/R E P E A T -- Day4 Energy Builds Foundation for Growth During Second Quarter/



    Technology scale-up completed. Capacity expansion positions Day4 for
    rapid growth

    BURNABY, BC, Aug. 8 /CNW/ - Day4 Energy Inc. (TSX: DFE), a manufacturer
of superior performance solar electric modules, today reported operating
results for the second quarter and first half of 2008.
    During the second quarter Day4 Energy completed an industrial scale-up
and automation of its proprietary solar module assembly process, resulting in
a quadrupling of its annual production capacity from 12 megawatts (MW), to
47 MW. An additional 50 MW of production capacity is anticipated to be
completed by the end of 2008 to further service the Company's sales backlog of
approximately $640 million (based on current market prices) and deliverable
through 2010. Further volume capacity growth is planned through a highly
scalable third party outsourced manufacturing strategy. Negotiations with
partners are underway and outsourced production is expected to account for the
majority of the Company's product output beginning in 2009. This substantially
reduces the Company's capital requirements for production volume growth and
leverages the efficient cost structures of the large integrated manufacturing
firms. The Company has also stepped up its research and development activities
in PV cell and module designs that have resulted in breakthroughs offering
potential cost reductions of up to 25%.
    For the second quarter ended June 30, 2008, total revenue reached
$15.0 million, as compared to $13.5 million for first quarter 2008 and
$3.1 million for the second quarter of 2007. Second quarter production
capacity remained unchanged from the first quarter of 2008 at 12 MW. However
second quarter product deliveries increased 8% over the first quarter of 2008
reflecting increased utilization and process improvements in the Company's
existing production capacity.
    Day4 Energy achieved an incremental improvement in quarterly gross profit
despite additional personnel and start-up costs associated with the
installation and turn-up of the Phase I capacity expansion completed in early
July 2008. The Phase I expansion essentially quadruples production compared to
the first half of 2008. After achieving an important milestone of
transitioning to positive gross margins earlier in the year, the Company
delivered a second consecutive gross margin positive quarter with 2.5% gross
profit or $0.4 million compared to 2.0% or $0.3 million in the first quarter
of 2008. This compares with negative gross margins for the year ended 2007 of
21%. Gross margin improvements are being gained from production volume
increases, improved production processes and product cost structure, and
favorable selling prices to customers. The Company expects that a ramp up to
4-fold increase in production volumes during the second half of the year will
result in further improvements in gross profit and operating performance.
    During the second quarter the Company's general & administrative expenses
increased to $1.4 million compared to $1.2 million in the first quarter of
2008. Sales and marketing expenses increased to $1.3 million compared to
$0.7 million in the first quarter of 2008 reflecting additional sales channel
initiatives in existing markets and increased efforts directed at
strengthening product positioning and development of new markets in Japan,
Korea, Mexico and Australia. The Company has been successful in diversifying
political risk related to government subsidies and currently does not have
sales backlog exposure to volatile market conditions in Spain and United
States. Day4 Energy has most of its sales backlog for the balance of 2008 and
2009 concentrated in stable German and Italian markets with newly established
sales opportunities in Asia and Central America providing for additional
upside and strong growth potential.
    Research and development expenses for the second quarter were
$0.6 million compared to $0.5 million in the first quarter of 2008. Net of
recognized investment tax credits, second quarter research and development
costs were $0.3 million. With the completion of the Day4 Electrode technology
automation and production volume scale-up the Company has diverted a large
portion of its research and development efforts towards development of next
generation solar cell designs which are enabled exclusively by the Day4
Electrode technology.
    The patented Day4 Electrode is an innovative approach to module
construction that directly replaces less efficient soldering methods used
throughout the industry. By improving connections to and between photovoltaic
(PV) cells, the Day4 Electrode produces solar electric products with higher
efficiency and performance, longer lifetime, improved aesthetics, and at lower
costs. Additionally, the Day4 Electrode provides for entirely new and
