| Hydrogenics Reports First Quarter 2009 Results MISSISSAUGA, ONTARIO, CANADA -- May 13, 2009 -- Hydrogenics Corporation, a leading developer and manufacturer of hydrogen generation and fuel cell products, today reported first quarter 2009 results. Results are reported in US dollars and are prepared in accordance with Canadian generally accepted accounting principles. Financial Highlights - Revenues were $5.5 million for the first quarter of 2009, a decrease of 35% from the first quarter of 2008, excluding Test Systems. - Gross margin was 30% for the first quarter of 2009, an increase of 13 percentage points from the first quarter of 2008. - EBITDA loss was $3.8 million for the first quarter of 2009, a reduction of $0.1 million or 3% from the first quarter of 2008. - Cash and cash equivalents, restricted cash and short-term investments were $15.7 million at March 31, 2009, a $7.0 million sequential quarterly decrease from the fourth quarter of 2008 reflecting: (i) $3.7 million of non-cash working capital; and (ii) a $3.8 million EBITDA loss; partially offset by (iii) $0.5 million of other items. - Order backlog was $17.7 million, more than 80% of which is anticipated to be delivered and recognized as revenue in 2009. "We continued to take appropriate steps this quarter to conserve cash and streamline our operations in the current economic environment," said Daryl Wilson, President and Chief Executive Officer. "While Hydrogenics' gross margin improved, revenues declined versus the first quarter of 2008 due primarily to the timing of certain projects within our OnSite Generation business unit. This was expected, as was the seasonal working capital impact on our cash flow, but the Corporation maintains a solid backlog and is experiencing strong quoting activity across our client spectrum. As we stated last quarter, the global economic slowdown has impacted the cycle time of new and existing projects, including in excess of $2.0 million which shifted from the first quarter to the second quarter. However, in spite of the factors noted above, we see improving traction within both OnSite Generation and Power Systems - recently recording a number of wins that position the Corporation for revenue expansion in the quarters to come. We remain cautiously optimistic about the second half of 2009." Results for the first quarter of 2009 compared to the first quarter of 2008 Revenues, exclusive of our Test Systems business unit, were $5.5 million, a decrease of 35%, reflecting lower revenues in our OnSite Generation business unit due to the timing of project deliveries, partially offset by increased revenues in our Power Systems business unit. Gross profit, expressed as a percentage of revenues, was 30% (17% in the first quarter of 2008) attributed to operational improvements, product cost reductions and product mix. Cash operating costs, a non-GAAP measure, defined as selling, general and administrative expenses, and research and product development expenses less stock-based compensation expense, were $5.3 million, a 4% decrease from $5.5 million in the first quarter of 2008. Cash operating costs for the first quarter of 2009 include $0.6 million of costs associated with further business streamlining initiatives as well as $0.2 million of costs attributable to our Test Systems business unit. Net loss was $4.0 million, an 8% decrease from $4.3 million in the first quarter of 2008. Liquidity Cash and cash equivalents, restricted cash and short-term investments were $15.7 million as at March 31, 2009, a $7.0 million sequential quarterly decrease from the fourth quarter of 2008 reflecting: (i) $3.7 million of non-cash working capital; and (ii) a $3.8 million EBITDA loss; partially offset by (iii) $0.5 million of other items. Order backlog Order backlog as at March 31, 2009 was $17.7 million, as follows (in $ millions):
Dec. 31, Orders Orders Mar. 31,
2008 Received Delivered 2009
Backlog Backlog
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OnSite Generation $ 14.6 $ 0.8 $ 3.7 $ 11.7
Power Systems 7.6 0.2 1.8 6.0
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Total $ 22.2 $ 1.0 $ 5.5 $ 17.7
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We expect to deliver and recognize as revenue, more than 80% of our total order backlog in 2009.
Conference Call Details Hydrogenics will hold a conference at 10:00 a.m. ET on May 13, 2009 to review the first quarter 2009 results. The conference call number is 800-769-8320. A live webcast of the call will also be available at www.hydrogenics.com. The webcast will be archived on the site, and investors will be able to access an encore recording of the conference call for one week by calling 416-695-5800, conference ID #7482145. The encore recording will be available two hours after the conference call has concluded. 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 and Europe. This release contains forward-looking statements and other statements concerning Hydrogenics' objectives and strategies and management's beliefs, plans, estimates and intentions about our achievements, future results, goals, levels of activity, performance, and other future events. We believe the expectations reflected in our forward-looking statements are reasonable, although we cannot guarantee achievements, future results, levels of activity, performance, or other future events. These statements are based on management's current expectations and actual results may differ from these forward-looking statements due to numerous factors, including risks related to our ability to successfully execute our business plan, which includes an increase in revenue and obtaining additional capital; our liquidity; our operating results; our revenue growth; our industry; and our technology and products. Readers should not place undue reliance on Hydrogenics' forward-looking statements. Readers are encouraged to review the section captioned "Risk Factors" in Hydrogenics' regulatory filings with the Canadian securities regulatory authorities and the United States 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 cautionary statement.
