- $25.8M Revenue, 21% Gross Margin,
($8.6)M Adjusted EBITDA
- Business continuity maintained with modest COVID-19 impact on
Q2 results
VANCOUVER, Aug. 5, 2020 /PRNewswire/ - Ballard Power Systems
(NASDAQ: BLDP) (TSX: BLDP) today announced consolidated financial
results for the second quarter ended June
30, 2020. All amounts are in U.S. dollars unless otherwise
noted and have been prepared in accordance with International
Financial Reporting Standards (IFRS).
"While the COVID-19 pandemic continues to cause some delays in
customer orders, it has not had an appreciable impact on
Ballard operations to this point
and we continue to take important precautions to mitigate its
impact on our people and our business," said Randy MacEwen, President and CEO. "In Q2
Ballard delivered revenue of
$25.8 million, gross margin of 21%
and ending cash reserves of $170.3
million."
Mr. MacEwen noted, "Important recent developments in key
geographic markets reaffirm our conviction that a strong future is
emerging for the deployment of Fuel Cell Electric Vehicles, or
FCEVs, particularly for use cases in which Heavy and Medium Duty
Motive applications require heavy payload, extended range, and
rapid refueling. Ballard is
well-positioned to provide leading fuel cell technology and
products in bus, truck, rail and marine applications."
Mr. MacEwen added, "In China,
the Weichai-Ballard joint venture commenced production activities
and assembly of fuel cell stacks and modules. We expect the JV to
optimize manufacturing processes and start a production ramp
through the remainder of 2020. In Europe, the European Commission set out an
ambitious phased approach for the transition to hydrogen, proposing
that it become an intrinsic part of an integrated energy system.
The plan contemplates the deployment of over 40 gigawatts of
renewable hydrogen electrolyzers, producing up to 10 million tons
of hydrogen by 2030. In California, the California Air Resources Board
passed the Advanced Clean Truck Regulation, which requires
increasing percentages of new truck purchases to be zero-emission,
starting in 2024 and with 75% of all new Class 4 to 8 trucks and
40% of all new Class 7 and 8 tractors to be zero-emission by 2035,
and 100% by 2045. Subsequently, fifteen U.S. states indicated their
intention to implement a similar mandate, starting with a
requirement for 30% of new medium- and heavy-duty truck sales to be
zero-emission by 2030, increasing to 100% by 2050."
Q2 2020 Financial Highlights
(all comparisons are
to Q2 2019 unless otherwise noted)
- Total revenue was $25.8 million
in the quarter, a year-over-year increase of 9% or $2.2 million, primarily the result of higher
shipments of Heavy Duty Motive products.
- The Power Products platform generated revenue of $16.0 million in the quarter, an increase of 62%
or $6.1 million:
-
- Heavy Duty Motive revenue was $12.5
million, an increase of 94% or $6.1
million, due primarily to higher shipments of fuel cell
products to customers in China;
- Material Handling revenue was $2.2
million, a decrease of 20% or $0.6
million, primarily the result of lower fuel cell stack
shipments to Plug Power; and
- Backup Power revenue was $1.3
million, an increase of 232% or $0.9
million, due primarily to an increase in sales of
hydrogen-based backup power fuel cell stacks to Europe and Asia, combined with a minor increase in
hydrogen-based backup power systems and service revenues in
Europe.
- The Technology Solutions platform generated revenue of
$9.8 million in the quarter, a
decrease of 29% or $4.0 million, due
primarily to decreased amounts earned on the Audi program, the
Weichai-Ballard JV technology transfer program, and the Siemens
development program. Full-year Technology Solutions revenue is
expected to be lower than in 2019 partly due to reduced program
scope, as certain planned activities have been completed, and
deferral of certain development work on certain programs in view of
COVID-19.
- Gross margin was 21% in Q2, a decrease of 2-points due
primarily to a shift to lower overall product margin and service
revenue mix.
- Cash operating costs2 were $11.6 million in the quarter, a 38% increase
primarily attributable to increased expenditure on technology and
product development expenses related to work on next-generation
stacks and modules for bus, truck, rail and marine applications as
well as higher general and administrative expenses.
