Hydrogenics Reports Second Quarter 2013 Results
MISSISSAUGA, Ontario, Aug. 1, 2013 (GLOBE NEWSWIRE) -- Hydrogenics Corporation (Nasdaq:HYGS) (TSX:HYG) ("Hydrogenics" or "the Company"), a leading developer and manufacturer of hydrogen generation and hydrogen-based power modules, today reported second quarter 2013 financial results. Results are reported in US dollars and are prepared in accordance with International Financial Reporting Standards (IFRS).
"We continued to execute our growth strategy this quarter, with revenue up sharply year-over-year and solid gross margins," said Daryl Wilson, President and Chief Executive Officer. "Our target markets are expanding and we are dedicated to reaching profitability as soon as possible. While some lumpiness remains from quarter to quarter due to order timing, we are bidding on a significant number of energy storage projects, industrial applications, and fuel cell power modules and anticipate the second half of 2013 should see a strengthening of bookings and revenue. In the past few months, we have continued to showcase our unique hydrogen-based energy storage solutions in both North America and Europe, and we have continued working with CommScope to secure additional backup power orders. We are also pursuing fuel cell mobility applications and providing power modules as part of our long-term propulsion-related supply agreement. Overall, our balance sheet is strong and our focus on improved bottom line results unwavering."
Highlights for the Quarter Ended June 30, 2013 (compared to the quarter ended June 30, 2012, unless otherwise noted)
- Revenue increased 18% to $9.8 million, reflecting higher bookings within Hydrogenics' Power Systems business unit partially offset by lower results from the OnSite Generation business unit.
- During the quarter, Hydrogenics announced an order for a 1 Megawatt Proton Exchange Membrane ("PEM") energy storage system for the City of Hamburg, Germany. This "Power-to-Gas" facility will be run by E.ON, one of the world's largest integrated power and gas companies and an existing customer of Hydrogenics.
- As previously disclosed, $6.9 million was raised by the Company from an underwritten share offering of 891,250 shares that closed in the second quarter of 2013. After underwriting fees and expenses the company realized $6.1 million in cash from the offering.
- Hydrogenics secured $4.7 million of orders for renewable energy storage, industrial gas and power system applications during the quarter, resulting in an order backlog of $49.9 million as of June 30, 2013. Order backlog movement during the second quarter (in $ millions) was as follows:
|Mar. 31, 2013||Orders||Orders||Jun. 30, 2013|
|OnSite Generation||$ 14.8||$ 3.4||$ 4.9||$ 13.3|
|Total||$ 55.0||$ 4.7||$ 9.8||$ 49.9|
- Gross profit was $2.6 million, or 26.3% of revenue, a 8.5 percentage point increase year-over-year, primarily reflecting improved product mix of higher-margin Power Systems business.
- Cash Operating Costs 1 were $3.8 million for the quarter, an increase of 11% compared to the second quarter of 2012, primarily resulting from net R&D expense, which increased 28% year-over-year in line with product development.
- The Company's Adjusted EBITDA 2 loss increased by $0.9 million to $3.2 million for the reasons noted above as well as the impact of the incremental cost of compensation expense tied to the Company's stock price (restricted stock units, or "RSU," and deferred share units, or "DSU" plans), which increased by $1.5 million to $1.8 million from $0.3 million in the second quarter of 2012. These amounts are not reflected in Hydrogenics' definition of cash operating costs.
- The Company exited the second quarter with $16.0 million of cash and restricted cash, a $3.8 million increase over March 31, 2013, reflecting: (i) $6.1 million of net proceeds from the underwritten share issue; (ii) $0.7 million of proceeds from warrant and stock option exercises; and (iii) a $1.5 million decrease in non-cash working capital; partially offset by (iv) $2.4 million of cash used in operations; (v) $1.7 million repayment of operating borrowings and government contributions; and (vi) $0.3 million of negative foreign exchange resulting from the devaluation of the euro relative to the US dollar; and (vi) $0.3 million of other items.
- Revenue of $22.1 million, an increase of 58%, reflecting higher shipments within Hydrogenics' Power Systems group including backup power orders for CommScope and initial revenue from the Company's previously-announced propulsion system contract.
- Gross profit was $6.1 million, or 27.7% of revenues, a 11.4 percentage point increase over 2012, primarily reflecting improved product mix tied to the higher proportion of Power Systems revenue versus the prior-year period.
- Cash operating costs 1 were $7.6 million, reflecting a $0.5 million increase in selling, general, and administrative costs associated with increased overall commercial activities.
- Adjusted EBITDA 2 loss improved by $1.4 million to $4.0 million, primarily reflecting: (i) the improved margins noted above; partially offset by (ii) a $2.2 million increase in costs and fair value adjustments within the Company's DSU and RSU plans, indexed to Hydrogenics' share price; and (iii) the $0.6 million increase in cash operating costs noted above.
- Cash operating costs are defined as the sum of SG&A and R&D, less amortization and depreciation, and stock-based compensation expense inclusive of compensation costs indexed to our share price. This is a non-IFRS measure and may not be comparable to similar measures used by other companies. Management uses this measure as a rough estimate of the amount of fixed costs to operate the Corporation and believes this is a useful measure for investors for the same purpose.
