Mr. Nick Blitterswyk reports

UGE REPORTS FISCAL YEAR 2015 FINANCIAL RESULTS

UGE International Ltd. has released its financial results for the three months and year ended Dec. 31, 2015. (UGE reports all amounts in U.S. dollars.)

Highlights for 2015:

• Revenue increased by 60 per cent to $6.1-million, as the company continues to focus on its growth plan by providing immediate savings to commercial clients through financed solar systems.
• During the fourth quarter of 2015, the company negotiated the acquisition of Endura Energy Project Corp., which subsequently closed on Feb. 22, 2016. Endura recorded nearly $11-million (Canadian) of revenue, and over $1-million (Canadian) in net income, in the year ended Oct. 31, 2015, and adds significant scale and technical expertise to UGE's commercial solar platform.
• As part of the company's strategy to gain leadership positions in new key markets, strategic projects at below-market margins have temporarily impacted gross margins, as did a one-time inventory adjustment in the fourth quarter of 2015.

                                SELECTED FINANCIAL INFORMATION

                                    Three months ended Dec. 31,                Years ended Dec. 31,
                                        2015              2014              2015              2014

Revenue                         $  1,359,479      $  1,315,562      $  6,140,100      $  3,837,801
Cost of sales                      1,387,565         1,491,805         5,655,583         3,077,274
                                   ---------         ---------         ---------         ---------
Gross profit                         (28,086)         (176,243)          484,517           760,527
                                   ---------         ---------         ---------         ---------
Expenses
Selling, general and
administrative                     1,621,330         1,693,487         5,953,918         5,541,857
Selling, general and
administrative -- listing
costs                                      -                 -                 -         1,805,039
Net finance costs
(income)                             (49,714)           49,529           136,837           250,902
Income tax expense
(recovery)                            48,149            59,659              (151)          194,629
                                   ---------         ---------         ---------         ---------
                                   1,619,765         1,802,675         6,090,604         7,792,427
                                   ---------         ---------         ---------         ---------
Net (loss)                      $ (1,647,851)     $ (1,978,918)     $ (5,606,087)     $ (7,031,900)
                                   ---------         ---------         ---------         ---------
(Loss) per share -- basic
and diluted                     $      (0.08)     $      (0.20)     $      (0.42)     $      (0.90)

Analysis of financial results

The company strengthened its position in the commercial solar industry through organic growth and through the acquisition of Endura (announced in November, 2015, and closed in February, 2016), while decreasing expenses in non-core areas, such as through the licensing of its street lighting offering in the third quarter of 2015.

Revenue for the year ended Dec. 31, 2015, was $6,140,100, compared with $3,837,801 in 2014, an increase of 60 per cent, as the company implemented new commercial solar projects in each of its key markets (the United States, Panama, the Philippines and China).

The gross profit margin for the year ended Dec. 31, 2015, was 8 per cent, compared with 20 per cent in the prior year. Reasons for the decrease primarily result from:

• An inventory adjustment of $272,141 in the fourth quarter of 2015, partly related to obsolete wind components, and partly related to the disposal of low-value components at the company's warehouse that no longer fit the company's sales strategy;
• The company's revenue recognition policy for the development of solar projects that includes a service component, for which revenue and costs are recognized in equal parts until the project is substantially completed, meaning recognition of gross profit margin occurs at a later date;
• Strategic projects at below-market margins to build relationships and market share in new key markets.

Net of an increase of $550,000 in stock-based compensation, the company's selling, general and administrative expenses, excluding listing costs, for the year ended Dec. 31, 2015, decreased slightly, despite the company's 60-per-cent increase in revenue, as the company focuses on scaling revenue while streamlining operations. The company expects further cost synergies to occur in early 2016 as a result of the acquisition of Endura.

As a result of increased revenue, decreased gross profit margins and the absence of listing costs in 2015, the company recorded a net loss in 2015 of $5,606,087, compared with $7,031,900 in 2014.

"Two thousand fifteen was a key year in our history, as we achieved strong revenue growth and made structural changes to the business to support our future growth and profitability," said Nick Blitterswyk, chief executive officer of UGE. "We look forward to growing significantly in 2016, both organically and through our recent acquisition of Endura Energy, as well as working towards profitability at an even faster pace."

Full financial results and management's discussion and analysis are posted to SEDAR and are available through the company's website.

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