Mr. Daryl Wilson reports
HYDROGENICS REPORTS FIRST QUARTER 2019 RESULTS
Hydrogenics Corp. has released its first quarter 2019 financial results. Results are reported in U.S. dollars and are prepared in accordance with international financial reporting standards (IFRS).
"I'm pleased to report that our fiscal first quarter was an active one for the company, and we ended the period with a much stronger balance sheet and backlog -- bolstered by our relationship with Air Liquide," said Daryl Wilson, president and chief executive officer. "Our partnership with this key industry player globally continues to develop, positioning us for more growth opportunities than ever before. At the same time, we recently announced an award from Halcyon Power to supply a carbon-free hydrogen production facility in New Zealand. This is our first major win in the South Pacific, and the 1.5-megawatt project should be up and running next year as Halcyon's owners -- Tuaropaki Trust and Obayashi Corp. -- look to implement a hydrogen supply chain strategy for New Zealand and Japan.
"Due to our leading role in the world's burgeoning fuel-cell-powered rail and bus sectors, we anticipate increasing activity in the space during the second half of 2019. Over all, given our solid balance sheet, strong partnerships and current demand trends, we remain optimistic about the outlook for meaningful top-line growth and improved financial performance this year."
Summary of results for the quarter ended March 31, 2019 (compared with the quarter ended March 31, 2018, unless otherwise noted):
Company revenue was $8.1-million for the first quarter of 2019, comparable with the prior-year period.
Hydrogenics secured $26.5-million of orders for renewable energy storage, industrial gas and power system applications during the quarter, resulting in an order backlog of $150.0-million as of March 31, 2019. Order backlog movement during the first quarter (in millions) was as shown in the associated table.
Q1 ORDER BACKLOG MOVEMENT
Dec. 31, 2018, Orders delivered/revenue March 31, 2019,
backlog received FX recognized backlog
(loss) $20.6 $22.0 ($0.1) $2.5 $40.0
Power Systems (loss) 112.1 4.5 (1.0) 5.6 110.0
Total (loss) $132.7 $26.5 ($1.1) $8.1 $150.0
Of the current backlog of $150-million, Hydrogenics expects to recognize approximately $57.6-million as revenue in the following 12 months, not including orders both received and delivered after March 31, 2019.
Gross profit was $3.9-million (47.9 per cent of revenue) in 2019 compared with $3.2-million (39.7 per cent of revenue) in the first quarter of 2018. The increase in gross profit and gross margin was attributable to higher profitability on licence and support services revenue in the company's Power Systems business.
Cash operating costs increased $100,000, to $5.0-million, for the current quarter compared with $4.9-million for the prior-year period, reflecting an increase in SG&A (selling, general and administrative) expense of $400,000, partially offset by a decline in R&D (research and development) expense of $300,000.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss improved $600,000, to $1.0-million, for the first quarter of 2019 compared with a loss of $1.6-million in the first quarter of 2018. This improvement reflects the higher gross margin noted above.
The net loss for the quarter was $2.6-million, or 15 cents per share, versus $2.0-million, or 13 cents per share, in the first quarter of 2018.
Conference call details
Hydrogenics will hold a conference call at 1 p.m. Eastern Daylight Time on May 14, 2019, to review first quarter results. The telephone number for the conference call is 877-307-1373 or, for international callers 678-224-7873. A live webcast of the call will also be available on the company's website.
An archived copy of the conference call and webcast will be available on the company's website approximately six hours following the call.
About Hydrogenics Corp.
Hydrogenics is a world leader in engineering and building the technologies required to enable the acceleration of a global power shift. Headquartered in Mississauga, Ont., Hydrogenics provides hydrogen generation, energy storage and hydrogen power modules to its customers and partners around the world.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
(in thousands of dollars, except share and per share amounts)
Three months ended
Revenues $8,084 $8,147
Cost of sales 4,209 4,909
Gross profit 3,875 3,238
Selling, general and administrative expenses 4,107 2,836
Research and product development expenses 1,809 2,081
(Loss) from operations (2,041) (1,679)
Gains (losses) from joint ventures 5 (69)
Finance income (loss)
Interest (expense), net (284) (381)
Foreign currency gains (losses), net (201) 219
Other finance gains (losses), net (126) 256
Finance income (loss), net (611) 94
(Loss) before income taxes (2,647) (1,654)
Income tax expense - 300
Net (loss) for the period (2,647) (1,954)
Items that may be reclassified
subsequently to net (loss)
Exchange differences (loss) on
translating foreign operations (180) 329
Comprehensive (loss) for the period (2,827) (1,625)
Net (loss) per share
Basic and diluted (loss) (0.15) (0.13)
We seek Safe Harbor.
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