UQM Technologies Reports Fourth Quarter and Fiscal 2007 Operating Results

Press Release 08-04

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, MAY 17, 2007…UQM TECHNOLOGIES, INC. (AMEX: UQM), a developer of alternative energy technologies, announced today operating results for the quarter and fiscal year ended March 31, 2007. Continuing operations for the fourth quarter resulted in a loss of $958,655 or $0.04 per common share on total revenue of $2,011,118 versus a loss from continuing operations of $957,468 or $0.04 per common share on total revenue of $1,141,205 for the fourth quarter last year. Net loss for the quarter was $964,972 or $0.04 per common share versus a net loss of $959,393 or $0.04 per common share for the comparable quarter last year.

Continuing operations for the fiscal year ended March 31, 2007 resulted in a loss of $3,402,566 or $0.14 per common share on total revenue of $6,653,194 versus a loss from continuing operations of $2,757,386 or $0.11 per common share on total revenue of $4,322,566 last fiscal year. Net loss for the fiscal year ended March 31, 2007 was $3,431,357 or $0.14 per common share versus a net loss for the previous fiscal year of $2,784,970 or $0.11 per common share.

“Fiscal 2007 was an important and exciting year for the company as we ramped up our volume production of electric auxiliary motors for conventional vehicles and launched a new production program for DC-to-DC converters for hybrid electric vehicles. As a result, product sales revenue for the year more than doubled to $3.7 million versus $1.8 million last fiscal year. Contract services revenue and low volume product sales showed significant growth increasing 16 percent and 17 percent, respectively, versus last fiscal year. The increase in low volume product sales was fueled principally by shipments of generators and motor controllers to Denver’s Regional Transportation District as part of the continued retro-fitting of their hybrid-electric bus fleet. At April 30, 2007 our product backlog stood at $16.5 million compared to $2.2 million at April 30, 2006 due to orders for the above products and the recently announced $9.25 million production order from Phoenix Motorcars, Inc. for electric propulsion systems and DC-to-DC converters for their all-electric Sport Utility Trucks (SUT)”, said William G. Rankin, President and Chief Executive Officer of UQM Technologies, Inc. “We expect revenue during fiscal 2008 to rise substantially from the fiscal 2007 level and for operating losses to decline driven by improvements in gross profit margins.”

“Losses from continuing operations for the quarter ended March 31, 2007 were flat on substantially greater revenue due to new share based payment accounting rules which generated additional non-cash expenses for the quarter of $198,699, and higher levels of production engineering expenditures which increased $367,580 to $586,801 versus $219,221 for the comparable quarter last fiscal year. The increase in production engineering expenditures is primarily attributable to increased staffing levels and other production engineering costs associated with the launch of production for Phoenix Motorcars’ all-electric SUT. The increase in loss from continuing operations for the fiscal year ended March 31, 2007 is primarily attributable to new share based payment accounting rules which generated additional non-cash expenses of $957,756 and higher levels of production engineering expenses associated with production planning and launch activities which rose 64 percent to $1,286,761 this fiscal year versus $783,579 for last fiscal year. Operating results for last fiscal year do not include any non-cash expenses associated with share based compensation,” said Donald A. French, UQM Technologies’ Treasurer and Chief Financial Officer.

"In addition to the exciting growth in our product sales, there were a number of other significant events during the fiscal year including:

A $.75 million U.S. Air Force Phase II Small Business Innovation Research contract to develop electric wheel motors for aircraft ground support equipment

An order from Chitron, Inc. for a propulsion system to power a hybrid electric urban bus in China

The delivery of a motor/generator system for a long-haul, class 8 hybrid truck application

Completion of a strategic alliance with Altair Nanotechnologies, Inc.

Receipt of an additional order from Eaton Corporation for compressor motors used in fuel cells

An additional $1 million contract supplement from the U.S. Air Force to continue the development of a silicon carbide electronic motor controller

In addition to these important events, shortly after fiscal year end we completed an agreement with Phoenix Motorcars, Inc. to collaborate on the development of a plug-in hybrid electric sport utility truck and we received a substantial order from the Denver Regional Transportation District for generators and motor controllers to retrofit eighteen additional hybrid electric MallShuttle buses. In addition, two major brokerage firms, Merriman, Curhan and Ford & Co. and Rodman and Renshaw rolled out analyst coverage on the Company in April. We are looking forward to an even more exciting fiscal 2008,” added Mr. Rankin.

Separately, the Company announced that it has leased an additional 6,000 square feet of manufacturing space near its existing facility and relocated its vehicle integration group to the new facility. The relocation of vehicle integration activities will make available additional production floorspace at the Company’s main facility.

The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss operating results for the quarter and fiscal year ended March 31, 2007. To attend the conference call, please dial 1-866-322-2356 approximately ten minutes before the conference is scheduled to begin. International callers should dial 1-416-640-3405. 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 234009. 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, plug-in 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.

