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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Hydrogenics Corporation New | NASDAQ:HYGS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 14.99 | 14.95 | 15.02 | 0 | 01:00:00 |
Exhibit
|
Description
|
|
99.1
|
Press Release dated May 6, 2015 titled "Hydrogenics Reports First Quarter 2015 Results"
|
|
99.2
|
First Quarter 2015 Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
99.3
|
First Quarter 2015 Consolidated Financial Statements and Results of Operations
|
|
99.4
|
PowerPoint Presentation titled "Q1 2015 Investor Presentation"
|
|
99.5 |
Form 52-109f2 - Certification of Annual Filings Full Certificate - Chief Executive Officer
|
|
99.6 |
Form 52-109f2 - Certification of Annual Filings Full Certificate - Chief Financial Officer
|
HYDROGENICS CORPORATION - CORPORATION HYDROGENIQUE
|
||
Date: May 6, 2015
|
By:
|
/s/ ROBERT MOTZ
Name: Robert Motz
Title: Chief Financial Officer
|
EXHIBIT 99.1
MISSISSAUGA, Ontario, May 6, 2015 (GLOBE NEWSWIRE) -- Hydrogenics Corporation (Nasdaq:HYGS) (TSX:HYG) ("Hydrogenics" or "the Company"), a leading developer and manufacturer of hydrogen generation and hydrogen-based power modules, today reported first quarter 2015 financial results. Results are reported in US dollars and are prepared in accordance with International Financial Reporting Standards (IFRS).
"First quarter results were negatively impacted by order timing and the weakening Euro to the US dollar," said Daryl Wilson, CEO of Hydrogenics. "We recently announced that E.ON completed its internal testing on our 1.5 megawatt PEM energy storage stack and, after prior delays tied to part certification and system analysis, we will deliver our Power-to-Gas application in the coming days. This will showcase our groundbreaking technology and serve as a strong impetus for securing future, larger orders, as we've been anticipating.
"We're also finishing the containerization work on our first one megawatt fuel cell array for Kolon in Korea and expect this to be installed during the second quarter, with testing to follow. We then anticipate further orders in the fourth quarter, in much greater magnitudes, for shipment in 2016. In addition, Hydrogenics plans to ship several fueling station orders later this year as well as continue to work on our initial two megawatt energy storage project in Canada.
"So while recent results have been softer than we would like, we remain very optimistic about the future and, as always, are focused on many business development initiatives, including new market penetration opportunities. We believe that quarterly results will trend higher sequentially this year. We have $34.7 in backlog for shipment in 2015 plus the potential for orders in the second and third quarters that could be delivered in the current year. Overall demand for our applications is growing, and our technology is second to none. We are dedicated to improved top line and bottom line performance for our shareholders and believe this will play out as the year proceeds."
Highlights for the Quarter Ended March 31, 2015 (compared to the quarter ended March 31, 2014, unless otherwise noted)
Dec. 31, 2015 Backlog |
Orders Received |
FX |
Orders Delivered |
Mar. 31, 2015 Backlog |
|
OnSite Generation | $ 28.3 | $ 4.6 | $ (1.9) | $ 3.3 | $ 27.7 |
Power Systems | 33.9 | 1.1 | (2.7) | 4.2 | 28.1 |
Total | $ 62.2 | $ 5.7 | $ (4.6) | $ 7.5 | $ 55.8 |
Notes
Conference Call Details
Hydrogenics will hold a conference call at 1:00 p.m. EDT on May 6, 2015 to review the first 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.