- Adjusted EBITDA2 was ($8.6)
million, compared to ($5.0)
million in Q2 2019, primarily as a result of higher cash
operating costs.
- Net loss and adjusted net loss were ($11.4) million in the quarter, declines of
64%.
- Net loss per share2 and adjusted net loss per
share2 were ($0.05),
declines of 55%.
- Cash used by operating activities was ($14.8) million, a decline of 966%, reflecting
cash operating loss of ($5.3) million
and use in working capital of ($9.5)
million.
- Cash reserves were $170.3 million
at June 30, 2020, an increase of 4%
from the end of Q2 2019 and a decrease of 6% from the end of the
prior quarter. An additional $12.2
million of cash was raised in the quarter from an
At-The-Market Equity Program. Ballard also made a further capital
contribution of $6.4 million to the
Weichai-Ballard JV in the quarter.
- During Q1 Ballard received
$11.9 million in new orders,
partially reflecting the impact of COVID-19 on timing of customer
orders, and delivered orders valued at $25.8
million, resulting in a decrease in the Order Backlog of
$13.9 million from the prior quarter,
ending Q2 at $155.5 million. The
12-month Order Book was $101.0
million at end-Q2, a decrease of $4.8
million from the prior quarter.
Q2 2020 Operating Highlights
- Received follow-on purchase orders from Wrightbus for 15 of
Ballard's 85-kilowatt
FCveloCity®-HD fuel cell modules to power Fuel Cell
Electric Buses (FCEBs) planned for deployment in the U.K. With
these orders, Ballard currently
has orders in-hand from Wrightbus for a total of 50 modules to
power FCEBs in the U.K., including planned deployments in the
cities of London and Aberdeen.
- Signed a non-binding Memorandum of Understanding with
consortium partners to establish the H2OzBus Project which will
develop detailed plans for a local transit authority for a first
phase deployment of 100 FCEBs in 10 central hub locations across
Australia, including the use of
'green hydrogen' produced from renewable energy.
- Filed a final short form base shelf prospectus (Prospectus),
and a related U.S. registration statement on Form F-10
(Registration Statement), for $750
million, which provides the flexibility to make offerings of
securities during the effective period of the Prospectus and
Registration Statement, until July
2022.
- Celebrated the Company's 25th anniversary on the
Nasdaq stock exchange, having initially been listed in 1995.
- Subsequent to the quarter:
-
- The Weichai-Ballard joint venture began production activities
and assembly of next-generation fuel cell stacks and modules.
Manufacturing processes are expected to be optimized and a
production ramp started through the remainder of 2020.
- Received a purchase order for $7.7
million of membrane electrode assemblies (MEAs) for use in
manufacturing FCvelocity®-9SSL fuel cell stacks, from
Guangdong Synergy Ballard Hydrogen Power Co., Ltd. (Synergy-Ballard
JVCo), a joint venture in which Ballard holds a 10% ownership interest.
- Recognized that several California transit agencies – including Orange
County Transportation Authority (OCTA) and Alameda-Contra Costa
Transit District (AC Transit) – have now issued zero-emission bus
rollout plans in compliance with CARB's Innovative Clean Transit
Regulation, which requires the scaled adoption of zero-emission
buses in California. Under the
regulation, 100% of all bus fleets in California must be zero-emission by 2040.
- Noted that the European Commission unveiled its Industrial
Strategy and issued its report "A Hydrogen Strategy for a
Climate-Neutral Europe". In addition to industrial uses of
hydrogen, the European Commission's report focuses on
transportation applications, including buses, commercial fleets of
cars and heavy-duty road vehicles, rail and marine vessels.
- Announced that on-road commercial Fuel Cell Electric Vehicles
powered by Ballard fuel cell
technology have now driven over 50 million kilometers, an
industry-leading metric and enough to circle the globe 1,250
times.
