- $16.0M Revenue, ($8.6) Adjusted EBITDA, $165.0M Cash Reserves
- Continued progress on execution of corporate strategy
VANCOUVER, May 1, 2019 /CNW/ - Ballard Power Systems
(NASDAQ: BLDP; TSX: BLDP) today announced consolidated financial
results for the first quarter ended March
31, 2019. All amounts are in U.S. dollars unless otherwise
noted and have been prepared in accordance with International
Financial Reporting Standards (IFRS).
"Q1 2019 results were consistent with our expectation for a
softer start to the year," said Randy
MacEwen, President and CEO. "We delivered revenue of
$16.0 million, gross margin of 14%
and ending cash reserves of $165.0
million. Together with the Weichai-Ballard JV agreement
announced earlier today, our order book and sales pipeline support
the Company's 2019 plan and growth into 2020. Importantly, in Q1 we
made solid progress in the execution of our corporate growth
strategy across key markets."
Mr. MacEwen continued, "We are seeing early signs of internal
combustion engine disruption in Heavy and Medium Duty Motive
applications, including in bus, commercial truck, rail and marine.
We expect fuel cell electric vehicles to offer a compelling
zero-emission value proposition for use cases requiring long range,
rapid refueling, heavy payload and route flexibility, and where the
barriers to hydrogen refueling infrastructure are lowest, such as
centralized depot refueling. We see growing interest in the key
geographic markets of China,
Europe, and California."
Mr. MacEwen stated, "Against a backdrop of positive policy
developments in China during the
quarter, we continue to execute our China strategy. We made important progress on
our collaboration and joint venture with Weichai Power. This work
included key development activities on our next-generation stack
and module, progress on the establishment of a joint venture
facility in Shandong Province and
initial technology transfer activities. Our Weichai-Ballard joint
venture is setting the stage for a valuable platform in the large
China market. We expect additional
policy developments in China to
promote the adoption of hydrogen fuel cell electric
vehicles."
Q1 2019 Financial Highlights
(all comparisons are
to Q1 2018 unless otherwise noted)
- Total revenue was $16.0 million
in the quarter, a year-over-year decrease of 20% or $4.1 million, primarily the result of lower
shipments of membrane electrode assemblies (MEAs) to China and the divestiture of Power Manager
assets in October 2018.
- The Power Products platform generated revenue of $6.4 million in the quarter, a decrease of 49% or
$6.0 million:
-
- Heavy Duty Motive revenue was $2.6
million, a decrease of 72% or $6.7
million, due primarily to lower shipments of MEAs to
China;
- Revenue from the Portable Power/UAV market was $0.1 million, a decrease of 94% or $2.3 million, primarily due to the disposition of
Power Manager assets in October
2018;
- Material Handling revenue was $3.2
million, an increase of 676% or $2.8
million, primarily as a result of higher fuel cell stack
shipments to Plug Power; an
- Backup Power revenue was $0.4
million, an increase of 43% or $0.1
million, due primarily to an increase in hydrogen-based
product and service revenues in Europe and Japan.
- The Technology Solutions platform generated revenue of
$9.7 million in the quarter, an
increase of 25% or $1.9 million, due
primarily to amounts earned from the Weichai-Ballard joint venture
technology transfer program which more than offset minor declines
in other programs in the period.
- Gross margin was 14% in Q1, a decline of 19-points due
primarily to a shift to a lower overall margin product mix, the
lack of higher margin MEA shipments to China, lower high margin revenues as a result
of the disposition of Power Manager assets, and increased costs to
attain milestones on certain Technology Solutions contracts.
- Cash operating costs2 were $9.3 million in the quarter, a 13% decrease
primarily attributable to lower product development costs, as
resources were deployed to the Weichai program, combined with
decreases in sales and marketing costs and the disposition of Power
Manager assets and related cost base.
- Adjusted EBITDA2 was ($8.6)
million, compared to ($3.8)
million in Q1 2018, primarily as a result of lower gross
margin due to the decline in overall revenues.
- Net loss was ($12.0) million in
the quarter, a decline of 119% and adjusted net loss was
($10.0), a decline of 82%.
- Net loss per share2 was ($0.05), a decline of 68% and adjusted net loss
per share2 was ($0.04), a decline of 40%.
- Cash used by operating activities was ($10.5) million, a decline of 45%, reflecting
cash operating loss of ($5.7) million
and use in working capital of ($4.8)
million.
- Cash reserves were $165.0 million
at March 31, 2019, an increase of
214% from the end of Q1 2018 and a decrease of 14% from the end of
the prior quarter.
- During Q1 Ballard received
$9.6 million in new orders and
delivered orders valued at $16.0
million, thereby lowering the Order Backlog by $6.4 million from the prior quarter, ending Q1 at
$188.4 million. The 12-month Order
Book increased $7.0 million from the
prior quarter, to $76.0 million at
end-Q1.
