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Hydrogenics Reports Fourth Quarter and Full Year 2014 Results

March 4, 2015
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MISSISSAUGA, Ontario, March 4, 2015 (GLOBE NEWSWIRE) — Hydrogenics Corporation (HYGS) (HYG.TO) (“Hydrogenics” or “the Company”), a leading developer and manufacturer of hydrogen generation and hydrogen-based power modules, today reported fourth quarter and full year 2014 financial results. Results are reported in US dollars and are prepared in accordance with International Financial Reporting Standards (IFRS).

“Hydrogenics once again ended the year with record revenue and a number of strategic accomplishments — posting our first profitable quarter and laying the groundwork for strong top-line growth going forward,” said Daryl Wilson, Hydrogenics CEO. “In 2014 Hydrogenics won a major energy storage application in North America, formed a power generation joint venture in Korea, and racked up more fueling stations awards than ever before. While the Company saw some slippage in certain December shipments due to one-time supplier issues, these orders are on track for the first quarter, and our backlog remains strong.

“Looking ahead our industry-leading position and pipeline of opportunities — particularly within energy storage and utility-scale power generation — are expected to drive further revenue growth this year; in 2014 alone, we won $18 million of energy storage projects, including funded RD activity, equipment sales and contracts for services. Prospects in this area continue to expand given our current level of qualified leads, which now stands at approximately $80 million. Hydrogenics is at the forefront of the hydrogen economy, and the Company continues to see larger, more complex requirements across the globe. Even in the face of lower fuel costs, the demand for our energy storage applications and power modules remains robust, and we are committed to achieving improved operating performance — and a path to profitability — in the quarters to come.”

Highlights for the Quarter Ended December 31, 2014 (compared to the quarter ended December 31, 2013, unless otherwise noted)

  • Revenue increased by 42% to $15.7 million reflecting higher sales in both the Onsite Generation and Power Systems business units.
  • Gross profit was 19.1% of revenue for the quarter, versus 24.6% in the prior-year period, reflecting a change in product mix as well as the impact of Euro denominated revenue where significant cost of sales are denominated in US dollars (principally in our German operations).
  • Cash Operating Costs1 declined by $0.2 million $2.7 million in the quarter, compared to $2.9 in 2013. A net increase in RD expense of $0.1 million was offset by a reduction in SGA expense of $0.3 million primarily due to the impact of the weakening Euro and Canadian dollar when translated to US dollars.
  • Adjusted EBITDA2 was $0.2 million for the quarter compared with an Adjusted EBITDA2 loss of $0.2 million in the fourth quarter of 2013.
  • Net income for the quarter was $0.6 million or $0.06 per share, an improvement of $3.7 million from the loss of $3.1 million or $(0.34) per share reported in the fourth quarter of 2013, reflecting the aforementioned items and higher stock-based compensation expense in 2013.
  • Hydrogenics secured $11.7 million of orders for renewable energy storage, industrial gas and power system applications during the quarter, resulting in an order backlog of $62.2 million as of December 31, 2014. Order backlog movement during the fourth quarter (in $ millions) was as follows:
  • The Company exited the fourth quarter with $10.4 million of cash and restricted cash, a $3.9 million decrease from September 30, 2014 primarily reflecting: (i) a $2.0 million decrease in working capital; (ii) $1.3 million invested in the Kolon-Hydrogenics joint venture; and (iii) $0.3 million related to the purchase of property, plant and equipment.

Highlights for the Year Ended December 31, 2014 (compared to the Year Ended December 31, 2013, unless otherwise noted)

  • Revenue rose 7% to $45.5 million versus 2013, primarily reflecting higher sales in the Company’s OnSite Generation business unit.
  • Gross profit was $11.2 million for the year, or 24.6% of revenue.
  • Cash operating costs were $13.9 million, versus $13.5 million in 2013. The year-over-year change primarily reflects an increase in total RD expense of $0.7 million, partially offset by a decline in SGA expense of $0.3 million primarily related to exchange rate fluctuations as noted in the fourth quarter of 2014.
  • The Adjusted EBITDA2 loss for 2014 was $2.5 million versus an Adjusted EBITDA2 loss of $1.2 million in 2013, primarily reflecting the above noted changes.
  • Net loss was $4.5 million, a 49% reduction from the $8.9 million reported in 2013, reflecting the aforementioned items and higher stock-based compensation expense in 2013.