innovative PV cell designs to be utilized providing greater power and cost
efficiencies previously unavailable to the industry.
    Day4's increased R&D investment in solar cell design has resulted in the
Company's recent announcement that it has developed a new patent-pending
design and manufacturing process for solar cells, capable of delivering
efficiencies of up to 19 percent on mono-crystalline and 18 percent on
multi-crystalline silicon materials. The application for multi-crystalline
products is particularly important because of the material's lower price point
and the Company's secured supply. The new design is fully compatible with Day4
Energy's existing manufacturing equipment, enabling fast, economical
deployment and scale-up. The technology also leverages existing solar cell
manufacturing infrastructure and certain processing techniques widely deployed
in other industries. The Company expects that a combination of the technology
and manufacturing process will reduce production costs by up to 25 percent of
what is currently possible with conventional technology.
    In addition to the breakthrough with high efficiency silicon-based solar
cell technologies Day4 has recently achieved significant progress applying its
core proprietary technology to alternative materials such as Upgraded
Metallurgical Grade (UMG) Silicon.
    "Our proprietary technology behind the Day4 Electrode is the key to our
recent breakthrough innovations. Now that the scale-up of the Day4 Electrode
manufacturing process is complete, we have the industrial grade platform
required to commercialize a new generation of solar cell technologies
developed by our R&D group" stated George Rubin, president of Day4 Energy. "We
believe that our unique combination of an industrial grade proprietary
manufacturing platform with our solar cell and module design breakthroughs,
has the potential to introduce new economics to the industry through the
increased efficiencies of next generation of cell technologies and, in the
case of UMG silicon, a substantial reduction in material costs. Our strategy
is to use this unique advantage to create market value by establishing
ourselves as a leading supplier of highest return on investment solutions for
solar power generation needs. Further, the potential exists for future
licensing of certain aspects of our proprietary technology to the broader
industry"
    For the second quarter, Day4 Energy recorded an operating loss of
$2.8 million, and a net loss of $2.5 million, or ($0.07) per share. This
compares to an operating loss of $2.4 million, and net loss of $0.7 million,
or ($0.02) per share, in the first quarter of 2008 respectively.
    With the economies of scale and contribution growth from increased
product sales enabled by the four-fold increase from the Phase I expansion
completed during the second quarter, management expects continued progress
towards its goal of positive earnings before interest, taxes, depreciation and
amortization ("EBITDA") in the fourth quarter of 2008.
    Capital expenditures for the second quarter and for the six-month period
ended June 30, 2008 rose to $9.1 million and $17.7 million compared to
$0.1 million and $0.2 million for same periods in 2007 respectively.
Substantially all capital expenditures were incurred for production machinery
and equipment in the Phase I (35 MW) and II (50 MW) expansion initiatives. The
Company expects production capital investments to decline substantially in
2009 as it executes its outsourced production strategy.
    At June 30, 2008 cash (including restricted cash) and short term
investments were $57.7 million compared to $74.2 million at March 31, 2008.
Working capital at June 30, 2008 was $86.3 million compared to $97.1 million
on March 31, 2008. Cash was used during the quarter as working capital to fund
production, operations, and investment in building Day4 Energy's expanding
production facilities.
    The successful automation of the last proprietary step of the Day4
Electrode manufacturing process in the second quarter was an important step in
increasing production efficiency gains in its newly completed 35 MW production
facility. More importantly, these production refinements provide Day4 Energy
with an industrial grade process technology that can be transferred to its
pending 50 MW expansion, and again to large third party manufacturers.
    Large scale expansion through third party production in 2009 is expected
to have positive impact on profit margins and provide the required product
volumes to address global demand for Day4 Energy's advanced solar products.
The strategy also reduces the capital intensiveness of the business and frees
a greater portion of Company resources to value-added activities in research
and development, and sales and marketing areas.
    Detailed financial results and management's discussion and analysis can
be found on SEDAR at: www.sedar.com.