Reconciliation of Adjusted EBITDA to Net Loss | ||
(in thousands of US dollars) | ||
(unaudited) | ||
Three months ended | ||
31-Mar-15 | 31-Mar-14 | |
Adjusted EBITDA |
(2,313) | (1,729) |
Less: |
||
Stock-based compensation |
118 | 136 |
Cash settled compensation indexed to share price |
(144) | 1,561 |
Net Finance losses |
979 | 183 |
Depreciation and amortization |
161 | 140 |
Net Loss |
(3,427) | (3,749) |
Hydrogenics Corporation | ||
Condensed Interim Consolidated Balance Sheets | ||
(in thousands of US dollars) | ||
(unaudited) | ||
March 31, 2015 |
December 31, 2014 |
|
Assets | ||
Current assets | ||
Cash and cash equivalents | $6,207 | $6,572 |
Restricted cash | 2,495 | 3,228 |
Trade and other receivables | 11,839 | 12,900 |
Inventories | 14,164 | 14,698 |
Prepaid expenses | 728 | 747 |
35,433 | 38,145 | |
Non-current assets | ||
Restricted cash | 817 | 621 |
Investment in joint venture | 2,134 | 2,150 |
Property, plant and equipment | 2,085 | 1,873 |
Intangible assets | 143 | 157 |
Goodwill | 4,096 | 4,609 |
9,275 | 9,410 | |
Total assets | $44,708 | $47,555 |
Liabilities | ||
Current Liabilities | ||
Operating borrowings | $2,151 | $-- |
Trade and other payables | 10,885 | 13,156 |
Warranty provisions | 667 | 1,392 |
Deferred revenue | 9,490 | 6,771 |
23,193 | 21,319 | |
Non-current liabilities | ||
Other non-current liabilities | 3,229 | 3,464 |
Non-current warranty provisions | 1,457 | 1,155 |
Non-current deferred revenue | 5,717 | 6,141 |
10,403 | 10,760 | |
Total liabilities | 33,596 | 32,079 |
Equity | ||
Share capital | 348,268 | 348,259 |
Contributed surplus | 19,042 | 18,927 |
Accumulated other comprehensive loss | (3,169) | (2,108) |
Deficit | (353,029) | (349,602) |
Total equity | 11,112 | 15,476 |
Total equity and liabilities | $44,708 | $ 47,555 |
Hydrogenics Corporation | ||
Condensed Interim Consolidated Statements of Operations and Comprehensive Loss | ||
For the three months ended March 31, | ||
(in thousands of US dollars, except share and per share amounts) | ||
(unaudited) | ||
2015 | 2014 | |
Revenues | $7,531 | $8,059 |
Cost of sales | 6,378 | 6,142 |
Gross profit | 1,153 | 1,917 |
Operating expenses | ||
Selling, general & administrative expenses | 2,579 | 4,567 |
Research and product development expenses | 1,022 | 916 |
3,601 | 5,483 | |
Loss from operations | (2,448) | (3,566) |
Finance income (expenses) | ||
Interest expense, net | (127) | (132) |
Foreign currency losses, net | (836) | 89 |
Loss from joint venture | (16) | -- |
Other finance losses, net | -- | (140) |
Finance income (loss), net | (979) | (183) |
Loss before income taxes | (3,427) | (3,749) |
Income tax expense | -- | -- |
Net loss for the period | (3,427) | (3,749) |
Items that may be reclassified subsequently to net loss | ||
Exchange differences on translating foreign operations | (1,061) | (5) |
Comprehensive loss for the period | $(4,488) | $(3,754) |
Net loss per share | ||
Basic and diluted | $(0.34) | $(0.41) |
Hydrogenics Corporation | ||
Condensed Interim Consolidated Statements of Cash Flows | ||
For the three months ended March 31, | ||
(in thousands of US dollars) | ||
(Unaudited) | ||
2015 | 2014 | |
Cash and cash equivalents provided by (used in): | ||
Operating activities | ||
Net loss for the period | $(3,427) | $(3,749) |
(Increase) decrease in restricted cash | 537 | (253) |
Items not affecting cash: | ||
Amortization and depreciation | 161 | 140 |
Other finance losses, net | -- | 140 |
Unrealized foreign exchange losses | 5 | 87 |
Unrealized loss on joint venture | 16 | -- |
Accreted non-cash interest | 121 | 118 |
Payment of post-retirement benefit liability | -- | (24) |
Stock-based compensation | 118 | 136 |
Stock based compensation – RSUs and DSUs | (144) | 1,561 |
Net change in non-cash working capital | 1,249 | (1,972) |
