VANCOUVER, BC, Nov. 7, 2022
/PRNewswire/ - Ballard Power Systems (NASDAQ: BLDP) (TSX:
BLDP) today announced consolidated financial results for the third
quarter ended September 30, 2022. All
amounts are in U.S. dollars unless otherwise noted and have been
prepared in accordance with International Financial Reporting
Standards (IFRS).
"We made important customer progress across our verticals during
Q3, while also advancing our global manufacturing strategy and
product cost reduction initiatives," said Mr. Randy MacEwen, President and CEO. "On the
customer front, we continued to focus on platform wins, with
commercial milestones achieved in our truck and rail verticals. In
truck, we announced an order from Quantron for 140 fuel cell
engines to support their planned deployment of heavy-duty fuel cell
trucks in Europe. In rail, we
announced orders across three continents, including an order from
Siemens Mobility to power seven trains in the Berlin-Brandenburg region and an LOI for up to
an additional 200 engines for the European commuter rail market.
Our total order backlog grew 11 percent from last quarter to a
total of $102 million, with
Europe now contributing over half
of our total backlog."
"As part of our 'local for local' global manufacturing strategy,
we announced our plan to invest $130
million in a new MEA manufacturing facility in Shanghai, with an annual production capacity
of approximately 13 million MEAs, which can supply approximately
20,000 fuel cell engines," Mr. MacEwen continued. "With the
facility planned to be in operation in 2025 to support anticipated
growth in MEA demand, this investment is expected to reduce MEA
manufacturing costs, align with China's fuel cell value chain localization
policy, and position Ballard more strongly in the large
China market."
Mr. MacEwen added, "We continue to advance on our product cost
reduction roadmap, with measured progress from technology
innovation, supply chain developments and advanced manufacturing
initiatives. We are running ahead of our cost reduction targets
which we expect to enable significant gross margin expansion in our
long-term financial plan."
"This quarter our revenue and gross margin were $21.3 million and (22)%, respectively. As
previously communicated, we continue to see a challenging gross
margin picture which we expect to persist through 2023 until our
volume ramps and our product cost reduction initiatives move into
production. We exited the quarter with a strong balance sheet to
support our growth strategy."
Q3 2022 Financial Highlights
(all comparisons are
to Q3 2021 unless otherwise noted)
- Total revenue was $21.3 million
in the quarter, down 15% year-over-year.
-
- Power Products revenue of $15.9
million decreased 2%, driven by lower shipments of fuel cell
products.
-
- Heavy-Duty revenues of $12.1
million increased 8% due to increased sales in North America, Europe and other areas offsetting lower sales
in China.
- Stationary Power Generation revenues of $2.1 million increased 9% due to increased sales
in North America, offsetting lower
sales in Europe.
- Material Handling revenues of $1.7
million decreased 46%, primarily as a result of lower
shipments to Plug Power.
- Technology Solutions revenue of $5.5
million decreased 39% due primarily to decreased amounts
earned on the Weichai Ballard JV and Audi programs.
- Gross margin was (22)% in the quarter, a decrease of 33-points,
driven by a combination of shift to lower overall product margin
and service revenue mix including the impacts of pricing strategy,
investment in manufacturing capacity, increases in supply costs and
inventory adjustments.
- Total Operating Expenses and Cash Operating Costs3
were $40.0 million and $30.0 million in the quarter, an increase of 46%
and 32%, respectively. Increases were driven primarily by higher
expenditure on research, technology and product development
activities. Costs were also higher as a result of increased general
and administrative expenses.
- Adjusted EBITDA3 was ($35.1)
million, compared to ($23.1)
million in Q3 2021, primarily a result of the decrease in
gross margin and increase in Cash Operating Costs.
- Ballard received approximately $31.8
million of new orders in Q3, and delivered orders valued at
$21.3 million, resulting in an Order
Backlog of approximately $101.7
million at end-Q3. Order Backlog growth was driven
predominantly by increased orders from Europe, which now represents approximately 55%
of the total Order Backlog, compared to approximately 38% at end-Q3
2021.
- The 12-month Order Book was $51.0
million at end-Q3, a decrease of $10.4 million from the end of Q2 2022.
|
Order Backlog
($M)
|
Order Backlog
at End-Q2 2022
|
Orders Received
in Q3 2022
|
Orders Delivered
in Q3 2022
|
Order Backlog
at End-Q3 2022
|
|
Total Fuel Cell
Products & Services
|
$91.2
|
$31.8
|
$21.3
|
$101.7
|
2022 Outlook
Ballard 2022 Total Operating Expense4 and Capital
Expenditure5 guidance remains unchanged, but now expects
to be at the higher end of the Total Operating Expense range and
the lower end of the Capital Expenditure range.
|
2022
|
Guidance
|
|
Total Operating
Expense4
|
$130 - $150
million
|
|
Capital
Expenditure5
|
$30 - $50
million
|
Q3 2022 Financial Summary
|
(Millions of U.S.
