VANCOUVER, July 28 /PRNewswire-FirstCall/ -- Ballard Power Systems
(TSX: BLD; NASDAQ: BLDP) announced revenue of $13.1 million and net
income of $0.01 per share for the second quarter ended June 30,
2009. All amounts are in U.S. dollars, unless otherwise noted. "Our
core fuel cell products segment shows continued growth in the
second quarter of 144% year over year, however this growth was
largely offset by declines in our supporting business segments,
reflecting the significant weakness in the automotive sector," said
John Sheridan, Ballard's President and CEO. He continued,
"Profitability in the second quarter was driven by a one-time
accounting gain from unwinding our Japanese residential
cogeneration systems joint venture, EBARA Ballard." Considering the
continued softness in Ballard's legacy supporting business segments
combined with the general economic conditions, Ballard has revised
its annual revenue guidance to $50 million to $60 million. However,
with regards to operating cash consumption, Ballard reconfirms its
guidance of $17 million to $27 million. Second Quarter Highlights -
Product acceptance milestone passed with ACME Tele Power Ltd.,
confirming the order of 310 of IdaTech plc's ElectraGen(TM) H2
hydrogen-based backup power units incorporating Ballard's
FCgen(TM)-1020 ACS fuel cell stack. - FCgen(TM)-1300 development
program is on track for product acceptance in the fourth quarter.
The low-cost, reformate-capable stack is a cornerstone for
Ballard's future product platforms. - Motorola deploys
FCgen(TM)-1020 ACS at 123 TETRA base stations throughout Denmark. -
FirstEnergy Corp. supply agreement to deliver a one megawatt
distributed power generation solution for use in a utility load
management demonstration project. - Completed delivery of
FCvelocity(TM)-HD6 modules for the B.C. Transit 2010 Olympic Fuel
Cell Bus Fleet. - EBARA Ballard Corporation operations in Japan
discontinued. Second Quarter 2009 Financial Highlights - Revenue
was $13.1 million (Q2 2008: $12.4 million), for a total of $21.2
million year-to-date. - Product and services revenues for the core
Fuel Cell Products business segment grew 252% over the prior year
quarter. - Fuel cell bus shipments for the B.C. Transit 2010
Olympic fuel cell bus program totaled $6.0 million. - Backup power
market revenues increased as a result of work completed on the
FirstEnergy Corp. project and the successful completion of the
hydrogen unit product acceptance milestone with ACME Tele Power
Ltd. - Supporting business segment revenue (Contract Automotive and
Material Products) declined 59% over the prior year quarter, as
impacted by auto sector conditions. - Operating expenses, excluding
depreciation and amortization, for the second quarter decreased
$1.0 million from 2008 to $13.0 million. - Research and product
development decreased $0.6 million to $8.5 million. - Sales and
Marketing flat at $1.9 million. - General and Administrative
decreased $0.4 million to $2.5 million. - Operating cash
consumption(1) was $17.0 million, an increase of $11.9 million from
the second quarter of 2008. - The increase was driven by a $10.9
million increase in working capital requirements and $2.2 million
in increased capital expenditures. - The working capital impacts
from the first and second quarter of 2009 are expected to reverse
as cash receipts occur in the second half of the year from our
long-term bus contracts. - Net Income was $1.0 million or $0.01
earnings per share, an increase of $14.5 million from Q2 2008 net
loss of ($13.5) million. The current quarter net income reflects a
one-time gain of $10.8 million from the unwinding of Ballard's
Japanese residential cogeneration joint venture, EBARA Ballard
Corporation as the obligations for the windup fell to our partner
EBARA Corporation. - Normalized net loss1 was ($9.6) million or
($0.11) per share, representing a $1.3 million decrease in loss
from Q2 2008 (($10.9) million) driven by reduced operating expenses
and foreign exchange gains, partially offset by reduced engineering
development revenues. - Cash reserves of $48.2 million and
debt-free balance sheet. The company revised its full year guidance
to: - Revenue: lowered to $50 million to $60 million, compared with
$59.8 million in 2008. - Operating cash consumption(1): reconfirmed
at $17 million to $27 million, compared to $29.3 million in 2008.
