- 76% revenue growth and 20% gross margin underpinned by
strong 2016 order book and improved product mix
VANCOUVER, April 26, 2016 /CNW/ - Ballard Power Systems
(NASDAQ: BLDP; TSX: BLD) today announced its consolidated financial
results for the first quarter ended March
31, 2016. All amounts are in U.S. dollars unless otherwise
noted and have been prepared in accordance with International
Financial Reporting Standards (IFRS).
"Our previously disclosed record order book of $58 million for 2016 drove a 76% year-on-year
increase in Q1 revenue," said Randy
MacEwen, President and CEO. "This was comprised of a 111%
increase in revenue from our Power Products platform – including a
large gain in the Heavy Duty Motive market, given last year's
progress in China, along with the
addition of Portable Power revenue from our acquisition of Protonex
– and a 38% increase in revenue from our Technology Solutions
platform. A shift in product mix toward higher margin Heavy Duty
Motive, Technology Solutions and Portable Power products resulted
in gross margin of 20% in the quarter, a significant year-on-year
improvement."
Mr. MacEwen continued, "During the quarter, we implemented a
number of initiatives to reduce our operating cost base, primarily
related to Telecom Backup Power. These initiatives are expected to
yield annualized cost savings in excess of $4 million, lowering breakeven revenue by more
than $20 million. In addition, we
further fortified the balance sheet, ending the quarter with
$44.3 million in
cash."
Q1 2016 Financial Highlights
(all comparisons are
to Q1 2015 unless otherwise noted)
- Total revenue was $16.3 million
in the quarter, an increase of 76% resulting from growth in both
Power Products and Technology Solutions.
- The Power Products platform generated revenue of $10.2 million in the quarter, an increase of
111%:
- Heavy Duty Motive revenue was $3.3
million, an increase of 91% due to shipments of power
modules, kits and fuel cell stacks to fulfill orders in support of
clean energy buses in China;
- Revenue from the new Portable Power market was $2.6 million;
- Material Handling revenue was $4.1
million, an increase of 59% due to increased fuel cell stack
shipments to Plug Power; and
- Telecom Backup Power revenue was $0.3
million, a decrease of $0.3
million.
- The Technology Solutions platform generated revenue of
$6.1 million in the quarter, an
increase of 38% reflecting work on bus and tram programs in
China.
- Gross margin was 20% in Q1, an improvement of 9-points due to a
shift in product mix toward higher margin Heavy Duty Motive,
Technology Solutions and Portable Power products.
- Cash operating costs2 were $9.4 million in the quarter, a 19% increase
attributable to the inclusion of the Protonex subsidiary operating
costs.
- Adjusted EBITDA2 was ($7.2)
million in Q1, a decline of $2.1
million. This decline reflects the following items:
- Restructuring charges of $2.2
million in the quarter related to the previously announced
elimination of three executive management positions and reduction
of the Telecom Backup Power cost base; and
- Lower impairment recoveries on trade receivables by
$0.8 million in Q1 2016, compared to
Q1 20
Excluding these items, Adjusted EBITDA would have improved
$0.9 million compared to Q1
2015.
- Net income was ($10.0) million in
the quarter, a decline from $7.0
million in Q1 2015. This decline reflects the following
items:
- Gain of $14.2 million on the sale
of certain intellectual property assets to Volkswagen Group, which
were reflected in Q1 2015 results.
- Restructuring charges of $2.2
million in the quarter related to the previously announced
elimination of three executive management positions and reduction
of the Telecom Backup Power cost base;
- Lower impairment recoveries on trade receivables by
$0.8 million in Q1 2016, compared to
Q1 2015; and
- Asset impairment charges of $1.2
million associated with Telecom Backup Power.
- Normalized net income2 was ($9.0) million, a decline of $0.8 million.
- Normalized net loss per share2 was ($0.06) per share, flat year-over-year.
- Cash used by operating activities was ($7.5) million, an increase of 39%, reflecting
cash operating loss of ($7.4) million
and use in working capital of ($0.1)
million.
- Cash reserves were $44.3 million
at March 31, 2016, fortified in the
quarter by a net amount of $9.2
million related to the final payment from the 2015
intellectual property transaction with Volkswagen Group and by
$3.3 million received from Superior
Plus as a final payment associated with a 2008 restructuring
agreement.
