13.11.2002: Meldung: Hydrogenics: Third Quarter 2002 Results (engl.)
Toronto, 12.11.2002. Hydrogenics Corporation (Nasdaq: HYGS, TSE: HYG), a designer and manufacturer of fuel cell technology, today announced its financial results for the third quarter 2002 and highlights of its recent corporate activity. All results are reported in U.S. dollars. Conference call details are provided below.
Hydrogenics" third quarter 2002 revenues increased 80 percent to $4.4 million, compared with $2.5 million for third quarter 2001. Net loss for the third quarter 2002 was $7.0 million, or $0.14 per share, compared with a net income of $0.3 million, or $0.01 per share, for the third quarter 2001.
Gross profit for the third quarter 2002 was 34 percent of revenues, or $1.5 million, compared with 32 percent of revenues, or $0.8 million, for the comparable period in 2001.
"Our record revenues combined with an additional $12 million in confirmed orders is clear evidence that Hydrogenics is breaking through some significant milestones in our efforts to accelerate the commercialization of fuel cell technology," said Hydrogenics President and CEO Pierre Rivard. "With healthy cash reserves and a strong, disciplined approach to commercial sustainability we are confident that the ambitious financial targets we set for 2002 are well within reach."
Excluding $3.8 million in non-cash amortization associated primarily with the intellectual property (IP) acquired in the GM transaction of October 16, 2001, net loss for the third quarter 2002 was $3.2 million, or $0.06 per share. There was no comparable amortization of IP in the third quarter 2001.
Foreign currency losses reduced earnings by $1.4 million, or $0.03 per share, for the third quarter 2002 compared with a foreign currency gain of $1.2 million, or $0.03 per share, for the third quarter 2001.
Revenues for the first three quarters 2002 increased 138 percent to $10.0 million compared with $4.2 million for the comparable period in 2001. Net loss for the first three quarters 2002 was $15.5 million, or $0.32 per share compared with a net income of $1.0 million, or $0.03 per share, for the first three quarters 2001.
Gross profit for the year-to-date 2002 was 31 percent of revenues, or $3.1 million, compared with 33 percent of revenues, or $1.4 million, for the comparable period in 2001.
Excluding $11.4 million in non-cash amortization associated primarily with the intellectual property (IP) acquired in the GM transaction, net loss for the first three quarters 2002 was $4.1 million, or $0.08 per share. There was no comparable amortization of IP in the first half 2001.
Foreign currency gains contributed a positive $0.5 million, or $0.01 per share, towards net income for the year-to-date 2002 compared with $2.7 million, or $0.08 per share, for the comparable period in 2001.
"Achieving $10 million in revenues after only nine months in 2002 is clearly a significant milestone for Hydrogenics," said Mr. Rivard. "While I am delighted with our record revenues of $4.4 million achieved during the third quarter, I am even more excited with the increase in our confirmed orders to a level exceeding $12 million."
"These confirmed orders encompass both our traditional test equipment business as well as our developing power module business," he said. "Consistently securing these orders with solid gross profits highlights the merits of our long-standing business plan to target premium power applications, such as, aerospace, research and development and military applications, prior to the larger consumer applications of the future. The ability to expand our gross profits, as we achieve early commercial traction is critical to our ongoing investment in product and market development.
"Hydrogenics also continues to make meaningful strides in our operations," Mr. Rivard said. "In this quarter, we have re-affirmed our leadership position as a provider of test equipment to several major automotive companies in three distinct market regions, delivered on our market commitment with the successful demonstration of the world"s first regenerative proton exchange membrane (PEM) fuel cell back up power generator, and secured a substantial new development agreement with John Deere."
PROGRESS ON GOALS FOR 2002
Hydrogenics established specific corporate goals in 2002. These goals include maintaining commercial sustainability; focusing on strategic alliances by capitalizing on existing relationships as well as establishing new ones; delivering commercial fuel cell products to targeted markets; and extending global reach.
With regard to these goals, Hydrogenics has demonstrated progress in the following areas during the first three quarters of 2002:
* Commercial Sustainability -- More than doubled 2002 revenues for the year-to-date compared with the same period in the prior year, achieving more revenue in the third quarter 2002 alone, than the first three quarters of 2001 combined. Higher than anticipated gross profit performance facilitated increased spending on market and product development which contributed to a substantial increase in confirmed orders. In spite of the rapid growth, "cash burn" has been minimized with only $4.7 million consumed to date, leaving a healthy $61 million to fund future fuel cell initiatives.
* Global Reach -- Expanded our European and Asia Pacific customer base with initial test system sales in France and China. Strengthened our North American market presence with fuel cell system sales to John Deere and AeroVironment, and the successful HyUPS demo in California. Participated in China Fuel Cell Mission sponsored by Canada"s National Research Council. Expanded and integrated the workforce at the wholly-owned German subsidiary EnKat, GmbH. Achieved multiple repeat orders from Japanese automotive manufacturers.
