VANCOUVER, BC, March 17,
2023 /CNW/ - Ballard Power Systems (NASDAQ: BLDP)
(TSX: BLDP) today announced consolidated financial results for the
fourth quarter ended December 31,
2022. All amounts are in U.S. dollars unless otherwise noted
and have been prepared in accordance with International Financial
Reporting Standards (IFRS).
"With an increasingly constructive policy landscape for hydrogen
globally, we are excited by the growing end customer interest to
decarbonize mobility and stationary power applications with fuel
cells," said Randy MacEwen,
President and CEO. "2022 proved to be an important year for Ballard
as we achieved key customer platform wins across our verticals of
bus, truck, rail and marine, along with early traction in select
stationary power applications. This dynamic is supporting our
planned transition of Ballard's business model to a heavier focus
on growing sales of Power Products and reduced relative
contribution of Technology Solutions. Bolstered by strong order
intake in Q4 in Europe and
North America, we ended 2022 with
an Order Backlog of $133.4 million,
with Power Products up more than double from the end of 2021 and up
almost 60% from the end of Q3."
"We are also excited with the measured progress we are making on
our investments in strategic technology and product development
programs and advanced manufacturing initiatives, underpinning our
roadmap for continued product performance improvements while also
achieving significant product cost reductions," Mr. MacEwen
added.
Mr. MacEwen continued, "In Q4, we delivered revenue of
$20.5 million and gross margin of
(29)%. On revenue, we continue to be disappointed with delayed
adoption in the China market and
low activity levels at the Weichai-Ballard JV, which weighed on our
2022 results. We are working closely with our Weichai-Ballard JV to
unlock growth in the China fuel
cell bus and truck markets. Gross margin results partly reflect
strategic pricing on customer platform wins during a period of
inflationary costs. We expect these dynamics to persist into 2024
until our volume ramps and our product cost reduction initiatives
move into production. On costs, we achieved our guided targets for
total operating expenses and capital expenditures for full year
2022. We ended the year with $913.7
million in cash reserves."
Mr. MacEwen concluded, "In 2023, we believe we are well
positioned to compete and grow in an increasingly exciting market.
We continue to prudently manage our balance sheet as we execute on
our planned investments in technology and products, advanced
manufacturing, product cost reduction, our local-for-local
manufacturing strategy, and providing an outstanding customer
experience."
Q4 2022 Financial Highlights
(all comparisons are
to Q4 2021 unless otherwise noted)
- Total revenue was $20.5 million
in the quarter, down 44% year-over-year.
-
- Power Products revenue of $13.5
million decreased 49%, driven by lower shipments of fuel
cell products.
-
- Heavy-Duty revenues of $9.2
million decreased 59% due to lower shipments of fuel cell
products in China and Europe.
- Stationary Power Generation revenues of $2.7 million decreased 2%, due to lower sales in
Europe, partially offset by
increased sales in China.
- Material Handling revenues of $1.6
million increased 23%, primarily as a result of higher
shipments to Plug Power.
- Technology Solutions revenue of $7.0
million decreased 31% due primarily to decreased amounts
earned on the Weichai Ballard JV and substantial completion of the
Audi program.
- Gross margin was (29)% in the quarter, a decrease of 42-points,
driven by a combination of a greater weight of power products in
the revenue mix, pricing strategy, increased investment in
manufacturing capacity, increases in supply costs and inventory
adjustments.
- Total Operating Expenses and Cash Operating Costs3
were $37.0 million and $30.6 million, respectively, in the quarter,
an increase of 15% and 15%, respectively. Increases were driven
primarily by higher expenditure on research, technology and product
development activities.
- Adjusted EBITDA3 was ($46.4)
million, compared to ($25.5)
million in Q4 2021, primarily a result of the decrease in
gross margin and increase in Cash Operating Costs.
- Ballard received approximately $52.2
million of new orders in Q4, and delivered orders valued at
$20.5 million, resulting in an Order
Backlog of approximately $133.4
million at end-Q4. Order Backlog growth was driven
predominantly by increased orders from Europe, which now represent approximately 64%
of the total Order Backlog, compared to approximately 38% at end-Q4
2021. Specifically, the Power Products backlog as of Q4 2022 is
more than double the amount in Q4 2021, and is up almost 60% from
end-Q3 2022.
- The 12-month Order Book was $57.3
million at end-Q4, an increase of $6.3 million from the end of Q3 2022. The
12-month Power Products Order Book increased by 37% as compared to
end-Q4 2021 and by a similar percentage from the end of Q3 2022.
Additionally, order intake in of $52.2
million in Q4 2022 was 124% higher than the 12 month average
ending in Q3 2022 of $23.3
million.
