Ballard Reports Improved Financial Performance, more Progress Projected in 2013
Ballard Power Systems has announced its consolidated financial results for the fourth quarter ended December 31, 2012. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS). Q4 revenue improved 50% to $21.3 million over the prior quarter, and improved 1% year-on-year. Full year revenue declined $16.8 million or 22% to $59.2 million year-on-year, consistent with the Companyâ€™s revised guidance for revenue of approximately $60 million. The companyâ€™s guidance for 2013 is for the following improvements in 2013 continuing operations: Revenue growth in excess of 30%; and Adjusted EBITDA improvement in excess of 50%.
â€œQ4 results reflected a marked turnaround from weak results earlier in the year â€“ both top line and bottom line,â€ said John Sheridan, President and CEO. â€œThis Q4 top line momentum and a solid yearend order book support our business outlook for 2013 revenue growth in excess of 30%. This top line growth, along with continued reductions in the cost base and a projected increase in gross margin, underpin our expectation for improvement in Adjusted EBITDA in excess of 50%.â€
Q4 and Full Year 2012 Results (including the divested Material Products division) include the following: Q4 revenue improved 50% to $21.3 million over the prior quarter, and improved 1% year-on-year. A key driver of the quarter-on-quarter revenue improvement was the addition of methanol-fueled ElectraGenâ„¢ systems to the backup power product line in August 2012. In Q4, 204 ElectraGen systems were shipped, 75% of which were methanol-fueled. In addition, engineering services contributed significantly to the growth, with revenue of $6.6 million in Q4 and more than $10 million for the year, a significant increase from less than $5 million in 2011.
Full year revenue declined $16.8 million or 22% to $59.2 million year-on-year, consistent with the Companyâ€™s revised guidance for revenue of approximately $60 million. This year-on-year decline in 2012 revenue reflected weak performance in Material Products and Bus, in addition to the 2011 wind down of contract manufacturing. Excluding 2011 contract manufacturing, revenue improved 2%.
In terms of product volume metrics, the 204 ElectraGen systems shipped for backup power in Q4 represented a 172% improvement over Q4 2011. In addition, Q4 stack shipments for material handling of 468 represented a 41% decline from Q4 2011. Full year ElectraGen system shipments for backup power of 399 represented a 175% improvement relative to 2011. Full year stack shipments for material handling of 2,022 represented a 42% improvement relative to 2011.
Q4 gross margin improved 10 points to 24% over Q3, and improved 4 points relative to Q4 2011. Full year gross margin improved 2 points to 20%. Q4 cash operating costs increased 10% to $7.8 million over Q3, but improved 10% relative to Q4 2011. Full year cash operating costs improved 18% relative to 2011, to $32.2 million. Q4 Adjusted EBITDA improved 65% to ($1.9) million over Q3, and improved 50% relative to Q4 2011. Full year Adjusted EBITDA improved 17% to ($18.5) million, consistent with the Companyâ€™s revised guidance for Adjusted EBITDA of approximately ($18) million.
The Company expects revenue growth in excess of 30%, led by backup power and engineering services, which together represent more than half of the $36.8 million 2012 yearend order book (excluding Material Products). It is expected that this growth, along with higher gross margins and a lower cost base, will contribute to improvements in bottom line performance.