MISSISSAUGA, Ontario, July 30, 2014 (GLOBE NEWSWIRE) -- Hydrogenics Corporation (Nasdaq:HYGS) (TSX:HYG) ("Hydrogenics" or "the Company"), a leading developer and manufacturer of hydrogen generation and hydrogen-based power modules, today reported second quarter 2014 financial results. Results are reported in US dollars and are prepared in accordance with International Financial Reporting Standards (IFRS).
"The evidence is building to support our growth strategy in energy storage and hydrogen power generation. Our recent announcement for a 2 megawatt Power-to-Gas installation in Ontario, Canada and our new joint venture in Korea represent significant increases in scale," said Daryl Wilson, President and Chief Executive Officer. "We are beginning to see momentum towards even larger projects where Hydrogenics' technology is uniquely positioned to lead. Our backlog has grown to $67.1 million, and we have visibility on a number of sizeable opportunities which could bring the backlog to well over $100 million within the next twelve months.
"Based on our current level of booked business and projected delivery timeframes, we forecast achieving positive Adjusted EBITDA2 and over $50 million in revenue for the full 2014 fiscal year. The second half of 2014 – and, in particular, the fourth quarter – will show strong top line growth due to our current expected shipments and new business development initiatives. The market for energy storage applications is evolving at the pace anticipated, and we see additional contracts being announced in the coming quarters. Overall, Hydrogenics is very well positioned to meet the increasing demand for our unique hydrogen-based product portfolio going forward."
Recent Highlights (for the Quarter Ended June 30, 2014, unless otherwise noted)
Expected Revenue Recognition | |||||||
March 31, 2014 backlog | Orders Received |
FX |
Orders Delivered/ Revenue Recognized | June 30, 2014 backlog | During next 12 mo | Beyond next 12 mo | |
OnSite Generation | 24.5 | 5.6 | 0.0 | 7.5 | 22.6 | 22.1 | 0.5 |
Power Systems | 34.0 | 13.6 | 0.1 | 3.2 | 44.5 | 18.0 | 26.5 |
Total | 58.5 | 19.2 | 0.1 | 10.7 | 67.1 | 40.1 | 27.0 |
Highlights for the Six months Ended June 30, 2014 (compared to the six months ended June 30, 2013, unless otherwise noted)
Notes
Conference Call Details
Hydrogenics will hold a conference call at 10:00 a.m. EDT today, July 30, 2014 to review the second quarter results. The telephone number for the conference call is (877) 307-1373 or, for international callers, (678) 224-7873. A live webcast of the call will also be available on the company's website, www.hydrogenics.com.
An archived copy of the conference call and webcast will be available on the company's website, www.hydrogenics.com, approximately six hours following the call.
About Hydrogenics
Hydrogenics Corporation is a world leader in engineering and building the technologies required to enable the acceleration of a global power shift. Headquartered in Mississauga, Ontario, Hydrogenics provides hydrogen generation, energy storage and hydrogen power modules to its customers and partners around the world. Hydrogenics has manufacturing sites in Germany, Belgium and Canada and service centres in Russia, Europe, the US and Canada.
Forward-looking Statements
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995, and under applicable Canadian securities law. These statements are based on management's current expectations and actual results may differ from these forward-looking statements due to numerous factors, including: our inability to increase our revenues or raise additional funding to continue operations, execute our business plan, or to grow our business; inability to address a slow return to economic growth, and its impact on our business, results of operations and consolidated financial condition; our limited operating history; inability to implement our business strategy; fluctuations in our quarterly results; failure to maintain our customer base that generates the majority of our revenues; currency fluctuations; failure to maintain sufficient insurance coverage; changes in value of our goodwill; failure of a significant market to develop for our products; failure of hydrogen being readily available on a cost-effective basis; changes in government policies and regulations; failure of uniform codes and standards for hydrogen fuelled vehicles and related infrastructure to develop; liability for environmental damages resulting from our research, development or manufacturing operations; failure to compete with other developers and manufacturers of products in our industry; failure to compete with developers and manufacturers of traditional and alternative technologies; failure to develop partnerships with original equipment manufacturers, governments, systems integrators and other third parties; inability to obtain sufficient materials and components for our products from suppliers; failure to manage expansion of our operations; failure to manage foreign sales and operations; failure to recruit, train and retain key management personnel; inability to integrate acquisitions; failure to develop adequate manufacturing processes and capabilities; failure to complete the development of commercially viable products; failure to produce cost-competitive products; failure or delay in field testing of our products; failure to produce products free of defects or errors; inability to adapt to technological advances or new codes and standards; failure to protect our intellectual property; our involvement in intellectual property litigation; exposure to product liability claims; failure to meet rules regarding passive foreign investment companies; actions of our significant and principal shareholders; dilution as a result of significant issuances of our common shares and preferred shares; inability of US investors to enforce US civil liability judgments against us; volatility of our common share price; and dilution as a result of the exercise of options. Readers should not place undue reliance on Hydrogenics' forward-looking statements. Investors are encouraged to review the section captioned "Risk Factors" in Hydrogenics' regulatory filings with the Canadian securities regulatory authorities and the US Securities and Exchange Commission for a more complete discussion of factors that could affect Hydrogenics' future performance. Furthermore, the forward-looking statements contained herein are made as of the date of this release, and Hydrogenics undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release, unless otherwise required by law. The forward-looking statements contained in this release are expressly qualified by this.