Q2 2020 Financial Summary
|
|
|
(Millions of U.S.
dollars)
|
Three months
ended June 30,
|
Six months ended
June 30,
|
|
2020
|
2019
|
% Change
|
2020
|
2019
|
% Change
|
REVENUE
|
|
|
|
|
|
|
Fuel Cell Products
& Services:1
|
|
|
|
|
|
|
Heavy Duty
Motive
|
$12.5
|
$6.5
|
94%
|
$22.9
|
$9.0
|
153%
|
UAV
|
$0.0
|
$0.2
|
-85%
|
$0.2
|
$0.4
|
-52%
|
Material
Handling
|
$2.2
|
$2.8
|
-20%
|
$2.9
|
$6.0
|
-51%
|
Backup
Power
|
$1.3
|
$0.4
|
232%
|
$2.5
|
$0.8
|
204%
|
Sub-Total
|
$16.0
|
$9.9
|
62%
|
$28.4
|
$16.2
|
75%
|
Technology
Solutions
|
$9.8
|
$13.8
|
-29%
|
$21.4
|
$23.4
|
-9%
|
Total Fuel Cell
Products & Services Revenue
|
$25.8
|
$23.7
|
9%
|
$49.8
|
$39.7
|
26%
|
PROFITABILITY
Gross Margin
$
|
$5.4
|
$5.6
|
-3%
|
$10.5
|
$7.8
|
36%
|
Gross Margin
%
|
21%
|
23%
|
-2-points
|
21%
|
20%
|
+1-point
|
Operating
Expenses
|
$14.0
|
$10.1
|
38%
|
$29.7
|
$20.9
|
42%
|
Cash Operating
Costs2
|
$11.6
|
$8.4
|
38%
|
$23.8
|
$17.7
|
34%
|
Equity gain (loss) in
JV & Associates
|
($2.9)
|
($2.9)
|
0%
|
($5.4)
|
($4.8)
|
-10%
|
Adjusted
EBITDA2
|
($8.6)
|
($5.0)
|
-72%
|
($17.7)
|
($13.6)
|
-30%
|
Net Income
(Loss)
|
($11.4)
|
($7.0)
|
-64%
|
($24.9)
|
($19.0)
|
-31%
|
Earnings Per
Share
|
($0.05)
|
($0.03)
|
-55%
|
($0.10)
|
($0.08)
|
-27%
|
Adjusted Net
Loss2
|
($11.4)
|
($7.0)
|
-64%
|
($24.9)
|
($17.0)
|
-46%
|
Adjusted Net Loss Per
Share2
|
($0.05)
|
($0.03)
|
-55%
|
($0.10)
|
($0.07)
|
-42%
|
CASH
|
|
|
|
|
|
|
Cash provided by
(used in) Operating Activities:
|
|
|
|
|
|
|
Cash Operating Income
(Loss)
|
($5.3)
|
($1.4)
|
-279%
|
($12.3)
|
($7.4)
|
-66%
|
Working Capital
Changes
|
($9.5)
|
$3.1
|
-406%
|
($12.6)
|
($1.3)
|
-869%
|
Cash
provided by (used in)
Operating Activities
|
($14.8)
|
$1.7
|
-966%
|
($24.9)
|
($8.7)
|
-185%
|
Cash
Reserves
|
$170.3
|
$163.7
|
4%
|
|
|
|
For a more detailed discussion of Ballard Power Systems' second
quarter 2020 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
Thursday, August 6, 2020 at
8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review second quarter
2020 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) vision is to deliver fuel cell power for
a sustainable planet. Ballard
zero-emission PEM fuel cells are enabling electrification of
mobility, including buses, commercial trucks, trains, marine
vessels, passenger cars, forklift trucks and UAVs. To learn more
about Ballard, please visit
www.ballard.com.
Important Cautions Regarding Forward-Looking
Statements
This release contains forward-looking statements
concerning the impact of the coronavirus pandemic on our business
and on the long-term demand for fuel cell products, projected
product orders and sales and product shipments, expected
manufacturing progress at the Weichai-Ballard joint venture, the
markets for our products and the effects of governmental
regulations on such markets, expected financial results and future
offerings of securities. 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), UAV, 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, acquisition
costs, the impact of unrealized gains or losses on foreign exchange
contracts, and financing charges. EBITDA measures net loss
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,
finance and other income, the impact of unrealized gains or losses
on foreign exchange contracts, and acquisition costs. Adjusted Net
Income (Loss) measures net income (loss) excluding transactional
gains and losses, asset impairment charges, and acquisition
costs.
|
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SOURCE Ballard Power Systems Inc.