Sustainable Energy Technologies Ltd.
TSX VENTURE : STG

Sustainable Energy Technologies Ltd.

September 02, 2009 18:27 ET

Sustainable Energy Third Quarter Results and Corporate Update

CALGARY, ALBERTA--(Marketwire - Sept. 2, 2009) – Sustainable Energy Technologies Ltd. (TSX VENTURE:STG) ("Sustainable" or the "Company") today reported its operating and financial results for the nine month period ending June 30, 2009. The Consolidated Financial Statements and Management's Discussion and Analysis thereof can be found with the Company's public documents on SEDAR (www.sedar.com) and at the Company's website (www.sustainableenergy.com) under Investor/Financials/Fiscal 2009.

Operating Results

  • Revenues for the nine month period were $77,208 compared to $1,552,881 for the same nine month period in 2008. Third quarter revenues were $9,957 by comparison to $752,140 for the same period in 2008. The revenues are in line with expectations. The Company's sales pipeline is for its next generation product ("Gen II") and the Company has terminated production of Gen I given the collapse of the Spanish market last year.
  • The Company expects to begin first deliveries of Gen II by mid-October, a delay of approximately 8 weeks from the previously indicated targets. First deliveries are pursuant to the previously announced Salicru purchase order for other projects in Greece.
  • Canadian Standards Agency ("CSA") is currently testing Gen II to confirm compliance with North American ("UL") and German ("VDE") standards. Although not entirely within its control, the Company is targeting mid October for UL listing with VDE certification to follow shortly thereafter.
  • In May, the Company secured an $8.9 million equity financing issuing 890,000 voting 8% convertible First Preferred Shares convertible into 59,333,333 common shares (0.15/share) and common share purchase warrants representing 22,280,000 common shares exercisable for a period of 4 years from closing at an exercise price of $0.30 per share. Doughty Hanson Technology Ventures led the round investing $4.5 million with an option to invest a further 1.5 million at $0.15/share for six months.
  • Working capital as of the end of the 3rd Quarter was approximately $9.1 million, of which approximately $2.4 million represented finished or semi-finished Gen I inverters. Although there is some risk that the Gen I units will be written down the Company believes it will be able to realize more than its investment in the units.
  • During this Quarter we introduced the PARALEXTM, concepts at the Genera show in Madrid. Building on the positive response there we are planning a formal product launch in Germany September 21 – 25; in the US in October and in Canada in December of this year.
  • Working capital as of the end of the 3rd Quarter was approximately $9.1 million, of which approximately $2.4 million represented finished or semi-finished Gen I inverters. Although there is some risk that the Gen I units will be written down the Company believes it will be able to realize its investment in the inventory. 

Industry Outlook

  • Global demand for solar PV products was dramatically impacted by changes in Spain during the latter part of 2008, which saw almost 50% of the demand for products in 2008 taken out of the market due to radical changes in that country's feed in tariff incentive structure. At the same time very substantial increases in production capacity – mainly thin film PV came on line – driving PV module prices lower.
  • 2009 promises to be a difficult year for the solar PV industry mainly due to the economic crisis which has affected credit markets and investor confidence. Industry forecasts are for as little 3.5 Gigawatts (GW) of installations in 2009 which would be a 32% decline from the 5.2 GW of estimated 2008 installations. While lower prices will lead to much higher unit growth longer term the dropping prices in fact reduced short term demand as the market deferred orders waiting for a bottom in the market.
  • Longer term, the prospect for industry growth is very promising. Forecasts are for a return to 2008 levels of demand or better by 2010 and with significant growth in the years following. According to a recently published estimate by iSuppli Corporation, a US based market intelligence firm, published April 2009, global installations will total 8.8 GW in 2011; 15.4 GW in 2012 and 25.9 GW in 2013.
  • Market acceptance of the performance and cost advantages of a parallel architecture has increased dramatically especially in the United States as several new product offerings targeting these value are promised. All use a variation of three main themes each of which entail module- scale electronics. These solutions add considerable cost per watt and increase maintenance complexity. Sustainable Energy's technology is still the only product in the market which offers the advantages of the parallel architecture with an industry standard form factor and efficiencies which compare with the best in the industry.
  • In Europe, increased attention is being paid to the safety of solar PV systems principally because fire fighters in some cities are refusing to quell blazes due to fear of injury or death from high voltage systems. An easy and relatively low cost solution is to set operating voltages below the "extra low voltage" European standard which deems such systems as intrinsically safe. This issue is new to the industry, and could be quite strategic to the future of the Company.
  • In Canada, the Province of Ontario has announced a European style feed in tariff structure biased towards rooftop systems which is slated to come into effect by the end of summer 2009. Declining module prices have increased prospective investor yields into double digit territory and the Company believes Ontario could be the largest market in North American for the next 2 – 3 years. With this in mind, it has been investigating the prospect of locating North American manufacturing and distribution for our Gen II products in the Province.

 
About Sustainable Energy: Based in Calgary, Canada, Sustainable Energy (www.sustainableenergy.com) is changing the way the world installs solar power through PARALEXTM a unique line of solar energy products and systems for commercial and public sector markets. PARALEXTM is based on a patented low voltage high yield inverter, with both crystalline and thin film PV modules, which enables a parallel architecture to increase total system yields while also addressing emerging safety concerns. PARALEXTM achieves between 5% and 25% higher energy yields operates at intrinsically safe operating voltages as well as enabling simpler more flexible design that reduces installation and maintenance costs and improves coverage of any rooftop. The result is the lowest cost per kilowatt hour for maximum return on invested capital.

Sustainable Energy's inverter technology is based on multiple patents covering core concepts and control algorithms issued by the US and Canadian patent office and filed in other major markets, with additional patents pending.

Forward Looking Information

The reader is advised that some of the information herein may constitute forward-looking statements within the meaning assigned by National Instruments 51-102 and other relevant securities legislation. In particular, we include: statements concerning the impact of our technology on solar PV system performance; statements concerning the potential for sales in the markets we have entered and statements concerning the manufactured cost of our products. Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties. Many factors could cause the Company's actual results, performance or achievements, or future events or developments, to differ materially from those expressed or implied by the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to forward- looking information contained herein to reflect events or circumstances that occur after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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