- Adjusted EBITDA is defined as net loss excluding finance income, net, other losses, depreciation and amortization. Adjusted EBITDA is a non-IFRS measure and may not be comparable to similar measures used by other companies. Management uses adjusted EBITDA as a useful measure of cash flows.
|Hydrogenics Corporation Consolidated Interim Balance Sheets (in thousands of US dollars) (unaudited)|
|June 30||December 31|
|Cash and cash equivalents||$ 12,345||$ 13,020|
|Trade and other receivables||3,808||5,615|
|Property, plant and equipment||1,415||1,399|
|Total assets||$ 39,268||$ 42,088|
|Trade and other payables||11,647||11,946|
|Other non-current liabilities||2,273||2,384|
|Non-current warranty provisions||770||556|
|Non-current deferred revenue||7,941||8,576|
|Accumulated other comprehensive loss||(1,101)||(999)|
|Total equity and liabilities||$ 39,268||$ 42,088|
|Hydrogenics Corporation Consolidated Interim Statements of Operations and Comprehensive Loss (in thousands of US dollars, except share and per share amounts) (unaudited)|
|Three months ended||Six months ended|
|June 30||June 30|
|Revenues||$ 9,771||$ 8,259||$ 22,083||$ 13,983|
|Cost of sales||7,205||6,787||15,975||11,706|
|Selling, general and administrative expenses||4,875||3,221||8,497||6,174|
|Research and product development expenses||1,080||843||2,018||1,992|
|Loss from operations||(3,389)||(2,592)||(4,407)||(5,889)|
|Finance income (expenses)|
|Foreign currency gains||239||28||354||230|
|Foreign currency losses||(87)||(183)||(299)||(372)|
|Other finance gains (losses), net||(1,185)||(320)||(1,536)||(154)|
|Finance income (loss), net||(1,127)||(553)||(1,660)||(437)|
|Loss before income taxes||(4,516)||(3,145)||(6,067)||(6,326)|
|Income tax expense||--||--||--||--|
|Net loss for the period||(4,516)||(3,145)||(6,067)||(6,326)|
|Other comprehensive income, net of tax|
|Items that may be reclassified subsequently to net loss|
|Exchange differences on translating foreign operations||196||(503)||(102)||(227)|
|Other comprehensive loss for the period, net of tax||196||(503)||(102)||(227)|
|Comprehensive loss for the period||$ (4,320)||$ (3,648)||$ (6,169)||$ (6,553)|
|Net loss per share|
|Basic and diluted||$ (0.53)||$ (0.42)||$ (0.74)||$ (0.90)|
|Weighted average number of common shares outstanding||8,542,637||7,462,012||8,194,937||7,033,830|
|Hydrogenics Corporation Consolidated Interim Statements of Cash Flows (in thousands of US dollars) (unaudited)|
|Three months ended||Six months ended|
|June 30||June 30|
|Cash and cash equivalents provided by (used in):|
|Net loss for the period||$ (4,516)||$ (3,145)||$ (6,067)||$ (6,326)|
|Increase in restricted cash||340||(321)||115||(859)|
|Items not affecting cash:|
|Amortization and depreciation||204||260||402||464|
|Other finance losses (gains), net||1,185||320||1,536||154|
|Unrealized foreign exchange (gains) losses||(31)||165||80||(29)|
|Portion of borrowings recorded as a reduction from research and development expenses||--||(520)||--||(520)|
|Accreted non-cash interest||82||106||171||127|
|Liabilities for compensation indexed to share price||1,811||264||2,212||381|
|Net change in other non-cash working capital||(121)||(1,320)||(5,802)||(515)|
|Cash used in operating activities||(880)||(4,043)||(7,012)||(6,795)|
|Purchase of property, plant and equipment||(220)||(128)||(409)||(308)|
|Purchase of intangible assets||--||(2)||--||(4)|
|Cash used in investing activities||(220)||(130)||(409)||(312)|
|Payment of post-retirement benefit liability||(22)||(23)||(49)||(50)|
|Payment of repayable government contributions||(250)||(150)||(250)||(188)|
|Proceeds of operating borrowings||--||843||1,412||1,511|
|Repayment of operating borrowings||(1,412)||--||(1,412)||--|
|Common shares issued, warrants and options exercised, net of issuance costs||6,811||4,851||7,234||4,851|
|Cash provided by financing activities||5,127||5,521||6,935||6,124|
|Effect of exchange rate fluctuations on cash and cash equivalents held||135||(312)||(189)||(114)|
|Increase (decrease) in cash and cash equivalents during the period||4,162||1,036||(675)||(1,097)|
|Cash and cash equivalents - Beginning of period||8,183||5,652||13,020||7,785|
|Cash and cash equivalents - End of period||$ 2,345||$ 6,688||$ 12,345||$ 6,688|
CONTACT: Hydrogenics Contacts: Bob Motz, Chief Financial Officer Hydrogenics Corporation (905) 361-3660 firstname.lastname@example.org Chris Witty Hydrogenics Investor Relations (646) 438-9385 email@example.com
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