UQM Technologies Reports Fourth Quarter and Fiscal 200 Operating Results

Press Release 07-05

UQM Technologies, Inc.
7501 Miller Drive
Frederick, CO 80530

Contact:
John Baldiserra
BPC Financial Marketing
(800) 368-1217
or
Donald A. French, Treasurer
(303) 278-2002

UQM Technologies Reports Fourth Quarter and Fiscal 2006 Operating Results

FREDERICK, COLORADO, JUNE 13, 2006… UQM TECHNOLOGIES, INC. (AMEX: UQM), a developer of alternative energy technologies, announced today operating results for the quarter and fiscal year ended March 31, 2006. Continuing operations for the fourth quarter resulted in a loss of $957,468 or $0.04 per common share on total revenue of $1,141,205 versus a loss from continuing operations of $371,341 or $0.01 per common share on total revenue of $1,537,235 for the fourth quarter last year. Net loss for the quarter was $959,393 or $0.04 per common share versus a net loss of $380,762 or $0.01 per common share for the comparable quarter last year.

Continuing operations for the fiscal year ended March 31, 2006 resulted in a loss of $2,757,386 or $0.11 per common share on total revenue of $4,322,566 versus a loss from continuing operations of $1,814,695 or $0.09 per common share on total revenue of $4,763,291 last fiscal year. Net loss for the fiscal year was $2,784,970 or $0.11 per common share versus a net loss last year of $1,868,896 or $0.09 per common share.

“Contract services revenue for the quarter rose 33 percent to $899,753 versus $675,805 for the comparable quarter last year due to improved utilization of engineering resources on our growing backlog of projects. As expected, product sales revenues declined substantially to $241,452 versus $861,430 for the same quarter last year reflecting the cessation of production of new wheelchair propulsion motors in the third quarter. Loss from continuing operations for the quarter ended March 31, 2006 rose to $957,468 or $0.04 per common share from $371,341 or $0.01 per common share due to higher levels of production engineering and other product launch expenditures associated with the ramp-up of production of an auxiliary motor for a new customer during the quarter and higher levels of selling, general and administrative expenses. Total revenue for the fiscal year ended March 31, 2006 declined to $4,322,566 versus $4,763,291 last fiscal year due to lower levels of product sales. Loss from continuing operations for the fiscal year ended March 31, 2006 rose to $2,757,386 or $0.11 per common share versus $1,814,695 or $0.09 per common share last fiscal year reflecting increased expenditures for internally-funded research and development and production engineering activities and higher accounting and auditing fees associated with implementation of section 404 of the Sarbanes-Oxley Act”, said Donald A. French, UQM Technologies’ Treasurer and Chief Financial Officer.

“During the fourth quarter, we began to see positive results from the investments that we have been making in expanding our capability and capacity for volume production,” said William G. Rankin, UQM Technologies’ President and Chief Executive Officer. In early March, we launched the production of vehicle auxiliary motors and to date, have received orders for 30,000 units, substantially all of which are scheduled for shipment this fiscal year, and today we announced a $1.9 million production contract for an electronic auxiliary product for hybrid vehicles with deliveries beginning this fall. These orders have raised our production backlog to over $4 million and will result in a significant increase in our product sales revenue, improved gross profit margins on product sales and decreasing operating losses. In the near term, we expect to receive additional orders for products in both the conventional and hybrid electric vehicle markets that can further accelerate the growth of our product revenue. Our product shipments for the first fiscal quarter ending June 30, 2006 are expected to total approximately $300,000 and rise to approximately $500,000 for the second fiscal quarter. Production volumes for the third fiscal quarter and beyond are expected to continue to rise, achieving an annual revenue value of several million dollars.”

Mr. Rankin added, "With the price of crude oil recently rising to over $75 a barrel and gasoline at the pump to over $3.00 per gallon, we have seen a corresponding increase in interest in our technology and our company in general. The electrification of vehicles is becoming the preferred solution that most OEMs and their key suppliers are adopting to improve fuel economy. We are involved in a number of vehicle electrification projects that range from simply converting inefficient belt driven pump, fan and compressor auxiliaries to electric motor driven ones, to incorporating our technology and products into parallel, series and plug-in hybrid propulsion systems, as well as full scale electric propulsion. We continued to make progress during the fiscal year in advancing our technology and developing products for both existing as well as new customers. We received a number of important engineering development contracts and orders for prototype products for both commercial and military applications. These included:

Motor/generator and controller systems for Eaton Corporation for hybrid electric trucks

Motor controllers and generators for Denver RTD for large hybrid electric buses

A wheel motor development contract from the U.S. Air Force for aircraft ground support equipment

An advanced traction motor development contract for the U.S. Department of Energy’s FreedomCar program

Electric power generators for DRS Technologies for the U.S. Army’s hybrid electric HMMWVs

A hybrid electric propulsion system development contract from Stewart & Stevenson for a U.S. Army future heavy truck demonstrator.