Order Backlog
($M)
|
Order Backlog
at End-Q3 2022
|
Orders Received
in Q4 2022
|
Orders Delivered
in Q4 2022
|
Order Backlog
at End-Q4 2022
|
Total Fuel Cell
Products & Services
|
$101.7
|
$52.2
|
$20.5
|
$133.4
|
2023 Outlook
Consistent with the Company's past practice, and in view of the
early stage of hydrogen fuel cell market development and adoption,
we are not providing specific revenue or net income (loss) guidance
for 2023. In 2023, we continue our plan to invest in the business
ahead of the hydrogen growth curve. Ballard's Total Operating
Expense4 and Capital Expenditure5 guidance
ranges for 2023 are as follows:
2023
|
Guidance
|
Total Operating
Expense4
|
$135 - $155
million
|
Capital
Expenditure5
|
$40 - $60
million
|
Q4 2022 Financial Summary
(Millions of U.S.
dollars)
|
Three months
ended December 31
|
|
2022
|
2021
|
% Change
|
REVENUE
|
|
|
|
Fuel Cell Products
& Services:1,2
|
|
|
|
Heavy Duty
Motive
|
$9.2
|
$22.5
|
(59) %
|
Material
Handling
|
$1.6
|
$1.3
|
23 %
|
Stationary Power
Generation
|
$2.7
|
$2.7
|
(2) %
|
Sub-Total
|
$13.5
|
$26.6
|
(49) %
|
Technology
Solutions
|
$7.0
|
$10.1
|
(31) %
|
Total Fuel Cell
Products & Services Revenue
|
$20.5
|
$36.7
|
(44) %
|
PROFITABILITY
|
|
|
|
Gross Margin
$
|
($5.9)
|
$4.8
|
(224) %
|
Gross Margin
%
|
(29) %
|
13 %
|
(42)pts
|
Operating
Expenses
|
$37.0
|
$32.3
|
15 %
|
Cash Operating
Costs3
|
$30.6
|
$26.6
|
15 %
|
Equity loss in JV &
Associates
|
($6.8)
|
($4.9)
|
39 %
|
Adjusted
EBITDA3
|
($46.4)
|
($25.5)
|
(82) %
|
Net Loss from
continuing operations
|
($34.4)
|
($43.8)
|
21 %
|
Loss Per
Share
|
($0.12)
|
($0.15)
|
(15) %
|
CASH
|
|
|
|
Cash provided by (used
in) Operating Activities:
|
|
|
|
Cash Operating
Loss
|
($27.1)
|
($23.5)
|
15 %
|
Working Capital
Changes
|
$5.9
|
($7.1)
|
(183) %
|
Cash used
in
|
($21.2)
|
($30.7)
|
-31 %
|
Operating
Activities
|
Cash
Reserves
|
$913.7
|
$1,123.9
|
(19) %
|
(Millions of U.S.
dollars)
|
|
|
Twelve
months ended December 31
|
|
2022
|
2021
|
% Change
|
REVENUE
|
|
|
|
Fuel Cell Products
& Services:1,2
|
|
|
|
Heavy Duty
Motive
|
$38.9
|
$51.7
|
(25) %
|
Material
Handling
|
$6.4
|
$8.1
|
(22) %
|
Stationary Power
Generation
|
$10.9
|
$8.2
|
33 %
|
Sub-Total
|
$56.2
|
$68.0
|
(17) %
|
Technology
Solutions
|
$27.6
|
$36.5
|
(24) %
|
Total Fuel Cell
Products & Services Revenue
|
$83.8
|
$104.5
|
(20) %
|
PROFITABILITY
|
|
|
|
Gross Margin
$
|
($13.1)
|
$14.0
|
(193) %
|
Gross Margin
%
|
(16) %
|
13 %
|
29pts
|
Operating
Expenses
|
$145.8
|
$102.1
|
43 %
|
Cash Operating
Costs3
|
$118.8
|
$83.8
|
42 %
|
Equity loss in JV &
Associates
|
($11.6)
|
($16.1)
|
(28) %
|
Adjusted
EBITDA3
|
($144.0)
|
($82.2)
|
(75) %
|
Net Loss from
continuing operations
|
($173.5)
|
($114.4)
|
(52) %
|
Loss Per
Share
|
($0.58)
|
($0.39)
|
|
CASH
|
|
|
|
Cash provided by (used
in) Operating Activities:
|
|
|
|
Cash Operating
Loss
|
($121.7)
|
($68.9)
|
77 %
|
Working Capital
Changes
|
($10.4)
|
($11.6)
|
(10) %
|
Cash (used
in
|
($132.2)
|
($80.5)
|
64 %
|
Operating
Activities
|
Cash
Reserves
|
$913.7
|
$1,123.9
|
|
For a more detailed discussion of Ballard Power Systems' fourth
quarter 2022 results, please see the company's financial statements
and management's discussion & analysis, which are available at
www.ballard.com/investors, www.sedar.com and
www.sec.gov/edgar.shtml.