Cash used in operating activities | (1,364) | (3,816) |
Investing activities | ||
Proceeds from disposals | -- | 9 |
Purchase of property, plant and equipment | (371) | (306) |
Purchase of intangible assets | -- | (80) |
Cash used in investing activities | (371) | (377) |
Financing activities | ||
Repayment of repayable government contributions | -- | (50) |
Proceeds of operating borrowings | 2,151 | 1,722 |
Common shares issued | 6 | 109 |
Cash provided by financing activities | 2,157 | 1,781 |
Effect of exchange rate fluctuations on cash and cash equivalents held | (787) | (68) |
Decrease in cash and cash equivalents during the period | (365) | (2,480) |
Cash and cash equivalents - Beginning of period | 6,572 | 11,823 |
Cash and cash equivalents - End of period | $6,207 | $9,343 |
Hydrogenics Corporation
|
Hydrogenics Corporation
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 2
|
Hydrogenics Corporation
|
Management’s Discussion and Analysis
Table of Contents
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|||
Section
|
Description
|
Page
|
|
1
|
Overall Performance
|
4
|
|
2
|
Operating Results
|
6
|
|
3
|
Financial Condition
|
9
|
|
4
|
Summary of Quarterly Results
|
10
|
|
5
|
Outlook
|
10
|
|
6
|
Liquidity
|
11
|
|
7
|
Capital Resources
|
14
|
|
8
|
Off Balance Sheet Arrangements
|
14
|
|
9
|
Related Party Transactions
|
15
|
|
10
|
Critical Accounting Estimates
|
15
|
|
11
|
Changes in Accounting Policies and Recent Accounting Pronouncements
|
15
|
|
12
|
Disclosure Controls
|
15
|
|
13
|
Internal Control Over Financial Reporting
|
16
|
|
14
|
Reconciliation of Non-IFRS Measures
|
17
|
|
15
|
Risk Factors
|
19
|
|
16
|
Outstanding Share Data
|
21
|
|
17
|
Forward-looking Statements
|
21
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 3
|
Hydrogenics Corporation
|
1
|
Overall Performance
|
Three months ended
March 31,
|
2015 vs
2014
|
|||||||||||
2015
|
2014
|
% Favourable
(Unfavourable)
|
||||||||||
OnSite Generation
|
3,335 | 5,963 | (44 | %) | ||||||||
Power Systems
|
4,196 | 2,096 | 100 | % | ||||||||
Total Revenue
|
7,531 | 8,059 | (7 | %) | ||||||||
Gross profit
|
1,153 | 1,917 | (40 | %) | ||||||||
Gross Margin %
|
15 | % | 24 | % | ||||||||
Selling, General and Administrative Expenses
|
2,579 | 4,567 | 44 | % | ||||||||
Research and Product Development Expenses
|
1,022 | 916 | (12 | %) | ||||||||
Income (Loss) from Operations
|
(2,448 | ) | (3,566 | ) | 31 | % | ||||||
Net Loss
|
(3,427 | ) | (3,749 | ) | 9 | % | ||||||
Net Loss Per Share
|
(0.34 | ) | (0.41 | ) | 17 | % | ||||||
Cash Operating Costs1
|
3,534 | 3,727 | 5 | % | ||||||||
Adjusted EBITDA1
|
(2,313 | ) | (1,729 | ) | (34 | %) | ||||||
Cash used in Operating Activities
|
(1,364 | ) | (3,816 | ) | 64 | % | ||||||
Cash and Cash Equivalents (including Restricted Cash)
|
9,519 | 11,620 | (18 | %) | ||||||||
Total Assets
|
44,708 | 45,045 | (1 | %) | ||||||||
Total Non-Current Liabilities (excluding Deferred Revenue)
|
4,686 | 3,789 | (24 | %) |
1
|
Cash operating costs and Adjusted EBITDA are Non-IFRS measures. Refer to section 14 - Reconciliation of Non-IFRS Measures.
|
·
|
Revenues decreased by $528 or 7% to $7,531 for the three months ended March 31, 2015 compared to $8,059 for the same period of the prior year. The decrease in revenue was due to fewer orders shipped in the current quarter combined with the weakening of the euro which also impacted revenue. During first quarter of 2015, the Company received new orders for $5.7 million (2014 - $9.8 million) consisting of $4.6 million (2014 - $8.1 million) for the OnSite Generation business and $1.1 million (2014 - $1.7 million) for the Power Systems business. Total backlog for the first quarter of 2015 was $55.8 million compared to $58.5 million for the same period a year ago.