Reconciliation of Adjusted EBITDA to Net Loss | ||||
(in thousands of US dollars) | ||||
(unaudited) | ||||
3 months ended | 6 months ended | |||
30-June-14 | 30-June-13 | 30-June-14 | 30-June-13 | |
Adjusted EBITDA |
(288) | (870) | (2,016) | (702) |
Less: |
||||
Stock-based compensation |
(157) |
(166) |
(293) | (341) |
Cash settled compensation indexed to share price |
969 |
(1,811) |
(592) | (2,212) |
Net Finance losses |
(471) |
(1,127) |
(654) | (1,660) |
Depreciation and amortization |
(178) |
(204) |
(318) | (402) |
Net Loss |
(125) | (4,178) | (3,873) | (5,317) |
Hydrogenics Corporation | ||
Consolidated Interim Balance Sheets | ||
(in thousands of US dollars) | ||
(unaudited) | ||
June 30 2014 |
December 31 2013 |
|
Assets | ||
Current assets | ||
Cash and cash equivalents | $ 16,658 | $ 11,823 |
Restricted cash | 1,098 | 635 |
Trade and other receivables | 8,015 | 5,391 |
Inventories | 18,196 | 12,821 |
Prepaid expenses | 1,115 | 979 |
45,082 | 31,649 | |
Non-current assets | ||
Restricted cash | 1,117 | 1,389 |
Property, plant and equipment | 1,894 | 1,684 |
Intangible assets | 156 | 100 |
Goodwill | 5,216 | 5,248 |
8,383 | 8,421 | |
Total assets | $ 53,465 | $ 40,070 |
Liabilities | ||
Current liabilities | ||
Trade and other payables | $ 13,923 | $ 13,193 |
Warranty provisions | 2,040 | 1,912 |
Deferred revenue | 8,371 | 6,348 |
Warrants | -- | 1,075 |
24,334 | 22,528 | |
Non-current liabilities | ||
Other non-current liabilities | 3,883 | 3,095 |
Non-current warranty provisions | 1,186 | 981 |
Non-current deferred revenue | 6,670 | 7,305 |
Total liabilities | 36,073 | 33,909 |
Equity | ||
Share capital | 348,251 | 333,312 |
Contributed surplus | 18,681 | 18,449 |
Accumulated other comprehensive loss | (316) | (249) |
Deficit | (349,224) | (345,351) |
Total equity | 17,392 | 6,161 |
Total equity and liabilities | $ 53,465 | $ 40,070 |
Hydrogenics Corporation | ||||
Consolidated Interim Statements of Operations and Comprehensive Loss | ||||
(in thousands of US dollars, except share and per share amounts) | ||||
(unaudited) | ||||
Three months ended June 30 |
Six months ended June 30 |
|||
2014 | 2013 | 2014 | 2013 | |
As Revised (Note 2) |
As Revised (Note 2) |
|||
Revenues | $ 10,723 | $ 9,786 | $ 18,782 | $ 22,177 |
Cost of sales | 7,483 | 7,036 | 13,624 | 15,551 |
Gross profit | 3,240 | 2,750 | 5,158 | 6,626 |
Operating expenses | ||||
Selling, general and administrative expenses | 1,979 | 4,875 | 6,546 | 8,497 |
Research and product development expenses | 915 | 926 | 1,831 | 1,786 |
2,894 | 5,801 | 8,377 | 10,283 | |
Gain (Loss) from operations | 346 | (3,051) | (3,219) | (3,657) |
Finance income (expenses) | ||||
Interest income | 1 | -- | 3 | 7 |
Interest expense | (133) | (94) | (267) | (186) |
Foreign currency gains | -- | 239 | 148 | 354 |
Foreign currency losses | (298) | (87) | (357) | (299) |
Other finance gains (losses), net | (41) | (1,185) | (181) | (1,536) |
Finance income (loss), net | (471) | (1,127) | (654) | (1,660) |