Conference Call
Ballard will hold a conference call on Friday, March 17, 2023 at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to review fourth quarter
2022 operating results. The live call can be accessed by dialing
+1.604.638.5340. Alternatively, a live audio and webcast can
be accessed through a link on Ballard's homepage (www.ballard.com).
Following the call, the audio webcast and presentation materials
will be archived in the 'Earnings, Interviews & Presentations'
area of the 'Investors' section of Ballard's website
(www.ballard.com/investors).
About Ballard Power Systems
Ballard Power Systems' (NASDAQ: BLDP; TSX: BLDP) vision is to
deliver fuel cell power for a sustainable planet. Ballard
zero-emission PEM fuel cells are enabling electrification of
mobility, including buses, commercial trucks, trains, marine
vessels, and stationary power. To learn more about Ballard, please
visit www.ballard.com.
Important Cautions Regarding Forward-Looking
Statements
This release contains forward-looking statements concerning the
hydrogen economy and markets for our products and the effects of
governmental regulations on such markets, expected revenues,
operating expenses, capital expenditures, corporate development
activities, impacts of investments in manufacturing and R&D
capabilities and market growth, and our carbon emissions goals.
These forward-looking statements reflect Ballard's current
expectations as contemplated under section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Any such statements are based on Ballard's
assumptions relating to its financial forecasts and expectations
regarding its product development efforts, manufacturing capacity,
and market demand. For a detailed discussion of the factors and
assumptions that these statements are based upon, and factors that
could cause our actual results or outcomes to differ materially,
please refer to Ballard's most recent management discussion &
analysis. Other risks and uncertainties that may cause Ballard's
actual results to be materially different include general economic
and regulatory changes, detrimental reliance on third parties,
successfully achieving our business plans and achieving and
sustaining profitability. For a detailed discussion of these and
other risk factors that could affect Ballard's future performance,
please refer to Ballard's most recent Annual Information Form.
These forward-looking statements are provided to enable external
stakeholders to understand Ballard's expectations as at the
date of this release and may not be appropriate for other purposes.
Readers should not place undue reliance on these statements and
Ballard assumes no obligation to update or release any revisions to
them, other than as required under applicable legislation.
Further Information
Kate Charlton +1.604.453.3939,
investors@ballard.com or media@ballard.com
Endnotes
1 We report
our results in the single operating segment of Fuel Cell Products
and Services. Our Fuel Cell Products and Services segment consists
of the sale
and service of PEM fuel cell products for our power product markets
of Heavy Duty Motive (consisting of bus, truck, rail and marine
applications), Material
Handling and Stationary Power Generation, as well as the delivery
of Technology Solutions, including engineering services, technology
transfer and the
license and sale of our extensive intellectual property portfolio
and fundamental knowledge for a variety of fuel cell
applications.
|
2 The
UAV market has been classified as a discontinued operation in our
third quarter of 2020 consolidated condensed financial statements.
As such, the
assets of the UAV market have been classified as assets held for
sale as of September 30, 2020. Furthermore, the historic operating
results of the UAV
market for 2020 have been removed from continuing operating results
and are instead presented separately in the statement of
comprehensive income as
income from discontinued operations.
|
3 Note
that Cash Operating Costs, EBITDA, and Adjusted EBITDA are non-GAAP
measures. Non-GAAP measures do not have any standardized
meaning
prescribed by GAAP and therefore are unlikely to be comparable to
similar measures presented by other companies. Ballard believes
that Cash Operating
Costs, EBITDA, and Adjusted EBITDA assist investors in assessing
Ballard's operating performance. These measures should be used in
addition to, and not as a
substitute for, net income (loss), cash flows and other measures of
financial performance and liquidity reported in accordance with
GAAP. For a reconciliation
of Cash Operating Costs, EBITDA, and Adjusted EBITDA to the
Consolidated Financial Statements, please refer to the tables
below.
|
Cash Operating Costs
measures operating expenses excluding stock-based compensation
expense, depreciation and amortization, impairment losses or
recoveries on trade receivables, restructuring charges, acquisition
related costs, the impact of unrealized gains or losses on foreign
exchange contracts, and
financing charges. EBITDA measures net loss from continuing
operations excluding finance expense, income taxes, depreciation of
property, plant and
equipment, and amortization of intangible assets. Adjusted EBITDA
adjusts EBITDA for stock-based compensation expense, transactional
gains and losses,
acquisition related costs, finance and other income, recovery on
settlement of contingent consideration, asset impairment charges,
and the impact of
unrealized gains or losses on foreign exchange
contracts.
|
4 Total
Operating Expenses refer to the measure reported in accordance with
IFRS.