    About Day4 Energy

    Headquartered near Vancouver, British Columbia, Day4 Energy Inc. designs,
manufactures and sells photovoltaic (PV) modules based on its patented Day4
Energy Electrode technology, a proprietary method of contacting and
interconnecting solar cells. The Day4 Energy Electrode produces PV panels of
high power density, increased lifetime and uncompromised aesthetic appearance.
The advanced solar module construction method increases the performance of
conventional silicon panels and enables the next-generation of PV innovation.
Day4 Energy partners with the industry's leading PV cell producers to deliver
IEC and UL certified commercial and residential solar products to customers
throughout Europe and North America. Day4 Energy is listed on the Toronto
Stock Exchange under the symbol "DFE". For more information, please visit
www.Day4 Energyenergy.com.

    Caution Regarding Forward-Looking Statements

    This news release contains forward-looking statements that relate to our
current expectations and views of future events. These forward-looking
statements include, among other things, statements relating to our
expectations regarding our revenues, expenses, cash flows, operating
performance and future profitability; our progression towards our goal of
positive EBITDA; our targeting of break-even EBITDA by the fourth quarter of
2008; our plans for and timing of expanding our manufacturing capacity; our
expectations on the value of our patents and intellectual property; and our
ability to meet demand for future contracted deliveries.
    The forward-looking statements contained in this news release are based
on assumptions, which include, but are not limited to, our ability to expand
our annual PV module manufacturing capacity; our ability to secure raw
materials at acceptable prices and qualities; our ability to achieve increased
PV cell and PV module efficiencies; our ability to expand our existing product
line; our ability to attract customers and develop and maintain customer and
supplier relationships; our ability to diversify our suppliers; our ability to
effectively manage foreign exchange risks; our ability to protect our
intellectual property rights and to not infringe on the intellectual property
rights of third parties; and our ability to comply with applicable
governmental regulations and standards going forward.
    Such forward-looking statements are subject to risks, uncertainties and
other factors, including those listed in our Annual Information Form filed
with Canadian securities regulatory authorities, many of which are beyond our
control and each of which contributes to the possibility that our
forward-looking statements will not occur or that actual results, performance
or achievements may differ materially from those expressed or implied by such
statements. These risks, uncertainties and other factors include, but are not
limited to, the impact of general economic, market or business conditions; our
limited operating history; the current industry-wide shortage of high-purity
silicon; risks relating to the protection of our intellectual property and
intellectual property infringement claims by third parties; our dependence on
a limited number of PV cell suppliers; government subsidies and economic
incentives for PV power could be reduced or eliminated; we may be unable to
achieve higher PV module efficiencies; our dependence on a limited number of
customers and our lack of long-term purchase contracts; demand for PV modules;
technological changes in the PV power industry could render our products
uncompetitive or obsolete; unexpected warranty expenses; fluctuations in
exchange rates; product liability claims; compliance with environmental
regulations; and other factors, many of which are beyond our control.
    The forward-looking statements made in this news release relate only to
events or information as of the date indicated above. Except as required by
law, we undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events.


    
    Day4 Energy Inc.
    Consolidated Statements of Operations, Comprehensive Loss and Deficit
    For the three and six months ended June 30, 2008 and 2007 (unaudited)
    -------------------------------------------------------------------------
                                Three-months ended          Six-months ended
                                           June 30,                  June 30,
                          ------------------------- -------------------------
                                 2008         2007         2008         2007
                                    $            $            $            $
    Revenue
    Sales                  15,038,078    3,060,592   28,532,464    3,407,096
    Cost of goods sold     14,659,998    3,329,443   27,883,995    3,657,398
                          ---------------------------------------------------
    Gross margin              378,080     (268,851)     648,469     (250,302)
                          ---------------------------------------------------
    Expenses
    General and
     administrative         1,386,540      438,830    2,545,244      792,736
    Research and
     development              593,556      450,213    1,074,039      781,495
    Less: Investment tax
     credits and Government
     assistance              (245,302)    (177,273)    (245,302)    (354,545)
    Selling expenses        1,276,723      363,408    1,942,040      557,971
    Depreciation              134,856       70,760      229,380      142,683
    Amortization               71,055            -      142,110            -
                          ---------------------------------------------------
                            3,217,428    1,145,938    5,687,511    1,920,340
                          ---------------------------------------------------
    Loss before other
     income (expense)       2,839,348    1,414,789    5,039,042    2,170,642
                          ---------------------------------------------------
    Other income (expense)
    Foreign exchange gain
     (loss)                  (263,687)      51,660    1,176,309       38,210
    Interest and other
     income                   584,881       29,681    1,416,748       71,177
    Interest expense                -       (5,241)           -      (10,299)
    Unrealized gain (loss)
     on derivative
     instruments              120,550            -     (637,200)           -
    Write-off of plant
     design costs             (18,980)           -      (18,980)           -
    Accretion expense         (50,231)     (30,427)     (96,772)     (54,385)
    Fair value gain on
     IRAP-TPC loan                  -       30,742            -       66,534
                          ---------------------------------------------------
                              372,533       76,415    1,840,105      111,237
                          ---------------------------------------------------
    Loss and comprehensive
     loss for the period    2,466,815    1,338,374    3,198,937    2,059,405

