- $25.6M Revenue, 19% Gross Margin,
($7.7)M Adjusted EBITDA
- $361.7M cash reserves at end-Q3,
reflecting proceeds of ATM
VANCOUVER, BC, Nov. 5, 2020 /CNW/ - Ballard Power Systems
(NASDAQ: BLDP) (TSX: BLDP) today announced consolidated financial
results for the third quarter ended September 30, 2020. All amounts are in U.S.
dollars unless otherwise noted and have been prepared in accordance
with International Financial Reporting Standards (IFRS).
"While Ballard's employees and
operations have not been appreciably impacted by COVID-19 to this
point, as previously communicated, delays in end market deployments
and customer orders are nonetheless impacting our 2020 revenue and
results," said Randy MacEwen,
President and CEO. "In Q3, Ballard
delivered revenue of $25.6 million,
gross margin of 19% and ending cash reserves of $361.7 million."
Mr. MacEwen noted, "During our virtual Investor and Analyst
Day 2020 in September we reviewed details of the $130 billion annual total addressable engine
market for the key Heavy- and Medium- Duty Motive applications of
bus, truck, rail and marine, as well as our corporate strategy to
penetrate use cases requiring heavy payload, extended range and
rapid refueling. As a result, we see tremendous long-term revenue
growth potential, initially in the target geographies of
China, Europe and California."
Mr. MacEwen continued, "In China, the issuance of an updated policy
framework during the quarter is consistent with our expectation for
long-term government support of hydrogen and fuel cell electric
vehicles, where we are well positioned with our Weichai-Ballard
joint venture. In Europe, we have
now signed our previously announced collaboration agreement with
MAHLE, a leading international development partner and Tier 1
supplier to the commercial vehicle and automotive industry. This
agreement provides for the development and commercialization of
zero-emission fuel cell systems for primary propulsion power in
commercial trucks, initially in Europe. And, we have signed definitive
agreements with AUDI AG that provide
Ballard with the ability to use
the FCgen®-HPS fuel cell stack technology in all
markets, including trucks, where high-power density is a critical
requirement. Finally, our future collaboration with Honeywell
International, following its purchase of our UAV business,
positions us for exciting business opportunities in a range of
future urban air mobility and broader aerospace applications."
Mr. MacEwen concluded, "I would like to acknowledge the
important contribution made over the past 10-years in the CFO role
by Tony Guglielmin, who has
announced his intention to retire on March
31st, 2021, following completion and
certification of our 2020 audited financial results. Under Tony's
leadership, Ballard has made
tremendous progress in crystalizing and executing a market-leading
growth strategy underpinned by prudent financial management that
has protected and significantly enhanced shareholder value. Tony's
commitment to, and unwavering support of, Ballard's corporate direction will be missed.
We have retained a leading international executive search firm
and expect to have a new CFO in place, and an orderly
transition completed, by the end of Q1 2021."
Q3 2020 Financial Highlights
(all comparisons are
to Q3 2019 unless otherwise noted)
- Total revenue was $25.6 million
in the quarter, a year-over-year increase of 4% or $0.9 million, primarily the result of higher
shipments of Heavy-Duty Motive and Backup Power products.
- The Power Products platform generated revenue of $15.3 million in the quarter, an increase of 94%
or $7.4 million:
-
- Heavy Duty Motive revenue was $12.9
million, an increase of 161% or $7.9
million, due primarily to higher shipments of fuel cell
products, including MEAs, to China;
- Material Handling revenue was $1.4
million, a decrease of 49% or $1.4
million, primarily the result of lower fuel cell stack
shipments to Plug Power; and
- Backup Power revenue was $1.0
million, an increase of 540% or $0.8
million, due primarily to an increase in shipments of fuel
cell stacks to customers in Europe.
- The Technology Solutions platform generated revenue of
$10.3 million in the quarter, a
decrease of 39% or $6.5 million, due
primarily to decreased amounts earned on the Audi program, the
Weichai-Ballard joint venture technology transfer program, and the
Siemens development program.
- Gross margin was 19% in Q3, a decrease of 6-points due
primarily to a shift to a lower overall product margin and service
revenue mix, including the decline in Technology Solutions
revenue.
