Hydrogenics Announces Q3 2001 Financial Results
November 20, 2001 09:03:00 AM ET
TORONTO, Nov. 20 /PRNewswire/ -- Hydrogenics Corporation (Nasdaq: HYGS and TSE: HYG), a leading designer and manufacturer of proton exchange membrane (PEM) fuel cell systems, today announced the highlights of its corporate activity and its financial results for the third quarter ending September 30, 2001.
Hydrogenics recorded revenues of US $2.5 million for the three months ended September 30, 2001, compared with US $2.6 million for the same period in 2000. Hydrogenics recorded net income of US $0.3 million or $0.01 per share for the three months ended September 30, 2001, compared with a net loss of US$ 54,000 or ($0.00) per share for the same period in 2000. Excluding the effect of foreign exchange the Company incurred a net loss for the third quarter of US$ 0.9 million or ($0.03) per share.
"To operate close to sustainability was our promise to shareholders at the beginning of this year and, in spite of the ongoing deterioration of global market conditions, we continue to deliver on this promise," commented Pierre Rivard, President and CEO of Hydrogenics. "These results have been achieved by garnering revenue from exciting new value streams, representing a crucial step in our evolution from a supplier of test and optimization equipment, to an integrator and developer of fuel cell power products. We are excited to be realizing this transition sooner than we had originally anticipated."
General Motors Alliance
On October 16, 2001, Hydrogenics announced a defining corporate alliance with General Motors. The alliance encompasses a number of significant activities including shared intellectual property rights and joint efforts in fuel cell product development, engineering, prototyping, testing, co-branding and marketing strategies. The key elements of this transaction are as follows:
* Worldwide, royalty-free license to certain General Motors' fuel cell stack design and related intellectual property. Hydrogenics has these rights in perpetuity, including subsequent improvements to the licensed technology.
* Access to GM's distribution and supply channels.
* Utilization of GM's vast experience in many aspects of product launches, ranging from materials, manufacturing, and packaging.
* Appointment of a GM director and an observer to Hydrogenics' board of directors. "We are delighted to be partnering with the world's largest vehicle manufacturer and leading developer of fuel cell technology," said Mr. Rivard. "Our relationship with GM and the members of its world class innovation and technology team will significantly enhance our ability to penetrate markets across the transportation, stationary and portable spectrum. I am confident that our collective efforts will accelerate the introduction of fuel cell vehicles and other premium power products."
Business Highlights of the Third Quarter
* Efforts toward realizing strategic alliances reached new levels in the third quarter, culminating in the announcement of the landmark alliance with General Motors.
* Delivered 3 HyPM(TM) power modules during the third quarter and ended the quarter with an order backlog for an additional 10 HyPM(TM) power modules.
* Realized significant benefits from Hydrogenics recently signed Japanese distributorship (Toyota Tsusho Corp), by securing a first sale with the Toyota Motor Company, as well as a repeat order from Nissan Motor Company.
Fuel Cell Technology Advancements for the Third Quarter
* Substantially completed the HyUPS(TM) prototype, a fully integrated uninterrupted power supply (UPS) system. HyUPS(TM) systems are being developed as backup power generators for telecom and other critical backup power markets.
* Completed second vehicular system integration contract (25 kW) during the quarter.
* Commenced development work on a second generation 5 kW HyPORT(TM) system. This product is being adapted to offer flexibility for UPS and APU (Auxiliary Power Unit) applications.
* Made significant progress in developing a 50 kW HySTAT(TM) stationary power generator which is to be integrated with a natural gas reformer. This product is targeted at multi-residential and commercial stationary power applications.
* Commenced work on a prototype 500-watt compact power generator that Hydrogenics is developing under contract with the Department of Defense Canada. This product is designed to charge batteries and power instrumentation in the field. A unique feature of this product is Hydrogenics' proprietary chemical hydride subsystem.
Financial Details for the Third Quarter
Revenues were US$ 2.5 million for the three months ended September 30, 2001, compared with US$ 2.6 million for the same period in 2000. For the nine months ended September 30, 2001, revenues were US$ 4.2 million compared with US$ 7.0 million in the corresponding period in 2000. At the end of the third quarter the Company had outstanding orders of approximately US$ 4.2 million. Subsequent to quarter end, this backlog has more than doubled to approximately US$ 10.0 million.
The Company realized a gross margin of US$ 0.8 million, or 32 percent of revenues, for the three months ended September 30, 2001, compared with US$ 0.7 million or 28 percent of revenues for the same period in 2000. For the nine-month period the Company realized a gross margin of US$ 1.4 million or 33 percent, compared with US$ 2.2 million or 32 percent of revenues for the corresponding period in 2000.
Interest income, net of bank charges, increased to US$ 0.6 million for the three months ended September 30, 2001, compared with US$ 16,000 for the three months ended September 30, 2000. For the nine-month period ended September 30, 2001, interest income increased to US$ 2.4 million compared with US$ 58,000 in the corresponding period in 2000. The Company incurred a foreign exchange gain of US$ 1.2 million for the three months ended September 30, 2001, as a result of a strengthening U.S. dollar against the Canadian dollar.
Outlook
Based on preliminary information, Hydrogenics is revising its revenue guidance for the fourth quarter and full year 2001 to US $3.0 million, and US $7.0 to $7.5 million, respectively. Hydrogenics presently has a confirmed order backlog of approximately US$ 10.0 million.
"In spite of challenging economic conditions, we have been able to develop new revenue streams sooner than our business model anticipated," said Mr. Rivard. "Quite simply, our prospects have never been better, both from a corporate development and projected revenue growth point of view. As we compare the Hydrogenics of today to the Hydrogenics of nine months ago, it is apparent we have developed into a very different company, replete with unique capabilities and a robust portfolio of opportunities." |
