UQM Technologies Reports Second Quarter and First Half Operating Results

Press Release 07-13

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

FREDERICK, COLORADO, OCTOBER 31, 2006…UQM TECHNOLOGIES, INC. (AMEX: UQM), a developer of alternative energy technologies, announced today operating results for the quarter and six months ended September 30, 2006. Continuing operations for the second quarter resulted in a loss of $864,930 or $0.04 per common share on total revenue of $1,614,218 versus a loss from continuing operations of $543,438 or $0.02 per common share on total revenue of $884,000 for the second quarter last year. Net loss for the quarter was $879,570 or $0.04 per common share versus a net loss of $576,708 or $0.02 per common share for the comparable quarter last year.

Continuing operations for the six months ended September 30, 2006 resulted in a loss of $1,650,614 or $0.07 per common share on total revenue of $2,915,550 versus a loss from continuing operations of $1,263,812 or $0.05 per common share on total revenue of $2,037,205 last fiscal year. Net loss for the first half was $1,667,366 or $0.07 per common share versus a net loss last year of $1,307,513 or $0.05 per common share.

“All aspects of our business performed well during the second quarter and six months ended September 30, 2006 evidenced by nearly a doubling in total revenue for the quarter and total revenue growth of 43 percent for the first half. This revenue growth was fueled by the successful execution of our strategy to identify and win production opportunities in conventional motor and electronic markets which resulted in product sales more than doubling for the second quarter to $935,092. Customer funded development activities also turned in a strong performance with contract services revenue increasing 44 percent and 60 percent for the quarter and six months ended September 30, 2006, respectively,” said William G. Rankin, President and Chief Executive Officer of UQM Technologies, Inc. “We expect to see continued revenue growth going forward as we begin shipping electronic auxiliary products as part of a $1.9 million production order announced in June and our recently announced $3 million follow-on production order for vehicle electric auxiliary motors. For the third quarter we expect high volume product revenue to continue to rise, with total revenue reaching approximately $1.8 million, resulting in improvements in gross profit margins and a decrease in our loss from continuing operations.”

“Loss from continuing operations for the quarter and first half were impacted by new share based payment accounting rules which generated additional non-cash expenses for the quarter and six month period of $313,409 and $474,384, respectively, with nearly 50 and 67 percent of these amounts arising from stock options granted in previous fiscal years. Loss from continuing operations for the quarter and six months ended September 30, 2006 reflect these increased non-cash charges while the comparable periods last fiscal year do not include any expenses associated with share based compensation. Accounting for share based payments is expected to continue to adversely impact the year-over-year comparability of financial results throughout the remainder of this first fiscal year of implementation,” said Donald A. French, UQM Technologies’ Treasurer and Chief Financial Officer.

The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss operating results for the quarter and six months ended September 30, 2005. To attend the conference call, please dial 1-866-321-6651 approximately ten minutes before the conference is scheduled to begin. International callers should dial 1-416-642-5212. 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 Time today. To access the playback call 1-866-244-4494 and give replay code 111845. International callers should dial 1-416-915-1028.

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, 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.

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (unaudited)
Assets					September 30, 2006		March 31, 2006
Current assets:
	Cash and cash equivalents				$ 2,093,668		4,076,806
	Short-term investments				6,749,759		6,009,394
	Accounts receivable				1,176,117		512,409
	Costs and estimated earnings in excess of billings on
			uncompleted contracts		151,318		450,044
	Inventories				842,592		467,485
	Prepaid expenses and other current assets				240,405		118,439
				Total current assets	11,253,859		11,634,577

Property and equipment, at cost:
		Land			181,580		181,580
		Building			2,303,919		2,297,467
		Machinery and equipment			3,121,239		2,808,324
					5,606,738		5,287,371
	Less accumulated depreciation				(2,840,499)		(2,683,295)
				Net property and equipment	2,766,239		2,604,076

Patent and trademark costs, net of accumulated
amortization of $594,930 and $545,468					509,092	552,382
Other assets					5,053		5,053

				Total assets	$ 14,534,243		14,796,088

Liabilities and Stockholders’ Equity							September 30, 2006	March 31, 2006
Current liabilities:
	Accounts payable						$ 366,144	534,428
	Other current liabilities						217,525	309,097
	Current portion of long-term debt						95,354	92,013
	Short-term deferred compensation under executive employment agreements						132,155	-
	Liabilities and commitments of discontinued operations						25,946	62,004
	Billings in excess of costs and estimated earnings on
		uncompleted contracts					372,094	221,626
					Total current liabilities		1,209,218	1,219,168

Long-term debt, less current portion							573,340	621,685
Long-term deferred compensation under executive employment agreements							152,231	210,861
							725,571	832,546

