Spire Corporation Reports Third Quarter 2006 Results

BEDFORD, Mass.--(BUSINESS WIRE)--Spire Corporation (Nasdaq: SPIR) today reported revenues of $5,794,000 for the three months ended September 30, 2006, an increase of 29% compared to $4,482,000 for the three months ended September 30, 2005. Net loss was $1,941,000 or $0.24 per basic share for the three months ended September 30, 2006, compared with a net loss of $1,429,000 or $0.20 per basic share for the three months ended September 30, 2005.

“The increase in the third quarter revenues were due to higher solar equipment, solar systems, and hemodialysis catheter sales. These third quarter revenue increases were partially offset by declines in our contract research and development (“R&D”

Revenues for the nine months ended September 30, 2006, were $15,062,000, a decrease of 6% compared to $16,009,000 for the nine months ended September 30, 2005. In addition, the Company recognized a gain of $6,320,000 on the sale of licenses in 2005. Net loss was $6,026,000, or $0.77 per basic share, for the nine months ended September 30, 2006, compared with net income, including the gain on the sale of licenses, of $1,689,000 or $0.24 per basic share, for the nine months ended September 30, 2005.

Roger G. Little, Chairman and CEO of Spire, said, “The increase in the third quarter revenues were due to higher solar equipment, solar systems, and hemodialysis catheter sales. These third quarter revenue increases were partially offset by declines in our contract research and development (“R&D”). The decline in year-to-date results were primarily lower sales in contract R&D and solar systems partially offset by increases in solar equipment and biomedical processing services. The net loss for the quarter increased by $512,000, however last year’s result benefited from a $593,000 gain on the extinguishment of a purchase discount. The year-to-date loss increased by $7,715,000. Last year’s results included gains from license sales of $6,320,000 plus the $593,000 gain extinguishing the purchase discount. The additional loss resulted from increased sales and marketing efforts and costs associated with new product development.”

Mr. Little concluded, “We continue to invest in new product development for each of our businesses. This quarter, our subsidiary Bandwidth Semiconductor, LLC, signed a major manufacturing agreement to produce wafers for next generation laser rear projection television sets. Spire Solar announced several new products during the quarter and Spire Biomedical began limited market release of its coated hemodialysis catheter.”

ABOUT SPIRE CORPORATION

Spire Corporation is a diversified energy, biomedical and optoelectronics company consisting of three wholly owned subsidiaries providing products and services including photovoltaic module manufacturing equipment from Spire Solar, hemodialysis catheters and implantable device processing services from Spire Biomedical, and optoelectronics components from Bandwidth Semiconductor. For more information visit www.spirecorp.com.

SPIRE CORPORATION AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	Three Months Ended September 30,				Nine Months Ended September 30,
		2006		2005		2006		2005
Net sales and revenues	$	5,794,000	$	4,482,000	$	15,062,000	$	16,009,000
Gain on sale of licenses		—		—		—		6,320,000
Income (loss) from operations		(2,001,000)		(1,365,000)		(6,095,000)		1,950,000
Other income (expense), net		60,000		(64,000)		69,000		(261,000)
Income (loss) before income taxes		(1,941,000)		(1,429,000)		(6,026,000)		1,689,000
Net income (loss)	$	(1,941,000)	$	(1,429,000)	$	(6,026,000)	$	1,689,000
Earnings (loss) per share of common stock – basic	$	(0.24)	$	(0.20)	$	(0.77)	$	0.24
Earnings (loss) per share of common stock – diluted	$	(0.24)	$	(0.20)	$	(0.77)	$	0.24
Weighted average number of common and common equivalent shares outstanding – basic		8,213,726		6,983,556		7,788,656		6,898,381
Weighted average number of common and common equivalent shares outstanding – diluted		8,213,726		6,983,556		7,788,656		7,172,985

SUMMARY OF CONDENSED CONSOLIDATED BALANCE SHEET
	September 30, 2006
Assets
Current assets	$	17,301,000
Net property and equipment		4,284,000
Other assets		2,508,000
Total assets	$	24,093,000
Liabilities and stockholders' equity
Current portion of capital lease obligations - related party	$	942,000
Accounts payable and accrued liabilities		3,478,000
Advances on contracts in progress		4,518,000
Total current liabilities		8,938,000
Total long-term liabilities		3,733,000
Stockholders’ equity		11,422,000
Total liabilities and stockholders’ equity	$	24,093,000

Certain matters described in this news release may be forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the risk of dependence on market growth, competition and dependence on government agencies and other third parties for funding contract research and services, as well as other factors described in the Company's Form 10-KSB filed with the Securities and Exchange Commission.