SonnenEnergy announces 2008 first quarter financial results and strong revenue growth versus comparable period in 2007

17:14 EDT Friday, May 30, 2008

TORONTO, May 30 /CNW/ - SonnenEnergy Corp. (TSX-V: PWR) ("SonnenEnergy" or "the company"), an established photovoltaic solar power systems integrator and solar power producer, today announced its fiscal 2008 first quarter results.

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    Q1 2008 highlights:

    -   Increased revenue by 288% to $1.58 million from $0.54 million in the
        first quarter of 2007
    -   Integration business completed first sale in Italy
    -   Integration business signed design, supply and installation agreement
        with The Home Depot Canada
    -   Solar power production business finished Phase 1 of Solar Park Hausen
        ahead of schedule. Once operating at full capacity of 2.5 MWp Solar
        Park Hausen is expected to generate annual revenues of $1.4 million

    Subsequent to the end of Q1:

    -   Solar integration business commenced construction on $6.5 million,
        1.1 MWp solar park for a customer near Munich, Germany
    -   Opened Italian sales office near Milan, Italy
    -   Presented at BioFinance 2008 Conference CleanTech luncheon and
        seminar
    >>

"We are pleased with our strong performance during the first quarter of 2008 as we nearly tripled our revenue through a combination of new customer wins in our integration business and power production revenues from our corporately owned solar plants," said Sudhir Morar, SonnenEnergy's President and Chief Executive Officer. "We are encouraged by the significant revenue growth we achieved during the first quarter, particularly in light of the seasonal nature of the solar industry where, historically, solar integrators have realized higher power production revenues during the summer months."

"The expansion of our operations into Italy represents a major opportunity for our company and, having completed our first sales in Italy during the first quarter of 2008, we look forward to building our presence in this market," continued Mr. Morar. "The Italian climate is extremely well-suited to solar power production and the Italian government has established long-term incentives for solar power production that are in keeping with our expansion strategy."

"By the end of 2008, we plan to increase our global power production capacity to a total of 10 MWp. In our integration business, we intend to install 2 MWp for third party customers this year," added Mr. Morar. "For 2009, our goal is to increase our total installed capacity by an additional 15 MWp."

Growth strategy

SonnenEnergy intends to build its business through a focused growth strategy involving three key elements:

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    i)   new customer wins in the integration business in existing markets;
    ii)  geographic expansion of both integration and power production
         businesses; and,
    iii) accretive acquisitions of existing solar power systems integrators
         and existing solar power plants.
    >>

SonnenEnergy plans to continue to expand both its integration and solar power production businesses into new regions that offer long-term incentives for solar power production, such as Italy, Spain, Greece, South Korea and California.

In North America, SonnenEnergy plans to leverage its engineering expertise and installation experience. The company is also evaluating opportunities to grow through the acquisition of existing solar power systems integrators whose strengths are complementary to SonnenEnergy's expertise in designing and engineering solar power systems.

In Ontario and California, the company intends to expand its integration business through both residential and commercial installations, and by establishing further relationships with strategic partners.

Year-to-date in 2008, SonnenEnergy has installed a total of 1.1 MWp, comprised of 800 kWp for the company's solar power production business and 300 kWp in the integration business.

In 2008, SonnenEnergy plans to increase its global power production capacity to a total of 10 MWp. In its integration business, the company also intends to build and install solar plants with a total capacity of 2 MWp for third party customers by the end of 2008. For 2009, SonnenEnergy plans to increase its total installed capacity by an additional 15 MWp. Of this total, the solar power production business is expected to contribute approximately 10 MWp in the form of solar parks with the remaining 5 MWp coming from SonnenEnergy's integration business in the form of installations for third party customers.

In 2008, SonnenEnergy also intends to increase the average size of the solar installations performed in its integration business. Management believes that, subsequent to the end of the first quarter ended March 31, 2008, the company made progress towards this goal with the completion of an agreement to construct a 1.1 MWp solar plant for a customer in Germany.

Financial Results

The company's financial results are presented in Canadian dollars based on Canadian generally accepted accounting principles ("GAAP").

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                                          3 Months Ended      3 Months Ended
                                          March 31, 2008      March 31, 2007

    Revenue                                   $1,580,975            $547,027
    Gross Margin                                $733,514            $300,667
    Net Income (Loss)                        $(1,248,776)          $(176,922)
    >>

Revenue

Revenue for the three months ended March 31, 2008 was $1.58 million, an increase of $1.03 million compared to the first quarter of 2007. The increase in revenue resulted from strong market demand, increased sales efforts, and the completion of a number of projects that were initially expected to be completed in fiscal 2007.

Expenses

General and administrative expenses for the three months ended March 31, 2008 were $0.48 million and increase of $0.17 from $0.31 million in the first quarter of 2007. The increased general and administrative expenses in the first quarter of 2008 resulted largely from increased travel expenses, as well as new costs associated with being a publicly listed company.

Wages and benefits for the three months ended March 31, 2008 were $0.60 million, an increase of $0.37 million from $0.23 million in the first quarter of 2007. The increase in wages and benefits is attributable to the addition of new staff in Germany during 2007 and the inclusion of wages paid to Toronto-based staff and directors during the three-month period ended March 31, 2008.

Net Loss

The net loss for the three months ending March 31, 2008 was $1.25 million, an increase of $1.07 million from $0.18 million for the first quarter of 2007. The increased net loss resulted in large part, from non-cash expense items such as stock options and asset amortization of $0.53 million, solar park interest of $0.23 million, as well as professional fees resulting from the transition from a private to public company.

Earnings Before Interest Taxes Depreciation and Amortization ("EBITDA")

EBITDA for the quarter ended March 31, 2008 was $(0.49) million including stock options. Although EBITDA is non-GAAP measure, management uses it as a gauge of operating performance and has set a goal to be EBITDA positive for the remainder of the year.

The company's complete 2008 first quarter financial statements and management discussion and analysis are available at www.sedar.com or on the company's website at www.sonnenenergy.com.