Azure Dynamics Reports Fiscal 2009 Year End Results

By Azure Dynamics Corporation, PRNE
Tuesday, March 23, 2010

OAK PARK, Michigan, March 24, 2010 -

     -  Azure Dynamics reports record fourth quarter revenue of $4.4 million
        and record year end revenue of $9.4 million representing increases of
        72% and 23%, respectively versus the same periods in the prior year.
     -  Balance(TM) Hybrid Electric delivery vans and shuttle buses continue
        to gain market acceptance with new and repeat customers in 2009.
     -  Azure and Ford Motor Company announced collaboration on Transit
        Connect Electric project.
     -  Company says that with the success of its recent public offering, and
        current and anticipated product demands, it anticipates having
        sufficient liquidity to execute its business plan in 2010.

Azure Dynamics Corporation (TSX: AZD) (
OTC: AZDDF) ("Azure" or the "Company") a leading developer of hybrid
electric and electric powertrains for commercial vehicles, today announced
its financial results for the three and twelve-month periods ended December
31, 2009
. The Company also provided an update on corporate and product
development activities during the year.

"2009 was just the start of what we expect will be a long-term trend
of positive results for Azure," said Scott T. Harrison, CEO of Azure
Dynamics. "Despite the economy, it was our best sales year ever with 566
total products sold which are now powering vehicles for 80 new and repeat
customers. Plus we completed major agreements with our key partners and
continued to build our already strong relationships with our major fleet

"As businesses start to ramp up their purchasing and implement their
green initiatives, Azure is in a good place," Harrison said. "Most of our
products qualify for federal and state stimulus funds which will help to
lower the purchase price and reduce the payback period making them even
more attractive to customers. That will help us build on the momentum we're
already enjoying in the marketplace."

Financial Results

Revenue for the fourth quarter of 2009 totaled $4.4 million compared
to $2.6 million in the fourth quarter of 2008. For the year ended December
31, 2009
revenue increased to $9.4 million compared to $7.7 million in 2008
. Net loss for the fourth quarter of 2009 totaled $8.0 million, or $(0.02)
per share compared to a loss of $14.5 million or $(0.04) per share in the
fourth quarter of 2008. For the year ended December 31, 2009, the Company's
net loss was $27.8 million, or $(0.07) per share, compared to a net loss of
$38.9 million, or $(0.12) per share in 2008.

Before contributions, the Company's engineering, research and
development ("R&D") expenses in the quarter totaled $5.2 million (including
$2.9 million in product development costs), compared to $6.0 million for
the same period in 2008 (including $3.1 million in product development
costs). For the year ended December 31, 2009, the Company's engineering and
R&D expenses totaled $15.6 million (including $6.1 million in product
development costs) compared to $21.5 million in 2008 (including $11.6
in product development costs).

As of December 31, 2009, the Company's cash and cash equivalents
totaled $33.6 million and working capital totaled $31.7 million, compared
to cash and cash equivalents of $13.8 million and working capital of $19.8
as at December 31, 2008. During the year, the Company completed two
equity financings, raising net proceeds of $37.2 million to fund ongoing
product development, operations and working capital.

