VANCOUVER, Oct. 26 /PRNewswire-FirstCall/ -- Ballard Power Systems
(TSX: BLD; NASDAQ: BLDP) announced revenue of $9.0 million, a
decrease of $3.3 million from the same period last year, and net
loss of $12.0 million, an improvement of $3.5 million, for the
third quarter ended September 30, 2009. Normalized net loss(1) of
$7.2 million reflects an improvement of $6.1 million relative to
the third quarter of 2008. All amounts are in U.S. dollars, unless
otherwise noted. "While Ballard's third quarter revenue is
disappointing, the improvements in both operating loss and
operating cash consumption(1) reflect the significant changes that
have been implemented in the business," said John Sheridan,
Ballard's President and CEO. "With our recent restructuring and the
development program of the low cost FCgen(TM)-1300 being
substantially complete, we see continued improvement in Ballard's
cost base and a positive step towards profitability for the
company." Given the continued softness in general economic
conditions, Ballard has narrowed its full-year guidance to: -
Revenue: expected to come in at the low end of the previously
stated range at $50.0 million, compared with $59.8 million in 2008.
This reflects essentially flat performance year on year in Fuel
Cell Products and significant decline in supporting business
segments. - Operating cash consumption(1): expected to come in at
the high end of the previously stated range at $27.0 million,
compared to $29.3 million in 2008. Third Quarter Highlights -
Organizational restructuring was completed, resulting in the
elimination of approximately 20% of Ballard's workforce. This
action, in tandem with other cost optimization initiatives, has
resulted in a significant resetting of the company's cost base of
approximately 30%. - Status update to the supply agreement between
IdaTech, LLC, ACME Group and Ballard was issued by IdaTech,
indicating that the product acceptance test (PAT) for the natural
gas system, scheduled for October 16, 2009, would likely be missed.
The agreement provides for an extension of the PAT deadline for up
to six months if IdaTech files an acceptable remediation plan by
November 16, 2009, with committed volumes to be reduced
commensurate with the length of the delay. - FCgen(TM)-1300
development program is substantially complete. This low-cost,
reformate-tolerant stack is a cornerstone for Ballard's future
product platforms. - The first bus in BC Transit's 2010 Olympic
fleet of 20 hydrogen fuel cell buses was introduced. BC Transit's
fleet will become the largest single deployment of zero-emission
fuel cell buses worldwide and it is powered by Ballard's heavy-duty
fuel cell module, the FCvelocity(TM)-HD6. Third Quarter 2009
Financial Highlights - Revenue was $9.0 million (Q3 2008: $12.3
million), for a total of $30.2 million year-to-date. - Fuel Cell
Products revenue declined 49% over the prior year quarter and are
flat on a year-to-date basis. - Supporting business segment revenue
(Contract Automotive and Material Products) declined 6% over the
prior year quarter. - Operating cash consumption(1) was $4.4
million, representing an improvement of $2.1 million from the third
quarter of 2008 ($6.5 million). - This represents a $12.6 million
improvement compared with Q2 2009 ($17.0 million). - Ballard
expects a positive cash flow in the fourth quarter of 2009. - Net
Loss was $12.0 million or ($0.14) per share, a decrease of $3.5
million from Q3 2008 net loss of $15.5 million or ($0.19) per
share. - Normalized net loss(1) was $7.2 million or ($0.09) per
share, representing a $6.1 million decrease in loss from Q3 2008
($13.2 million or ($0.16) per share), primarily as a result driven
by reductions in operating expenses. - Operating expenses were $8.7
million, excluding restructuring and related costs and depreciation
and amortization, representing a decrease of $5.2 million from
2008. - Cash reserves of $42.0 million and debt-free balance sheet.
