14.5.2007: Meldung: Hydrogenics Corp.: First Quarter 2007 Results

Hydrogenics Reports First Quarter 2007 Results
Friday May 11, 6:30 am ET

Significant Cost Reduction Measures Implemented Increased Production and Orders in OnSite Generation Business

MISSISSAUGA, ONTARIO-- May 11, 2007 -- Hydrogenics Corporation) -


- Q1 Revenues up 12% year over year

- $30.8 million order backlog

- Secured 8 new customers in Power Systems business

- Actions implemented to deliver $4 million of annualized cost savings

Hydrogenics Corporation, a leading developer and manufacturer of hydrogen and fuel cell products, is reporting first quarter 2007 results. Results are reported in U.S. dollars and are prepared in accordance with Canadian generally accepted accounting principles.

"During the first quarter we undertook a comprehensive analysis of our operations. As a result of this analysis we implemented a restructuring and streamlining of our operations to reduce our overall cost structure, and as anticipated, we effected the majority of this initiative by March 31, 2007," said Daryl Wilson, President and Chief Executive Officer. "This initiative, as previously communicated, along with an improved order intake and the phased resumption of deliveries in our OnSite Generation business unit is anticipated to allow us to reduce annual cash consumption by a minimum of one third on an annualized basis," added Wilson.

Results for the first quarter of 2007 compared to the first quarter of 2006

Revenues were $6.9 million for the first quarter of 2007, a 12% increase from revenues of $6.1 million for the comparable period of 2006 and reflects increased revenues in the Power Systems and Test Systems business units of 36% and 34%, respectively, partially offset by a 24% decrease in revenues in the OnSite Generation business unit, attributed to a phased return to historical production levels.

Gross profit, expressed as a percentage of revenues, was 13% (17% in 2006) and reflects lower overhead absorption in our OnSite Generation business unit due to the gradual resumption of production.

Cash operating costs, a non-GAAP measure, defined as selling, general and administrative expenses, and research and product development expenses less stock-based compensation expenses, were $9.3 million, a 26% increase from $7.4 million in 2006, primarily attributed to a $2.1 million charge taken in the first quarter of 2007 to streamline our operations and a $1.1 million reduction in funding of research and product development initiatives from third parties. These costs were partially offset by the absence of $1.1 million of one-time consulting charges related to Sarbanes-Oxley Act implementation and other business strategy matters as well as $0.2 million of other expenses.

Net loss was $8.3 million for the first quarter of 2007, consistent with the first quarter of 2006.

Results for the first quarter of 2007 compared to the fourth quarter of 2006

Revenues were $6.9 million for the first quarter of 2007, a 28% decrease in revenues over the fourth quarter of 2006.

Gross profit, expressed as a percentage of revenues, was 13%, compared to negative 1% in fourth quarter of 2006 due to the absence of late delivery penalties, additional warranty accruals and provisions for slow moving inventory in our OnSite Generation business unit.

Cash operating costs were $9.3 million, a decrease of 15% from $10.8 million in the fourth quarter of 2006.

Net loss was $8.3 million for the first quarter of 2007, a decrease of 62% from $22.1 million in 2006 primarily attributed to the absence of a $10.8 million impairment charge related to the intangible assets of Stuart Energy Systems Corporation and $1.3 million of other expenses incurred in the fourth quarter of 2006.


Cash and cash equivalents and short-term investments were $51.0 million as at March 31, 2007. The $9.3 million sequential quarterly decrease in cash and cash equivalents and short-term investments is attributable to $9.4 million of net cash outflows from operations inclusive of $1.9 million of non-cash working capital due to increased production and $1.3 million of severance payments.

Order backlog

Order backlog as at March 31, 2007 was $30.8 million, as follows (in $ millions):

Q4/06 Orders Orders Q1/07
Backlog Received Delivered Backlog

OnSite Generation $ 15.1 $ 4.5 $ 1.8 $ 17.8
Power Systems 8.3 1.4 1.6 8.1
Test Systems 6.0 2.4 3.5 4.9
Total $ 29.4 $ 8.3 $ 6.9 $ 30.8

In addition to revenue recognized during Q1, we currently expect to deliver and recognize as revenue, a minimum of 75% of our total order backlog in the remainder of 2007.

First Quarter Highlights

Progress on markets:

OnSite Generation

- Booked $4.5 million of new orders

- Delivered 2 hydrogen generation units for industrial applications

- Exited the quarter with a $17.8 million order backlog

Power Systems

- Booked $1.4 million in new orders

- Delivered 14 fuel cell power modules

- Received power module orders from eight new customers including three customers developing integrated stand-alone renewable energy systems

- Exited the quarter with an $8.1 million order backlog

Test Systems

- Booked $2.4 million of new orders in the quarter with eight customers

- Delivered 19 test stations

- Exited the quarter with a $4.9 million order backlog

Progress on products and technology:

- Launched next generation HyPX products targeted as a lead acid battery replacement for Class 1 forklift trucks at major North American materials handling tradeshow

- Initiated new product development for low power test station

Conference Call Details

Hydrogenics will hold a conference call to review results on May 11, 2007 at 8:30 a.m. (EDT). To participate in this conference call, please dial 416-695-9719 approximately ten minutes before the call. Alternatively, a live webcast of the conference call will be available on the Corporation"s website at www.hydrogenics.com. Please visit the website at least ten minutes early to register and download any necessary software. Should you be unable to participate, a replay will be available on our website for two weeks.

About Hydrogenics

Hydrogenics Corporation (www.hydrogenics.com) is a globally recognized developer and provider of hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets of today and tomorrow. Based in Mississauga, Ontario, Canada, Hydrogenics has operations in North America, Europe and Asia.


Hydrogenics Corporation
Lawrence E. Davis
Chief Financial Officer
(905) 361-3633
Email: ldavis@hydrogenics.com
Website: http://www.hydrogenics.com

Source: Hydrogenics Corporation
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