MISSISSAUGA, Ontario, March 8, 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 fourth quarter and full year 2012 financial results. Results are reported in US dollars and are prepared in accordance with International Financial Reporting Standards (IFRS). "We exited 2012 well positioned for future growth in 2013 and subsequent years," said Daryl Wilson, President and Chief Executive Officer. "We ended December with $16.8 million in cash, and our backlog stood at approximately $60 million – up 106% over 2011. This growth reflects firm commitments including our recently-won Power Systems order, worth up to $90 million, combined with ongoing demand within our OnSite Generation business. We also announced several milestones in the fourth quarter including orders from CommScope, our partner in backup energy applications for the telecommunications market, as well as the delivery of a two megawatt 'Power-to-Gas' energy storage system to E.ON, one of the world's largest power and gas companies. Expanding demand and our current backlog give us confidence for continued performance improvement in 2013 and beyond." Highlights for the Quarter Ended December 31, 2012 (compared to the quarter ended December 31, 2011, unless otherwise noted)
- The Company secured $8.5 million of orders for renewable energy storage, hydrogen fueling, industrial gas and fuel cell applications, driving order backlog to $60 million, an increase of 106% over the previous year. Increased order bookings were driven by the award of a Power Systems contract for integrated power propulsion systems as well as the Company's first significant order for delivery of HyPM ™ XR Series fuel cell backup power modules from CommScope, Inc.
- Order backlog movement during the fourth quarter (in $ millions) was as follows:
|Sept. 30, 2012 Backlog||Orders Received||Orders Delivered||Dec. 31, 2012 Backlog|
|OnSite Generation||$ 22.7||$ 3.5||$ 7.3||$ 18.9|
|Total||$ 61.4||$ 8.5||$ 9.9||$ 60.0|
- Exited the fourth quarter with $16.8 million of cash and restricted cash, reflecting increases of $7.5 million and $6.8 million, respectively, compared with September 30, 2012 and December 31, 2011.
- Revenue for the fourth quarter increased 30% to $9.9 million, reflecting increased revenue in the Company's Power Systems business unit as a result of initial revenue on the contract for integrated power propulsion systems.
- Gross profit was $1.3 million, or 13.2% of revenue, a decrease of 13.9 percentage points, primarily reflecting strategic pricing – accelerating the demonstration phase within a new market. Hydrogenics may use this strategy when the Company's technology finds a fit in certain key growth markets – whether they be geographically or application based – if it is believe that the adoption by a lead company will materially move the market in Hydrogenics' favor. Also contributing to the gross margin decrease was the effect of price increases on key supplier components in the Company's OnSite Generation business. Cost reduction efforts are continuing through supply chain management and product design innovation in order to restore margins to target levels.
- Cash Operating Costs 1 were $3.5 million, a increase of 8%, resulting from a net increase in research and product development expenses offset by a reduction of $1.0 million in selling, general and administration costs.
- The Company secured $62.7 million of orders for renewable energy storage, hydrogen fueling, industrial gas and fuel cell applications, driving order backlog to $60 million – an increase of 106% over the previous year. Increased order bookings were driven by the award of a Power Systems contract for integrated power propulsion systems as well as the Company's first significant order for delivery of HyPM ™ XR Series fuel cell backup power modules from CommScope, Inc.
|Dec. 31, 2011 Backlog||Orders Received||Orders Delivered||Dec. 31, 2012 Backlog|
- Revenue was $31.8 million, an increase of 33% over 2011, primarily reflecting increased sales and fulfillment of 2011 backlog in the Company's OnSite Generation business unit. This revenue growth reflected higher demand in fueling and renewable energy markets. The overall increase was also driven by stronger revenue in the Company's Power Systems business unit, primarily due to the award of a contract for integrated power propulsion systems. These growth factors were partially offset by a weakening of the Euro relative to the US dollar.
- Gross profit was $5.2 million, or 16.4% of revenue, a 6.6 percentage point decrease, primarily reflecting the effect of pricing increases on key supplier components in the Company's OnSite Generation business as well as other factors as noted in the fourth quarter. Cost reduction efforts are continuing through supply chain management and product design innovation in order to restore margins to target levels.
- Cash operating costs 1 were $15.2 million, versus $12.3 million last year, with costs as a percent of revenue falling 4%. The year-over-year change reflects planned increases in research and development efforts focused on next-generation energy storage product development, additional marketing costs, and increased compensation costs arising from improved business performance.
- Hydrogenics' Adjusted EBITDA 2 loss was $11.2 million versus $8.2 million last year, reflecting: (i) the above-noted increase in cash operating costs of $2.9 million; (ii) a $0.1 million increase associated with the Company's deferred compensation plans, which are indexed to the share price; (iii) a $0.2 million decrease in gross profit; partially offset by (iv) a $0.2 million decrease in stock-based compensation. The Adjusted EBITDA loss as a percent of sales increased slightly year-over-year.