Q1 2016 Sales and Operations Highlights
- Signed an Equipment Supply Agreement, valued at $12 million, with Guangdong Synergy Hydrogen
Power Technology Co., Ltd. ("Synergy") to provide
FCvelocityTM-9SSL fuel cell stacks for use in commercial
buses in China. Ballard expects to
deliver the stacks in 2016 and 2017 and Synergy will collaborate
with Dongfeng Xiangyangtouring Car Co., Ltd., part of Dongfeng
Motor Corporation, the largest manufacturer of commercial vehicles
in China.
- Received a follow-on purchase order from Nisshinbo Holdings
Inc., a new strategic investor in Ballard, for a further phase of a
Technology Solutions program related to the development of a
breakthrough catalyst technology intended to reduce the cost of
certain component parts in air-cooled fuel cells stacks.
- Received a purchase order from Ncell, part of the Telia Group
in Nepal, for 55
ElectraGenTM-ME Telecom Backup Power systems.
- Following the quarter, announced that Protonex – Ballard's
subsidiary – has begun delivery of PEM fuel cell propulsion modules
to Insitu, a wholly owned subsidiary of The Boeing Company, for use
in its ScanEagle unmanned aerial vehicle. Work related to the
integration of the Protonex fuel cell propulsion module into the
ScanEagle system is ongoing, with flight demonstrations planned for
the second half of 2016.
Q1 2016 Corporate Platform Highlights
- As previously announced, eliminated three C-level positions,
with related severance costs booked in the quarter.
- As previously announced, an ongoing review of strategic
alternatives for Telecom Backup Power is underway, including
discussions with potential partners or buyers. Cost reduction
initiatives were also implemented to reduce the cost structure of
this business, with related severance costs booked in the quarter.
Further details regarding the review of strategic alternatives will
be provided as they become available.
- The foregoing rationalization initiatives are expected to yield
annualized cost savings in excess of $4.0
million, lowering breakeven revenue by more than
$20 million.
Q1 2016 Financial Summary
|
|
(Millions of U.S.
dollars)
|
Three months ended March 31,
|
|
2016
|
2015
|
%
Improvement
|
REVENUE
|
|
|
|
Fuel Cell Products
& Services Revenue:1
|
|
|
|
|
Heavy Duty
Motive
|
3.3
|
1.7
|
91%
|
|
Portable
Power
|
2.6
|
N/A
|
N/A
|
|
Material
Handling
|
4.1
|
2.6
|
59%
|
|
Telecom Backup
Power
|
0.3
|
0.6
|
-45%
|
|
Sub-Total
|
$10.2
|
$4.8
|
111%
|
|
Technology
Solutions
|
6.1
|
4.4
|
38%
|
Total Fuel Cell
Products & Services
Revenue
|
$16.3
|
$9.3
|
76%
|
PROFITABILITY
|
|
|
|
Gross Margin
$
|
$3.3
|
$1.0
|
223%
|
Gross Margin
%
|
20%
|
11%
|
9-points
|
Cash Operating
Costs2
|
$9.4
|
$7.9
|
-19%
|
Adjusted
EBITDA2
|
($7.2)
|
($5.1)
|
-42%
|
Net Income
(Loss)3
|
($10.0)
|
$7.0
|
-242%
|
Earnings Per
Share
|
($0.06)
|
$0.05
|
-220%
|
Normalized Net
Loss2
|
($9.0)
|
($8.2)
|
-10%
|
Normalized Net Loss
per share2
|
($0.06)
|
($0.06)
|
8%
|
CASH
|
|
|
|
Cash Used by
Operating Activities:
|
|
|
|
|
Cash Operating Income
(Loss)
|
($7.4)
|
($5.8)
|
-27%
|
|
Working Capital
Changes
|
($0.1)
|
$0.4
|
-113%
|
|
Cash Used By
Operating Activities
|
($7.5)
|
($5.4)
|
-39%
|
Cash
Reserves
|
$44.3
|
$47.6
|
-7%
|
For a more detailed discussion of Ballard Power Systems' first
quarter 2016 results, please see the company's financial statements
and management's discussion & analysis, which are available at
www.ballard.com/investors, www.sedar.com and
www.sec.gov/edgar.shtml.
