- Record quarterly revenue of $41.9M in Q4
- $106.3M full year revenue exceeds
2019 outlook
- $147.8M cash reserves at
year-end
- 2020 outlook for revenue of approximately $130 million, supported by 12-month order book of
$110.3M at year-end 2019
VANCOUVER, March 4, 2020 /CNW/ - Ballard Power Systems
(NASDAQ: BLDP; TSX: BLDP) today announced consolidated financial
results for the fourth quarter and full year ended December 31, 2019. All amounts are in U.S.
dollars unless otherwise noted and have been prepared in accordance
with International Financial Reporting Standards (IFRS).
Randy MacEwen, President and CEO
said, "We closed out 2019 with high activity levels, record
quarterly revenue of $41.9 million in
Q4, and full year revenue of $106.3
million, exceeding our full year outlook. Gross margin for
the full year was 21%, Adjusted EBITDA was ($28.2) million and year-end cash reserves were
$147.8 million. In 2019 Ballard also
delivered continued progress in the execution of our strategy: we
launched our next-generation LCS fuel cell stack and
FCmoveTM power module, offering lower cost and
enhanced performance; we received purchase orders for fuel cell
products from the Weichai-Ballard joint venture in China, with construction of the joint venture
facility moving toward commissioning by mid-year 2020; we announced
our membership in the H2Bus Consortium in Europe as well as the creation of a Marine
Center of Excellence at our Denmark facility."
Mr. MacEwen continued, "In 2019 the hydrogen and fuel cell
industry experienced remarkable momentum. A total of 18 countries,
representing 70% of global GDP, announced hydrogen and fuel cell
roadmaps. Major mobility players, including Weichai, Bosch,
Cummins, Faurecia, Michelin, CNH, Hyundai and others, committed to
significant investments in fuel cells. There is growing consensus
in the financial community regarding a reallocation of capital as a
direct result of global climate change. And, deployments of fuel
cell electric buses and trucks also increased significantly in
2019, led by China."
Mr. MacEwen added, "I believe there is now a consolidated
industry view that the most attractive near-term markets for fuel
cell electric vehicles, or FCEVs, are in Medium- and Heavy-Duty
Motive use cases that feature heavy payload, long daily range and a
need for fast refuelling. Two important studies released in
January 2020 underscore the
expectation that FCEVs will be the most competitive zero-emission
option from a total-cost-of-ownership perspective for numerous
medium and heavy vehicle use cases, as well as the most
environmentally attractive: a Hydrogen Council report, prepared in
conjunction with McKinsey, entitled "Path to Hydrogen
Competitiveness: A cost perspective"; and a white paper
prepared jointly by Deloitte China
and Ballard entitled "Fueling
the Future of Mobility: Hydrogen and fuel cell solutions for
transportation"."
Mr. MacEwen concluded, "Looking ahead to 2020, we anticipate
total revenue of approximately $130
million as we address Medium- and Heavy-Duty Motive demand
in key global markets. Ballard
will continue to invest in world-leading technology and product
development, including product cost reduction, while also
completing our planned expansion in MEA production capacity at
Ballard's Vancouver facility. We will also invest in our
Weichai-Ballard joint venture in China, as this facility transitions from
construction to operation. In 2020, we will deepen our exposure to
the European market as signals further strengthen to decarbonize
mobility with hydrogen fuel cell solutions. We anticipate
significant longer-term growth in China, Europe
and California, setting the stage
for attractive returns for Ballard
and our shareholders."
Q4 2019 Financial Highlights
(all comparisons are
to Q4 2018 unless otherwise noted)
- Total revenue was $41.9 million,
a 47% year-over-year increase and a record quarter.
-
- Power Products revenue was $25.5
million, an increase of 63% reflecting increases in the
shipment of products for Heavy Duty Motive applications, as well as
an increase in Backup Power product shipments, partially offset by
decreases in Material Handling and Portable Power/UAV.