    Deficit - Beginning of
     period                21,550,155    7,648,869   20,818,033    7,123,404

    Fair value adjustment
     on IRAP-TPC loan               -            -            -     (195,566)
                          ---------------------------------------------------
    Deficit - End of
     period                24,016,970    8,987,243   24,016,970    8,987,243
                          ---------------------------------------------------
                          ---------------------------------------------------
    Net loss per share
     - basic and diluted         0.07         0.07         0.09         0.11
                          ---------------------------------------------------
                          ---------------------------------------------------
    Weighted average
     number of shares
     outstanding
     - basic and diluted   36,639,586   18,676,000   36,622,711   18,387,840
                          ---------------------------------------------------
                          ---------------------------------------------------


    Day4 Energy Inc.
    Consolidated Balance Sheets
    As at June 30, 2008 and December 31, 2007
    -------------------------------------------------------------------------
                                                        June 30, December 31,
                                                           2008         2007
                                                              $            $
                                                     (unaudited)
    Assets

    Current assets
    Cash and cash equivalents                        12,935,343   53,093,136
    Restricted cash                                  12,200,299    1,322,140
    Short-term investments                           32,603,818   40,232,996
    Accounts receivable                              12,089,898    3,559,391
    Investment tax credits receivable                 1,005,994    1,165,000
    Other receivables                                 1,893,600    2,486,811
    Inventory                                        28,801,089   15,168,541
    Prepaid expenses                                    527,695      547,444
                                                   --------------------------
                                                    102,057,736  117,575,459
    Intangible assets                                   686,859      828,969
    Property, plant and equipment                    24,101,809    7,078,998
                                                   --------------------------
                                                    126,846,404  125,483,426
                                                   --------------------------
                                                   --------------------------
    Liabilities
    Current liabilities
    Accounts payable and accrued liabilities         13,373,557   10,438,525
    Income taxes payable                                830,000      830,000
    Short-term debt                                     906,832      821,213
    Deferred revenue - current                                -       89,442
    Derivative instruments                              637,200            -
                                                   --------------------------
                                                     15,747,589   12,179,180
    Deferred revenue                                    112,840      102,186
    Deferred lease inducement                                 -       11,245
                                                   --------------------------
                                                     15,860,429   12,292,611
                                                   --------------------------
    Shareholders' Equity
    Share capital
    Authorized
      Unlimited number of common shares
      Unlimited number of preferred shares

    Issued and outstanding
      36,679,366 (2007 - 36,373,116) common shares  130,952,257  129,935,370
    Contributed surplus                               1,770,798    1,439,491
    Warrants                                          2,279,890    2,633,987
    Deficit                                         (24,016,970) (20,818,033)
                                                   --------------------------
                                                    110,985,975  113,190,815
                                                   --------------------------
                                                    126,846,404  125,483,426
                                                   --------------------------
                                                   --------------------------


    Day4 Energy Inc.
    Consolidated Statements of Cash Flows
    For the three and six months ended June 30, 2008 and 2007 (unaudited)
    -------------------------------------------------------------------------
                          Three-month period ended          Six-months ended
                                           June 30,                  June 30,
                          ------------------------- -------------------------
                                 2008         2007         2008         2007
                                    $            $            $            $