Consolidated Balance Sheets
					March 31, 2007	March 31, 2006
Assets
Current assets:
	Cash and cash equivalents				$ 1,952,177	4,076,806
	Short-term investments				5,981,828	6,009,394
	Accounts receivable				1,434,686	512,409
	Accounts receivable from discontinued operations				76,097	-
	Costs and estimated earnings in excess of billings on
		uncompleted contracts			187,913	450,044
	Inventories				899,885	467,485
	Prepaid expenses and other current assets				279,343	118,439
			Total current assets		10,811,929	11,634,577

Property and equipment, at cost:
	Land				181,580	181,580
	Building				2,306,154	2,297,467
	Machinery and equipment				3,152,296	2,808,324
					5,640,030	5,287,371
	Less accumulated depreciation				(2,977,305)	(2,683,295)
			Net property and equipment		2,662,725	2,604,076

Patent and trademark costs, net of accumulated amortization
	of $622,320 and $545,468				482,303	552,382
Other assets					55,650	5,053

				Total assets	$ 14,012,607	$ 14,796,088

				March 31, 2007	March 31, 2006
Liabilities and Stockholders’ Equity
Current liabilities:
	Accounts payable			$ 982,931	534,428
	Other current liabilities			344,952	309,097
	Current portion of long-term debt			98,760	92,013
	Short-term deferred compensation under executive employment
		agreements		149,325	-
	Liabilities and commitments of discontinued operations			13,847	62,004
	Billings in excess of costs and estimated earnings on
		uncompleted contracts		312,537	221,626
			Total current liabilities	1,902,352	1,219,168

Long-term debt, less current portion				522,925	621,685
Long-term deferred compensation under executive employment agreements				396,214	210,861
				919,139	832,546
			Total liabilities	2,821,491	2,051,714

Stockholders’ equity:
	Common stock, $0.01 par value, 50,000,000 shares
		authorized; 25,176,889 and 24,776,042 shares
		issued and outstanding		251,769	247,760
	Additional paid-in capital			71,376,462	69,293,461
	Accumulated deficit			(60,437,115)	(56,796,847)
			Total stockholders’ equity	11,191,116	12,744,374

			Total liabilities and stockholders’ equity	$ 14,012,607	14,796,088

Consolidated Statements of Operations
					Year Ended	Year Ended	Year Ended
					March 31, 2007	March 31, 2006	March 31, 2005
Revenue:
	Contract services				$ 2,907,536	2,502,098	2,281,427
	Product sales				3,745,658	1,820,468	2,481,864
					6,653,194	4,322,566	4,763,291
Operating costs and expenses:
	Costs of contract services				2,666,316	2,471,625	2,496,223
	Costs of product sales				3,323,577	1,671,206	1,994,540
	Research and development				321,160	241,563	171,918
	Production engineering				1,286,761	783,579	211,933
	Selling, general and administrative				2,855,213	2,191,289	1,686,409
	Impairment of long-lived assets				889	2,963	39,748
					10,453,916	7,362,225	6,600,771

		Loss from continuing operations before other
			income (expense)		(3,800,722)	(3,039,659)	(1,837,480)

Other income (expense):
	Interest income				445,578	344,751	97,188
	Interest expense				(47,422)	(63,003)	(74,005)
	Other				-	525	(398)
					398,156	282,273	22,785

		Loss from continuing operations			(3,402,566)	(2,757,386)	(1,814,695)

Discontinued operations - loss from operations of
	discontinued electronic products segment				(28,791)	(27,584)	(54,201)

		Net loss			$ (3,431,357)	(2,784,970)	(1,868,896)

		Net loss per common share-basic and diluted:
				Continuing operations	$(0.14)	(0.11)	(0.09)
				Discontinued operations	-	-	-
					$(0.14)	(0.11)	(0.09)

Weighted average number of shares of common
	stock outstanding – basic and diluted				25,116,354	24,283,523	21,024,757

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, 2007:
	Technology	Power Products	Total

Revenue	$ 4,026,255	2,626,939	6,653,194
Interest income	$ 439,460	6,118	445,578
Interest expense	$ -	(47,422)	(47,422)
Depreciation and amortization	$ (244,401)	(169,921)	(414,322)
Impairment of long-lived assets	$ -	(889)	(889)
Segment loss from continuing operations	$ (2,841,516)	(561,050)	( 3,402,566)
Assets of continuing operations	$ 10,092,842	3,843,668	13,936,510
Expenditures for long-lived segment assets	$ (162,690)	(241,091)	(403,781)

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:
	Technology		Power 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)

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-K filed today, which is available through our website at www.uqm.com or at www.sec.gov.

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Last Update:05/17/07