- Cash operating costs2 were $10.7 million in the quarter, a 21% increase
primarily attributable to increased expenditure on technology and
product development expenses related to work on next-generation
stacks and modules for bus, truck, rail and marine applications as
well as higher general and administrative expenses. The company has
increased and accelerated technology and product development
activities related to fuel cell stacks and modules for the
commercial truck market as well as activities focused on product
cost reduction.
- Adjusted EBITDA2 was ($7.7)
million, compared to ($6.8)
million in Q3 2019, primarily as a result of higher cash
operating costs.
- Net loss from continuing operations was ($11.2) million in the quarter, an increase of
20%.
- Net loss per share2 from continuing operations
was ($0.05), an increase of
14%.
- Cash used by operating activities was ($11.3) million, an increase of 18%, reflecting
cash operating loss of ($6.7) million
and use in working capital of ($4.6)
million.
- Cash reserves were $361.7 million
at September 30, 2020, an increase of
136% from the end of Q3 2019 and an increase of 112% from the end
of the prior quarter. Approximately $211.6
million of cash was raised in the quarter from an
At-The-Market Equity Program. Ballard also made a further capital
contribution of $6.6 million to the
Weichai-Ballard JV in the quarter.
- Order Backlog and 12-month Order Book have been adjusted to
reflect reduced scope of the program with Audi through to expected
completion in 2022. As of end-Q3 Order Backlog decreased from the
prior quarter to $128.1 million and
12-month Order Book decreased to $79.6
million.
![Ballard Reports Q3 2020 Results (CNW Group/Ballard Power Systems Inc.) Ballard Reports Q3 2020 Results (CNW Group/Ballard Power Systems Inc.)](https://mma.prnewswire.com/media/1328068/Ballard_Power_Systems_Inc__Ballard_Reports_Q3_2020_Results.jpg)
Q3 2020 Operating Highlights
- Announced an agreement to collaborate with MAHLE, a leading
international development partner and Tier 1 supplier to the
commercial vehicle and automotive industry, for the development and
commercialization of zero-emission fuel cell systems to provide
primary propulsion power in various classes of commercial trucks,
initially in Europe. Signed a
collaboration agreement subsequent to the quarter, on October 1st.
- Launched FCgen®-HPS in Q3 and signed definitive
agreements with Audi subsequent to the quarter, giving Ballard the right to use this high-performance
zero-emission PEM fuel cell stack in all applications. The stack
was designed by Ballard and can
provide propulsion for a range of Light-, Medium- and Heavy-Duty
vehicles in an industry-leading volumetric high-power density of
4.3 kilowatts per liter (4.3 kW/L), marking another power density
milestone for Ballard over the
company's decades of PEM fuel cell product innovation.
- Noted that China's government
announced a new official policy regarding Fuel Cell Electric
Vehicles (FCEVs), setting a framework for scaled adoption toward
the national goal of deploying 1-million FCEVs by 2030.
- Launched FCwaveTM, the industry's first fuel cell
module designed for primary propulsion power in marine vessels.
FCwaveTM is a 200-kilowatt modular unit that can be
scaled in series up to the multi-megawatt power level.
- Hosted a virtual Investor and Analyst Day 2020, during
which corporate executives provided a comprehensive review of
Ballard's strategy and progress
across a number of important commercial, technical and operational
areas, including details of a 6x expansion in MEA manufacturing
capacity by 2021 and plans for 70% cost reduction in fuel cell
stacks and modules by 2024.
- Named by the Toronto Stock Exchange (TSX) to the TSX30
for the second consecutive year for the company's 459% share price
appreciation over the period July
1st, 2017 to June
30th, 2020, the 2nd-largest
appreciation among all TSX-listed companies.
- Entered into an At-The-Market (ATM) Equity Distribution
Agreement and launched an ATM Program which added approximately net
$211.6 million to cash reserves in
the quarter, with an additional approximately net $32.7 million added subsequent to the quarter.
Together these transactions increased Ballard's cash reserves by approximately
$244.3 million.
- Subsequent to the quarter sold the Unmanned Aerial Vehicle
(UAV) business assets of Ballard's
subsidiary located in Southborough,
Massachusetts to Honeywell International.