Notes

  1. Cash operating costs are defined as the sum of SGA and RD, 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 Corporation and believes this is a useful measure for investors for the same purpose.
  1. Adjusted EBITDA is defined as net loss excluding stock based compensation (both cash settled long term compensation indexed to share price and share based compensation), other finance income and expenses, depreciation and amortization. These items are considered by management to be outside of Hydrogenics’ ongoing operational results. Adjusted EBITDA is a non-IFRS measure and may not be comparable to similar measures used by other companies.

Conference Call Details

Hydrogenics will hold a conference call at 10:00 a.m. EST on March 4, 2015 to review the fourth 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, www.hydrogenics.com.

An archived copy of the conference call and webcast will be available on the company’s website, www.hydrogenics.com, approximately six hours following the call.

About Hydrogenics

Hydrogenics Corporation is a world leader in engineering and building the technologies required to enable the acceleration of a global power shift. Headquartered in Mississauga, Ontario, Hydrogenics provides hydrogen generation, energy storage and hydrogen power modules to its customers and partners around the world. Hydrogenics has manufacturing sites in Germany, Belgium and Canada and service centres in Russia, Europe, the US and Canada.

Forward-looking Statements

This release contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995, and under applicable Canadian securities law. These statements are based on management’s current expectations and actual results may differ from these forward-looking statements due to numerous factors, including: our inability to increase our revenues or raise additional funding to continue operations, execute our business plan, or to grow our business; inability to address a slow return to economic growth, and its impact on our business, results of operations and consolidated financial condition; our limited operating history; inability to implement our business strategy; fluctuations in our quarterly results; failure to maintain our customer base that generates the majority of our revenues; currency fluctuations; failure to maintain sufficient insurance coverage; changes in value of our goodwill; failure of a significant market to develop for our products; failure of hydrogen being readily available on a cost-effective basis; changes in government policies and regulations; failure of uniform codes and standards for hydrogen fuelled vehicles and related infrastructure to develop; liability for environmental damages resulting from our research, development or manufacturing operations; failure to compete with other developers and manufacturers of products in our industry; failure to compete with developers and manufacturers of traditional and alternative technologies; failure to develop partnerships with original equipment manufacturers, governments, systems integrators and other third parties; inability to obtain sufficient materials and components for our products from suppliers; failure to manage expansion of our operations; failure to manage foreign sales and operations; failure to recruit, train and retain key management personnel; inability to integrate acquisitions; failure to develop adequate manufacturing processes and capabilities; failure to complete the development of commercially viable products; failure to produce cost-competitive products; failure or delay in field testing of our products; failure to produce products free of defects or errors; inability to adapt to technological advances or new codes and standards; failure to protect our intellectual property; our involvement in intellectual property litigation; exposure to product liability claims; failure to meet rules regarding passive foreign investment companies; actions of our significant and principal shareholders; dilution as a result of significant issuances of our common shares and preferred shares; inability of US investors to enforce US civil liability judgments against us; volatility of our common share price; and dilution as a result of the exercise of options. Readers should not place undue reliance on Hydrogenics’ forward-looking statements. Investors are encouraged to review the section captioned “Risk Factors” in Hydrogenics’ regulatory filings with the Canadian securities regulatory authorities and the US Securities and Exchange Commission for a more complete discussion of factors that could affect Hydrogenics’ future performance. Furthermore, the forward-looking statements contained herein are made as of the date of this release, and Hydrogenics undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release, unless otherwise required by law. The forward-looking statements contained in this release are expressly qualified by this.

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Article source: http://finance.yahoo.com/news/hydrogenics-reports-fourth-quarter-full-113000002.html

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