Press releases

ISE Limited Announces First Quarter 2010 Financial Results

- First Quarter 2010 Revenue Increased More Than Threefold Over First Quarter 2009 to $11.0 Million
- Quarterly Gross Margin Improved by 44 Percentage Points

SAN DIEGO -- (May 17, 2010) -- ISE Limited (TSX: ISE), a leading developer, manufacturer and distributor of heavy duty hybrid-electric drive systems, reported its financial results for the three months ended March 31, 2010. All dollar amounts in this press release are United States dollars unless otherwise indicated.

Rick Sander, CEO and President of ISE, stated, "Our first quarter growth demonstrates we are successfully driving sales in our core business of complete hybrid systems, including launching three substantial programs at Las Vegas Transit, California's Sunline Transit Agency and Vancouver's BC Transit. While the overall transit market is challenged by cuts in state and local subsidies for transit operating costs resulting in a reduction in the number of routes, we are leveraging our expertise and our reputation as innovators. ISE will begin accepting orders for our next-generation, battery-dominant compressed natural gas (CNG) hybrid system for transit buses with production units expected to be available in 2011. These will initially be marketed to transit agencies with existing CNG infrastructure as they can rapidly convert from conventional CNG systems to our significantly greener and more fuel efficient CNG hybrid system. We are also gaining traction in our energy storage systems and anticipate announcements in the second quarter."

Recent Corporate Highlights

• Delivered a zero emission fuel cell hybrid system to Sunline Transit, based in Thousand Palms, CA.
• Deployed 20 of ISE's zero emission fuel cell hybrid systems at the 2010 Games in Vancouver.
• Launched 50 diesel hybrid systems with Las Vegas Transit
• Announced ISE will begin accepting orders for our next-generation, battery-dominant CNG hybrid system for transit buses with production units expected to be available in 2011.
• Received 2010 certification for its gasoline Hybrid System from the California Air Resources Board (CARB), which is the first engine certification issued in 2010 by CARB in the hybrid urban bus category.

David Morash, CFO and Treasurer of ISE, stated, "We continue to foster strong relationships with our strategic partners including Maxwell and Siemens. We believe these as well as alliances with additional large corporations will fuel long-term expansion efforts. In addition, we are progressing in our efforts to establish an accounts receivable line of credit to fund working capital."

First Quarter 2010 Compared to First Quarter 2009

• Revenue was $11.0 million in the first quarter of 2010, increasing more than threefold compared to $3.4 million in the first quarter of 2009.
• Gross loss was reduced to $281,000 in the first quarter of 2010, including approximately $1.2 million of costs for integration support of systems onto new original equipment manufacturer platforms this quarter, compared to a gross loss of $1.6 million in the first quarter of 2009.
• Operating expenses were $3.6 million in the first quarter of 2010, compared to $4.3 million in the first quarter of 2009.
• R&D was $928,000 in the first quarter of 2010, compared to $1.6 million in the first quarter of 2009, reflecting a reduction in external consulting fees.
• Sales and marketing expenses were $633,000 in the first quarter of 2010, compared to $540,000 in the first quarter of 2009.
• G&A was $2.0 million in the first quarter of 2010, including the additional costs associated with being a public company, compared to $2.1 million in the first quarter of 2009.
• Net loss from operations was $3.9 million in the first quarter of 2010, compared to $5.8 million in the first quarter of 2009.
• At March 31, 2010, cash and cash equivalents were $9.0 million, compared to $782,000 at December 31, 2009. At March 31, 2010, working capital deficit improved to $547,000, from a deficit of $15.0 million at December 31, 2009.

Company Outlook

"Long sales cycles in the industry result in lumpiness in our revenue from quarter to quarter. In 2010, we expect unit growth of hybrid systems compared to 2009, and we expect revenue for the first two quarters to increase over the same periods in 2009. However, we do not expect revenue growth for the second half of 2010, as in the second half of 2009 we enjoyed the sale of 20 zero-emission buses that carry a significantly higher average selling price than our other hybrid systems," concluded Morash.

Conference Call Access Instructions

ISE will host a conference call at 4:30 p.m. EDT on Monday, May 17, 2010, to discuss its financial results. To access the call in Canada (and the US) please dial 877-718-5107 and for international calls dial 719-325-4921 approximately 10 minutes prior to the start of the conference. The conference ID is 2345439. The conference call will also be broadcast live over the Internet and available for replay for a period of 90 days at www.isecorp.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the replay, in the U.S., please dial 888-203-1112 and internationally, 719-457-0820. Enter access code 2345439.

About ISE Limited

ISE Limited (www.isecorp.com) is a leading developer, manufacturer and distributor of heavy duty hybrid-electric drive systems based on our core proprietary technology, which is focused on three critical subsystems: energy storage, controls software and power electronics. ISE specializes in series hybrid-electric and all-electric/zero emission technologies, and offers industry-leading energy storage systems and hybrid system components. Over the past 10 years, ISE has sold over 300 hybrid-electric drive systems that have demonstrated reliability and performance in over 13 million miles of fleet operation.

Established in 1995, ISE is headquartered in San Diego, California. ISE's history of innovation and technological leadership has resulted in the design and development of systems and components that deliver superior operating performance. For more information visit www.isecorp.com.

Investor Contact
Kirsten Chapman/Becky Herrick
Lippert/Heilshorn & Associates
+1 415-433-3777
bherrick@lhai.com

Company IR Contact
David Morash
Chief Financial Officer
ISE Limited
+1 858-413-1724

Media Contact
Carolyn Paynton
Mktg. & Comm. Mgr.
ISE Limited
cpaynton@isecorp.com

Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical fact contained in this press release are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "project," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. Some of these factors are described in greater detail in the "Risk Factors" section of ISE's Prospectus dated February 11, 2010 filed on SEDAR, ISE's Annual Information Form for the year ended December 31, 2009 filed on SEDAR, and ISE's other filings with the Canadian securities regulatory authorities. These risks and uncertainties include, among others, risks associated with ISE's long and unpredictable sales cycle; risks associated with product liability and warranty claims and the safety of ISE's products; risks relating to ISE's need for additional capital; risks associated with variations in the size, type and timing of customer orders for ISE's products; risks associated with market acceptance and reliability of ISE's products; risks associated with entering into long-term contracts and contracts with governmental agencies; risks associated with the availability, level and terms of government subsidies and incentives; risks associated with customer concentration and ISE's dependence on a small number of suppliers and original equipment manufacturers ("OEMs"); risks associated with ISE's strategic relationships; risks associated with executing ISE's growth strategy in the United States and internationally and scaling up our manufacturing capacity; risks relating to the retention and recruitment of qualified personnel; risks resulting from competition with larger businesses with greater resources; risks associated with technological advancements in ISE's industry; and risks relating to the protection of ISE's intellectual property.

Although ISE believes that the expectations reflected in the forward-looking statements are reasonable, ISE cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, ISE does not intend to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release.

ISE and its logo are trademarks of ISE Limited. Other brand or product names are trademarks of their respective holders. Copyright © 2010 ISE Limited. All rights reserved.