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 4
|
Hydrogenics Corporation
|
Expected Revenue Recognition
|
||||||||||||||||||||||||||||
Dec 31, 2014 backlog
|
Orders Received
|
FX
|
Orders Delivered/ Revenue Recognized
|
March 31, 2015 backlog
|
During next 12 months
|
Beyond next 12 months
|
||||||||||||||||||||||
OnSite Generation
|
$ | 28.3 | $ | 4.6 | $ | (1.9 | ) | $ | 3.3 | $ | 27.7 | $ | 27.7 | $ | - | |||||||||||||
Power Systems
|
33.9 | 1.1 | (2.7 | ) | 4.2 | 28.1 | 7.5 | 20.6 | ||||||||||||||||||||
Total
|
$ | 62.2 | $ | 5.7 | $ | (4.6 | ) | $ | 7.5 | $ | 55.8 | $ | 35.2 | $ | 20.6 |
·
|
Selling, general and administrative (“SG&A”) expenses for the first quarter of 2015 of $2,579 were lower by $1,988 or 44% compared to $4,567 for the prior year quarter. The improvement over the prior year was primarily due to the impact of the higher mark-to-market adjustment on the restricted share units (“RSUs”) and deferred share units (“DSUs”) at C$30.05 per share in the prior year compared the current quarter with a share price of C$14.40 per share. Additionally there was no mark-to-market adjustment on the RSUs in current quarter due to their vesting and being paid out at the end of 2014. SG&A was also lower in the first quarter of 2015 compared to same quarter of the prior year due to the lower value of the euro and Canadian dollars when compared to the US dollar in the current quarter.
|
·
|
Research and development expenses were $1,022 for the three months ended March 31, 2015 compared to $916 in the same period of 2014 and were on target with the prior year.
|
·
|
Net loss for the three months ended March 31, 2015, was $3,427 or $0.34 per share compared to a net loss of $3,749 or $0.41 per share for the same quarter of the prior year. The net loss in the current quarter reflects the improvement due to the lower mark-to-market adjustment on the value of RSUs and DSUs indicated above, somewhat offset by lower margins and losses on foreign currency translation compared to the prior year period.
|
·
|
Cash operating costs were $3,534 for the three months ended March 31, 2015 compared to $3,727 for the three months ended March 31, 2014, with the lower costs due to lower SG&A expenses in the current year due to the impact of lower exchange rates on the translation of costs from euros and Canadian dollars to US dollars.
|
·
|
Adjusted EBITDA loss increased to $2,313 for the three months ended March 31, 2015 from $1,729 for the same period last year. The decline resulted from lower margin sales and slightly higher research and development costs in the current year period.
|
·
|
Net loss decreased by $322 or $0.07 per share to $3,427 or $0.34 per share in the current quarter from $3,749 or $0.41 per share, primarily due to the lower mark-to-market adjustment on DSUs and RSUs in the current quarter partially offset by losses on the foreign currency translation of long term receivables and lower margins as indicated above.