						Total liabilities	1,934,789	2,051,714

Commitments and contingencies

Stockholders’ equity:
	Common stock, $.01 par value, 50,000,000 shares authorized;
			25,143,051 and 24,776,042 shares issued and outstanding				251,431	247,760
	Additional paid-in capital						70,812,236	69,293,461
	Accumulated deficit						(58,464,213)	(56,796,847)
				Total stockholders’ equity			12,599,454	12,744,374

				Total liabilities and stockholders’ equity			$ 14,534,243	14,796,088

UQM TECHNOLOGIES, INC. AND SUBSIDIARIES Consolidated Statements of Operations (unaudited)
				Quarter Ended September 30,			Six Months Ended September 30,
				2006	2005		2006	2005
Revenue:
	Contract services			$ 679,126		470,276	1,503,480	937,864
	Product sales			935,092		413,724	1,412,070	1,099,341
				1,614,218		884,000	2,915,550	2,037,205

Operating costs and expenses:
	Costs of contract services			613,130		471,758	1,268,255	1,134,314
	Costs of product sales			879,248		327,198	1,403,324	930,884
	Research and development			79,330		103,532	174,481	133,852
	Production engineering			232,517		172,876	480,889	339,566
	Selling, general and administrative			780,322		418,608	1,452,839	867,053
	Impairment of long-lived assets			-		-	-	1,455
				2,584,547		1,493,972	4,779,788	3,407,124

			Loss from continuing operations before other income (expense)	(970,329)		(609,972)	(1,864,238)	(1,369,919)


Other income (expense):
	Interest income			117,559		81,833	238,211	137,998
	Interest expense			(12,160)		(15,824)	(24,587)	(32,416)
	Other			-		525	-	525
				105,399		66,534	213,624	106,107

			Loss from continuing operations	(864,930)		(543,438)	(1,650,614)	(1,263,812)


Discontinued operations – loss from operations of discontinued electronic products segment				(14,640)		(33,270)	(16,752)	(43,701)

			Net loss	$ (879,570)		(576,708)	(1,667,366)	(1,307,513)

		Net loss per common share - basic and diluted
			Continuing operations	$ (.04)		(.02)	(.07)	(.05)
			Discontinued operations	-		-	-	-
				$ (.04)		(.02)	(.07)	(.05)

Weighted average number of shares of common stock outstanding - basic and diluted				25,137,888		24,552,704	25,082,358	23,876,669

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the quarter ended September 30, 2006:
	Technology		Power Products	Total
Revenue	$	1,130,528	483,690	1,614,218
Interest income	116,830		729	117,559
Interest expense	-		(12,160)	(12,160)
Depreciation and amortization	(67,538)		(41,164)	(108,702)
Segment loss from continuing operations	(695,161)		(169,769)	(864,930)
Assets of continuing operations	11,365,226		3,169,017	14,534,243
Expenditures for long-lived segment assets	$	(31,787)	(48,094)	(79,881)

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the quarter ended September 30, 2005:
	Technology		Power Products	Total
Revenue	$	717,844	166,156	884,000
Interest income	79,395		2,438	81,833
Interest expense	-		(15,824)	(15,824)
Depreciation and amortization	(60,895)		(27,596)	(88,491)
Segment loss from continuing operations	(508,969)		(34,469)	(543,438)
Assets of continuing operations	12,851,752		2,750,098	15,601,850
Expenditures for long-lived segment assets	$	(53,642)	16,138	(37,504)

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the six months ended September 30, 2006:
	Technology		Power Products	Total
Revenue	$	2,010,160	905,390	2,915,550
Interest income	235,919		2,292	238,211
Interest expense	-		(24,587)	(24,587)
Depreciation and amortization	(134,667)		(71,999)	(206,666)
Segment loss from continuing operations	(1,301,208)		(349,406)	(1,650,614)
Assets of continuing operations	11,365,226		3,169,017	14,534,243
Expenditures for long-lived segment assets	$	(117,020)	(208,519)	(325,539)

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the six months ended September 30, 2005:
	Technology		Power Products	Total
Revenue	$	1,442,988	594,217	2,037,205
Interest income	133,151		4,847	137,998
Interest expense	-		(32,416)	(32,416)
Depreciation and amortization	(121,169)		(56,104)	(177,273)
Segment loss from continuing operations	(1,257,557)		(6,255)	(1,263,812)
Assets of continuing operations	12,851,752		2,750,098	15,601,850
Expenditures for long-lived segment assets	$	(70,620)	(10,181)	(80,801)

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 and the adequacy of our cash balances and liquidity to meet future operating needs. Important Risk Factors that could cause actual results to differ from those contained in the forward-looking statements are contained in our Form 10-Q filed today, which is available through our website at www.uqm.com or at www.sec.gov.

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Last Update:10/31/06