- Technology Solutions revenue was $16.4
million, a 27% increase due primarily to the Weichai-Ballard
joint venture (JV) technology transfer program.
- Gross margin was 21%, down 4-points to $8.6 million, due primarily to a shift in revenue
and product mix.
- Cash operating costs2 were $13.6 million, an increase of 21%, due primarily
to higher program development and engineering expenses incurred by
Ballard Power Systems Europe A/S to support marine market
applications.
- Adjusted EBITDA2 declined 43% to ($7.4) million, due primarily to higher equity in
loss of investment in joint ventures and associates.
- Net loss3 was ($10.3)
million or ($0.04) per share,
improvements of 10% and 21%, respectively, driven primarily by the
decrease in loss on sale of assets and by higher finance and other
income. Net loss in the fourth quarter of 2018 also included a loss
on sale of assets of ($4.0) million,
related to the divestiture of Power Manager
- Adjusted net loss2 was ($10.3) million or ($0.04) per share, declines of 37% and 22%,
respectively.
- Cash provided by operating activities was $4.1 million, an improvement of 2,081%,
reflecting cash operating loss of ($3.9)
million, more than offset by net working capital changes of
$8.0 million largely related to lower
inventory to satisfy Q4 shipments.
Full Year 2019 Financial Highlights
(all
comparisons are to full year 2018 unless otherwise noted)
- Total revenue was $106.3 million,
a 10% year-over-year increase.
-
- Power Products revenue was $49.7
million, down 13% due primarily to lower MEA shipments to
Guangdong Synergy Ballard Hydrogen Power Co., Ltd. ("Synergy
JVCo"), partially offset by increased shipments of a variety of
fuel cell products primarily to customers in China and Europe.
- Technology Solutions revenue was $56.6
million, an increase of 43% due primarily to the
Weichai-Ballard JV technology transfer program.
- Gross margin was 21%, down 10-points to $22.6 million, due primarily to a shift in
revenue and product mix, including lower shipments of MEAs to
Synergy JVCo and lower Portable Power/UAV revenues resulting from
the disposition of Power Manager assets in Q4 2018.
- Cash operating costs2 were $40.6 million, a decrease of 6% due primarily to
lower expenses as a result of the disposition of Power Manager
assets and associated personnel reduction in Q4 2018.
- Adjusted EBITDA2 declined to ($28.2) million, due primarily to higher equity
in loss of investment in joint venture and associates attributed to
the ongoing establishment of Weichai-Ballard JV operations.
- Net loss3 increased to ($39.1) million or ($0.17) per share, declines of 43% and 14%,
respectively. The increase in net loss was driven primarily by the
increase in Adjusted EBITDA loss including higher equity in loss of
investment in joint venture and associates.
- Adjusted net loss2 was ($37.1) million or ($0.16) per share, declines of 59% and 27%,
respectively.
- Cash used in operating activities was ($14.2) million, an improvement of 55% reflecting
cash operating loss of ($14.1)
million and net working capital changes of ($0.1) million.
- Cash reserves were $147.8 million
at December 31, $44.4 million lower than at the end of 2018.
- The Order Backlog at end-2019 was $178.7
million, down from $199.6
million at end-Q3, reflecting $41.9
million in shipments and $21.0
million in new orders in Q4. At end-2019 the 12-month Order
Book was $110.3 million, a decrease
of $13.3 million from end-Q3, and an
increase of $41.3 million from
$69.0 million at end-2018.
2020 Outlook
Ballard intends to maintain
focus throughout 2020 on Heavy- and Medium-Duty Motive applications
– including bus, commercial truck, train and marine segments – to
increase penetration in the key markets of China, Europe and California. We will continue to invest in
next-generation products and technology, including MEAs, stacks,
modules, and system integration, as well as advanced manufacturing
processes, technologies and equipment. We will also continue to
invest in technology and product cost reduction and in production
capacity expansion.