A $600,000 development contract from the U.S. Department of Energy for a 5 kW DC to AC modular inverter

A $1.08 million development contract from the U.S. Air Force for an advanced silicon carbide electronic controller

Under-the-hood auxiliary systems for General Dynamics for hybrid electric RST-V military vehicles

In addition to these new developments, we continued to make significant progress on a number of ongoing programs including:

Developing advanced systems for Deere & Company
Supporting Carnegie Mellon's Robotics Center in their development and testing of “Crusher” unmanned ground combat vehicles
Providing Engineered Machined Products with a variety of motor/controller systems for use in electric auxiliaries for vehicles
Developing a high torque density wheel motor for TACOM/U.S. military vehicles
Converting a GM Silverado pick-up truck to all-electric for the U.S. Air Force using advanced lithium ion batteries and our most advanced propulsion system.”

The Company will host a conference call today at 4:30 p.m. Eastern Daylight Time to discuss operating results for the quarter and fiscal year ended March 31, 2006. To attend the conference call, please dial 1-866-321-8231 approximately ten minutes before the conference is scheduled to begin. International callers should dial 1-416-642-5213. For anyone who is unable to participate in the conference, a recording will be available for 48 hours beginning at 6:30 p.m. Eastern Daylight Time today. To access the playback call 1-888-562-2819 and give reservation number 1618648. International callers should dial 1-402-220-7737.

UQM Technologies, Inc. is a developer and manufacturer of power dense, high efficiency electric motors, generators and power electronic controllers for the automotive, aerospace, medical, military and industrial markets. A major emphasis of the Company is developing products for the alternative energy technologies sector including propulsion systems for electric, hybrid electric and fuel cell electric vehicles, 42-volt under-the-hood power accessories and other vehicle auxiliaries and distributed power generation applications. The Company's headquarters, engineering and product development center, and motor manufacturing operation are located in Frederick, Colorado. For more information on the Company, please visit its worldwide website at www.uqm.com

Consolidated Balance Sheets
Assets					March 31, 2006	March 31, 2005
Current assets:
	Cash and cash equivalents				$ 4,076,806	5,788,232
	Short-term investments				6,009,394	2,220,594
	Accounts receivable				512,409	890,509
	Costs and estimated earnings in excess of billings on
		uncompleted contracts			450,044	435,925
	Inventories				467,485	648,173
	Prepaid expenses and other current assets				118,439	109,198
			Total current assets		11,634,577	10,092,631

Property and equipment, at cost:
	Land				181,580	181,580
	Building				2,297,467	2,292,687
	Machinery and equipment				2,808,324	2,422,034
					5,287,371	4,896,301
	Less accumulated depreciation				(2,683,295)	(2,443,590)
			Net property and equipment		2,604,076	2,452,711

Patent and trademark costs, net of accumulated amortization
	of $545,468 and $450,011				552,382	613,448
Other assets					5,053	850

				Total assets	$ 14,796,088	13,159,640

Liabilities and Stockholders’ Equity					March 31, 2006	March 31, 2005
Current liabilities:
	Accounts payable				$ 534,428	678,007
	Other current liabilities				309,097	269,746
	Current portion of long-term debt				92,013	135,255
	Liabilities and commitments of discontinued operations				62,004	154,287
	Billings in excess of costs and estimated earnings on
		uncompleted contracts			221,626	66,510
			Total current liabilities		1,219,168	1,303,805

Long-term debt, less current portion					621,685	810, 915
Long-term liabilities and commitments of discontinued operations					-	57,051
Long-term deferred compensation under executive employment agreements					210,861	-
					832,546	867,966

			Total liabilities		2,051,714	2,171,771

Commitments and contingencies

Stockholders’ equity:
	Common stock, $0.01 par value, 50,000,000 shares
		authorized; 24,776,042 and 23,177,133 shares
		issued and outstanding			247,760	231,771
	Additional paid-in capital				69,293,461	64,767,975
	Accumulated deficit				(56,796,847)	(54,011,877)
			Total stockholders’ equity		12,744,374	10,987,869