- The Company's improved 2012 financial performance resulted in the removal of the going concern paragraph in Hydrogenics' audited annual financial statements.
- 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 the Company's 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 Company 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.
|Consolidated Balance Sheets|
|(in thousands of US dollars)|
|December 31, 2012||December 31, 2011|
|Cash and cash equivalents||$13,020||$7,785|
|Trade and other receivables||5,615||4,151|
|Property, plant and equipment||1,399||1,790|
|Trade and other payables||$11,946||$9,986|
|Other non-current liabilities||2,384||1,979|
|Non-current deferred revenue||8,576||83|
|Accumulated other comprehensive loss||(758)||(884)|
|Total equity and liabilities||$42,088||$31,061|
|Consolidated Statements of Operations and Comprehensive Loss|
|(in thousands of US dollars, except for share and per share amounts)|
|Three Months Ended December 31||Year ended December 31|
|Cost of sales||8,616||5,561||26,561||18,344|
|Selling, general and administrative expenses||3,115||3,903||12,751||11,740|
|Research and product development expenses||1,041||(284)||4,606||2,934|
|Loss from operations||(2,853)||(1,589)||(12,107)||(9,278)|
|Finance income (expenses)|
|Foreign currency gains||381||30||755||304|
|Foreign currency losses||(27)||--||(586)||(311)|
|Other finance (losses) gains, net||(706)||421||(438)||(332)|
|Finance income (loss), net||(426)||407||(572)||(510)|
|Loss before income taxes||(3,279)||(1,182)||(12,679)||(9,788)|
|Income tax expense||--||--||--||--|
|Net loss for the period||(3,279)||(1,182)||(12,679)||(9,788)|
|Exchange differences on translating foreign operations||227||(257)||126||(179)|
|Comprehensive loss for the period||$ (3,052)||$ (1,439)||$ (12,553)||$ (9,967)|
|Net loss per share|
|Basic and diluted||$ (0.42)||$ (0.18)||$ (1.72)||$ (1.58)|
|Weighted average number of common shares outstanding||7,724,427||6,605,491||7,371,908||6,180,048|
|Consolidated Statements of Cash Flows|
|(in thousands of US dollars)|
|Three months ended December 31||Year ended December 31|
|Cash and cash equivalents provided by (used in):|
|Net loss for the period||$ (3,279)||$ (1,182)||$ (12,679)||$ (9,788)|
|(Increase) decrease in restricted cash||(424)||543||(1,607)||(1,067)|
|Items not affecting cash:|
|Loss on disposal of assets||7||35||7||42|
|Amortization and depreciation||197||232||870||950|
|Other finance losses (gains), net||706||(421)||438||332|
|Unrealized foreign exchange gains||(148)||274||(257)||570|
|Government grant revenue||(155)||(913)||(981)||(913)|
|Accreted non-cash interest||84||46||288||180|
|Net change in non-cash working capital||9,904||1,445||12,328||4,544|
|Cash used in operating activities||6,928||163||(1,063)||(4,401)|
|Proceeds from disposal of property, plant and equipment||26||--||26||10|
|Purchase of property, plant and equipment||--||(22)||(424)||(897)|
|Purchase of intangible assets||(54)||(79)||(2)||(22)|
|Cash provided by (used in) investing activities||(28)||(101)||(400)||(909)|
|Repayment of post-retirement benefit liability||(23)||(23)||(100)||(101)|
|Repayment of repayable government contributions||(84)||(37)||(308)||(269)|
|Proceeds of borrowings||265||1,390||1,621||1,390|
|Proceeds from operating borrowings||--||--||1,182||--|
|Repayment of operating borrowings||(514)||--||(1,182)||--|
|Common shares and warrants issued and exercised, net of issuance costs||327||4||5,178||4,555|
|Cash provided by (used in) financing activities||(29)||1,334||6,391||5,575|
|Effect of exchange rate fluctuations on cash and cash equivalents held||228||(117)||307||(361)|
|Increase (decrease) in cash and cash equivalents during the period||7,099||1,279||5,235||(96)|
|Cash and cash equivalents - Beginning of period||5,921||6,506||7,785||7,881|
|Cash and cash equivalents - End of period||$13,020||$7,785||$13,020||$7,785|
CONTACT: Hydrogenics Contacts: Chris Witty Hydrogenics Investor Relations (646) 438-9385 firstname.lastname@example.org Bob Motz, Chief Financial Officer Hydrogenics Corporation (905) 361-3660 email@example.com