Conference Call
Ballard will hold a conference call on
Wednesday, April 27, 2016 at
8:00 a.m. PDT (11:00 a.m. EDT) to review its first quarter 2016
operating results. The live call can be accessed by dialing
+1.604.638.5340. Alternatively, a live audio and slide webcast can
be accessed through a link on Ballard's homepage (www.ballard.com).
Following the call, the audio webcast will be archived in the
Quarterly Results area of the Investors section of Ballard's
website (www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems
(NASDAQ: BLDP; TSX: BLD) provides clean energy products that reduce
customer costs and risks, and helps customers solve difficult
technical and business challenges in their fuel cell programs. To
learn more about Ballard, please visit www.ballard.com.
Important Cautions Regarding Forward-Looking
Statements
This release contains forward-looking statements
concerning projected revenue growth, product shipments, gross
margin, Adjusted EBITDA, cash operating expenses and product sales.
These forward-looking statements reflect Ballard's current
expectations as contemplated under section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Any such statements are based on Ballard's
assumptions relating to its financial forecasts and expectations
regarding its product development efforts, manufacturing capacity,
and market demand. For a detailed discussion of the factors and
assumptions that these statements are based upon, and factors that
could cause our actual results or outcomes to differ materially,
please refer to Ballard's most recent management discussion &
analysis. Other risks and uncertainties that may cause Ballard's
actual results to be materially different include general economic
and regulatory changes, detrimental reliance on third parties,
successfully achieving our business plans and achieving and
sustaining profitability. For a detailed discussion of these and
other risk factors that could affect Ballard's future performance,
please refer to Ballard's most recent Annual Information Form.
These forward-looking statements are provided to enable external
stakeholders to understand Ballard's expectations as at the
date of this release and may not be appropriate for other purposes.
Readers should not place undue reliance on these statements and
Ballard assumes no obligation to update or release any revisions to
them, other than as required under applicable legislation.
Endnotes:
1 We report our results
in the single operating segment of Fuel Cell Products and Services.
Our Fuel Cell Products and Services segment consists of the sale
and service of fuel cell products for our power product markets of
Heavy Duty Motive (consisting of bus and tram applications),
Portable Power, Material Handling and Telecom Backup Power, as well
as the delivery of Technology Solutions including engineering
services and the license and sale of our extensive intellectual
property portfolio and fundamental knowledge for a variety of fuel
cell applications.
2 Note that Cash Operating Costs, EBITDA, Adjusted
EBITDA and Normalized Net Loss, are non GAAP measures. Non GAAP
measures do not have any standardized meaning prescribed by GAAP
and therefore are unlikely to be comparable to similar measures
presented by other companies. Ballard believes that Cash Operating
Costs, EBITDA, Adjusted EBITDA and Normalized Net Loss assist
investors in assessing Ballard's operating performance and
liquidity. These measures should be used in addition to, and not as
a substitute for, net income, cash flows and other measures of
financial performance and liquidity reported in accordance with
GAAP. For a reconciliation of Cash Operating Costs, EBITDA,
Adjusted EBITDA and Normalized Net Loss to the Consolidated
Financial Statements, please refer to Ballard's Management's
Discussion & Analysis.
Cash Operating Costs measures operating expenses excluding stock
based compensation expense, depreciation and amortization,
impairment losses or recoveries on trade receivables, restructuring
charges, acquisition costs and financing charges. EBITDA measures
net loss attributable to Ballard Power Systems Inc. excluding
finance expense, income taxes, depreciation of property, plant and
equipment, amortization of intangible assets, and goodwill
impairment charges. Adjusted EBITDA adjusts EBITDA for stock based
compensation expense, transactional gains and losses, asset
impairment charges, finance and other income, and acquisition
costs. Normalized Net Loss measures net loss attributable to
Ballard from continuing operations, excluding impairment losses or
recoveries on trade receivables, transactional gains and losses,
asset impairment charges, and acquisition costs.
3 Includes gain of $14.2
million in the first quarter of 2015 on sale of intellectual
property to Volkswagen Group.
SOURCE Ballard Power Systems Inc.