- Revenue of $26.4M, 36% Gross
Margin and ($0.8)M Adjusted
EBITDA
- Order Backlog expansion to $283.3M at June 30,
2018
VANCOUVER, Aug. 1, 2018 /CNW/ - Ballard Power Systems
(NASDAQ: BLDP; TSX: BLDP) today announced consolidated financial
results for the second quarter ended June
30, 2018. 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, "Financial results and new contract bookings for Q2 and
year-to-date are consistent with the type of first half to the year
we had expected. We delivered Q2 revenue of $26.4 million, gross margin of 36% and Adjusted
EBITDA of ($0.8) million. We are
excited to have ended the quarter with a record Order Backlog of
$283.3 million."
Mr. MacEwen also noted, "The global megatrend of electrification
of propulsion systems is accelerating. This megatrend is driving
growing interest in fuel cell electric vehicles, or FCEVs, for
transportation applications where long range, rapid refueling,
heavy payload and route flexibility are customer requirements.
Interest and customer engagement continues to build in heavy-duty
motive applications, including bus, truck, rail and marine, along
with automotive, material handling and unmanned vehicle
applications. During Q2, we were particularly excited with the
long-term extension, through to August
2022, of our HyMotion program with AUDI AG, in support of its automotive fuel cell
strategy and deployment plans."
Mr. MacEwen concluded, "As we look out to 2019 and beyond, and
to our pathway to profitability, we expect strong growth in FCEV
demonstration programs and commercial scaling in certain heavy and
medium duty applications in China,
Europe and the United States. With continued investment
in technology, products, customer engagement and our brand, we see
Ballard having a leading position in these large and growing
addressable markets."
Q2 2018 Financial Highlights
(all comparisons are to Q2 2017 unless otherwise
noted)
- Revenue was $26.4 million, flat
on a year-over-year basis, reflecting growth in Power Products,
offset by a decline in Technology Solutions due primarily to the
strong contribution in Q2 2017 from one-time technology transfer
and related agreements with the company's joint venture in
China.
- The Power Products platform generated revenue of $17.8 million, an increase of 18%:
-
- Heavy Duty Motive revenue was $13.3
million, an increase of 9% related primarily to increased
product shipments to China,
Europe and North America;
- The Portable Power business generated $2.4 million, an increase of 170% due to Power
Manager product orders from military customers;
- Material Handling revenue was $1.7
million, a decline of 13% primarily due to the continued
in-housing of stack supply by a key customer, combined with lower
average selling price resulting from a shift in product mix;
and
- Telecom Backup Power revenue was $0.4
million, an increase of $0.3
million resulting primarily from sales in Europe for a variety of backup power
installations.
- The Technology Solutions platform generated revenue of
$8.6 million, a decrease of 24% due
primarily to the strong contribution in Q2 2017 from one-time
technology transfer and related agreements with the company's joint
venture in China, partially offset
by increases in amounts earned from other programs.
- Gross margin was 36%, a 1-point improvement reflecting revenue
mix.
- Cash operating costs2 were $10.5 million, an increase of 24% primarily
attributable to higher research and product development
expenses.
- Adjusted EBITDA2 was ($0.8)
million in Q2, a decline of 180% or $1.8 million, primarily driven by higher
operating costs.
- Net loss was ($4.3) million, a
decline of $3.1 million.
- Net loss per share was ($0.02)
compared to ($0.01) in Q2 2017.
- Adjusted net loss2 was ($4.3)
million, a decline of $3.9
million.
- Adjusted net loss per share2 was ($0.02) compared to ($0.00) in Q2 2017.
- Cash used by operating activities was ($16.9) million, a decline of $18.7 million reflecting cash operating loss of
($1.6) million and use in working
capital of ($15.3) million, largely
associated with an increase in accounts receivable and increased
inventory to support expected deliveries in the second half of this
year.
- Cash reserves were $35.2 million
at June 30, a decrease of 48% from
the end of Q2 2017 and a decrease of 33% from the end of the prior
quarter, primarily due to an increase in working capital in the
quarter.
