Hoku Scientific, Inc. Reports Results for Fiscal Year 2009 and Fourth Quarter Ended March 31, 2009

Market Wire, June, 2009

Hoku Scientific, Inc. (NASDAQ: HOKU), a materials science company focused on clean energy technologies, today announced its financial results for the fiscal year and fourth quarter ended March 31, 2009. The Company also provided a general update on its business.

Financial Results

Revenue for the fiscal year ended March 31, 2009 was $5.0 million, compared to $3.2 million for fiscal 2008. Revenues for the quarters ended March 31, 2009 and 2008 were $112,000 and $621,000, respectively. All revenue in fiscal 2009 was derived from photovoltaic, or PV, system installation and other related services and the resale of solar inventory. Revenue for fiscal 2008 was primarily derived from PV system installations and fuel cell revenue from contracts with the U.S. Navy. As of March 31, 2009 and March 31, 2008, deferred revenues of $784,000 and $36,000, respectively, were attributable to PV system installation projects and related service contracts.

Net loss, computed in accordance with U.S. generally accepted accounting principles, or GAAP, for the fiscal year ended March 31, 2009 was $3.0 million, or $0.15 per diluted share, compared to $4.3 million, or $0.26 per diluted share for fiscal 2008. GAAP net loss for the quarter ended March 31, 2009 was $904,000, or $0.04 per diluted share, compared to $2.1 million, or $0.12 per diluted share for the same period in fiscal 2008.

Non-GAAP net loss for the fiscal year ended March 31, 2009 was $1.7 million, or $0.09 per diluted share, compared to $3.2 million, or $0.20 per diluted share for fiscal 2008. Non-GAAP net loss for fiscal 2009 and fiscal 2008 excludes non-cash stock-based compensation of $1.2 million and $1.1 million, respectively. Non-GAAP net loss for the quarter ended March 31, 2009 was $634,000, or $0.03 per diluted share, compared to $1.9 million, or $0.11 per diluted share, for the same period in fiscal 2008. Non-GAAP net loss for the quarters ended March 31, 2009 and 2008 excludes non-cash stock-based compensation of $270,000 and $192,000, respectively. The accompanying schedules provide a reconciliation of net loss per share computed on a GAAP basis to net loss per share computed on a non-GAAP basis.

Dustin Shindo, chairman, president, and chief executive officer of Hoku Scientific, said, "We were pleased to have met our revised revenue guidance of $5 million for fiscal 2009. In addition, we received $121 million in customer prepayment deposits against future polysilicon shipments from our production facility currently under development in Pocatello, Idaho. These receipts bring the total amount of prepayment deposits received as of March 31, 2009 to $134 million."

Mr. Shindo continued, "These results were in keeping with our previous guidance, with losses expected as we continued advancing the development of both our polysilicon manufacturing and PV systems integration businesses. Going forward, we plan to continue expanding our PV integration business in fiscal 2010 and, provided we are able to secure the required financing for the construction of our polysilicon plant, we look forward to generating revenue from the sale of polysilicon in fiscal 2010."

Business Updates

Hoku Materials Polysilicon Plant Update

Commenting on the Company's polysilicon subsidiary, Hoku Materials, Inc., Mr. Shindo said, "We have made excellent progress during the past fiscal year and we remain on track to make our first deliveries of polysilicon in accordance with our customer contracts, assuming satisfactory financing is identified to accelerate the current pace of construction."

Mr. Shindo said, "Together with our partners, we have focused the construction effort on delivering those elements of the polysilicon facility required for initial commercial operations. This includes the main reactor, engineering, and control buildings; vent gas recovery equipment, cooling water loops, and process piping, among other systems. We installed the first six of our expected 28 polysilicon deposition reactors, and in the coming months, expect to complete construction of the substation and transmission lines required to deliver up to 82 megawatts of electricity to the plant, more than enough to power our facility at full capacity."

The Company had previously reported that it had the ability to defer some of its planned capital expenditure by delaying the construction of its trichlorosilane (TCS) production facility and by further delaying the arrival of additional reactors, while still ensuring enough production capacity to fulfill its current contractual obligations.

Mr. Shindo confirmed this approach, saying, "We now plan to purchase TCS from a third-party supplier to support our reactor testing and initial production runs. We will also time the delivery of our remaining reactors to match customer prepayment receipts as closely as possible, while still supporting our planned production ramp-up schedule. Cash flow permitting, we expect this revised approach will allow us to meet all delivery obligations to our current customers."