VANCOUVER, March 3 /PRNewswire-FirstCall/ - Ballard Power Systems (TSX: BLD;
NASDAQ: BLDP) announced its financial results for the fourth quarter and
full-year ended December 31, 2008 today. All amounts are in U.S. dollars,
unless otherwise stated.
"Ballard had a strong fourth quarter and solid financial results for the full
year," said John Sheridan, President and CEO. "We grew revenues 17% on a pro
forma basis, reduced operating cash consumption by 23% and ended the year with
$85.4 million in cash reserves. As a result, we believe we are well positioned
to execute our growth plan, although the challenges are heightened by the
macro-economic conditions."
FOURTH QUARTER 2008 HIGHLIGHTS
------------------------------
- Shipments were 802 fuel cell products, representing growth of 140%
from the same quarter in 2007.
- Revenue was $18.9 million, a decrease of 6% from the prior year's
quarter. On a pro forma basis adjusting for automotive engineering
development, revenue increased 61%.
- Operating cash consumption(1) was $8.5 million, a 31% decline from Q4
2007.
- A high volume supply agreement with ACME was announced on October 21,
2008, with units to be deployed primarily for telecom backup power
applications in India, subject to product acceptance in Q4.
- The Notice to Proceed was received for delivery of 20 fuel cell buses
for B.C. Transit's 2010 Olympic fuel cell bus fleet.
- A non-dilutive financing transaction with Superior Plus Income Fund
closed on December 31, 2008 with net proceeds of $34 million.
FULL YEAR 2008 HIGHLIGHTS
-------------------------
- Shipments were 1,855 fuel cell products, exceeding guidance.
- Revenue met revised guidance at $59.6 million, a decrease of 9% from
2007. On a pro forma basis, revenue grew 17% over the prior year.
- Operating cash consumption(1) met guidance at $29.3 million, down 23%
from 2007.
- Operating expenses, excluding depreciation and amortization, declined
$29.3 million, to $57.2 million.
- Net income was $34.1 million, or $0.40 per share.
- Normalized net loss1 was $60.0 million or ($0.71) per share,
representing a $7.7 million increase from 2007 driven by decreases in
foreign exchange gains and investment income, totaling $18.6 million.
- Cash reserves of $85.4 million.
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Three months Full year
ended Dec. 31, ended Dec. 31,
2008 2007 % Change 2008 2007 % Change
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Total Product
Shipments 802 334 140% 1,855 1,035 79%
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Key Markets:
Material Handling 254 81 214% 508 204 149%
Backup Power 357 101 252% 720 200 260%
Res. Cogeneration 96 111 -14% 403 445 -9%
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FULL YEAR 2008 FINANCIAL RESULTS
--------------------------------
In 2008, revenues were $59.6 million, representing a 9% decline from $65.5
million in 2007 and meeting the revised guidance range of $58 to $64 million.
However, adjusting for light-duty automotive engineering development revenue
of $1.6 million in 2008 and $15.8 million in 2007, which relates to the
business sold to AFCC, pro forma revenues increased $8.2 million, or 17%,
compared to 2007.
Product and service revenues totaled $52.7 million, an increase of $9.4
million, or 22% compared with 2007. An $8.8 million increase in product
revenues to $38.2 million was driven by higher shipments of bus, material
handling, light-duty automotive and backup power fuel cell products, partially
offset by lower shipments of residential cogeneration and material products.
The decline in residential cogeneration product sales was expected due to the
introduction in 2008 of a new lower cost product combined with the delivery of
fuel cell membrane electrode assemblies instead of fuel cell stacks, as the
fuel cell stacks are now assembled in Japan by Ballard's joint venture, EBARA
BALLARD. The decline in carbon fiber products was due to the effects of a
labor strike that affected a key customer in the first half of 2008 and the
unprecedented weakness in the U.S. automotive industry. Service revenues
increased $0.5 million due to new testing and engineering services provided to
AFCC, partially offset by a decline in field service for fuel cell buses.
Engineering development revenue totaled $6.9 million, a decline of $15.3
million from 2007 primarily due to the elimination of automotive fuel cell
program work subsequent to the closing of the automotive transaction on
January 31, 2008.
Lower gross margins were driven by larger reductions in warranty provisions
for 2007 compared to 2008, more aggressive product pricing and enhanced
warranty coverage on material handling products in order to encourage market
adoption, declines in field service revenues for fuel cell buses, declines in
service revenue and higher program expenditures on Power Generation
non-recurring engineering government contracts, and lower volumes of carbon
fiber products due to the effects of a labor strike affecting a key customer
and the slow down in the U.S. automotive industry. These declines were only
partially offset by increased margins as a result of new testing and
engineering services provided to AFCC and the commencement of shipments of
fuel cell bus modules related to the B.C. Transit 2010 Olympic fuel cell bus
project.
Operating expenses declined $29.3 million, primarily due to lower research and
development expenses on automotive fuel cell programs as a result of the
automotive transaction.
