Ballard Power Systems Reports First Quarter Results
VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--May 19, 1998--Ballard Power
System (TSE:BLD. - news; NASDAQ:BLDPF - news) Ballard Power Systems, Inc. today
reported results for its first quarter ended March 31, 1998, and highlighted progress made in each of
its business areas.
As Ballard continued its fuel cell development, cost reduction and development of manufacturing
processes, revenues for the first quarter of 1998 were $4.8 million, compared with $5.5 million a
year ago. This was primarily due to lower revenues from the Chicago Transit Authority and BC
Transit bus engine demonstration and development programs as they move from the construction
phase into the testing phase. The net loss for the quarter was $8.2 million, or $0.35 per share,
compared with $4.2 million, or $0.28 per share in 1997. The larger loss reflects additional
expenditures to fund increased research and product development activities as well as general and
administrative expenses related to the formation of Ballard's new alliances with Ford Motor
Company [NYSE:F - news] and GEC ALSTHOM.
At March 31, Ballard's financial statements recorded shareholders' equity of $303.3 million,
including cash and short-term investments of $151.1 million.
In January, Mr. Stephen T. Bellringer joined the Ballard board of directors. Mr. Bellringer was
President and Chief Executive Officer of BC Gas Inc. from 1996 to 1997, and currently is President
and Chief Executive Officer of Orca Bay Sports and Entertainment Inc.
On April 3, Ballard announced that its board had authorized a 3-for-1 stock split for shareholders of
record on June 5 - subject to regulatory and stockholder approval at the annual meeting of
shareholders scheduled for May 21.
Shortly after the end of the quarter, Ballard, Daimler-Benz, and Ford Motor Company completed
the formal closing of their alliance to create the world's leading producer of fuel cell powered electric
drive-trains and power-train components for buses, cars, and trucks. Under the agreement, Ballard
Power Systems is exclusively responsible for fuel cells and Daimler-Benz and Ford now have
minority stakes of 20 percent and 15 percent in Ballard Power Systems, respectively. DBB Fuel
Cell Engines, which designs and produces fuel cell powered systems for vehicles, is majority-owned
by Daimler-Benz, with Ballard holding 27 percent and Ford 22 percent. As well, Ford principally
owns a new joint venture company that provides electric drive-trains, with Ballard's share at 21
percent and Daimler-Benz at 17 percent. Including Ford's cash, technology, and assets worth more
than C$600 million, Ballard, Daimler-Benz, and Ford have collectively invested more than C$1
billion in this alliance.
In addition to supplying fuel cells to the alliance, Ballard continues to sell fuel cells to other auto
companies developing their own fuel cell engines. In March 1998, Ballard received a C$3.6 million
follow-on order from General Motors for fuel cells, related equipment, and support services,
continuing a relationship that began in 1991.
Also during the quarter, the Chicago Transit Authority placed in regular transit service the three
Ballard Fuel Cell buses delivered by DBB Fuel Cell Engines in December 1997. The three Ballard
Fuel Cell buses for BC Transit and their refueling facility are being commissioned and the driver
training has commenced in preparation for regular service introduction.
During the quarter work continued to complete the formal agreements related to the strategic
investment of GEC ALSTHOM in Ballard Generation Systems (BGS), the Ballard subsidiary
responsible for commercializing fuel cell stationary power plants. Separately, the Company
announced a C$2.3 million order from Cinergy Technology, Inc. of Indianapolis, Indiana for the first
customer field trial unit to be manufactured by BGS.
In February, Ballard received a C$2.5 million order from Honda R&D Co. Ltd. of Japan, a
subsidiary of Honda Motor Company, to supply one-kilowatt Ballard Fuel Cell systems for
demonstration, testing, and development of portable and specialty power applications.
Firoz Rasul, President and Chief Executive Officer, commented, ''Achievements in the first quarter,
particularly the progress made towards completing key strategic partnerships, enabled us to begin
the year with considerable momentum. The significance of the orders received should be viewed
beyond their near-term impact. The order from Cinergy marked the movement of our stationary
power business to its next phase of commercialization, focused on the manufacturing and testing of
field trial power plants. The Honda order underscored the increased interest in low power Ballard
Fuel Cells and the potential new market opportunities for low power fuel cell systems as simple,
dependable, and clean power generators.''
He added, ''We remain focused on attaining the annual milestones towards commercialization set
out in our 1997 annual report.''
Ballard Power Systems is the world leader in the development of proton exchange membrane fuel
cell power systems. At the heart of its products is the Ballard Fuel Cell, a proprietary zero-emission
engine that converts natural gas, methanol, gasoline, or hydrogen fuel into electricity without
combustion. Ballard is working with leading international companies including Daimler-Benz, Ford,
General Motors, Chrysler, Nissan, Hitachi, Honda, Mazda, Volkswagen, Volvo, GPU International
and GEC ALSTHOM to develop zero-emission engines for vehicles and clean stationary power
plants.
This report contains forward-looking statements reflecting Ballard Power Systems' current
expectations as contemplated under the Safe Harbor provisions of the US Private Securities
Litigation Reform Law of 1995. Investors are cautioned that all forward-looking statements involve
risks and uncertainties, including, without limitation, product development delays, changing
environmental regulations, the ability to attract and retain business partners, future levels of
government funding, competition from other fuel cell manufacturers, competition from other
advanced energy technologies, competition from existing energy technologies, evolving markets for
electric power and transportation vehicles, and the ability to provide the capital required for product
development, operations and marketing. Investors are encouraged to review the section
Management Discussion and Analysis in Ballard's 1997 Annual Report titled ''Operating Results,
Capital Requirements, and Risks'' (pages 22 to 26) for a more complete discussion of factors that
could affect Ballard's future performance.
|