Third Quarter 2009 Financial Results Quarter Ended September 30,
2009 Our revenues for the three months ended September 30, 2009
decreased to $9.0 million, or 26%, compared to $12.3 million for
the third quarter of 2008 as increases in our supporting Material
Products business segment of $1.2 million were more than offset by
declines in our core Fuel Cell Products business segment of $2.8
million and declines in our supporting Contract Automotive business
segment of $1.7 million. In our core Fuel Cell Products business
segment, revenues decreased 49% to $2.9 million as increases in
back-up power market revenues as a result of work completed on the
FirstEnergy Corp. ("First Energy") distributed power generator
project combined with increased unit shipments in back-up power
were more than offset by lower shipments in the material handing
market and by lower residential cogeneration market revenues. As a
reminder, management effected a decision to discontinue operations
in EBARA BALLARD in May 2009. In our supporting Contract Automotive
and Material Products business segments, revenues decreased 6% to
$6.2 million. Improvements in our Material Products segment of $1.2
million related to increased volumes of carbon friction material
products in the U.S. automotive sector during the quarter were more
than offset by declines in our Contract Automotive segment of $1.7
million related to lower automotive testing and engineering
services provided to AFCC. Our net loss for the three months ended
September 30, 2009 decreased to $12.0 million, or ($0.14) per
share, compared with a net loss of $15.5 million, or ($0.19) per
share, in the third quarter of 2008. The third quarter of 2009 net
loss includes restructuring and related expenses of $4.8 million
relating to a 20% workforce reduction initiated in August 2009. Our
normalized net loss(1) for the third quarter of 2009 decreased $6.1
million, or 46%, to $7.2 million, or ($0.09) per share, compared
with a normalized net loss of $13.2 million, or ($0.16) per share,
for the corresponding period of 2008. Reductions in operating
expenses (excluding restructuring and related expenses) of $5.2
million primarily as a result of our workforce reduction and cost
optimization initiatives combined with improvements in investment
and other income of $0.9 million more than offset the loss of
revenue and related gross margin in the quarter. Operating cash
consumption1 for the third quarter of 2009 decreased $2.1 million
to $4.4 million, compared to $6.5 million for the corresponding
period in 2008. The lower operating cash consumption was driven by
reduced working capital requirements primarily as a result of
customer collections on our B.C. Transit 2010 Olympic fuel cell bus
program and by lower operating expenses (net of restructuring and
related payments) primarily as a result of our workforce reduction
and cost optimization initiatives. Nine Months Ended September 30,
2009 Our revenues for the nine months ended September 30, 2009
decreased to $30.2 million, or 26%, compared to $40.7 million for
the first three quarters of 2008, as increases in our core Fuel
Cell Products business segment of $0.4 million were more than
offset by declines in our supporting Contract Automotive and
Material Products business segments of $10.9 million. Fuel Cell
Products revenues increased 2% to $16.5 million due primarily to a
$5.3 million, or 48%, 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 back-up 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. As a reminder, the decline in residential
cogeneration relates to our decision to discontinue operations in
EBARA BALLARD in May 2009. Contract Automotive and Material
Products revenues decreased 44% to $13.8 million due to lower
shipments of light-duty automotive fuel cell modules to AFCC, 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"). Our net loss for the nine months ended September 30,
2009 increased to $29.6 million, or ($0.35) per share, compared
with net income of $52.1 million, or $0.61 per share, in the
corresponding period of 2008. The net loss for the first three
quarters of 2009 includes restructuring and related expenses of
$6.2 million relating to a 20% workforce reduction initiated in
August 2009 and a 7% workforce reduction initiated in March 2009,
and a non-cash gain of $10.8 million related to our decision to
discontinue operations in EBARA Ballard Corporation ("EBARA
BALLARD") on May 24, 2009. EBARA BALLARD was a joint venture with
EBARA Corporation ("Ebara") that was focused on the development,
manufacture, sale, and servicing of stationary power systems for
the residential cogeneration market in Japan. The net income for
the first three quarters of 2008 includes a gain on sale of assets
of $96.8 million related to the AFCC Transaction. Our normalized
net loss(1) the first nine months of 2009 decreased $5.7 million,
or 15%, to $31.3 million, or ($0.37) per share, compared with a
normalized net loss of $37.0 million, or ($0.43) per share, for the
first nine months of 2008. Reductions in operating expenses
(excluding restructuring and related expenses) of $10.8 million
primarily as a result of our workforce reduction and cost
optimization initiatives more than offset the decline in revenue
and the related gross margin. Operating cash consumption(1) for the
first three quarters of 2009 increased $11.2 million to $32.0
million, compared to $20.8 million for the corresponding period in
2008. The higher operating cash consumption was driven by higher
working capital requirements due primarily to increased inventory
investment and the draw down of deferred revenue, combined with
increased capital expenditures. Product Shipments:
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Three months ended Nine months ended September 30, September 30,
2009 2008 % Change 2009 2008 % Change
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Material Handling 61 168 -64% 80 254 -69% Backup Power 197 127 +55%
613 364 +68%
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Revenue breakdown:
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(Expressed in Three months ended Nine months ended millions of
September 30, September 30, U.S. dollars) 2009 2008 % Change 2009
2008 % Change
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Fuel Cell Products $ 2.9 $ 5.7 -49% $ 16.4 $ 16.1 +2% Contract
Automotive 1.9 3.6 -46% 4.7 15.4 -70% Material Products 4.2 3.0
+40% 9.1 9.2 -1%
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Total Revenue $ 9.0 $ 12.3 -26% $ 30.2 $ 40.7 -26%
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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. For a more detailed discussion of Ballard Power
Systems' third 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. Third
Quarter 2009 Conference Call Ballard will hold a conference call on
Tuesday, October 27, 2009 at 8:00 a.m. PST (11:00 a.m. EST). John
Sheridan, President and CEO, and Bruce Cousins, Chief Financial
Officer, will present Ballard's 2009 third quarter financial
results. 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, the audio
webcast with slides will be archived in the Investor Events &
Conference Calls section of Ballard's website. 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) 453-3683, or on e-mail .
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