Second Quarter 2009 Financial Results Quarter ended June 30, 2009
Revenues for the three months ended June 30, 2009 increased to
$13.1 million, or 6%, compared to $12.4 million for the second
quarter of 2008 as increases in the core Fuel Cell Products
business segment of $5.7 million more than offset declines in the
supporting Contract Automotive and Material Products business
segments of $5.0 million. In Ballard's Fuel Cell Products business
segment, revenues increased 144% to $9.7 million due primarily to a
$6.9 million, or 251%, increase in product and service revenues as
a result of fuel cell bus shipments for the B.C. Transit 2010
Olympic fuel cell bus program (totaling $6.0 million) combined with
increases in backup power market revenues as a result of work
completed on the FirstEnergy Corp. distributed power generator
project and increased unit shipments as a result of the successful
completion of the hydrogen unit product acceptance milestone with
ACME Tele Power Ltd. These increases were partially offset by lower
shipments in the material handing market and by lower residential
cogeneration market revenues due to the absence of engineering
development revenues as a result of the completion of the 1kW
residential cogeneration fuel cell development program and due to
the decision to discontinue operations in EBARA BALLARD in May
2009. For the supporting Contract Automotive and Material Products
business segments, revenues continued to be negatively impacted by
the slowdown in the automotive sector. Revenues in these supporting
areas decreased 59% to $3.4 million due to lower shipments of
light-duty automotive fuel cell modules, lower shipments of carbon
friction material products, and lower testing and engineering
services provided to AFCC. Net income for the three months ended
June 30, 2009 increased to $1.0 million, or $0.01 per share,
compared with a net loss of $13.5 million, or ($0.16) per share, in
the second quarter of 2008. The second quarter net income in 2009
includes a non-cash gain of $10.8 million related to the decision
to discontinue operations in EBARA Ballard Corporation on May 24,
2009. EBARA BALLARD was a joint venture with EBARA Corporation that
was focused on the development, manufacture, sale, and servicing of
stationary power systems for the residential cogeneration market in
Japan. Normalized net loss(1) for the second quarter of 2009
decreased $1.3 million, or 12%, to $9.6 million, or ($0.11) per
share, compared with a normalized net loss of $10.9 million, or
($0.13) per share, for the corresponding period of 2008. Reductions
in operating expenses of $1.0 million combined with improvements in
investment and other income of $0.8 million more than offset the
loss of engineering development revenues of $1.2 million. Operating
cash consumption(1) for the second quarter of 2009 increased $11.9
million to $17.0 million, compared to $5.1 million for the
corresponding period in 2008. The higher operating cash consumption
was driven by higher working capital requirements of $9.6 million
(net of restructuring and related payments of $1.4 million) due
primarily to the timing of collections of product and service
revenues and the payment of our remaining 2008 annual employee
bonuses. Increased capital expenditures of $2.2 million were
partially offset by the lower normalized net loss of $1.3 million.
Six months ended June 30, 2009 Revenues for the six months ended
June 30, 2009 decreased to $21.2 million, or 25%, compared to $28.4
million for the first two quarters of 2008, as increases in the
core Fuel Cell Products business segment of $3.2 million were more
than offset by declines in the supporting Contract Automotive and
Material Products business segments of $10.4 million. Fuel Cell
Products revenues increased 31% to $13.6 million due primarily to a
$6.7 million, or 99%, increase in product and service revenues as a
result of fuel cell bus shipments for the B.C. Transit 2010 Olympic
and the Transport of London fuel cell bus programs combined with
increases in backup power market revenues as a result of work
completed on the First Energy distributed power generator project
and increased unit shipments as a result of the successful
completion of the hydrogen unit product acceptance milestone with
ACME. These increases were partially offset by lower shipments in
the material handing market and by lower residential cogeneration
market revenues due to the absence of engineering development
revenues as a result of the completion of the 1kW residential
cogeneration fuel cell development program and due to our decision
to discontinue operations in EBARA BALLARD in May 2009. Contract
Automotive and Material Products revenues decreased 58% to $7.6
million due to lower shipments of light-duty automotive fuel cell
modules, lower shipments of carbon friction material products, and
lower testing and engineering services provided to AFCC combined
with the absence of engineering development revenues due to the
elimination of light-duty automotive fuel cell program work
subsequent to the closing of the AFCC Transaction on January 31,
2008 (the "AFCC Transaction"). Net loss for the six months ended
June 30, 2009 increased to $17.6 million, or ($0.21) per share,
compared with net income of $67.6 million, or $0.77 per share, in
the corresponding period of 2008. The first half net income in 2008
includes a gain on sale of assets of $96.8 million related to the
AFCC Transaction. The first half net loss in 2009 includes a gain
on discontinuance of operations in EBARA BALLARD of $10.8 million
and restructuring and related expenses of $1.4 million relating to
a 7% workforce reduction initiated in March 2009. Normalized net
loss(1) for the first six months of 2009 increased 1%, or $0.3
million, to $24.1 million, or ($0.29) per share, compared with a
normalized net loss of $23.8 million, or ($0.27) per share, for the
first six months of 2008. Product and service revenue and related
gross margin declines of $2.1 million and $1.5 million,
respectively, combined with lower engineering development revenues
of $5.2 million, were only partially offset by reductions in
operating expenses of $5.8 million (net of restructuring and
related expenses of $1.4 million). Operating cash consumption(1)
for the first half of 2009 increased $13.7 million to $27.9
million, compared to $14.2 million for the corresponding period in
2008. The higher operating cash consumption was driven by higher
working capital requirements of $7.2 million due primarily to the
timing of collections of product and service revenues and increased
inventory investment, combined with increased capital expenditures
of $3.4 million and the slightly higher normalized net loss.