Loss before income taxes | (125) | (4,178) | (3,873) | (5,317) |
Income tax expense | -- | -- | -- | -- |
Net loss for the period | (125) | (4,178) | (3,873) | (5,317) |
Items that will be reclassified subsequently to net loss: | ||||
Exchange differences on translating foreign operations | (62) | 196 | (67) | (102) |
Comprehensive loss for the period | $ (187) | $ (3,982) | $ (3,940) | $ (5,419) |
Net loss per share | ||||
Basic and diluted | $ (0.01) | $ (0.49) | $ (0.41) | $ (0.65) |
Weighted average number of common shares outstanding | 9,605,220 | 8,542,637 | 9,340,843 | 8,194,937 |
Hydrogenics Corporation | ||||
Consolidated Interim Statements of Cash Flows | ||||
(in thousands of US dollars) | ||||
(unaudited) | ||||
Three months ended June 30 |
Six months ended June 30 |
|||
2014 | 2013 | 2014 | 2013 | |
As Revised (Note 2) |
As Revised (Note 2) |
|||
Cash and cash equivalents provided by (used in): | ||||
Operating activities | ||||
Net loss for the period | $ (125) | $ (4,178) | $ (3,873) | $ (5,317) |
Increase (decrease) in restricted cash | 62 | 340 | (191) | 115 |
Items not affecting cash: | ||||
Amortization and depreciation | 178 | 204 | 318 | 402 |
Other finance losses (gains), net | 41 | 1,185 | 181 | 1,536 |
Unrealized foreign exchange (gains) losses | 4 | (30) | 90 | 81 |
Stock-based compensation | 157 | 166 | 293 | 341 |
Portion of borrowings recorded as a reduction from research and development expenses (note 7(i)) | (118) | -- | (118) | -- |
Accreted non-cash interest | 115 | 82 | 233 | 171 |
Payment of post-retirement benefit liability | (21) | (22) | (45) | (49) |
Liabilities for compensation indexed to share price | (969) | 1,811 | 592 | 2,212 |
Net change in non-cash working capital | (4,126) | (331) | (6,097) | (6,424) |
Cash used in operating activities | (4,802) | (773) | (8,617) | (6,932) |
Investing activities | ||||
Proceeds from disposals | -- | -- | 9 | -- |
Purchase of property, plant and equipment | (219) | (349) | (525) | (538) |
Purchase of intangible assets | -- | -- | (80) | -- |
Cash used in investing activities | (219) | (349) | (596) | (538) |
Financing activities | ||||
Repayment of repayable government contributions | (339) | (250) | (389) | (250) |
Proceeds of borrowings, net of transaction costs | 854 | 854 | ||
Proceeds of operating borrowings | -- | -- | -- | 1,412 |
Repayment of operating borrowings | (1,722) | (1,412) | -- | (1,412) |
Common shares issued and warrants exercised, net of issuance costs | 13,552 | 6,811 | 13,661 | 7,234 |
Cash provided by financing activities | 12,345 | 5,149 | 14,126 | 6,984 |
Effect of exchange rate fluctuations on cash and cash equivalents held | (9) | 135 | (77) | (189) |
Increase (Decrease) in cash and cash equivalents during the period | 7,315 | 4,162 | 4,836 | (675) |
Cash and cash equivalents - Beginning of period | 9,344 | 8,183 | 11,823 | 13,020 |
Cash and cash equivalents - End of period | $ 16,659 | $ 12,345 | $ 16,659 | $12,345 |