MISSISSAUGA, ONTARIO– Hydrogenics Corporation (TSX:HYG)(NASDAQ:HYGS), a leading developer and manufacturer of hydrogen generation and fuel cell products, today reported first quarter 2009 results. Results are reported in US dollars and are prepared in accordance with Canadian generally accepted accounting principles.
Financial Highlights
- Revenues were $5.5 million for the first quarter of 2009, a decrease of 35% from the first quarter of 2008, excluding Test Systems.
- Gross margin was 30% for the first quarter of 2009, an increase of 13 percentage points from the first quarter of 2008.
- EBITDA loss was $3.8 million for the first quarter of 2009, a reduction of $0.1 million or 3% from the first quarter of 2008.
- Cash and cash equivalents, restricted cash and short-term investments were $15.7 million at March 31, 2009, a $7.0 million sequential quarterly decrease from the fourth quarter of 2008 reflecting: (i) $3.7 million of non-cash working capital; and (ii) a $3.8 million EBITDA loss; partially offset by (iii) $0.5 million of other items.
- Order backlog was $17.7 million, more than 80% of which is anticipated to be delivered and recognized as revenue in 2009.
“We continued to take appropriate steps this quarter to conserve cash and streamline our operations in the current economic environment,” said Daryl Wilson, President and Chief Executive Officer. “While Hydrogenics’ gross margin improved, revenues declined versus the first quarter of 2008 due primarily to the timing of certain projects within our OnSite Generation business unit. This was expected, as was the seasonal working capital impact on our cash flow, but the Corporation maintains a solid backlog and is experiencing strong quoting activity across our client spectrum. As we stated last quarter, the global economic slowdown has impacted the cycle time of new and existing projects, including in excess of $2.0 million which shifted from the first quarter to the second quarter. However, in spite of the factors noted above, we see improving traction within both OnSite Generation and Power Systems – recently recording a number of wins that position the Corporation for revenue expansion in the quarters to come. We remain cautiously optimistic about the second half of 2009.”
Results for the first quarter of 2009 compared to the first quarter of 2008
Revenues, exclusive of our Test Systems business unit, were $5.5 million, a decrease of 35%, reflecting lower revenues in our OnSite Generation business unit due to the timing of project deliveries, partially offset by increased revenues in our Power Systems business unit.
Gross profit, expressed as a percentage of revenues, was 30% (17% in the first quarter of 2008) attributed to operational improvements, product cost reductions and product mix.
Cash operating costs, a non-GAAP measure, defined as selling, general and administrative expenses, and research and product development expenses less stock-based compensation expense, were $5.3 million, a 4% decrease from $5.5 million in the first quarter of 2008. Cash operating costs for the first quarter of 2009 include $0.6 million of costs associated with further business streamlining initiatives as well as $0.2 million of costs attributable to our Test Systems business unit.
Net loss was $4.0 million, an 8% decrease from $4.3 million in the first quarter of 2008.
Liquidity
Cash and cash equivalents, restricted cash and short-term investments were $15.7 million as at March 31, 2009, a $7.0 million sequential quarterly decrease from the fourth quarter of 2008 reflecting: (i) $3.7 million of non-cash working capital; and (ii) a $3.8 million EBITDA loss; partially offset by (iii) $0.5 million of other items.
Order backlog
Order backlog as at March 31, 2009 was $17.7 million, as follows (in $ millions):
Dec. 31, Orders Orders Mar. 31,
2008 Received Delivered 2009
Backlog Backlog
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OnSite Generation $ 14.6 $ 0.8 $ 3.7 $ 11.7
Power Systems 7.6 0.2 1.8 6.0
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Total $ 22.2 $ 1.0 $ 5.5 $ 17.7
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We expect to deliver and recognize as revenue, more than 80% of our total order backlog in 2009.
Conference Call Details
Hydrogenics will hold a conference at 10:00 a.m. ET on May 13, 2009 to review the first quarter 2009 results. The conference call number is 800-769-8320. A live webcast of the call will also be available at www.hydrogenics.com.
The webcast will be archived on the site, and investors will be able to access an encore recording of the conference call for one week by calling 416-695-5800, conference ID #7482145. The encore recording will be available two hours after the conference call has concluded.
ABOUT HYDROGENICS
Hydrogenics Corporation (www.hydrogenics.com) is a globally recognized developer and provider of hydrogen generation and fuel cell products and services, serving the growing industrial and clean energy markets of today and tomorrow. Based in Mississauga, Ontario, Canada, Hydrogenics has operations in North America and Europe.
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