At the present time the Company's 2020 outlook does not reflect
any material impact of the coronavirus disease (COVID-19). It is
currently too early to accurately project any impact, since the
duration and scope of the outbreak is not yet known with any
certainty. If the outbreak continues for an extended period of
time, Ballard and the
Weichai-Ballard JV may experience supply chain disruptions, a
decline in sales activities, and reductions in operations and
workforce.
Consistent with the Company's practice, and in view of the early
stage of hydrogen fuel cell market development and adoption,
Ballard is not providing specific
financial performance guidance for 2020. However, directionally the
Company anticipates total revenue of approximately $130 million in 2020. This growth is expected to
primarily result from commercial progress in the Heavy-Duty Motive
segment, underpinned by increasing demand for FCEVs in China and Europe. Ballard's 12-month Order Book of $110.3 million at the end of 2019, together with
a robust sales pipeline, establishes a strong foundation for our
projected full year 2020 revenue outlook.
In China, the Company continues to expect the Weichai-Ballard JV
facility to be commissioned and operating by mid-year 2020.
Ballard anticipates delivery of
membrane electrode assemblies to the Weichai-Ballard JV for the
production of next-generation LCS fuel cell stacks and
FCmoveTM fuel cell modules. During 2020 the Company
has a commitment to make contributions totaling approximately
$20 million towards its pro rata
ownership share of the Weichai-Ballard JV. This is in addition to
$20.9 million contributed in 2019 and
$14.6 million contributed in 2018, as
part of Ballard's total capital
commitment of approximately $78
million. The Company also expects to report equity losses of
approximately $10-15 million in
connection with the Weichai-Ballard JV in 2020.
In Europe, during 2020 Ballard
plans to continue execution of its automotive program with Audi,
and to deliver a significant number of modules to support
deployments of Fuel Cell Electric Buses (FCEBs) in a number of
countries. The Company also expects increased market activity for
FCEBs, which can be expected to result in additional module
purchase orders.
Within North America in 2020,
Ballard expects continued market
activity in California for FCEBs
and fuel cell-powered trucks, which can be expected to result in
additional module purchase orders. In addition, the Company expects
a volume contraction of fuel cell stack sales for material handling
applications.
Technology Solutions revenue is expected to be relatively flat
in 2020, compared to 2019, primarily reflecting ongoing work on our
technology transfer programs with Audi and Weichai-Ballard JV. In
addition to the Audi and Weichai-Ballard JV programs, Technology
Solutions engineering services activity is expected with existing
and new customers in a variety of markets.
Ballard intends to establish an
At-The-Market equity program ("ATM Program") and to issue up to
$75 million of common shares from
treasury to the public from time to time at the Company's
discretion, subject to favorable market conditions. The ATM Program
will be conducted under the Company's existing $150 million Base Shelf Prospectus and will be
used to fund growth and strategic opportunities.
Q4 & Full Year 2019 Financial Summary
|
|
|
(Millions of U.S.
