. There can be no
assurance that the company will be successful in achieving any of
the objectives that are stated within the release, and such failure
to achieve those objectives could have a material, adverse effect
on the future of the Company. Additional information concerning
risk factors is contained from time to time in the Company's SEC
filings. The Company expressly disclaims any obligation to update
the information contained in this release. -0- *T SATCON TECHNOLOGY
CORPORATION CONSOLIDATED BALANCE SHEETS July 2, September 30, 2005
2004 ------------- ------------- (Unaudited) (Audited) ASSETS
Current assets: Cash and cash equivalents $2,513,834 $1,171,152
Restricted cash and cash equivalents 84,000 1,011,900 Accounts
receivable, net of allowance of $671,867 and $848,565 at July 2,
2005 and September 30, 2004, respectively 6,470,410 6,274,178
Unbilled contract costs and fees 144,024 447,405 Funded research
and development expenses in excess of billings -- 292,111 Inventory
7,591,308 6,184,672 Prepaid expenses and other current assets
1,077,962 687,083 ------------- ------------- Total current assets
17,881,538 16,068,501 Warrants to purchase common stock -- 7,036
Property and equipment, net 5,156,361 5,913,211 Goodwill, net
704,362 704,362 Intangibles, net 1,998,090 2,391,193 Other
long-term assets 523,509 501,634 ------------- ------------- Total
assets $26,263,860 $25,585,937 ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current
portion of long-term debt $344,387 $184,177 Accounts payable
3,509,485 3,823,249 Accrued payroll and payroll related expenses
1,490,690 1,449,349 Other accrued expenses 1,849,498 2,412,409
Accrued contract losses 84,779 514,489 Deferred revenue 2,341,004
2,048,442 Accrued restructuring costs -- 495,612 -------------
------------- Total current liabilities 9,619,843 10,927,727
Redeemable convertible Series B preferred stock (425 shares issued
and outstanding; face value: $5,000 per share; liquidation
preference: 100%) 2,125,000 2,125,000 Long-term debt, net of
current portion -- 311,178 Other long-term liabilities 512,048
563,372 Commitments and contingencies Stockholders' equity: Common
stock; $0.01 par value, 50,000,000 shares authorized; 33,407,662
and 28,226,010 shares issued and outstanding at July 2, 2005 and
September 30, 2004, respectively 334,078 282,261 Additional paid-in
capital 147,588,254 139,208,000 Accumulated deficit (133,732,614)
(127,659,993) Accumulated other comprehensive loss (182,749)
(171,608) ------------- ------------- Total stockholders' equity
14,006,969 11,658,660 ------------- ------------- Total liabilities
and stockholders' equity $26,263,860 $25,585,937 =============
============= SATCON TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended
------------------------- ------------------------- July 2, June
26, July 2, June 26, 2005 2004 2005 2004 ------------- -----------
------------ ------------ Revenue: Product revenue $6,971,627
$6,840,972 $22,373,422 $19,254,617 Funded research and development
and other revenue 1,186,141 1,771,056 3,240,763 5,703,626
------------- ----------- ------------ ------------ Total revenue
$8,157,768 8,612,028 25,614,185 24,958,243 -------------
----------- ------------ ------------ Operating costs and expenses:
Cost of product revenue 6,325,023 5,483,030 20,136,564 15,845,447
Research and development and other revenue expenses: Funded
research and development and other revenue expenses 1,205,756
1,415,758 2,899,449 4,210,900 Unfunded research and development
expenses 2,397 4,188 10,901 5,489 ------------- -----------
------------ ------------ Total research and development and other
revenue expenses 1,208,153 1,419,946 2,910,350 4,216,389 Selling,
general and administrative expenses 2,723,064 2,248,449 8,044,945
7,055,127 Restructuring costs -- -- (255,612) -- Amortization of
intangibles 111,671 111,671 335,013 335,014 -------------
----------- ------------ ------------ Total operating costs and
expenses 10,367,911 9,263,096 31,171,260 27,451,977 -------------
----------- ------------ ------------ Operating loss (2,210,143)
(651,068) (5,557,075) (2,493,734) Net unrealized loss on warrants
to purchase common stock -- (77,200) (7,036) (80,766) Net
unrealized gain on Series B warrants -- -- -- 35,442 Other
income/(expense) (22,867) 2,479 (152,289) 2,479 Interest income
16,392 2,545 27,497 9,069 Interest expense (57,283) (71,865)
(383,718) (6,831,712) ------------- ----------- ------------
------------ Net loss $(2,273,901) $(795,109) $(6,072,621)
$(9,359,222) ============= =========== ============ ============
Net loss per weighted average share, basic and diluted $(0.07)
$(0.03) $(0.19) $(0.35) ============= =========== ============
============ Weighted average number of common shares, basic and
diluted 33,364,094 28,078,113 31,909,163 26,378,830 *T
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