Hydrogenics Corporation
Interim Consolidated Balance Sheets
(in thousands of US dollars)
(unaudited)
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March 31 December 31
2009 2008
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Assets
Current assets
Cash and cash equivalents $ 14,411 $ 21,601
Restricted cash 1,111 1,130
Accounts receivable 4,735 3,974
Grants receivable 656 505
Inventories 9,819 10,101
Prepaid expenses 873 1,161
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31,605 38,472
Restricted cash 223 -
Property, plant and equipment 3,726 4,082
Goodwill 5,025 5,025
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$ 40,579 $ 47,579
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Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 15,200 $ 17,298
Unearned revenue 4,398 4,785
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19,598 22,083
Deferred research and development grants 3 13
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19,601 22,096
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Shareholders' Deficiency
Common shares 307,000 307,000
Contributed surplus 16,390 16,300
Deficit (295,417) (291,420)
Accumulated other comprehensive loss (6,995) (6,397)
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Total deficit and accumulated other
comprehensive loss (302,412) (297,817)
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20,978 25,483
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$ 40,579 $ 47,579
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Hydrogenics Corporation
Interim Consolidated Statements of Operations
(in thousands of US dollars, except for share and per share amounts)
(unaudited)
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Three months ended March 31
2009 2008
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Revenues $ 5,536 $ 10,711
Cost of Sales 3,905 8,846
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1,631 1,865
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Operating expenses
Selling, general and administrative 3,708 4,061
Research and product development 1,682 1,712
Amortization of property, plant and equipment 291 271
Amortization of intangible assets - 63
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5,681 6,107
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Loss from operations (4,050) (4,242)
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Other income (expenses)
Provincial capital tax - (38)
Interest 49 228
Foreign currency gains (losses) 4 (270)
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53 (80)
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Loss before income taxes (3,997) (4,322)
Current income tax expense - -
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Net loss for the period $ (3,997) $ (4,322)
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Net loss per share
Basic and diluted $ (0.04) $ (0.05)
Shares used in calculating basic and
diluted net loss per share 92,405,666 91,765,689
Hydrogenics Corporation
Interim Consolidated Statements of Cash Flows
(in thousands of US dollars)
(unaudited)
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Three months ended March 31
2009 2008
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Cash and cash equivalents provided by (used in)
Operating activities
Net loss for the period $ (3,997) $ (4,322)
Items not affecting cash
Amortization of property, plant and equipment 291 271
Amortization of intangible assets - 63
Unrealized foreign exchange (gains) losses 252 (152)
Stock-based compensation 90 236
Net change in non-cash working capital (3,665) 7,000
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(7,029) 3,096
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Investing activities
Decrease in short-term investments - 15,032
Increase in restricted cash (204) (6,066)
Purchase of property, plant and equipment (36) (315)
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(240) 8,651
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Financing activities
Repayment of long-term debt - (10)
Deferred research and development grant 79 (170)
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79 (180)
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Increase (decrease) in cash and cash
equivalents during the period (7,190) 11,567
Cash and cash equivalents - Beginning of period 21,601 15,460
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Cash and cash equivalents - End of period $ 14,411 $ 27,027
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Hydrogenics Corporation
Interim Consolidated Statements of Shareholders' Deficiency
(in thousands of US dollars, except for share and per share amounts)
(unaudited)
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Accumu-
lated
other Total
compre- share-
Common shares Contri- hensive holders'
---------------- buted income defic-
Number Amount surplus Deficit (loss) iency
Balance at
Dec. 31,
2007 91,765,691 $ 306,872 $ 15,606 $ (277,101) $ (4,993) $ 40,384
Net loss for
the period - - - (4,322) - (4,322)
Foreign
currency
translation
adjustments - - - - 691 691
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Comprehensive
loss - - - - - (3,631)
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Shares issued:
Adjustment
for partial
shares (5) - - - - -
Stock-based
compensation
expense - - 236 - - 236
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Balance at
Mar. 31,
2008 91,765,686 306,872 15,842 (281,423) (4,302) 36,989
Net loss for
the period - - - (9,997) - (9,997)
Foreign
currency
translation
adjustments - - - - (2,095) (2,095)
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Comprehensive
loss (12,092)
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Shares issued:
Issuance of
common shares
on exercise
of stock
options 639,980 128 - - - 128
Stock-based
compensation
expense - - 458 - - 458
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Balance at
Dec. 31,
2008 92,405,666 $ 307,000 $ 16,300 $ (291,420) $ (6,397) $ 25,483
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Net loss for
the period - - - (3,997) - (3,997)
Foreign
currency
translation
adjustments - - - - (598) (598)
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Comprehensive
loss (4,595)
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Shares issued:
Stock-based
compensation
expense - - 90 - - 90
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Balance at
Mar. 31,
2009 92,405,666 $ 307,000 $ 16,390 $ (295,417) $ (6,995) $ 20,978
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The authorized capital stock of the Corporation consists of an unlimited number of common shares and an unlimited number of preferred shares issuable in series.
Contact: Contacts: Hydrogenics Corporation Lawrence Davis Chief Financial Officer (905) 361-3633 investors@hydrogenics.com http://www.hydrogenics.com Investor Relations Contact: Chris Witty (646) 438-9385 cwitty@darrowir.com |
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