Ballard announces Q2 2010 results

Ballard Power Systems announced its financial results for the second quarter ended June 30, 2010 today. All amounts are consolidated to include Dantherm Power's results and are in U.S. dollars, unless otherwise noted.

John Sheridan, President and CEO said "Ballard's second quarter results are in line with our expectations and full-year guidance. Revenue of $15.5 million represents growth of 31% over the first quarter and 30% on a year-to-date basis. Our operating expense and cash flow improved significantly over last year and, in addition, we further augmented cash reserves by $5 million in July."

    Second Quarter 2010 Highlights
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    Growth:
    -  Revenue of $15.5 million, for a total of $27.4 million on a year-to-
       date basis, representing growth of 19% and 30%, respectively.
    -  Fuel cell product shipments of 651 units, representing growth of 46%
       over the same period last year. Year-to-date fuel cell product
       shipments of 979 units, representing growth of 54% over the same
       period in 2009.
    -  Twelve-month rolling order book of $31.0 million, an increase of $2.0
       million over the previous quarter.
    -  Deployment of Dantherm Power backup power systems in the Wind Mobile
       telecom network, meeting a 2010 growth milestone.
    -  Signing of new supply agreement with Plug Power on July 15 through
       2014, including mutual exclusivity in North America.
    -  Completion of the factory acceptance test of a utility-scale
       distributed generation system for FirstEnergy Generation Corp.

    Profitability:
    -  Operating expense of $12.2 million. Excluding Dantherm Power,
       operating expense of $10.2 million represents an improvement of 21%
       year-over-year, despite the negative impact of a 14% stronger Canadian
       dollar.
    -  EBITDA(1) of ($9.3) million. A year-over-year comparison is not
       meaningful given the one-time gain of $10.8 million in 2009 resulting
       from discontinuation of EBARA-Ballard Corporation's operations.
    -  Net loss of $10.9 million or $0.13 per share. Excluding Dantherm
       Power, net loss is $9.8 million or $0.12 per share.
    -  Cash flow from operations of ($12.1) million. Excluding Dantherm
       Power, cash flow from operations was ($10.1) million, an improvement
       of 34% year-over-year. The company notes that year-to-date cash flow
       from operations of ($21.6) million, excluding Dantherm Power, includes
       over $10 million in non-trend items, specifically bonuses, severance
       and inventory buildup.
    -  Cash reserves at the end of second quarter of $73.6 million. Cash
       reserves were further augmented by $5 million on July 9, 2010 through
       the monetization of the remaining tranche of Ballard's Share Purchase
       Agreement with Ford.

    Guidance:
    -  Ballard expects strong revenue in the second half of the year and
       reconfirms full-year guidance of growth in excess of 35%.
    -  Ballard continues to expect to achieve its goal of improving cash flow
       from operations by 30% for the full year, excluding the cash flow
       impact of Dantherm Power and a negative foreign exchange impact of
       approximately $4 million. However, timing impacts related to working
       capital requirements in support of increased sales activity in the
       second half of the year could result in increased pressures against
       this target.

    Revenue Breakdown:
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    (Millions of U.S.        Three months ended           Six months ended
     dollars)                      June 30,                   June 30,
                           2010     2009  % Change    2010     2009  % Change
    -------------------------------------------------------------------------
    Fuel Cell Products*  $6.4     $9.7      -34%   $11.4    $13.6      -16%
    Contract Automotive     3.0      0.9     +241%     4.6      2.8      +67%
    Material Products       6.1      2.5     +140%    11.4      4.8     +135%
    -------------------------------------------------------------------------
    Total Revenue         $15.5    $13.1      +19%   $27.4    $21.2      +30%
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    * The reduction in fuel cell product revenue over prior year is
        primarily due to $6 million bus revenue in the second quarter of
        2009 for the B.C. Transit 2010 Olympic fuel cell bus program.

    Product Shipments:
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                             Three months ended           Six months ended
                                   June 30,                   June 30,
                           2010     2009  % Change    2010     2009  % Change
    -------------------------------------------------------------------------
    Fuel Cell Products      651      445      +46%     979      635      +54%
    Material Handling       428       12   +3,467%     544       19   +2,763%
    Backup Power*         207      423      -51%     417      601      -31%
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    * The reduction in backup power shipments over prior year is primarily
        due to shipments of 368 hydrogen-based units to IdaTech, LLC for
        India.

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    Endnotes:
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    (1) EBITDA is a non-GAAP measure used to assist in assessing Ballard's
    financial performance and liquidity. Non-GAAP measures do not have any
    standardized meaning prescribed by GAAP and are therefore unlikely to be
    comparable to similar measures presented by other companies. EBITDA
    measures net loss after excluding interest expense, income tax expense,
    depreciation of property, plant and equipment, amortization of intangible
    assets, and goodwill impairment charges. EBITDA includes the impact
    attributable to Ballard's controlling interest in Dantherm Power. Ballard
    believes that EBITDA assists investors in assessing actual and future
    performance. For a reconciliation of EBITDA to the Consolidated Financial
    Statements, please refer to Ballard's Management's Discussion & Analysis,
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Source: Ballard Power Systems Inc.