* Strategic Alliances -- Announced an agreement with Dow Corning to jointly commercialize an innovative manufacturing process for sealing PEM fuel cell stacks, electrolyzers and membrane electrode assemblies (MEA). Expanded upon our initial development agreement with John Deere to provide power module technology for premium power applications of PEM fuel cells. Continued co-demonstrating, co-branding, and technology transfer from GM with successful demonstration of HyUPS regenerative fuel cell technology in California.
* Commercial Fuel Cell Products -- Following the successful introduction of our 2002 series of test equipment incorporating industry leading advances, received multiple repeat orders and new customer orders spanning the full range of Hydrogenics FCATS offerings. Delivered a fuel cell module to AeroVironment for a specialty aerospace application. Installed and successfully tested the HyUPS unit at a cell tower site in Northern California.
FUEL CELL TECHNOLOGY ADVANCEMENTS
* Building on the success of the second generation HyPM(TM) power module which realized a 30 percent reduction in weight, a 25 percent reduction in parts and corresponding reduction in cost, the Company has designed a new low profile third generation HyPM(TM) 20 kW power module, referred to as HyPM-LP2. This new configuration is expected to demonstrate further advancements in performance, durability, reliability and modularity. Release of the alpha prototype is targeted for fourth quarter 2002.
* Completing final stages in the development of our regenerative Auxiliary Power Unit (APU) incorporating a Hydrogenics" PEM electrolyzer and HyPM fuel cell power module. The Company is under contract with the U.S. military and expects to demonstrate the fully integrated system in the fourth quarter 2002.
* In conjunction with Dow Corning, a leading developer and manufacturer of silicone-based materials, the Company is developing plans to jointly commercialize an innovative and cost-effective manufacturing process for sealing PEM fuel cell stacks and electrolyzers. This automated "Seal-in-Place"(TM) process injects silicone materials into an unsealed, assembled stack, a process that substantially reduces stack assembly time and labor costs, resulting in improved reliability of stack performance. Further details of this breakthrough process will be released in the fourth quarter, 2002.
Based on the $10 million in year-to-date revenue performance and on the additional $12 million of confirmed orders, Hydrogenics maintains its expectation of full-year revenues in 2002 of between $14 million and $16 million. On the expense side, the Company will continue to align its resources with emerging market opportunities and will increase investment in R&D and SG&A as needed to directly support the growing commercial opportunities in the upcoming year. In addition to expanding gross profits, the Company expects to offset increased R&D spending on its power module technology by securing substantial government funding and grants for specific demonstration projects.
"The ambitious financial targets we set for ourselves earlier this year are well within reach," said Mr. Rivard. "In fact with the current portfolio of confirmed orders, we are cautiously optimistic that our 2002 revenues will more than double the full year 2001 revenues and come in at the high end of our previous revenue guidance. In order to accomplish this more aggressive target, in the fourth quarter we will once again have to set a new record for quarterly revenues."
"Our team at Hydrogenics continues to demonstrate its ability to grow revenues in a commercially sustainable manner," Mr. Rivard added, "with solid gross margins and prudent investment in research and development and SG&A expense. This consistent execution, combined with confirmed orders at record levels, is generating tremendous excitement throughout Hydrogenics. Continuing technological innovations and new customer relationships are generating real momentum, giving us confidence as we undertake early commercialization projects. In spite of our rapid growth, we remain firmly committed to minimizing our cash burn from operations."
CONFERENCE CALL DETAILS:
Hydrogenics" senior management will hold a conference call today to discuss the third quarter 2002 results at 10:30 am EDT. The U.S./Canada dial-in number for the conference call is (719) 457-2662. A replay of the call will be available from November 12th at 2:00 pm EDT until November 26th at 11:59 pm EDT. The U.S./Canada dial-in number for the replay is (719) 457-0820. The access code for the replay is 303426. A live webcast of the conference call will be available on the Company"s website at http://www.hydrogenics.com. A replay of the webcast will be available following the conference call.
Hydrogenics Corporation (http://www.hydrogenics.com) is dedicated to the design and development of commercial PEM fuel cell systems for transportation, stationary and portable power applications. With its first commercial product line of fully integrated fuel cell test systems, the Company has established a leadership position in fuel cell balance-of-plant and operating system technology. The knowledge, expertise, and relationships that Hydrogenics has established from this early R&D product market are providing the foundation for the development and manufacture of fuel cell power modules and fully integrated power generators. Hydrogenics" 95,000 square foot headquarters and R&D facility is located in Mississauga, Ontario, Canada. The Company also has Asia-Pacific operations in Tokyo, Japan, a facility in New York State, and European operations based in Gelsenkirchen, Germany.