Net income increased to $34.1 million, or $0.40 per share, compared to a net
loss of $57.3 million, or ($0.50) per share, in 2007. Net income for 2008
included a gain on sale of assets of $96.8 million resulting from the
automotive transaction, partially offset by the write-down of a non-core
investment of $3.0 million.
Normalized net loss(1) increased to $60.0 million, or ($0.71) per share,
representing a $7.7 million increase compared with $52.2 million or ($0.46)
per share in 2007. This increase in normalized net loss is primarily a result
of non-operating items, including decreases in foreign exchange gains of $12.4
million and decreases in investment income of $6.2 million. Decreases in
product and service gross margins and engineering development revenues were
more than offset by decreases in operating expenses and depreciation and
amortization.
Operating cash consumption(1) for 2008 decreased 23% to $29.3 million,
compared to $38.2 million for 2007, meeting our guidance range of $20 million
to $30 million. This $8.9 million improvement was driven primarily by lower
working capital requirements, lower operating expenses and lower capital
expenditures partially offset by lower foreign exchange gains of $12.4
million, a decline in investment income of $6.2 million and lower product and
service gross margins and engineering development revenues.
For a more detailed discussion of Ballard Power Systems' fourth quarter and
full-year 2008 results, please see the company's financial statements and
management's discussion & analysis, which are available at www.ballard.com,
www.sedar.com and www.sec.gov/edgar.shtml.
Selected Consolidated Financial Information:
Fourth Quarter & Full Year 2008
Unaudited (Expressed in thousands of U.S. dollars, except for per share
amount and number of shares)
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Three months ended
December 31, Year ended December 31,
2008 2007 2008 2007
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Revenues:
Product and
service revenue $ 18,605 $ 10,591 $ 52,726 $ 43,352
Engineering
development
revenue 296 9,474 6,854 22,180
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Total revenues 18,901 20,065 59,580 65,532
Cost of revenues
and expenses:
Cost of product and
service revenues 16,887 6,430 47,401 25,052
Research and
product development 7,957 15,467 37,172 58,478
General
and administrative 2,506 8,379 12,615 19,068
Marketing and
business development 1,877 2,588 7,461 8,981
Depreciation and
amortization 1,556 4,595 6,034 15,732
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Total cost of
revenues and expenses 30,783 37,459 110,683 127,311
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Loss before undernoted (11,882) (17,394) (51,103) (61,779)
Investment and
other income (loss) (2,410) 2,628 186 16,933
Loss on disposal
& write-down of
long-lived assets (2,794) - (2,812) (4,583)
Gain on sales of assets - - 96,845 -
Equity in loss of
associated companies (942) (1,125) (8,649) (7,433)
---------------------------------------------------
Income (loss) from
continuing operations
before income taxes (18,028) (15,891) 34,095 (56,862)
Income taxes - - 16 (53)
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Income (loss) from
continuing operations
for period (18,028) (15,891) 34,079 (56,809)
Loss from discontinued
operations for period - - - (493)
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Net income (loss)
for period $ (18,028) $ (15,891) $ 34,079 $ (57,302)
---------------------------------------------------
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Basic earnings
(loss) per share $ (0.22) $ (0.14) $ 0.40 $ (0.50)
Diluted earnings
(loss) per share $ (0.22) $ (0.14) $ 0.40 $ (0.50)
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Weighted average
number of
common shares
outstanding-basic 82,116,349 114,742,491 84,922,364 114,575,473
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Cash used
by operations $ (7,536) $ (9,795) $ (26,209) $ (31,850)
Capital expenditures (994) (2,583) (3,085) (6,379)
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Operating cash
consumption
(End note 1) $ (8,530) $ (12,378) $ (29,294) $ (38,229)
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December 31, December 31,
2008 2007
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Total cash, cash
equivalents and short
term investments $ 85,399 $ 145,574
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Conference Call
Ballard will hold a conference call to discuss its 2008 financial results on
Wednesday, March 4, 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 (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#. The audio webcast
with slides 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 www.ballard.com.
This release contains forward-looking statements, including estimated future
revenue and operating cash consumption contained in our outlook, which are
provided to enable external stakeholders to understand our 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
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.
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Endnote:
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(1) Operating cash consumption and normalized net loss 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. Operating cash consumption measures the
amount of cash required to fund the operating activities of Ballard's
business and excludes financing and investing activities except for
net additions to property, plant and equipment. Normalized net loss
measures our 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 and write-downs of long-lived assets are not
considered part of our core activities, and are expected to occur
infrequently. Therefore we have removed these in our calculation of
normalized net loss.
Ballard, the Ballard logo and Power to Change the World are registered
trademarks of Ballard Power Systems Inc.
SOURCE Ballard Power Systems Inc.
or to arrange an interview with a Ballard spokesperson, please contact Amy
Harada Bradley at telephone number (604) 412-7913 or on e-mail
amy.harada@ballard.com