Q1 2019 Operating Highlights
- Subsequent to the quarter, announced plans to establish a
Marine Center of Excellence (CoE) at Ballard's subsidiary in Hobro, Denmark by end-2019. The Marine CoE will be
dedicated to fuel cell marine applications, including the design
and manufacture of heavy duty fuel cell modules to address
zero-emission powertrain requirements.
- Announced participation of Ballard's Hobro, Denmark-based subsidiary in the H2PORTS
project, aimed at facilitating a rapid transition at European ports
from fossil fuels to low-carbon, zero-emission alternatives based
on hydrogen and fuel cells. The Port of Valencia in Spain will execute pilot initiatives to bridge
the gap between prototypes and pre-commercial products, including:
(i) a fuel cell-powered Reach Stacker for loading, unloading and
transporting containers; (ii) a fuel cell-powered Terminal Tractor
for roll-on/roll-off shipping operations; and (iii) a Mobile
Hydrogen Refueling Station to support this equipment.
- Signed an Equipment Supply Agreement with Norled A/S in
Norway to provide two
next-generation 200 kilowatt (kW) fuel cell modules that will be
used to power a hybrid ferry planned to begin operating in 2021.
Ballard's modules will be designed
and manufactured at the Company's new Marine Center of
Excellence.
- Subsequent to the quarter, launched the FCair® fuel
cell product line, a complete power solution that supports Unmanned
Aerial Vehicle manufacturers and operators in the delivery of fuel
cell-powered UAV benefits, including: 3x the flight duration of
batteries; 5x the reliability and a fraction of the noise of small
internal combustion engines; and significantly reduced operational
expenses.
- Ballard's subsidiary in Hobro,
Denmark signed Framework
Agreements for the provision of FCgen®-H2PM direct
hydrogen backup power systems with Eniig and Fibia A/S, operators
of fiber optic broadband networks in Denmark, and also received initial orders for
30 of its 5kW systems for Eniig and Fibia A/S, including
installation, hydrogen storage and power management equipment,
having a total value of approximately $1.2
million.
- Appointed two new members to Ballard's Board of Directors effective
January 1, 2019. Mr. Jiang Kui (also known as Mr. Kevin Jiang) and Mr. Sun Shaojun (also known as
Mr. Sherman Sun), are both
executives at Weichai Power Co., Ltd. These appointments expand the
board from seven members to nine members and are consistent with
terms of the Company's strategic collaboration with Weichai Power,
which closed on November 13,
2018.
Q1 2019 Financial Summary
(Millions of U.S.
dollars)
|
Three months ended March
31,
|
|
2019
|
2018
|
% Change
|
REVENUE
|
|
|
|
Fuel Cell Products
& Services Revenue:1
|
|
|
|
Heavy Duty
Motive
|
2.6
|
9.3
|
-72%
|
Portable
Power/UAV
|
0.1
|
2.4
|
-94%
|
Material
Handling
|
3.2
|
0.4
|
676%
|
Backup
Power
|
0.4
|
0.3
|
43%
|
Sub-Total
|
$6.3
|
$12.4
|
-49%
|
Technology
Solutions
|
9.7
|
7.7
|
25%
|
Total Fuel Cell
Products & Services
Revenue
|
$16.0
|
$20.1
|
-20%
|
PROFITABILITY
|
|
|
|
Gross Margin
$
|
$2.2
|
$6.6
|
-67%
|
Gross Margin
%
|
14%
|
33%
|
-19-points
|
Operating
Expenses
|
$10.7
|
$12.7
|
-15%
|
Cash Operating
Costs2
|
$9.3
|
$10.7
|
-13%
|
Adjusted
EBITDA2
|
($8.6)
|
($3.8)
|
-123%
|
Net Income
(Loss)
|
($12.0)
|
($5.5)
|
-119%
|
Earnings Per
Share
|
($0.05)
|
($0.03)
|
-68%
|
Adjusted Net
Loss2
|
($10.0)
|
($5.5)
|
-82%
|
Adjusted Net Loss per
share2
|
($0.04)
|
($0.03)
|
-40%
|
CASH
|
|
|
|
Cash Used by
Operating Activities:
|
|
|
|
Cash Operating Income
(Loss)
|
($5.7)
|
($2.8)
|
-104%
|
Working Capital
Changes
|
($4.8)
|
($4.4)
|
-8%
|
Cash Used By Operating
Activities
|
($10.5)
|
($7.2)
|
-45%
|
Cash
Reserves
|
$165.0
|
$52.5
|
214%
|
For a more detailed discussion of Ballard Power Systems' first
quarter 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, May 2, 2019 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review its first
quarter 2019 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 challenges or address new business
opportunities. 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, the impact
of 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, the impact of
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.
|
SOURCE Ballard Power Systems Inc.