dollars)
|
Three months
ended December 31,
|
Twelve months
ended December 31,
|
|
2019
|
2018
|
% Change
|
2019
|
2018
|
% Change
|
REVENUE
|
|
|
|
|
|
|
Fuel Cell Products
& Services:1
|
|
|
|
|
|
|
Heavy Duty
Motive
|
$21.4
|
$10.6
|
101%
|
$35.4
|
$39.5
|
-10%
|
Portable
Power/UAV
|
$0.2
|
$0.4
|
-66%
|
$0.6
|
$7.1
|
-92%
|
Material
Handling
|
$1.9
|
$3.2
|
-40%
|
$10.7
|
$8.0
|
34%
|
Backup
Power
|
$2.0
|
$1.4
|
47%
|
$3.0
|
$2.4
|
23%
|
Sub-Total
|
$25.5
|
$15.6
|
63%
|
$49.7
|
$57.0
|
-13%
|
Technology
Solutions
|
$16.4
|
$12.9
|
27%
|
$56.6
|
$39.6
|
43%
|
Total Fuel Cell
Products & Services
Revenue
|
$41.9
|
$28.5
|
47%
|
$106.3
|
$96.6
|
10%
|
PROFITABILITY
Gross Margin
$
|
$8.6
|
$7.2
|
20%
|
$22.6
|
$29.7
|
-24%
|
Gross Margin
%
|
21%
|
25%
|
-4-points
|
21%
|
31%
|
-10-points
|
Operating
Expenses
|
$16.1
|
$13.4
|
20%
|
$50.0
|
$50.5
|
-1%
|
Cash Operating
Costs2
|
$13.6
|
$11.2
|
21%
|
$40.6
|
$43.0
|
-6%
|
Equity gain (loss) in
JV & Associates
|
($3.0)
|
($1.1)
|
-173%
|
($11.1)
|
($1.2)
|
-825%
|
Adjusted
EBITDA2
|
($7.4)
|
($5.2)
|
-43%
|
($28.2)
|
($13.5)
|
-109%
|
Net Income
(Loss)
|
($10.3)
|
($11.5)
|
10%
|
($39.1)
|
($27.3)
|
-43%
|
Earnings Per
Share
|
($0.04)
|
($0.06)
|
21%
|
($0.17)
|
($0.15)
|
-14%
|
Adjusted Net
Loss2
|
($10.3)
|
($7.5)
|
-37%
|
($37.1)
|
($23.4)
|
-59%
|
Adjusted Net Loss Per
Share2
|
($0.04)
|
($0.04)
|
-22%
|
($0.16)
|
($0.13)
|
-27%
|
CASH
|
|
|
|
|
|
|
Cash provided by
(used in) Operating
Activities:
|
|
|
|
|
|
|
Cash Operating Income
(Loss)
|
($3.9)
|
($4.4)
|
11%
|
($14.1)
|
($14.4)
|
2%
|
Working Capital
Changes
|
$8.0
|
$4.6
|
74%
|
($0.1)
|
($17.3)
|
99%
|
Cash provided by (used
in) Operating
Activities
|
$4.1
|
$0.2
|
2,081%
|
($14.2)
|
($31.7)
|
55%
|
Cash
Reserves
|
$147.8
|
$192.2
|
-23%
|
|
|
|
For a more detailed discussion of Ballard Power Systems Q4 and
full year 2019 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
Thursday, March 5, 2020 at
8:00 a.m. PT (11:00 a.m. ET) to review Q4 and full year 2019
operating results and Outlook for 2020. The live call can be
accessed by dialing +1.604.638.5340. Alternatively, a live audio
and PowerPoint 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 'Earnings, Interviews and Presentations' area of
the 'Investors' section of Ballard's website
(www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems'
(NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for
a sustainable planet. Ballard
zero-emission PEM fuel cells are enabling electrification of
mobility, including buses, commercial trucks, trains, marine
vessels, passenger cars, forklift trucks and UAVs. 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 product sales and
market adoption of fuel cell electric vehicles. 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 PEM fuel cell products for our
power product markets of Heavy Duty Motive (consisting of bus,
truck, rail and marine applications), Portable Power/UAV, Material
Handling and Backup Power, as well as the delivery of Technology
Solutions, including engineering services, technology transfer 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 Adjusted Net Income (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 Adjusted Net Income (Loss) assist investors in assessing
Ballard's operating performance. These measures should be used in
addition to, and not as a substitute for, operating expenses, net
income (loss), 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
Adjusted Net Income (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, the impact of unrealized gains or losses on foreign exchange
contracts, and financing charges. EBITDA measures net loss
excluding finance expense, income taxes, depreciation of property,
plant and equipment, and amortization of intangible assets.
Adjusted EBITDA adjusts EBITDA for stock based compensation
expense, transactional gains and losses, asset impairment charges,
finance and other income, the impact of unrealized gains or losses
on foreign exchange contracts, and acquisition costs. Adjusted Net
Income (Loss) measures net income (loss) excluding transactional
gains and losses, asset impairment charges, and acquisition
costs.
|
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SOURCE Ballard Power Systems Inc.