- Revenue of $20.1 million and 33%
Gross Margin
VANCOUVER, May 1, 2018 /CNW/ - Ballard Power Systems
(NASDAQ: BLDP; TSX: BLDP) today announced consolidated financial
results for the first quarter ended March
31, 2018. All amounts are in U.S. dollars unless otherwise
noted and have been prepared in accordance with International
Financial Reporting Standards (IFRS).
"Q1 results were consistent with the type of start to 2018 we
had anticipated and our typically slower first half of a year,"
said Randy MacEwen, President and
CEO. "At the same time, the underlying growth in our Q1 results is
masked by significant one-time revenue in the first quarter of
2017. Our outlook for the full year remains unchanged."
Mr. MacEwen noted, "During the quarter we made important
progress across key market applications to support long-term growth
and profitability. Continued execution of our strategy, including
focus on key market opportunities in China, Europe, the U.S. and Japan resulted in revenue of $20.1 million and gross margin of 33% for the
quarter, along with a solid order book and robust sales pipeline
for 2018 deliveries and 2019 scaling."
Mr. MacEwen continued, "The convergence of key global megatrends
– specifically decarbonization, air quality and electrification of
propulsion – has surfaced important opportunities for our
highly-disruptive and field-proven technology in a growing array of
transport applications. This is particularly the case where long
range, rapid refueling, heavy payload and full route flexibility
are customer requirements, such as in key bus and commercial truck
markets. In addition, during Q1 we saw strong evidence of expanding
future demand for fuel cells in a range of applications, including
buses, commercial trucks, material handling equipment, unmanned
vehicles, trains and marine vessels, across a number of geographic
regions."
Mr. MacEwen concluded, "We expect these emerging opportunities
to support continued scaling of the underlying business as we
advance toward sustainable profitability."
Q1 2018 Financial Highlights
(all comparisons are
to Q1 2017 unless otherwise noted)
- Total revenue was $20.1 million
in the quarter, a year-over-year decrease of 11%.
- The Power Products platform generated revenue of $12.4 million in the quarter, an increase of
11%:
-
- Heavy Duty Motive revenue was $9.3
million, an increase of 29% resulting from shipments of
membrane electrode assemblies (MEAs) to the company's joint venture
operation in China for use in the
manufacture and assembly of FCvelocity®-9SSL fuel cell
stacks;
- Revenue from the Portable Power market was $2.4 million, an increase of 100% due primarily
to Power Manager product shipments for use by U.S. Special
Operations Command, following late-2017 receipt of Milestone C in
the program of record;
- Material Handling revenue was $0.4
million, a decline of 81% due to a reduction in fuel cell
stack shipments to Plug Power; and
- Telecom Backup Power revenue was $0.3
million, a decrease of $0.2
million
- The Technology Solutions platform generated revenue of
$7.7 million in the quarter, a
decrease of 33%, as Q1 2017 revenue included $6.2 million in one-time high margin revenue
related to technology transfer and engineering support associated
with the establishment of the company's 10%-owned stack joint
venture operation in China.
- Gross margin was 33% in Q1, a decline of 9-points due primarily
to the contribution of high margin Technology Solutions revenue in
Q1 2017, as previously referenced.
- Cash operating costs2 were $10.7 million in the quarter, an 8% increase
primarily attributable to higher research and product development
expenditures related to next-generation products as well as a
stronger Canadian dollar relative to the U.S. dollar, since a
significant amount of cash operating costs are denominated in
Canadian dollars.
- Adjusted EBITDA2 was ($3.8)
million, compared to ($0.7)
million in Q1 2017, as a result of lower revenue and gross
margin and higher cash operating costs.
- Both net loss and adjusted net loss were ($5.5) million in the quarter, declines of
87%.
- Both net loss per share and adjusted net loss per
share2 were ($0.03),
declines of 84%.
- Cash used by operating activities was ($7.2) million, a decline of 133%, reflecting
cash operating loss of ($2.8) million
and use in working capital of ($4.4)
million, which increased primarily to support expected 2018
product deliveries.
- Cash reserves were $52.5 million
at March 31, 2018, decreases of 23%
from the end of Q1 2017 and 13% from the end of the prior
quarter.
- During Q1 Ballard received
$20.7 million in new orders and
delivered orders valued at $20.1
million, thereby adding modestly to the Order Backlog from
the prior quarter, ending Q1 at $220.0
million. The 12-month Order Book increased significantly
from the prior quarter, to $89.0
million at end-Q1.
Q1 2018 Highlights
Bus
- Subsequent to the quarter 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.
Ballard expects to begin shipping
modules in the second half of 2018, with initial bus deployments
expected in 2019.
Commercial Truck
- Announced the planned deployment of 500 licensed fuel cell
electric commercial trucks, all using Ballard
FCvelocity®-9SSL fuel cell stacks, in Shanghai, China during 2018. This is believed
to be the largest planned deployment of fuel cell-powered trucks
anywhere in the world.