    Cash flows from
     operating activities
    Loss and comprehensive
     loss for the period   (2,466,815)  (1,338,374)  (3,198,937)  (2,059,405)
      Items not affecting
       cash
        Stock-based
         compensation         202,547      189,891      421,598      428,368
        Accretion -
         IRAP-TPC loan         43,871       30,427       85,619       54,385
        Fair value -
         IRAP-TPC loan              -      (30,742)           -      (66,534)
        Depreciation and
         amortization         428,326      165,955      766,395      329,109
        Write-off of
         plant design
         costs                 18,980            -       18,980            -
        Deferred lease
         inducement            (5,623)      (5,620)     (11,246)     (11,216)
        Unrealized foreign
         exchange (gain)
         loss                (184,990)     (29,862)   1,017,836      155,582
        Unrealized (gain)
         loss on derivative
         instruments         (120,550)           -      637,200            -
    Changes in non-cash
     working capital items
      Accounts receivable   1,589,802   (2,255,388)  (9,895,076)  (2,300,261)
      Investment tax
       credits receivable     159,006     (177,273)     159,006     (354,545)
      Other receivables      (756,853)     (97,063)     222,389      (91,415)
      Inventory           (13,747,198)    (314,135) (13,632,548)  (2,946,624)
      Prepaid expenses        (55,310)     (93,843)      19,749     (781,250)
      Accounts payable and
       accrued liabilities  7,749,966      904,219    2,997,076   (1,993,230)
      Deferred revenue       (494,294)           -      (78,788)           -
                          ---------------------------------------------------
                           (7,639,135)  (3,051,808) (20,470,747)  (9,637,036)
                          ---------------------------------------------------

    Cash flows from
     investing activities
    Proceeds from sale of
     short-term
     investments            6,000,000            -   16,000,000            -
    Purchase of short-term
     investments           (8,000,000)               (8,000,000)
    Restricted cash           319,959            -  (10,878,159)           -
    Purchase of property,
     plant and equipment   (9,089,253)    (100,708) (17,666,075)    (178,342)
                          ---------------------------------------------------
                          (10,769,294)    (100,708) (20,544,234)    (178,342)
                          ---------------------------------------------------
    Cash flows from
     financing activities
    Proceeds from loans             -      145,242            -      289,379
    Proceeds from exercise
     of stock options          80,000            -       80,000            -
    Proceeds from
     conversion of
     warrants                       -            -      492,498   10,341,281
                          ---------------------------------------------------
                               80,000      145,242      572,498   10,630,660
                          ---------------------------------------------------
    Impact of foreign
     exchange on cash and
     cash equivalents         (54,978)     (14,258)     284,690      (21,066)
                          ---------------------------------------------------
    (Decrease) increase in
     cash and cash
     equivalents          (18,383,407)  (3,021,533) (40,157,793)     794,216
    Cash and cash
     equivalents -
     Beginning of period   31,318,750    4,049,521   53,093,136      233,773
                          ---------------------------------------------------
    Cash and cash
     equivalents - End of
     period                12,935,343    1,027,989   12,935,343    1,027,989
                          ---------------------------------------------------
                          ---------------------------------------------------
    Supplemental cash flow
     information
    Cash paid for interest        121            -          121            -
    Cash received for
     interest                 565,537       21,580    1,376,058       21,580
    Non-cash transactions
    Conversion of warrants
     to common shares               -            -            -      354,097
    






For further information:

For further information: Cory Pala, Investor Relations, Day4 Energy
Inc., (416) 657-2400, CPala@Day4Energy.com; Dr. John MacDonald, Chairman &
CEO, Day4 Energy Inc., (604) 759-3294, jmacdonald@Day4Energy.com; George
Rubin, President, Day4 Energy Inc., (604) 759-3294, grubin@Day4Energy.com;
John Stonier, VP Finance, Day4 Energy Inc., (604) 759-3294,
JStonier@Day4Energy.com; Rosalind Jackson, Media Contact, Antenna Group (for
Day4 Energy), (415) 977-1923, rosalind@antennagroup.com

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