Q3 2020 Financial Summary
(Millions of U.S.
dollars)
|
Three months
ended Sept. 30,
|
Nine months ended
Sept. 30,
|
|
2020
|
2019
|
% Change
|
2020
|
2019
|
% Change
|
REVENUE
|
|
|
|
|
|
|
Fuel Cell Products
& Services:1,2
|
|
|
|
|
|
|
Heavy Duty
Motive
|
$12.9
|
$5.0
|
161%
|
$35.8
|
$14.0
|
156%
|
Material
Handling
|
$1.4
|
$2.8
|
-49%
|
$4.3
|
$8.8
|
-51%
|
Backup
Power
|
$1.0
|
$0.2
|
540%
|
$3.5
|
$1.0
|
258%
|
Sub-Total
|
$15.3
|
$7.9
|
94%
|
$43.6
|
$23.8
|
83%
|
Technology
Solutions
|
$10.3
|
$16.8
|
-39%
|
$31.7
|
$40.2
|
-21%
|
Total Fuel Cell
Products & Services Revenue
|
$25.6
|
$24.7
|
4%
|
$75.3
|
$64.0
|
18%
|
PROFITABILITY
Gross Margin
$
|
$4.8
|
$6.2
|
-22%
|
$15.3
|
$13.8
|
11%
|
Gross Margin
%
|
19%
|
25%
|
-6-points
|
20%
|
22%
|
-2-points
|
Operating
Expenses
|
$12.6
|
$12.4
|
2%
|
$41.2
|
$32.2
|
28%
|
Cash Operating
Costs3
|
$10.7
|
$8.9
|
21%
|
$33.6
|
$25.7
|
31%
|
Equity gain (loss) in
JV & Associates
|
($2.8)
|
($3.2)
|
13%
|
($8.2)
|
($8.1)
|
-1%
|
Adjusted
EBITDA3
|
($7.7)
|
($6.8)
|
-13%
|
($24.5)
|
($19.6)
|
-25%
|
Net Income (Loss)
from continuing operations
|
($11.2)
|
($9.3)
|
-20%
|
($35.1)
|
($25.5)
|
-38%
|
Earnings (Loss) Per
Share from continuing operations
|
($0.05)
|
($0.04)
|
-14%
|
($0.14)
|
($0.11)
|
-30%
|
CASH
|
|
|
|
|
|
|
Cash provided by
(used in) Operating Activities:
|
|
|
|
|
|
|
Cash Operating Income
(Loss)
|
($6.7)
|
($2.8)
|
-139%
|
($19.1)
|
($10.2)
|
-87%
|
Working Capital
Changes
|
($4.6)
|
($6.8)
|
32%
|
($17.2)
|
($8.1)
|
-112%
|
Cash
provided by (used in)
Operating Activities
|
($11.3)
|
($9.6)
|
-18%
|
($36.3)
|
($18.3)
|
-98%
|
Cash
Reserves
|
$361.7
|
$153.4
|
136%
|
|
|
|
For a more detailed discussion of Ballard Power Systems' third
quarter 2020 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
Friday, November 6, 2020 at
8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review third quarter
2020 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 and presentation materials
will be archived in the 'Earnings, Interviews & 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 and forklift trucks. To learn more about
Ballard, please visit
www.ballard.com.
Important Cautions Regarding Forward-Looking
Statements
This release contains forward-looking statements
concerning the impact of the coronavirus pandemic on our business
and on the long-term demand for fuel cell products, projected
product orders and sales and product shipments, expected
manufacturing progress at the Weichai-Ballard joint venture, the
markets for our products and the effects of governmental
regulations on such markets, expected financial results and future
offerings of securities. 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), 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 The
UAV market has been classified as a discontinued operation in our
third quarter of 2020 consolidated condensed financial statements.
As such, the assets of the UAV market have been classified as
assets held for sale as of September 30, 2020. Furthermore, the
historic operating results of the UAV market for both 2020 and 2019
have been removed from continuing operating results and are instead
presented separately in the statement of comprehensive income as
income from discontinued operations.
|
|
3 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, 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 from
continuing operations 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) from continuing operations excluding transactional gains and
losses, asset impairment charges, and acquisition costs.
|
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