     Key 2009 Milestones
     - On December 22, Azure closed its offering of common shares for total
       gross proceeds to the Company of approximately $30,000,000.
     - On December 14, Azure announced that Purolator Courier Ltd.
       ("Purolator") placed an order for an additional 200 Balance(TM)
       Hybrid Electric delivery trucks. The 200 unit purchase is Azure's
       largest revenue order ever. Purolator had already ordered 50 units
       earlier in the year.
     - On November 9, Azure announced that FedEx Express purchased fifty-one
       (51) additional Azure Balance(TM) Hybrid Electric vans.
     - On October 30, Azure announced its collaborative effort to deliver
       the Ford Transit Connect Electric van. Azure will upfit the Transit
       Connect with its proprietary Force Drive(TM) pure electric
     - On October 14, Azure and Kidron announced a record 248 unit Low
       Emission Electric Power (LEEP(TM)) sale to Idealease on behalf of its
       client, Schwan Food Company.
     - On August 13, Azure Dynamics closed a private placement offering for
       gross proceeds of approximately $10,000,000.
     - On April 9, Azure announced an exclusive supply agreement with
       Collins Bus of Kansas to create NEXBUS, the only hybrid electric
       Type A (short) school bus available in North America.
     - On January 15, the Company announced a plan designed to address cost
       issues while meeting growing demand for its green technology
       solutions. The plan included a 25% workforce reduction, cuts in
       discretionary spending, actions to offset component cost increases
       and a focus on new programs that involve a sharing of development
     - On January 13, Azure announced a five year supply agreement with
       Johnson Controls-Saft under which Johnson Controls-Saft will supply
       the Company with its state-of-the-art lithium-ion hybrid batteries.
     - Azure's Balance(TM) Hybrid Electric drivetrain integrated on the Ford
       E-450 chassis continues to enjoy little competition in the medium
       duty commercial truck segment where it resides and where Ford is the
       clear market leader. Azure customers report up to 40% fuel economy
       improvement, 30% reduction in maintenance costs, and a 30% reduction
       in greenhouse gas emissions. Current government incentives are
       encouraging adoption of this environmentally-friendly technology.
     - During 2009 Azure deepened both its relationship with Ford and its
       offering to commercial customers with the October announcement that
       the Company will provide its Force Drive(TM) electric powertrain
       technology for the Ford Transit Connect Electric. The award winning
       Transit Connect began selling in North America in 2009 and the
       electric variant is the first electric offspring in Ford's Blueprint
       for Sustainability. Johnson Controls-Saft was chosen as the battery
       supplier for Azure's Force Drive(TM) integration on the Ford Transit
       Connect Electric.
     - Azure established a new strategic relationship with Johnson
       Controls-Saft (JC-S) in 2009 by signing a five year supply agreement
       for lithium-ion battery packs. The relationship gives Azure a
       predictable supply of JC-S advanced lithium-ion batteries at market
       competitive prices. Led by this battery, Azure expects to
       significantly reduce the Balance(TM) Hybrid Electric product costs by
       up to 40% by year end 2010. Azure expects significant margin
       improvement on the product as a result, and where appropriate a
       portion of the savings will be passed along to customers to drive
       additional volume.
     - Azure's sales strategy includes a combination of direct sales,
       distributor sales and Ford dealerships. Azure has partnerships with
       seven of the top shuttle bus body manufacturers that represent
       approximately 90% of this target market. The Company's relationship
       with Ford commercial truck dealerships in major metro markets in
       North America for both sales and service provides distribution
       bandwidth while keeping internal sales costs comparatively low.
     - Azure has avoided significant investment in manufacturing facilities
       by leveraging existing capacity. The Company has announced that
       Transit Connect Electric upfitting will occur in the State of
       Michigan, however, the location and partner have not been named
       pending final agreement.

"Adding new customers is the name of the game but it's especially
gratifying to add repeat business to the portfolio, and we did a lot of
both in 2009," said Harrison. "Our biggest customers who already have
experience with our products placed significant repeat orders during the
year and we signed on a number of new customers who are just starting to
convert to more
energy efficient fleets. This bodes well for our future opportunities since
we traditionally have a high re-order rate.

"We have the technology, the partners and the products to make Azure
the choice for commercial fleets looking to reduce costs and green their
fleets," Harrison said. "Our development work over the past twenty years is
paying off and we expect that sales and revenue records will be short lived
around here."

     Product Development
     G1 Series (7,500 to 16,000 lbs. gross vehicle weight, "GVW")
     -  Purolator's fleet of 49 series hybrid vehicles have approximately
        1.3 million miles as of December 31, 2009
     -  During the year all 19 G1 diesel hybrids have surpassed their
        warranty period of 3 years
     -  The 30 gas series hybrids have surpassed two years in service and the
        earlier units will hit the 3 yr in-service milestone in Q1 of 2010
     -  2009 was the final model year for production of G1 Hybrid vans and
        CitiBuses. The program will now move into a service engineering mode.
        The high mileage and time in-service data will provide Azure with
        valuable durability data for future developments
     Balance(TM) Hybrid Electric (P1) Parallel (10,000 - 19,000 lbs. GVW)
     -  The Balance(TM) Hybrid Electric shuttle bus was released into
        production in the first quarter of 2009
     -  The 2009 model Balance(TM) Hybrid Electric was certified as a new
        qualified heavy-duty hybrid motor vehicle by the IRS, which qualifies
        it for a $3,000 US Federal tax credit to eligible buyers
     -  Azure received notification of certification from California Air
        Resources Board (CARB) for the 2009 Azure Balance Hybrid E-450
     -  The EPA and CARB certifications serve to qualify the product for the
        California Hybrid Truck and Bus Voucher Incentive Project (HVIP)
        which will provide vouchers of $10,000 to $45,000 on a first-come,
        first-served basis for purchase of each eligible new hybrid truck or
        bus in the state
     -  The Company worked with JC-S throughout the year on development and
        testing of the a new Lithium-Ion battery pack and by year-end a
        second generation of prototype battery packs were received and are
        running in the Azure development fleet
     Transit Connect Electric (Force Drive(TM))
     -  Development for the Transit Connect Electric was begun in the fourth
        quarter of 2009
     -  By December 1st, the Company completed a development and supply
        agreement with Johnson Controls-Saft to collaborate on the Lithium
        Ion battery pack for the Transit Connect Electric
     -  By year-end the Company had completed a concept design release for
        the vehicle and also built an initial show vehicle
     -  Testing on the completed vehicle was in progress through the end of
        the year, and the delivery to Ford occurred in January, 2010. The
        build of a second engineering vehicle began within the first quarter,
     LEEP Freeze(TM) & LEEP Lift(TM) (Low Emission Electric Power)
     -  With support of Eaton, the company released a new variant of the LEEP
        Freeze(TM) system that is compatible with Eaton Ultrashift
     -  The company executed validation and durability testing on the LEEP
        Freeze(TM) system throughout the year
     -  In support of the 248 unit order for LEEP Freeze(TM) systems in
        October, the Company undertook final design upgrades and
        manufacturing ramp-up activities to support volume production. Forty
        systems were produced and delivered by year end
     -  A product field trial of LEEP Lift(TM) commenced with AT&T in the
        first quarter and continued throughout the year demonstrating up to
        30% fuel savings and idle-off performance attributes
     Other Product Developments
     -  Development of a next generation of the Force Drive(TM) inverter
        commenced in the first half of 2009; the product will go into
        production mid 2010 and be used across the Company's product lines
     -  A second generation prototype advanced soft-switched inverter was
        received and preliminary testing completed with the support of the US
        DOE Freedom Car program