|
5 Capital Expenditure is defined as
Additions to property, plant and equipment and
Investment in other intangible assets as disclosed in the
Consolidated Statements of Cash Flows
|
Operating Expenses and Cash Operating Costs
(Expressed in
thousands of U.S. dollars)
|
Three months ended
December 31,
|
|
|
2022
|
2021
|
$ Change
|
%
Change
|
Research and
Product
Development
|
$
22,944
|
$
19,870
|
$ 3,074
|
15 %
|
General and
Administrative
|
5,561
|
7,420
|
(1,859)
|
(25 %)
|
Sales and
Marketing
|
3,381
|
3,417
|
(36)
|
(1 %)
|
Operating
Expenses
|
$
31,886
|
$
30,707
|
$ 1,179
|
4 %
|
|
|
|
|
|
Research and
Product
Development (cash operating cost)
|
$
21,526
|
$
17,153
|
$ 4,373
|
25 %
|
General and
Administrative
(cash operating cost)
|
5,921
|
6,408
|
(487)
|
(8 %)
|
Sales and Marketing
(cash operating
cost)
|
3,163
|
3,043
|
120
|
4 %
|
Cash Operating
Costs
|
$
30,610
|
$
26,604
|
$ 4,006
|
15 %
|
(Expressed in
thousands of U.S. dollars)
|
Three months ended
December 31,
|
EBITDA and Adjusted
EBITDA
|
2022
|
2021
|
$
Change
|
Net loss from
continuing operations
|
$
(34,427)
|
$
(43,836)
|
$
9,409
|
Depreciation and
amortization
|
2,828
|
3,272
|
(444)
|
Finance
expense
|
300
|
313
|
(13)
|
Income taxes
(recovery)
|
(3,004)
|
(233)
|
(2,771)
|
EBITDA
|
$
(34,303)
|
$
(40,484)
|
$
6,181
|
Stock-based
compensation expense
|
1,471
|
2,319
|
(848)
|
Acquisition
related costs
|
106
|
1,580
|
(1,474)
|
Finance and
other (income) loss
|
(15,731)
|
11,366
|
(27,097)
|
Recovery on
settlement of contingent
consideration
|
(9,891)
|
-
|
(9,891)
|
Impairment loss
on intangible assets
|
13,024
|
-
|
13,024
|
Impact of
unrealized (gains) losses on foreign
exchange contracts
|
(1,057)
|
(263)
|
(794)
|
Adjusted
EBITDA
|
$
(46,381)
|
$
(25,482)
|
$
(12,899)
|
Operating Expenses
and Cash Operating Costs
|
(Expressed in
thousands of U.S. dollars)
|
Year ended December
31,
|
|
2022
|
2021
|
$ Change
|
%
Change
|
Research and
Product
Development
|
$
95,952
|
$
62,162
|
$
33,790
|
54 %
|
General and
Administrative
|
28,754
|
24,725
|
4,029
|
16 %
|
Sales and
Marketing
|
12,851
|
12,904
|
(53)
|
(0 %)
|
Operating
Expenses
|
$
137,557
|
$
99,791
|
$
37,766
|
38 %
|
|
|
|
|
|
Research and
Product
Development (cash operating cost)
|
$
84,048
|
$
52,539
|
$
31,509
|
60 %
|
General and
Administrative
(cash operating cost)
|
23,137
|
19,754
|
3,383
|
17 %
|
Sales and Marketing
(cash operating
cost)
|
11,582
|
11,489
|
93
|
1 %
|
Cash Operating
Costs
|
$
118,767
|
$
83,782
|
$
34,985
|
42 %
|
(Expressed in
thousands of U.S. dollars)
|
Year ended December
31,
|
EBITDA and Adjusted
EBITDA
|
2022
|
2021
|
$
Change
|
Net loss from
continuing operations
|
$
(173,494)
|
$
(114,397)
|
$
(59,097)
|
Depreciation and
amortization
|
13,357
|
9,752
|
3,605
|
Finance
expense
|
1,279
|
1,294
|
(15)
|
Income taxes
(recovery)
|
(3,536)
|
(216)
|
(3,320)
|
EBITDA
|
$
(162,394)
|
$
(103,567)
|
$
(58,827)
|
Stock-based
compensation expense
|
9,408
|
9,669
|
(261)
|
Acquisition
related costs
|
2,857
|
2,115
|
742
|
Finance and
other (income) loss
|
2,102
|
8,813
|
(6,711)
|
Recovery on
settlement of contingent
consideration
|
(9,891)
|
-
|
(9,891)
|
Impairment loss
on intangible assets
|
13,024
|
263
|
12,761
|
Impact of
unrealized (gains) losses on foreign
exchange contracts
|
862
|
519
|
343
|
Adjusted
EBITDA
|
$
(144,032)
|
$
(82,188)
|
$
(61,844)
|
|
|
|
|
|
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SOURCE Ballard Power Systems Inc.