Product Shipments:
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Three months ended June 30, Six months ended June 30, 2009 2008 %
Change 2009 2008 % Change
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Material Handling 12 29 -59% 19 86 -78% Backup Power 340 138 146%
416 237 76%
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Revenue breakdown:
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(Expressed in thousands of Three months ended June 30, Six months
ended June 30, U.S. dollars) 2009 2008 % Change 2009 2008 % Change
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Fuel Cell Products $ 9,653 $ 3,960 144% $ 13,565 $ 10,353 31%
Contract Automotive 883 5,127 -83% 2,760 11,862 -77% Material
Products 2,539 3,264 -22% 4,834 6,179 -22%
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Total Revenue $ 13,075 $ 12,351 6% $ 21,159 $ 28,394 -25%
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For a more detailed discussion of Ballard Power Systems' second
quarter 2009 results, please see the company's financial statements
and management's discussion analysis, which are available at
http://www.ballard.com/, http://www.sedar.com/ and
http://www.sec.gov/edgar.shtml.
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Endnotes: --------- (1) Normalized net loss and operating cash
consumption are non-GAAP measures used to assist in assessing
Ballard's financial performance. Non-GAAP measures do not have any
standardized meaning prescribed by GAAP and are therefore unlikely
to be comparable to similar measures presented by other companies.
Normalized net loss measures Ballard's net loss after excluding
items that are unusual in nature or do not reflect the normal
continued operating activity of the business. Gains on sale of
assets held for sale, losses from discontinued operations,
write-downs of long-lived assets, restructuring and related
expenses, and equity income (loss) in associated companies are not
considered part of our core activities, and are expected to occur
infrequently. Therefore Ballard removes these in the calculation of
normalized net loss. Operating cash consumption measures the amount
of cash required to fund the operating activities of our business
(net of restructuring and related costs) and excludes financing and
investing activities except for net additions to property, plant
and equipment. Second Quarter 2009 Conference Call Ballard will
hold a conference call to discuss its second quarter 2009 financial
results on Wednesday, July 29, 2009 at 8:00 a.m. PST (11:00 a.m.
EST). The live call can be accessed by calling +1-604-638-5340. The
live audio webcast can be accessed through a link on Ballard's
homepage (http://www.ballard.com/). Following the call, an audio
recording will be available for approximately 24 hours and can be
accessed at +1-604-638-9010 using confirmation number 6325 followed
by the number sign. The audio webcast will also be archived in the
Investor Events Conference Calls section of Ballard's website for
approximately 90 days. About Ballard Power Systems Ballard Power
Systems (TSX: BLD; NASDAQ: BLDP) is recognized as a world leader in
the design, development, manufacture and sale of clean energy fuel
cell products. Ballard's mission is to accelerate fuel cell product
adoption. To learn more about what Ballard is doing with Power to
Change the World(R), visit http://www.ballard.com/. This release
contains forward-looking statements, including estimated revenue
and operating cash consumption contained in Ballard's outlook,
which 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. These forward-looking statements
are based on the beliefs and assumptions of Ballard's management
and 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. Such
assumptions relate to Ballard's financial forecasts and
expectations regarding its product development efforts,
manufacturing capacity, and market demand, and include matters such
as generating new sales, producing, delivering and selling the
expected number of units, and controlling its costs. These
statements involve risks and uncertainties that may cause Ballard's
actual results to be materially different, including, without
limitation, the condition of the global economy, the rate of mass
adoption of its products, product development delays, changing
environmental regulations, its ability to attract and retain
business partners and customers, its access to funding, increased
competition, its ability to protect its intellectual property,
changes in its customers' requirements, foreign exchange impacts on
its net monetary assets and its ability to provide the capital
required for product development, operations and marketing. For a
detailed discussion of these risk factors and other risk factors
that could affect Ballard's future performance, please refer to
Ballard's most recent Annual Information Form. Readers should not
place undue reliance on Ballard's forward-looking statements and
Ballard assumes no obligation to update or release any revisions to
these forward looking statements, other than as required under
applicable legislation. Ballard, the Ballard logo and Power to
Change the World are registered trademarks of Ballard Power Systems
Inc. DATASOURCE: Ballard Power Systems Inc. CONTACT: or to arrange
an interview with a Ballard spokesperson, please contact Lori
Rozali at telephone number (604) 453-3804 or on e-mail
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