"We believe that our products and our internal practices, set against
a backdrop of external factors including the threat of higher oil prices,
access to government stimulus programs, greater recognition and
appreciation for environmental issues, and better understanding of hybrid
electric and electric technology in general, set the stage for Azure's
accelerated growth in 2010 and beyond," said Harrison. "Our goal is very
clear - to be a profitable company delivering state-of-the-art products and
a solid return to our customers, investors, partners and employees. The
road to profitability requires us to pass through the breakeven plateau. We
believe that this plateau is within reach and hope to have a clear picture
in time for our 2010 Annual General Meeting in June," Harrison said.

The Company's complete fiscal 2009 audited year-end financial
statements and MD&A are available at or on the Company's
website at

All figures are in Canadian dollars.

Azure Dynamics

Azure Dynamics Corporation (TSX: AZD) (OTC: AZDDF) is a world leader
in the development and production of hybrid electric and electric
components and powertrain systems for commercial vehicles. Azure is
strategically targeting the commercial delivery vehicle and shuttle bus
markets and is currently working internationally with various partners and
customers. The Company is committed to providing customers and partners
with innovative, cost-efficient, and environmentally-friendly energy
management solutions.

For more information please visit

The TSX Exchange does not accept responsibility for the adequacy or
accuracy of this release.

Forward-looking Statements

This press release contains forward-looking statements. More
particularly, this press release contains statements concerning Azure's
business development strategy, projected commercial revenues and product

The forward-looking statements are based on certain key expectations
and assumptions made by Azure, including expectations and assumptions
concerning achievement of current timetables for development programs,
target market acceptance of Azure's products, current and new product
performance, availability and cost of labor and expertise, and evolving
markets for power for transportation vehicles. Although Azure believes that
the expectations and assumptions on which the forward-looking statements
are based are reasonable, undue reliance should not be placed on the
forward-looking statements because Azure can give no assurance that they
will prove to be correct. Since forward-looking statements address future
events and conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are
not limited to, the risks associated with Azure's early stage of
development, lack of product revenues and history of losses, requirements
for additional financing, uncertainty as to commercial viability,
uncertainty as to product development and commercialization milestones
being met, uncertainty as to the market for Azure's products and unproven
acceptance of Azure's technology, competition for capital, product market
and personnel, uncertainty as to target markets, dependence upon third
parties, changes in environmental laws or policies, uncertainty as to
patent and proprietary rights, availability of management and key personnel
, and acquisition integration risk. These risks are set out in more detail in
Azure's annual information form which can be accessed at

The forward-looking statements contained in this press release are
made as of the date hereof and Azure undertakes no obligation to update
publicly or revise any forward-looking statements or information, whether
as a result of new information, future events or otherwise, unless so
required by applicable securities laws.