dollars,
except per share amounts)
|
Three months
ended September 30
|
|
2022
|
2021
|
% Change
|
|
REVENUE
|
|
|
|
|
Fuel Cell Products
& Services:1,2
|
|
|
|
|
Heavy Duty
Motive
|
$12.1
|
$11.2
|
8 %
|
|
Material
Handling
|
$1.7
|
$3.1
|
(46) %
|
|
Stationary Power
Generation
|
$2.1
|
$1.9
|
9 %
|
|
Sub-Total
|
$15.9
|
$16.3
|
(2) %
|
|
Technology
Solutions
|
$5.5
|
$9.0
|
(39) %
|
|
Total Fuel Cell
Products & Services Revenue
|
$21.3
|
$25.2
|
(15) %
|
|
PROFITABILITY
Gross Margin
$
|
|
|
|
|
($4.8)
|
$2.8
|
(268) %
|
|
Gross Margin
%
|
(22) %
|
11 %
|
(33) pts
|
|
Total Operating
Expenses
|
$40.0
|
$27.4
|
46 %
|
|
Cash Operating
Costs3
|
$30.0
|
$22.7
|
32 %
|
|
Equity (loss) in JV
& Associates
|
($1.0)
|
($4.1)
|
76 %
|
|
Adjusted
EBITDA3
|
($35.1)
|
($23.1)
|
(52) %
|
|
Net (Loss) from
continuing operations
|
($42.9)
|
($30.8)
|
(39) %
|
|
Earnings Per
Share
|
($0.14)
|
($0.10)
|
(40) %
|
|
CASH
|
|
|
|
|
Cash provided by (used
in) Operating Activities:
|
|
|
|
|
Cash Operating
(Loss)
|
($35.7)
|
($20.8)
|
(71) %
|
|
Working Capital
Changes
|
$5.4
|
$6.4
|
(16) %
|
|
Cash provided by (used
in) Operating Activities
|
($30.3)
|
($14.4)
|
(110) %
|
|
Cash
Reserves
|
$957.4
|
$1,222.3
|
(22) %
|
For a more detailed discussion of Ballard Power Systems' third
quarter 2022 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 Monday, November 7, 2022 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review third quarter
2022 operating results. The live call can be accessed by dialing
+1.604.638.5340. Alternatively, a live audio and 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, and stationary power. To learn more about Ballard, please
visit www.ballard.com.
Important Cautions Regarding
Forward-Looking Statements
This release contains forward-looking statements concerning the
hydrogen economy and markets for our products and the effects of
governmental regulations on such markets, expected revenues,
operating expenses, capital expenditures, corporate development
activities, impacts of investments in manufacturing and R&D
capabilities and market growth, and our carbon emissions goals.
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.
Further Information
Kate
Charlton +1.604.453.3939, investors@ballard.com or
media@ballard.com
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), Material Handling and Stationary Power Generation,
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
|
The UAV market has been
classified as a discontinued operation in our third quarter of 2020
consolidated condensed financial statements. As such, the assets of
the UAV market have been classified as assets held for sale as of
September 30, 2020. Furthermore, the historic operating results of
the UAV market for 2020 have been removed from continuing operating
results and are instead presented separately in the statement of
comprehensive income as income from discontinued
operations.
|
|
3
|
Note that Cash
Operating Costs, EBITDA, and Adjusted EBITDA 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, and Adjusted EBITDA 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, and Adjusted EBITDA to the
Consolidated Financial Statements, please refer to the tables
below.
|
|
Cash Operating Costs
measures operating expenses excluding stock-based compensation
expense, depreciation and amortization, impairment losses or
recoveries on trade receivables, restructuring charges, acquisition
related costs, the impact of unrealized gains or losses on foreign
exchange contracts, and financing charges. EBITDA measures net loss
from continuing operations 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 related costs.
|
|
4
|
Total Operating
Expenses refer to the measure reported in accordance with
IFRS.
|
|
5
|
Capital Expenditure is
defined as Additions to property, plant and
equipment and Investment in other intangible assets as
disclosed in the Consolidated Statements of Cash Flows
|
|
(Expressed in
thousands of U.S. dollars)
|
|
Three months ended
September 30
|
|
Cash operating
costs
|
|
2022
|
2021
|
$ Change
|
|
Research and product
development
|
$
25,263
|
$
16,566
|
$ 8,697
|
|
|
General and
administrative
|
8,727
|
6,768
|
1,959
|
|
|
Sales and
marketing
|
3,486
|
3,570
|
(84)
|
|
|
Operating
expenses
|
$
37,476
|
$
26,904
|
$
10,572
|
|
|
|
|
|
|
|
Research and product
development (cash operating cost)
|
$
21,201
|
$
14,174
|
$ 7,027
|
|
|
General and
administrative (cash operating cost)
|
5,679
|
5,349
|
330
|
|
|
Sales and marketing
(cash operating cost)
|
3,115
|
3,211
|
(96)
|
|
|
Cash operating
costs
|
$
29,995
|
$
22,734
|
$ 7,261
|
|
|
|
|
|
|
|
|
|
|
|
(Expressed in
thousands of U.S. dollars)
|
Three months ended
September 30,
|
|
EBITDA and adjusted
EBITDA
|
2022
|
2021
|
$
Change
|
|
Net loss from
continuing operations
|
$
(42,881)
|
$
(30,844)
|
$
(12,037)
|
|
Depreciation and
amortization
|
3,979
|
2,167
|
1,812
|
|
Finance
expense
|
324
|
335
|
(11)
|
|
Income taxes
(recovery)
|
(420)
|
3
|
(423)
|
|
EBITDA
|
$
(38,998)
|
$
(28,339)
|
$
(10,659)
|
|
Stock-based
compensation expense
|
|
2,828
|
2,477
|
351
|
|
Acquisition related
costs
|
|
2,261
|
535
|
1,726
|
|
Finance and other
(income) loss
|
|
(2,781)
|
1,545
|
(4,326)
|
|
Impairment loss on
assets
|
|
-
|
263
|
(263)
|
|
Impact of unrealized
(gains) losses on foreign
exchange contracts
|
|
1,588
|
440
|
1,148
|
|
Adjusted
EBITDA
|
|
$
(35,102)
|
$
(23,079)
|
$
(12,023)
|
|
|
|
|
|
|
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SOURCE Ballard Power Systems Inc.