- Signed a contract with CALSTART for a Ballard 30 kilowatt (kW)
FCveloCity®-MD fuel cell module to be used in a trial
and development program involving UPS Class-6 delivery vans
operating in California's South
Coast Air Basin.
- A Kenworth Truck Company hybrid Class-8 drayage truck using a
Ballard FCveloCity®-MD 85kW fuel cell module
successfully completed initial road testing by pulling a shipping
container through highway conditions in the Pacific Northwest. A
demonstration program is planned at the Ports of Los Angeles and Long Beach.
Train
- Siemens AG announced receipt of approximately €12 million in
funding to support development of a zero-emission fuel cell light
rail train, called Mireo. Ballard
previously signed a multi-year Development Agreement with Siemens
for development of a 200kW fuel cell module to power the Mireo,
with a contemplated value of $9
million to Ballard.
Marine
- Subsequent to the quarter announced that two
FCveloCity®-MD 30kW modules were successful 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.
Material Handling
- Following the quarter, signed a multi-year Master Supply
Agreement with Hyster-Yale Group encompassing the supply of minimum
annual volumes of Ballard 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.
- Signed a multi-year $4.2 million
Technology Solutions program with an unnamed strategic customer to
develop an ultra-high durability, high performance air-cooled fuel
cell stack for use in a number of target market applications,
including Class-3 forklift trucks as well as stationary continuous
and backup power.
- Received a follow-on purchase order from Nisshinbo Holdings to
progress a previously announced Technology Solutions program,
focused on development of Non Precious Metal Catalyst-based fuel
cell stacks for use in commercial material handling applications,
to the next stage.
Unmanned Vehicle
- Announced a 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
- Following the late-2017 receipt of Milestone C in the program
of record, Ballard's subsidiary
Protonex received two purchase orders totaling $3.5 million for the supply of Squad Power
Manager (SPM-622) Special Operations Kits, including a $1.6 million purchase order for end customer U.S.
Special Operations Command and a $1.9
million purchase order to support U.S. Army Security Force
Assistance Brigades (SFAB). All deliveries are expected to be
completed in 2018.
Backup Power
- Following the quarter, Toyota Tsusho Corporation announced the
sale of 5 Ballard FCgen®-H2PM backup power systems,
under its Distribution Agreement with Ballard, to be used as part of a renewable
emergency power system installed under the Soma Revitalization
Smart Community Construction Project in Japan's Fukushima Prefecture.
Other
- Received ISO14001:2015 certification at the Company's
Vancouver operations through the
establishment of an internal environmental management system that
will support the company's environmental objectives.
Q1 2018 Financial Summary
|
(Millions of U.S.
dollars)
|
Three months ended March
31,
|
|
2018
|
2017
|
% Change
|
REVENUE
|
|
|
|
Fuel Cell Products
& Services Revenue:1
|
|
|
|
|
Heavy Duty
Motive
|
9.3
|
7.2
|
29%
|
|
Portable
Power
|
2.4
|
1.2
|
100%
|
|
Material
Handling
|
0.4
|
2.2
|
-81%
|
|
Backup
Power
|
0.3
|
0.5
|
-42%
|
|
Sub-Total
|
$12.4
|
$11.1
|
11%
|
|
Technology
Solutions
|
7.7
|
11.5
|
-33%
|
Total Fuel Cell
Products & Services
Revenue
|
$20.1
|
$22.7
|
-11%
|
PROFITABILITY
|
|
|
|
Gross Margin
$
|
$6.6
|
$9.6
|
-31%
|
Gross Margin
%
|
33%
|
42%
|
-9-points
|
Operating
Expenses
|
$12.7
|
$12.0
|
5%
|
Cash Operating
Costs2
|
$10.7
|
$10.0
|
8%
|
Adjusted
EBITDA2
|
($3.8)
|
($0.7)
|
-488%
|
Net Income
(Loss)
|
($5.5)
|
($2.9)
|
-87%
|
Earnings Per
Share
|
($0.03)
|
($0.02)
|
-84%
|
Adjusted Net
Loss2
|
($5.5)
|
($2.9)
|
-87%
|
Adjusted Net Loss per
share2
|
($0.03)
|
($0.02)
|
-84%
|
CASH
|
|
|
|
Cash Used by
Operating Activities:
|
|
|
|
|
Cash Operating Income
(Loss)
|
($2.8)
|
($1.2)
|
-135%
|
|
Working Capital
Changes
|
($4.4)
|
($1.9)
|
-131%
|
|
Cash Used By
Operating Activities
|
($7.2)
|
($3.1)
|
-133%
|
Cash
Reserves
|
$52.5
|
$68.0
|
-23%
|
For a more detailed discussion of Ballard Power Systems' first
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
Wednesday, May 2, 2018 at
8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review its first
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.