                                                  Azure Dynamics Corporation
                                                 Consolidated Balance Sheets
                                    (Stated in thousands of Canadian dollars)

                                                    December 31  December 31
     As at                                                 2009         2008
                                                              $            $

       Cash and cash equivalents                         33,588       13,803
       Accounts receivable                                2,632        2,317
       Inventory (Note 5)                                 5,215        8,318
       Prepaid expenses                                     974          675
                                                         42,409       25,113

     Restricted cash (Note 4)                             1,041        1,440
     Property and equipment (Note 6)                      5,277        6,194
     Intangible assets (Note 7)                           6,755        8,012
     Goodwill                                             2,932        2,932

                                                         58,414       43,691



       Accounts payable and accrued liabilities           9,837        4,806
       Customer deposits & deferred revenue (Note 8)        746          360
       Current portion of notes payable (Note 3)             66           74
       Current portion of obligations under
        capital leases (Note 9)                              99          114
                                                         10,748        5,354
       Obligations under capital leases (Note 9)            117          263
       Customer deposits & deferred revenue (Note 8)        644          839
       Notes payable (Note 3)                             2,055        2,459
                                                          2,816        3,561
     Shareholders' equity
       Share capital (Note 11)                          202,250      165,007
       Contributed surplus (Note 11)                      7,139        6,500
       Deficit                                         (164,539)    (136,731)
                                                         44,850       34,776

                                                         58,414       43,691


     Approved on behalf of the Board:

     "signed D. Campbell Deacon"    Director
     D. Campbell Deacon

     "signed James C. Gouin"        Director
     James C. Gouin

     The accompanying notes are an integral part of these consolidated
     financial statements.

                                                   Azure Dynamics Corporation
       Consolidated Statements of Operations, Comprehensive Loss, and Deficit
           (Stated in thousands of Canadian dollars, except per share amounts
                                                        and number of shares)

                                              For the years ended December 31
                                                            2009         2008
                                                              $            $

     Revenues                                             9,403        7,651

     Cost of sales                                       14,520       12,866

     Gross Margin                                        (5,117)      (5,215)

       Engineering, research, development and
        related costs, net (Note 13)                     11,681       22,286
       Selling and marketing                              2,388        2,833
       General and administrative                         9,134        7,899
     Total expenses                                      23,203       33,018

     Loss from operations                               (28,320)     (38,233)

       Interest and other income, net                       546          347
       Interest expense                                    (110)         (10)
       Other expense                                       (586)        (568)
       Foreign currency gains/(losses)                      662         (403)

     Net loss and comprehensive loss                    (27,808)     (38,867)

     Deficit, beginning of year                        (136,731)     (97,864)

     Deficit, end of year                              (164,539)    (136,731)


     Loss per share - basic and diluted                   (0.07)       (0.12)

     Weighted average number of shares
      - basic and diluted                           406,148,487  313,802,407


     The accompanying notes are an integral part of these consolidated
     financial statements.

                                                   Azure Dynamics Corporation
                                        Consolidated Statements of Cash Flows
                                    (Stated in thousands of Canadian dollars)

                                              For the years ended December 31
                                                            2009         2008
                                                              $            $

     Cash flows from operating activities
       Net loss for the period                          (27,808)     (38,867)
       Adjustments for:
         Amortization of property and equipment           1,048        1,005
         Amortization of intangible assets                1,460        1,414
         Unrealized foreign currency (gains)/losses        (448)         525
         Stock option compensation expense                  400          711
         Deferred share units compensation expense          244          184
                                                        (25,104)     (35,028)

       Changes in non-cash working capital items
        (Note 17)                                         8,032        1,625
     Total cash flows from operating activities         (17,072)     (33,403)

     Cash flows from financing activities
       Issuance of common shares (net of costs)          37,238       24,342
       Principal repayments on notes payable                (69)         (40)
       Repayment of obligations under capital lease        (160)         (26)
     Total cash flows from financing activities          37,009       24,276

     Cash flows from investing activities
       Acquisition of property and equipment               (141)      (1,089)
       Acquisition of intangible assets                    (203)        (143)
       Sale of property and equipment                        35            -
       Changes in restricted cash                           211            -
     Total cash flows from investing activities             (98)      (1,232)

     Increase/(Decrease) in cash and cash equivalents    19,839      (10,359)

     Exchange impact on cash held in foreign currency       (54)          29

     Cash and cash equivalents, beginning of year        13,803       24,133

     Cash and cash equivalents, end of year              33,588       13,803

     Supplemental cash flow information

     Cash paid for interest                                 110          159
     Cash paid for taxes                                      -            -
     Non cash investing and financing activities:
       Vehicles and equipment acquired under
        capital lease                                        24          364

     The accompanying notes are an integral part of these consolidated
     financial statements.

For further information: Ryan Carr, Chief Financial Officer,
+1-(248)-298-2403 ext 1206, Email:; Pat Liebler,
Liebler Group, +1-(313)-832-4376, Email: (AZD.)

For further information: Ryan Carr, Chief Financial Officer, +1-(248)-298-2403 ext 1206, Email: rcarr at; Pat Liebler, Liebler Group, +1-(313)-832-4376, Email: pat at (AZD.)

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