Hoku Scientific Inc. (Hoku), a materials science company focused on clean energy technologies, has reported total revenue of $5 million for the fiscal year 2009, compared with the total revenue of $3.2 million in the previous year. It also reported a net loss of $3 million, or $0.15 loss per share, for the fiscal year 2009, compared with the net loss of $4.3 million, or $0.26 loss per share, in the previous year.

Financial Results;

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 US 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.

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.

Dustin Shindo, chairman, president, and chief executive officer of Hoku, said, We were pleased to have met the company’s revised revenue guidance of $5 million for fiscal 2009. In addition, the company received $121 million in customer prepayment deposits against future polysilicon shipments from the company’s 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.

Shindo continued, These results were in keeping with the company’s previous guidance, with losses expected as the company continued advancing the development of both the company’s polysilicon manufacturing and PV systems integration businesses. Going forward, the company plan to continue expanding the company’s PV integration business in fiscal 2010 and, provided the company are able to secure the required financing for the construction of the company’s polysilicon plant, the company 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., Shindo said, We have made excellent progress during the past fiscal year and the company remain on track to make the company’s first deliveries of polysilicon in accordance with the company’s customer contracts, assuming satisfactory financing is identified to accelerate the current pace of construction.

Shindo said, Together with the company’s partners, the company 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. The company installed the first six of the company’s 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 the company’s 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.

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

Hoku planned to conduct its initial reactor testing in June 2009, but to preserve cash as Hoku seeks additional financing, it reported that the testing has been delayed, and may now occur in the third quarter of calendar year 2009. Subject to receipt of financing, Hoku plans to make initial shipments to its customers in the second half of 2009.

Polysilicon Plant Financing Update:

Hoku Materials has signed off-take contracts with six customers for the aggregate sale of up to $1.9 billion of polysilicon over 10 years. In total, these customers have committed to provide more than $243 million in cash prepayments, which Hoku plans to use as a primary source of financing for developing and constructing its polysilicon facility.

Regarding the strength of the company’s customer base, Shindo said, In fiscal 2009, the company signed new long-term polysilicon sales agreements with fthe company’s industry leaders: Jiangxi Jinko Solar Co., Ltd.; Tianwei New Energy (Chengdu) Wafer Co., Ltd.; Wealthy Rise International, a wholly owned subsidiary of Solargiga Energy Holdings, Ltd.; and Shanghai Alex New Energy Co., Ltd. The company also continued to pursue the company’s long-term partnership approach, working closely and successfully with the company’s partners and customers to navigate challenging market conditions and produce mutually beneficial contract amendments where required.

Hoku had received $134 million in prepayment deposits from its current customers as of March 31, 2009. In April and May 2009, the company received subsequent prepayments from Wealthy Rise International (Solargiga) and Tianwei New Energy in the amounts of $7 million and $14.5 million, respectively, for a total of $155.5 million received to date. As of March 31, 2009, construction-in-progress for the project was $199 million.

Shindo said, The company continue to manage the company’s cash position carefully. While the company work to identify the remaining sources of financing, the company have decreased spending to match the company’s project investment obligations with the company’s cash inflows from customer prepayments. This has allowed us to make continued progress without jeopardizing the company’s delivery obligations to the company’s customers.

Hoku Materials estimates the total cost to engineer, procure and construct its polysilicon plant to be around $390 million. The estimate is based on its discussion with vendors, declining costs of materials and labor, and ongoing adjustments of certain design elements; however, changes in costs, modifications in construction timelines, and other factors could significantly increase the actual costs.

In addition to the $243 million in customer commitments, Hoku has already contributed $41 million of its available cash. Assuming that all of Hoku’s customers meet their prepayment commitments in full, a gap remains of around $106 million of additional capital required to fully fund the estimated $390 million construction budget. Hoku is actively working to finance this remaining amount through a combination of prepayments from new customers, and through one or more financing strategies.