Satcon Reports Second Quarter 2009 Results

(In millions, except per share data)                                Three Months Ended                              Six Months Ended
                                                                    July 4, 2009      June 28, 2008     % Change    July 4, 2009      June 28, 2008     % Change
Revenue                                                             $    9.2          $    13.4         -31  %      $    24.1         $    24.7         -3   %
Gross Margin                                                             0.0   %           11.4  %                       6.1   %           8.7   %
Operating (loss) income                                             $    (7.0  )      $    (5.1  )      -38  %      $    (12.2 )      $    (7.8  )      -55  %
Net Loss Attributable to Common Stockholders                        $    (7.1  )      $    (9.1  )      22   %      $    (19.0 )      $    (13.5 )      -41  %
Net Loss Attributable to Common Stockholders per weighted average   $    (0.13 )      $    (0.18 )      28   %      $    (0.36 )      $    (0.27 )      -33  %
share, basic and diluted

"Although the global recession and the lack of available financing for large scale solar projects made Q2 very challenging for Satcon and we missed our quarter targets, we were able to continue to execute on our overall corporate strategy," said Steve Rhoades, President and Chief Executive Officer at Satcon. "We will accomplish this through maintaining our efforts to drive top-line growth through the introduction of high-value solutions such as Prism and Solstice, developing strategic partnerships with utilities, major system integrators and panel manufacturers, and aggressively expanding operations in EMEA and Asia, as well as reducing expenses through our move to low cost supply chain and manufacturing solutions."

Highlights from Q2 included the company's industry standard PowerGate line of solar PV Inverters eclipsing lifetime shipments over 340 megawatts, including over 170 megawatts delivered of the PowerGate 500kW solution.

The company also made generally available its Satcon S-Type PowerGate inverter, optimized for next-generation thin film panel technologies, and Satcon Prism(TM), North America's first fully-integrated one megawatt medium voltage solution optimized for utility scale solar installations. The highly successful June launch of Prism secured nine megawatts of initial orders for the next generation solution.

Recently, Satcon signed distribution and reseller agreements with two leading vertically-integrated worldwide solar companies. Under these agreements, Satcon will provide its renewable energy solutions to large-scale commercial rooftop and utility grade projects in North America and China, further positioning itself to capitalize on the recently announced federal incentives and local feed-in tariff programs in those regions.

"We believe we are uniquely positioned with products and solutions, and as one of the global leaders in utility scale renewable energy, to take advantage of the second half recovery of the commercial and utility solar industry," concluded Rhoades.

Conference Call Reminder

The company will hold a conference call to review its financial results and business highlights today, August 13, 2009 at 5:00 p.m. ET. During the conference call, the company may answer questions concerning business and financial developments and trends, and other business and financial matters. The company's responses to these questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.

The conference call will be webcast live over the Internet and can be accessed on the Investor Relations section of the company's website at http://investor.satcon.com. The conference call also can be accessed by dialing (877) 869-3847 (U.S. and Canada) or (201) 689-8261 (International). Interested parties that are unable to listen to the live call may access an archived version of the webcast on Satcon's website.

About Satcon

Satcon Technology Corporation is a leading provider of utility scale distributed power solutions for the renewable energy market, enabling the industry's most advanced, reliable, and proven clean energy alternatives. For over 24 years, Satcon has designed and delivered the next generation of efficient energy systems for solar photovoltaic, stationary fuel cells, wind-turbines, and energy storage systems. To learn more about Satcon, please visit www.Satcon.com.

Safe Harbor

Statements made in this document that are not historical facts or which apply prospectively are forward-looking statements that involve risks and uncertainties. These forward-looking statements are identified by the use of terms and phrases such as "will," "intends," "believes," "expects," "plans," "anticipates" and similar expressions. Investors should not rely on forward looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the company's expectation. Additional information concerning risk factors is contained from time to time in the company's SEC filings, including its Annual Report on Form 10-K and other periodic reports filed with the SEC. Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The company expressly disclaims any obligation to update the information contained in this release.

