Ballard Power Systems, Inc. today announced consolidated financial results for the fourth quarter ended December 31, 2013 and full year 2013. All amounts are in U.S. dollars unless otherwise noted and have been prepared in accordance with International Financial Reporting Standards (IFRS). Ballard posted strong operating results in Q4, on both the top line and bottom line. Q4 results, compared to the same quarter last year, were as follows: revenue was up 5%, to $17.3 million; gross margin was up 12 points, to 34%; and Adjusted EBITDA improved significantly from ($3.2) million to $0.2 million. These results continued the strong positive trend in Ballard's operating performance posted through the earlier quarters of 2013, as shown in the following quarterly results charts.
John Sheridan, President and CEO said, "Ballard's strong Q4 results capped off a great year for the Company, with full year revenue growth of 40%, gross margin improvement of 10 points to 27% and 63% improvement in Adjusted EBITDA. When viewing this 2013 performance in the context of the past two years, it is clear the Company is executing strongly, on the right strategy. Executing on our three-level business model over the past two years, with product sales, engineering services and IP licensing, Ballard has posted 62% revenue growth, a doubling of gross margin and a 70% improvement in Adjusted EBITDA."
Fuel Cell Product Sales were reported for three categories: 1) Telecom Backup Power where Q4 revenue was $5.9 million and full year revenue of $20.5 million, an increase of 74%. ElectraGenâ„¢ system shipments of 177 in Q4 and full year system shipments of 796, an increase of 99%. The bulk of these shipments fulfilled sales in Ballard's priority markets of Japan, China, Southeast Asia, South Africa and the Caribbean. Material Handling where Q4 revenue of $2.0 million and full year revenue of $6.5 million, an increase of 5%. While full year 2013 revenue was relatively flat year-over-year, Ballard's partner - Plug Power - has solidified its financing and recently reported a significant increase in its order book, including repeat orders from Walmart, Kroger, BMW and Mercedes-Benz.
Continuing the Fuel Cell Product Sales, 2013 bus revenue was generated from the shipment of 12 power modules to system integrators in Europe, the U.S. and China, as well as from IP licensing. Bus revenue is reported in development stage markets. In addition, in Q4 Ballard signed an MOU with Van Hool to support the manufacture and further deployment of zero emission fuel cell buses in Europe. The Companies are planning to submit a joint bid in Q1 2014 for additional funding of up to 25 European fuel cell buses.
2) Engineering Services where Q4 revenue was $6.2 million and full year revenue of $21.1 million, an increase of 24%. Engineering services is anchored by a 4-year contract with Volkswagen, signed in March 2013, and has broadened to include other automotive and non-automotive contracts. And 3) IP Licensing saw Q4 revenue of $2.3 million from the bus module assembly license contract in China. Expected value of the contract in China is approximately $11 million over the initial 12-month period, from licensing and engineering services.
The Company expects the positive growth trends in 2012 and 2013 to continue in 2014 with a similar trajectory, as Ballard continues to pursue its growth strategy for fuel cell product sales, engineering services and IP licensing. As such, for the full year 2014 Ballard expects: Revenue growth of approximately 30%; and Approximately break-even Adjusted EBITDA.
In a further development, John Sheridan, Ballard President and CEO, has informed the Board of Directors of his intention to retire by year end 2014. Sheridan, 59, said, "After being CEO now for eight years and, with Ballard's strengthened positioning and momentum, this is the right time for a transition in leadership." The Board of Directors has established a search committee and expects to have the new CEO in place and the transition process completed by Q4.
Ian Bourne, Chairman of the Board of Directors said, "While we will be sorry to see John retire as CEO, we support his decision and thank him for his strong leadership, driving the transformation of Ballard from an automotive fuel cell R&D organization, to successfully become a global leader in clean energy fuel cell products and services."
