Ballard Reports Second Quarter 2012 Results

15 Aug 2012

VANCOUVER, CANADA– Ballard Power Systems (NASDAQ: BLDP) (TSX: BLD) today [13 August 2012] announced its consolidated financial results for the second quarter ended June 30, 2012. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS). 

John Sheridan, President and CEO said, “Second quarter revenues were significantly below expectations, primarily due to zero bus module shipments and the absence of fuel cell stack shipments to IdaTech. Despite the lower level of revenue, continued progress was posted in the quarter for cash operating costs and Adjusted EBITDA.” He added, “Looking forward, we expect strong revenue growth in the second half of this year. Further, the Company remains committed to achieving profitability in 2013, and has taken actions since the end of the quarter to strengthen the top line with the IdaTech asset purchase, and bottom line with cost optimization actions.” 

Second Quarter 2012 Highlights

Growth

  • Decline in total revenue of $8.8 million to $10.3 million in Q2, and $10.6 million to $23.8 million year-to-date.
    • Fuel cell product revenue declined 24% in the quarter, but grew 4% year-to-date.
    • Material product revenue decreased 38% in Q2 and 35% year-to-date.
    • Wind down of contract automotive activity at the end of Q3 2011 had a negative impact of $4.6 million on Q2 revenue and $7.4 million year-to-date.
  • Fuel cell stack shipments were flat in Q2 at 815 units and increased 4% to 1,365 units year-to-date.
  • Twelve-month rolling order book of $54.4 million.
  • Recent commercial developments: 
    • Acquired key fuel cell assets from IdaTech, including its methanol backup power products, a license for related intellectual property as well as distribution agreements and customer contracts.
    • Announced a trial of Dantherm Power’s direct hydrogen fuel cell backup power systems in the China Mobile telecommunications network. 
    • Progressed to the second phase of a program to develop a methanol-fuelled home generator that can supplement the power grid in rural South Africa. The program is a joint undertaking with Anglo American Platinum Limited, which has also committed significant funding.
    • Signed engineering services contracts with leading aerospace and military customers, to support their fuel cell development work.

Path to Profitability

  • Gross margin decline of 2-points to 15% in Q2, driven by low product shipment volumes, despite continuing reductions in product costs. Gross margin improvement of 2-points to 19% year-to-date.
  • Cash operating cost1 improvement of 28% to $7.7 million in Q2 and 19% to $17.4 million year-to-date, consistent with the Company’s expectation for full year cash operating costs of approximately $30 million.
  • Adjusted EBITDA2 improvement of 12% to ($5.4) million in Q2 and 18% to ($11.1) million year-to-date.
  • Net income improvement of 23% to ($6.6) million or ($0.08) per share in Q2, and 21% to ($15.1) million or ($0.18) per share year-to-date.
  • Improvement in cash used by operating activities of 17% to $11.2 million in Q2, driven by lower working capital requirements of $1.5 million combined with reductions in cash operating losses of $0.9 million. On a year-to-date basis, cash used by operating activities improved 5% to $26.3 million.
  • Cash reserves of $24.6 million, or $15.2 million net of $9.4 million outstanding on the company’s bank operating line.

2012 Business Outlook 

Revenue 
While revenue results for Q2 were below expectations, the Company expects significant revenue growth in Q3 and Q4, led by increased activity in engineering services, bus and backup power markets. Shipments of backup power products are expected to be augmented by the recent acquisition of assets from IdaTech. Given this expectation for stronger revenue growth in the second half of the year, the Company has not updated its guidance – provided on June 18 – for revenue of approximately $85 million. 

Adjusted EBTIDA 
In Q3 and Q4 the Company expects higher revenue, a change in product mix, continued reductions in product cost along with gross margin improvement. Given these expectations, together with a lower expected trajectory for cash operating costs, the Company has not updated its guidance – provided on June 18 – for Adjusted EBITDA of approximately ($5) million. 

For Second Quarter 2012 financial highlights and conference call details please see the full press release.

 

Source: Ballard Power Systems


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