Performance Revenue Total Revenue for The Three Months Ended March 31, 2012 Decreased 26%

Nexxus Lighting, Inc. today reported its first quarter 2012 results. First Quarter 2012 Performance Revenue Total revenue for the three months ended March 31, 2012 decreased 26%, or approximately $405, 000, to approximately $1, 148, 000 as compared to approximately $1, 554, 000 for the three months ended March 31, 2011. Sales of Lumificient products decreased 27% from approximately $1, 175, 000 in the first quarter of 2011 to approximately $858, 000 in the first quarter of 2012. This decrease reflects the deferral of purchases by several large national sign customers in the first quarter of 2012 that should return once the programs are re-initiated, which is expected to be later this year. In addition, Lumificient experienced a growth in sales for non-sign lighting applications in the first quarter of 2011, which was not replicated in the first quarter of 2012. Sales of Array® products decreased 23% from approximately $379, 000 in the first quarter of 2011 to approximately $290, 000 in the first quarter of 2012. Sales were adversely affected by lower adoption rates of LED lights, competitive price pressures and general economic conditions. "The first quarter was extremely difficult and disappointing from a revenue standpoint, " stated Mike Bauer, Nexxus' President and Chief Executive Officer. "We have not executed well on the sales front and in the last two quarters we have seen competitors, with lesser products, dramatically cutting prices to gain market share. We are acutely aware that the LED lighting market dynamics for Nexxus have changed significantly in a short period of time, and we are working hard to increase revenue by expanding commercial sales, large national accounts, and our growing direct portal customer base. At the same time, we are also working to drive down costs and price competitively. " "With a product that has been proven to be best in class, we are the one new lighting company that has been able to complete nationally with the large lighting conglomerates at the consumer retail level. As a result, we have become a target and have to work harder and explore every option to keep our Array® brand competitive in the market. As we mentioned in our recent press release, we have engaged Canaccord-Genuity to assist us in evaluating strategic alternatives available to the company, which may include a sale or merger, " added Bauer. Gross Profit For the quarter ended March 31, 2012, we reported a negative gross profit of approximately $39, 000, or -3% of revenue, as compared to a gross profit of approximately $489, 000, or 31% of revenue, for the comparable period of 2011. Direct gross margin, which is revenue less material cost, decreased from 47% in the first quarter of 2011 to 43% in the first quarter of 2012. This decrease primarily reflects sales of surplus inventory at reduced prices and competitive market pressures. In the first quarter of 2012, distribution costs, which include some light assembly costs, increased to approximately $537, 000, or 47% of revenue, as compared to approximately $243, 000, or 16% of revenue, in the first quarter of 2011. The increase in distribution costs includes approximately $243, 000 more expense for inventory reserves recorded in the first quarter of 2012 compared to the same period in 2011. In response to our sales efforts and tightening market conditions, we established a general inventory reserve in the first quarter of 2012 to provide us with the flexibility to lower our selling price for Array products in certain circumstances. Operating Expenses Selling, general and administrative (SG&A) expenses were approximately $1, 488, 000 for the quarter ended March 31, 2012 as compared to approximately $1, 602, 000 for the same period in 2011, a decrease of approximately $115, 000, or 7%. SG&A expenses decreased in the first quarter of 2012 due to lower employee compensation costs of approximately $112, 000 and lower stock-based compensation expense of approximately $47, 000. Research and development costs were approximately $197, 000 during the three months ended March 31, 2012 and were flat as compared to the same period in 2011. Net Loss Net loss for the three months ended March 31, 2012 and 2011 was approximately $1, 771, 000 and $1, 329, 000, respectively, including income from discontinued operations related to the Legacy Commercial and Pool Lighting Businesses of approximately $1, 000 and $5, 000 for the three months ended March 31, 2012 and 2011, respectively. Basic and diluted loss per common share was $0.11 and $0.08 for the three months ended March 31, 2012 and 2011, respectively. Basic and diluted loss per common share from continuing operations was $0.11 and $0.08 for the three months ended March 31, 2012 and 2011, respectively. Basic and diluted loss per common share from discontinued operations was $0.00 for the three months ended March 31, 2012 and 2011. We expect continuing losses in 2012, further eroding our cash position. In the event that we are unable to successfully manage our costs and expenses and raise additional capital through debt or equity financing or the liquidation or divestiture of assets or businesses, these conditions could significantly impair our ability to fund future operations. On April 30, 2012, we announced that we are exploring strategic alternatives available to us, including a possible sale of the company. However, we can make no assurances and there is uncertainty regarding our ability to conclude transactions necessary for us to maintain liquidity sufficient to operate our business effectively over at least the next twelve months. Cash and Recent Activities As of March 31, 2012, we had cash and cash equivalents of $1, 915, 000. Our long term debt consists of convertible promissory notes issued in exchange for our preferred stock in December 2009. These notes have a principal amount of $2.4 million, provided for interest at 1% per annum, were originally to mature three years from the date of issuance and are convertible into shares of common stock at a fixed conversion price of $5.33. On February 28, 2012, our company and the holders of the notes amended the notes. As of the amendment date, the notes bear interest at 10% per annum and mature on June 30, 2013. Interest on the outstanding principal amount of the notes will be due and payable on the maturity date. The notes remain convertible into 450, 281 shares of common stock at a fixed conversion price of $5.33. Source: PR Newswire