			Total liabilities and stockholders’ equity	$ 14,796,088		13,159,640

Consolidated Statements of Operations
					Year Ended	Year Ended	Year Ended
					March 31, 2006	March 31, 2005	March 31, 2004
Revenue:
	Contract services				$ 2,502,098	2,281,427	2,747,833
	Product sales				1,820,468	2,481,864	2,293,071
					4,322,566	4,763,291	5,040,904
Operating costs and expenses:
	Costs of contract services				2,471,625	2,496,223	2,215,196
	Costs of product sales				1,671,206	1,994,540	1,960,549
	Research and development				241,563	171,918	461,223
	Production engineering				783,579	211,933	-
	Selling, general and administrative				2,191,289	1,686,409	1,799,472
	Impairment of long-lived assets				2,963	39,748	30,523
					7,362,225	6,600,771	6,466,963

		Loss from continuing operations before other
			income (expense)		(3,039,659)	(1,837,480)	(1,426,059)

Other income (expense):
	Interest income				344,751	97,188	26,362
	Interest expense				(63,003)	(74,005)	(84,193)
	Gain on sale of Taiwan joint venture				-	-	60,975
	Other				525	(398)	600
					282,273	22,785	3,744

		Loss from continuing operations			(2,757,386)	(1,814,695)	(1,422,315)

Discontinued operations:
	Loss from operations of discontinued electronic
		products segment (including loss on disposal
		in 2004 of $770,434)			(27,584)	(54,201)	(3,364,638)

		Net loss			$ (2,784,970)	(1,868,896)	(4,786,953)

		Net loss per common share-basic and diluted:
				Continuing operations	$(0.11)	(0.09)	(0.07)
				Discontinued operations	-	-	(0.18)
					$(0.11)	(0.09)	(0.25)

Weighted average number of shares of common
	stock outstanding – basic and diluted				24,283,523	21,024,757	19,172,680

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the year ended March 31, 2006:

		Power
	Technology	Products	Total

Revenue	$ 3,459,900	862,666	4,322,566
Interest income	$ 333,022	11,729	344,751
Interest expense	$ -	(63,003)	(63,003)
Depreciation and amortization	$ (251,748)	(112,320)	(364,068)
Impairment of long-lived assets	$ (2,963)	-	(2,963)
Segment loss from continuing operations	$ (2,599,906)	(157,480)	(2,757,386)
Assets of continuing operations	$ 12,166,688	2,629,400	14,796,088
Expenditures for long-lived segment assets	$ (260,790)	(196,540)	(457,330)

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the year ended March 31, 2005:

			Power
		Technology	Products	Total

Revenue		$ 3,089,114	1,674,177	4,763,291
Interest income		$ 89,869	7,319	97,188
Interest expense		$ (2,108)	(71,897)	(74,005)
Depreciation and amortization		$ (245,735)	(109,682)	(355,417)
Impairment of long-lived assets		$ (39,748)	-	(39,748)
Segment earnings (loss) from continuing
	operations	$(1,869,518)	54,823	(1,814,695)
Assets of continuing operations		$ 9,967,003	3,192,637	13,159,640
Expenditures for long-lived segment assets		$ (194,873)	(49,434)	(244,307)

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the year ended March 31, 2004:

		Power
	Technology	Products	Total

Revenue	$ 3,339,939	1,700,965	5,040,904
Interest income	$ 22,054	4,308	26,362
Interest expense	$ (3,704)	(80,489)	(84,193)
Depreciation and amortization	$ (278,894)	(168,558)	(447,452)
Impairment of long-lived assets	$ (30,523)	-	(30,523)
Segment loss from continuing operations	$(1,289,738)	(132,577)	(1,422,315)
Assets of continuing operations	$ 4,705,076	2,789,239	7,494,315
Expenditures for long-lived segment assets	$ (175,303)	(27,554)	(202,857)

This Release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements appear in a number of places in this Release and include statements regarding our plans, beliefs or current expectations, including those plans, beliefs and expectations of our officers and directors with respect to, among other things the development of markets for our products; the adequacy of our cash balances and liquidity to meet future operating needs, and our ability to issue equity or debt securities; and the effect of legal actions and claims that we are involved in. Important Risk Factors that could cause actual results to differ from those contained in the forward-looking statements are contained in our Form 10-K filed today which is available through our website at www.uqm.com or at www.sec.gov.

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Last Update: 06/13/06