- During Q2 Ballard received $87.7
million in new orders and also delivered orders valued at
$26.4 million, thereby significantly
increasing Order Backlog from $222.0
million in the prior quarter, to $283.3 million at end-Q2. The 12-month Order Book
also increased from $89.0 million in
the prior quarter, to $96.0 million
at end-Q2.
Q2 2018 Highlights
Bus
- Received a purchase order from Van Hool NV for 40
FCveloCity®-HD modules to power buses planned for
deployment in Germany under the
Joint Initiative for hydrogen Vehicles across Europe (JIVE) funding program.
- Subsequent to the quarter, announced that El Dorado National's
40-foot Axess fuel cell bus, powered by Ballard's
FCveloCity®-HD module, successfully completed testing at
The Altoona Bus Research and Testing Center in Pennsylvania under a program established by
the Federal Transit Administration (FTA), making them ready for
large-scale deployments under FTA funding.
Marine
- Signed a Memorandum of Understanding with ABB to undertake
collaboration activities toward the development of megawatt (MW)
scale proton exchange membrane fuel cell power systems for the
marine market, with an initial focus on the cruise ship
segment.
- Ballard Power Systems Europe became a member of a consortium
that has received funding to design and build HySeas III,
the world's first sea-going renewables-powered car and passenger
ferry. Operation of the ferry is planned in the Orkney Archipelago,
located off the northeastern coast of Scotland.
- Two FCveloCity®-MD modules were successfully
integrated and tested in a hybrid marine application by a
consortium including Yanmar Co. Ltd. as part of a program to
develop safety guidelines for hydrogen fuel cell-powered boats
operating in Japan's restricted
coastal waters. The modules were previously provided to Yanmar by
Toyota Tsusho Corporation under a Distribution Agreement with
Ballard.
Automotive
- Signed a 3½-year extension to the long-term Technology
Solutions contract with AUDI AG,
part of the Volkswagen Group, extending the HyMotion program from
March 2019 to August 2022. The aggregate value of the contract
extension, which supports AUDI AG
through its small series production launch, is expected to be
C$80-130 million (US$62-100 million).
Material Handling
- Signed a multi-year Master Supply Agreement with Hyster-Yale
Group encompassing the supply of minimum annual volumes of
FCgen®-1020 air-cooled fuel cell stacks for use in
powering Class-3 forklift trucks, as well as support on the design
of a fuel cell electric propulsion system to power these lift
trucks.
Unmanned Vehicles
- Ballard's subsidiary, Protonex, received purchase orders from
the U.S. Navy for a total of 13 fuel cell propulsion systems for
unmanned aerial vehicle (UAV) or drone platforms, with deliveries
expected to occur in 2018.
- Announced a Protonex collaboration program with Cellula
Robotics to demonstrate a fuel cell for long range autonomous
underwater vehicles, funded by an award on behalf of Canada's Department of National Defence.
Power Manager
- Protonex received a $1.0 million
order for the supply of SPM-622 Power Manager Kits to support U.S.
Army brigades deploying overseas.
Other
- Subsequent to Q2, acquired certain strategic assets of
Automotive Fuel Cell Cooperation Corporation (AFCC), a private
company owned by Daimler AG and Ford Motor Company, enabling
Ballard to efficiently and rapidly accelerate production growth
objectives.
- Toyota Tsusho Corporation sold 5 FCgen®-H2PM backup
power systems under its Distribution Agreement with Ballard, to be
used as part of Japan's renewable
emergency power system installed under the "Soma Revitalization
Smart Community Construction Project".
- All items were approved by shareholders at the June 6th Annual General Meeting. Mr.
James Roche was subsequently
appointed by the company's board of directors to the role of
Chairman, succeeding Mr. Ian Bourne.
Consistent with board term limits, Mr. Bourne did not stand for
re-election as a director.
