News from CNW Group

SonnenEnergy announces 2008 third quarter financial results and additional management changes

17:00 EST Thursday, November 27, 2008

TORONTO, Nov. 27 /CNW/ - SonnenEnergy Corp. ("SonnenEnergy" or "the Company") (TSX-V: PWR), a leading photovoltaic solar power systems integrator and solar power producer, today announced its fiscal 2008 third quarter results.

    <<
    Q3 2008 highlights:

    -   Jeff Dennis named President and CEO
    -   Total quarterly revenue of $1.0 million, $0.5 million from solar
        parks and $0.5 million from integration sales
    -   Installed 97 kWp of solar power systems.
    -   Completed construction of 30% of $6.5 million, third party,
        SonnenFischer solar park.

    Financial Results

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

                                              Three-months      Three-months
                                                     ended             ended
                                            Sept. 30, 2008    Sept. 30, 2007

                                           ----------------------------------

    Revenue                                     $1,006,494        $1,949,438

    Gross Margin                                  $244,375          $642,602

    Net Loss                                   $(1,524,613)        $(323,328)

    Loss per share                                   $0.03               N/A

    EBITDA                                     $(1,035,655)              N/A
    >>

Financials

Total revenue of $1,006,494 in the third quarter of 2008 was 48% lower versus the third quarter of 2007 where revenue was $1,948,020. A number of large orders were delayed until the fourth quarter of 2008, and are expected to ship prior to year end. Revenue from solar parks amounted to $0.5 million during the third quarter of 2008. The Company invested in Solar Park Waldstetten in 2006 and in Solar Park Hausen in late 2007 and early 2008. The Company reported its first revenue from the Solar Park Hausen in the second quarter of 2008. Both projects have long-term pricing agreements in place and are expected to produce ongoing cash flows.

Revenue from solar integration sales to third parties totalled $0.4 million in the third quarter of 2008. The Company installed 97.4 kWp of solar power systems during the quarter.

The cost of sales was $762,119 in the third quarter of 2008 compared to $1,305,418 in the third quarter of 2007, representing an increase of 42% over the same period last year. The decline was a direct result of lower quarterly sales.

General and Administrative expenses in the third quarter of 2008 were $361,135 compared to $337,970 in the third quarter of 2007, representing an increase of 7% over the same period last year. The Company commenced a significant marketing research program in the third quarter of 2008 to better position the Company for future sales and to better understand the markets in which it operates. Travel costs were significant in 2008 as the Company continued to integrate its operations into a public domain company from a private company. Trade show attendance and advertising comprised a significant cost component thus far in 2008, as did the various costs associated with being a publicly-listed company.

Wages in the third quarter of 2008 were $604,670 compared to $523,000 in the third quarter of 2007. The 16% increase in wages over the same period last year was due to the Company expanding staff substantially during 2007 as it expected a significant sales increase would result in 2008. Also, staff was added at the Toronto location to meet the needs of a public company. The Company also accrued expenses associated with a severance settlement paid to a former employee.

Professional fees and expenses in the third quarter of 2008 were $314,225 compared to $nil in the third quarter of 2007. Costs associated with becoming and maintaining a publicly-listed company, including legal and audit expenses have increased substantially from 2007 when the Company was private. The company has incurred substantial legal expenses due to legal conflicts with a current shareholder.

Interest expenses in the third quarter of 2008 were $245,383 compared to $57,611 in the third quarter of 2007. The Solar Park Waldstetten lease was officially activated at the beginning of June. The third quarter interest expense benefited from a reduction in the lease interest expense from 8.9% used previously to 6.9% in the new lease agreement.

Amortization expense in the third quarter of 2008 was $239,391 compared to $47,349 in the third quarter of 2007. The 2008 amortization included the initial charges for the Solar Park Hausen asset and ongoing charges for the Solar Park Waldstetten asset.

The Company has experienced a series of losses and will not accrue for taxes until these losses are reversed to profitability.

Earnings before interest taxes depreciation and amortization ("EBITDA") for the third quarter of 2008 was ($1,035,655) The Company defines EBITDA as adding the following to net income; interest, taxes, depreciation, amortization and stock option expenses.

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                                              Year to Date      Year to Date
                                            Sept. 30, 2008    Sept. 30, 2007

                                           ----------------------------------

    Revenue                                     $4,086,512        $3,620,573

    Gross Margin                                $1,732,446        $1,900,644

    Net Loss                                   $(4,122,365)        $(495,493)

    Loss per share                                  $(0.07)              N/A

    EBITDA                                     $(2,084,722)              N/A
    >>

For the nine-month period ended September 30, 2008 revenue was $4.1 million compared to $3.6 million for the nine-month period ended September 30, 2007. General and administrative expenses for the nine-month period ended September 30 2008 were $1.4 million compared to $1.1 million during the first nine months of 2007. Wages and benefits for the first nine months of 2008 were $1.8 million compared to $1.2 million for the comparable period in 2007. Net loss for the nine-month period ended September 30, 2008 was $4.1 million compared to a loss of $0.5 million for the comparable period in 2007.