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Law of 1995. These statements are based on management"s current expectations and are subject to changes in the competitive environment adversely affecting the products, markets, revenues or margins of Hydrogenics" business. Readers should not place undue reliance on Hydrogenics" forward-looking statements. Investors are encouraged to review the section captioned "Risk Factors" in Hydrogenics" Form 20F filed with the Securities and Exchange Commission on June 26, 2002 for a more complete discussion of factors that could affect Hydrogenics" future performance. 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.
Hydrogenics Corporation Consolidated Balance Sheets As at September 30, 2002 and December 31, 2001 (thousands of U.S. dollars)
September 30, December 31, 2002 2001 $ $ (unaudited)
Cash 1,612 1,639
Short-term investments 59,472 64,170
Accounts receivable 4,963 4,353
Grants receivable 282 741
Inventories 3,924 2,969
Prepaid expenses 546 129 70,799 74,001
Deposits 102 102
Property, plant and equipment 3,558 3,780
Acquired intellectual property and
other intangible assets 19,361 29,750 93,820 107,633
Accounts payable and accrued liabilities 2,690 1,593
Income taxes payable 82 11 2,772 1,604
Loans payable 441 208 3,213 1,812
Share capital and other equity 114,792 114,526
Deficit (20,139) (4,659)
Foreign currency translation adjustment (4,046) (4,046) 90,607 105,821 93,820 107,633
Hydrogenics Corporation (unaudited) Interim Consolidated Statements of Operations and Deficit For the three and nine-month periods ended September 30, 2002
(thousands of U.S. dollars, except for share and per share amounts)
Three months ended Nine months ended September 30, September 30, 2002 2001 2002 2001 $ $ $ $
Revenues 4,411 2,450 10,022 4,214
Cost of revenues 2,924 1,663 6,888 2,840
1,487 787 3,134 1,374
Selling, general and
administrative 1,788 1,269 4,424 3,262
development 1,428 1,174 3,358 2,489
development grants (114) (391) (368) (944)
Depreciation of property,
plant and equipment 348 245 971 506
Amortization of acquired
and other intangibles 3,833 -- 11,380 --
7,283 2,297 19,765 5,313
Loss from operations (5,796) (1,510) (16,631) (3,939)
Other income (expenses)
Provincial capital tax (35) 18 (104) (109)
Interest 286 619 849 2,387
gains (losses) (1,398) 1,216 518 2,732
(1,147) 1,853 1,263 5,010
Income (loss) before
income taxes (6,943) 343 (15,368) 1,071
tax expense 37 26 112 112
Net income (loss) for
the period (6,980) 317 (15,480) 959
(deficit) - Beginning
of period (13,159) (1,201) (4,659) (1,843)
Deficit - End of
period (20,139) (884) (20,139) (884)
Net income (loss)
Basic (0.14) 0.01 (0.32) 0.03
Diluted (0.14) 0.01 (0.32) 0.02
Shares used in
income (loss) per
share 48,538,897 35,702,028 48,338,097 35,611,467
Shares used in
per share 48,538,897 38,786,798 48,338,097 39,013,548
Hydrogenics Corporation (unaudited) Interim Consolidated Statements of Cash Flows For the three and nine-month periods ended September 30, 2002 (thousands of U.S. dollars)
Three months ended Nine months ended September 30, September 30, 2002 2001 2002 2001 $ $ $ $
Cash provided by (used in)
Net income (loss)
for the period (6,980) 317 (15,480) 959
Items not affecting cash
Depreciation of property, plant and equipment 348 245 971 506
Amortization of acquired intellectual property and other intangibles 3,833 -- 11,380 --
Unrealized foreign exchange losses (gains) 1,421 (1,082) (576) (1,403)
Imputed interest on loan payable 14 5 34 14
Non-cash consulting fees 35 -- 84 --
Net change in non-cash
working capital 1 (265) 17 (4,231)
(1,328) (780) (3,570) (4,155)
Decrease in short-term
investments 2,704 1,891 5,034 4,889
Purchase of property,
plant and equipment (128) (1,172) (944) (2,693)
intellectual property -- -- (50) --
net of cash acquired (78) -- (633) --
2,498 719 3,407 2,196
in loan payable (50) -- (50) 98
Common shares issued 11 19 182 27
(39) 19 132 125
Increase (decrease) in
cash during the period 1,131 (42) (31) (1,834)
Effect of exchange
rate changes on cash (17) (1) 4 113
Cash - Beginning
of period 498 190 1,639 1,868
Cash - End
of period 1,612 147 1,612 147
Hydrogenics Corporation - Canada
5985 McLaughlin Road