SATCON TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS                                                               July 4,              December 31,
                                                                     2009                 2008
Current assets:
Cash and cash equivalents                                            $  22,893,806        $    9,957,716
Restricted cash and cash equivalents                                    84,000                 84,000
Accounts receivable, net of allowance of $178,182 and $168,219 at       8,621,944              11,471,671
July 4, 2009 and December 31, 2008, respectively
Unbilled contract costs and fees                                        213,730                398,707
Inventory                                                               6,686,480              11,457,532
Prepaid expenses and other current assets                               1,327,592              1,040,441
Total current assets                                                 $  39,827,552        $    34,410,067
Property and equipment, net                                             2,661,544              1,964,968
Goodwill, net                                                           123,714                123,714
Intangibles, net                                                        201,382                398,526
Total assets                                                         $  42,814,192        $    36,897,275
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Line of credit                                                       $  3,000,000         $    3,000,000
Accounts payable                                                        6,998,960              8,588,313
Accrued payroll and payroll related expenses                            2,282,318              2,042,786
Other accrued expenses                                                  3,607,569              2,825,255
Accrued contract loss                                                   --                     1,131,370
Accrued restructuring costs                                             292,318                602,782
Deferred revenue                                                        162,352                4,214,389
Total current liabilities                                            $  16,343,517        $    22,404,895
Warrant liabilities                                                  $  2,849,528         $    2,407,438
Deferred revenue, net of current portion                                3,508,084              2,512,794
Redeemable convertible Series B preferred stock (75 and 290 shares      375,000                1,450,000
issued and outstanding at July 4, 2009 and December 31, 2008,
respectively; face value $5,000 per share; liquidation preference
$375,000 and $1,450,000 at July 4, 2009 and December 31, 2008,
respectively)
Other long-term liabilities                                             43,259                 58,282
Total Liabilities                                                    $  23,119,388        $    28,833,409
Commitments and contingencies (Note H)
Redeemable convertible Series C preferred stock (25,000 shares       $  19,665,703        $    17,248,593
issued and outstanding at July 4, 2009 and December 31, 2008; face
value $1,000 per share; liquidation preference $26,983,562 and
$26,350,000 at July 4, 2009 and December 31, 2008, respectively)
Stockholders' equity (deficit):
Common stock; $0.01 par value, 200,000,000 shares authorized;        $  702,115           $    514,798
70,211,491 and 51,479,822 shares issued and outstanding at July 4,
2009 and December 31, 2008, respectively
Additional paid-in capital                                              219,469,087            182,222,762
Accumulated deficit                                                     (218,372,749 )         (189,962,435 )
Accumulated other comprehensive loss                                    (1,769,352   )         (1,959,852   )
Total stockholders' equity (deficit)                                 $  29,101            $    (9,184,727   )
Total liabilities and stockholders' equity (deficit)                 $  42,814,192        $    36,897,275

SATCON TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
                                                                    Three Months Ended                    Six Months Ended
                                                                    July 4,            June 28,           July 4,             June 28,
                                                                    2009               2008               2009                2008
Revenue
Product revenue                                                     $  7,627,619       $  9,555,891       $  21,007,468       $  19,731,809
Funded research and development and other revenue                      1,563,131          3,807,450          3,044,798           4,991,128
Total revenue                                                       $  9,190,750       $  13,363,341      $  24,052,266       $  24,722,937
Cost of revenue:
Cost of product revenue                                             $  7,935,446       $  9,167,176       $  20,220,484       $  18,877,555
Cost of funded research and development and other revenue              1,251,418          2,666,547          2,368,251           3,682,420
Total cost of revenue                                               $  9,186,864       $  11,833,723      $  22,588,735       $  22,559,975
Gross margin                                                        $  3,886           $  1,529,618       $  1,463,531        $  2,162,962
Operating expenses:
Research and development                                            $  2,244,162       $  1,109,258       $  4,115,424        $  1,977,350
Selling, general and administrative                                    4,667,594          4,785,895          9,343,818           7,245,004
Restructuring charge                                                   --                 606,607            --                  606,607
Amortization of intangibles                                            78,571             78,572             157,144             157,144
Total operating expenses from continuing operations                 $  6,990,327       $  6,580,332       $  13,616,386       $  9,986,105
Operating loss from continuing operations                           $  (6,986,441 )    $  (5,050,714 )    $  (12,152,855 )    $  (7,823,143  )
Change in fair value of warrant liabilities                         $  1,776,137       $  (2,396,717 )    $  (3,594,334  )    $  (2,864,198  )
Other (loss) income, net                                               (486,649   )       (17,570    )       (625,590    )       241,353
Interest income                                                        1,836              70,886             5,567               140,271
Interest expense                                                       (137,823   )       (97,546    )       (220,184    )       (143,737    )
Net loss from continuing operations                                 $  (5,832,940 )    $  (7,491,661 )    $  (16,587,396 )    $  (10,449,454 )
Loss from discontinued operations, net                                 --              $  (523,996   )       --               $  (967,403    )
Net loss                                                            $  (5,832,940 )    $  (8,015,657 )    $  (16,587,396 )    $  (11,416,857 )
Deemed dividend and accretion on Series C preferred stock and       $  (887,526   )    $  (795,008   )    $  (1,709,020  )    $  (1,433,000  )
warrants
Dividend on Series C preferred stock                                   (387,051   )       (310,792   )       (708,089    )       (614,753    )
Net loss attributable to common stockholders                        $  (7,107,517 )    $  (9,121,457 )    $  (19,004,505 )    $  (13,464,610 )
Net loss per weighted average share, basic and diluted:
From loss on continuing operations attributable to common           $  (0.13      )    $  (0.17      )    $  (0.36       )    $  (0.25       )
stockholders
From loss on discontinued operations                                   --              $  (0.01      )       --               $  (0.02       )
Net loss attributable to common stockholders per weighted average   $  (0.13      )    $  (0.18      )    $  (0.36       )    $  (0.27       )
share, basic and diluted
Weighted average number of common shares, basic and diluted            54,717,764         50,414,800         53,127,814          50,174,860

SOURCE: Satcon Technology Corporation

Satcon Technology Corporation 
Leah Gibson, 617-897-2400 
Investor Relations Manager 
leah.gibson@Satcon.com