Q2 2018 Financial Summary
|
|
|
(Millions of U.S.
dollars)
|
Three months ended June
30,
|
Six months ended June 30,
|
|
2018
|
2017
|
% Change
|
2018
|
2017
|
% Change
|
GROWTH
|
|
|
|
|
|
|
Fuel Cell Products
& Services Revenue:1
|
|
|
|
|
|
|
|
Heavy Duty
Motive
|
$13.3
|
$12.2
|
9%
|
$22.6
|
$19.4
|
17%
|
|
Portable
Power
|
$2.4
|
$0.9
|
170%
|
$4.8
|
$2.1
|
129%
|
|
Material
Handling
|
$1.7
|
$2.0
|
-13%
|
$2.1
|
$4.2
|
-49%
|
|
Backup
Power
|
$0.4
|
$0.1
|
248%
|
$0.7
|
$0.7
|
10%
|
|
Sub-Total
|
$17.8
|
$15.2
|
18%
|
$30.2
|
26.3
|
15%
|
|
Technology
Solutions
|
$8.6
|
$11.3
|
-24%
|
$16.3
|
$22.9
|
-29%
|
Total Fuel Cell
Products & Services Revenue
|
$26.4
|
$26.5
|
0%
|
$46.5
|
$49.2
|
-5%
|
PROFITABILITY
|
|
|
|
|
|
|
Gross Margin
$
|
$9.4
|
$9.3
|
2%
|
$16.0
|
$18.8
|
-15%
|
Gross Margin
%
|
36%
|
35%
|
1-point
|
34%
|
38%
|
-4-points
|
Operating
Expenses
|
$12.5
|
$10.2
|
23%
|
$25.2
|
$22.2
|
14%
|
Cash Operating
Costs2
|
$10.5
|
$8.5
|
24%
|
$21.2
|
$18.4
|
15%
|
Adjusted
EBITDA2
|
($0.8)
|
$1.0
|
-180%
|
($4.6)
|
$0.4
|
-1,403%
|
Net Income
(Loss)
|
($4.3)
|
($1.2)
|
-260%
|
($9.8)
|
($4.1)
|
-138%
|
Earnings Per
Share
|
($0.02)
|
($0.01)
|
-252%
|
($0.06)
|
($0.02)
|
-154%
|
Adjusted Net Income
(Loss)2
|
($4.3)
|
($0.4)
|
-1,068%
|
($9.8)
|
($3.3)
|
-197%
|
Adjusted Net Loss Per
Share2
|
($0.02)
|
($0.00)
|
-1,050%
|
($0.06)
|
($0.02)
|
-218%
|
CASH
|
|
|
|
|
|
|
Cash Provided (Used)
by Operating Activities:
|
|
|
|
|
|
|
|
Cash Operating Income
(Loss)
|
($1.6)
|
$1.4
|
-216%
|
($4.4)
|
$0.2
|
-2,086%
|
|
Working Capital
Changes
|
($15.3)
|
$0.4
|
-4,072%
|
($19.7)
|
($1.5)
|
-1,199%
|
|
Cash Provided (Used)
By Operating Activities
|
($16.9)
|
$1.8
|
-1,040%
|
($24.1)
|
($1.3)
|
-1,764%
|
|
Cash
Reserves
|
$35.2
|
$68.1
|
-48%
|
|
|
|
For a more detailed discussion of Ballard Power Systems' second
quarter 2018 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, August 2, 2018 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review second quarter
2018 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) 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 PEM fuel cell products for our
power product markets of Heavy Duty Motive (consisting of bus,
truck, rail and marine applications), Portable Power, 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, 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, unrealized
gains or losses on foreign exchange contracts, 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, and amortization of
intangible assets. Adjusted EBITDA adjusts EBITDA for stock based
compensation expense, transactional gains and losses, asset
impairment charges, unrealized gains or losses on foreign exchange
contracts, finance and other income, and acquisition costs.
Adjusted Net Income (Loss) measures net income (loss) attributable
to Ballard from continuing operations, excluding transactional
gains and losses, asset impairment charges, and acquisition
costs.
|
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SOURCE Ballard Power Systems Inc.