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 5
|
Hydrogenics Corporation
|
2
|
Operating Results
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 6
|
Hydrogenics Corporation
|
Three months ended
March 31
|
||||||||||||
2015
|
2014
|
% Favourable (Unfavourable)
|
||||||||||
Revenues
|
$ | 3,335 | $ | 5,963 | (44 | %) | ||||||
Gross profit
|
277 | 767 | (64 | %) | ||||||||
Gross margin %
|
8 | % | 13 | % | (38 | %) | ||||||
Selling, General and Administrative Expenses
|
635 | 841 | (24 | %) | ||||||||
Research and Product Development Expenses
|
424 | 382 | (11 | %) | ||||||||
Segment Loss
|
$ | (782 | ) | $ | (456 | ) | (71 | %) |
First Quarter 2015 Management’s Discussion and Analysis
|
Page 7
|
Hydrogenics Corporation
|
Three months ended
March 31
|
||||||||||||
2015
|
2014
|
% Favourable (Unfavourable)
|
||||||||||
Revenues
|
$ | 4,196 | $ | 2,096 | 100 | % | ||||||
Gross Profit
|
876 | 1,150 | (24 | %) | ||||||||
Gross margin %
|
21 | % | 55 | % | (62 | %) | ||||||
Selling, General and Administrative Expenses
|
920 | 1,055 | 13 | % | ||||||||
Research and Product Development Expenses
|
579 | 532 | (9 | %) | ||||||||
Segment Loss
|
$ | (623 | ) | $ | (437 | ) | (43 | %) |
First Quarter 2015 Management’s Discussion and Analysis
|
Page 8
|
Hydrogenics Corporation
|
Three months ended
March 31
|
||||||||||||
2015
|
2014
|
% Favourable (Unfavourable)
|
||||||||||
Selling, general and administrative expenses
|
$ | 1,024 | $ | 2,671 | 62 | % | ||||||
Research and product development expenses
|
19 | 2 | (850 | %) | ||||||||
Net other finance losses
|
- | (140 | ) | 100 | % | |||||||
Loss on joint venture
|
(16 | ) | - | (100 | %) | |||||||
Interest expense
|
(127 | ) | (132 | ) | 4 | % | ||||||
Foreign exchange gains (losses) net
|
(836 | ) | 89 | (1,039 | %) | |||||||
Total
|
$ | (2,022 | ) | $ | (2,856 | ) | 29 | % |
3
|
Financial Condition
|
March 31
|
December 31
|
Increase/(decrease)
|
||||||||||||||
2015
|
2014
|
$ | % | |||||||||||||
Cash, cash equivalents, restricted cash and short-term investments
|
$ | 9,519 | $ | 10,421 | $ | (902 | ) | (9 | %) | |||||||
Trade and other receivables
|
11,839 | 12,900 | (1,061 | ) | (8 | %) | ||||||||||
Inventories
|
14,164 | 14,698 | (534 | ) | (4 | %) | ||||||||||
Operating borrowings
|
2,151 | - | 2,151 | 100 | % | |||||||||||
Trade and other payables
|
10,885 | 13,156 | (2,271 | ) | (17 | %) | ||||||||||
Warranty provisions (current and non-current)
|
2,124 | 2,547 | (423 | ) | (17 | %) | ||||||||||
Deferred revenue (current and non-current)
|
15,207 | 12,912 | 2,295 | (18 | %) | |||||||||||
Other non-current liabilities
|
$ | 3,229 | $ | 3,464 | (235 | ) | (7 | %) |
First Quarter 2015 Management’s Discussion and Analysis
|
Page 9
|
Hydrogenics Corporation
|
4
|
Summary of Quarterly Results
|
2015
Q1
|
2014
Q4
|
2014
Q3
|
2014
Q2
|
2014
Q1
|
2013
Q4
|
2013
Q3
|
2013
Q2
|
|||||||||||||||||||||||||
Revenues
|
$ | 7,531 | $ | 15,673 | $ | 11,093 | $ | 10,723 | $ | 8,059 | $ | 11,000 | $ | 9,236 | $ | 9,786 | ||||||||||||||||
Gross Profit
|
1,153 | 2,989 | 3,067 | 3,240 | 1,918 | 2,705 | 2,730 | 2,749 | ||||||||||||||||||||||||
Gross Margin %
|
15 | % | 19 | % | 28 | % | 30 | % | 24 | % | 25 | % | 30 | % | 28 | % | ||||||||||||||||
Adjusted EBITDA1
|
(2,313 | ) | 160 | (683 | ) | (288 | ) | (1,728 | ) | (165 | ) | (350 | ) | (873 | ) | |||||||||||||||||
Net (Loss) Income
|
(3,427 | ) | 612 | $ | (1,262 | ) | $ | (125 | ) | $ | (3,747 | ) | $ | (3,100 | ) | $ | (491 | ) | $ | (4,178 | ) | |||||||||||
Net (Loss) income Per Share - (Basic and Fully Diluted)
|
$ | (0.34 | ) | $ | 0.06 | $ | (0.13 | ) | $ | (0.01 | ) | $ | (0.40 | ) | $ | (0.35 | ) | $ | (0.05 | ) | $ | (0.49 | ) | |||||||||
Weighted Average Common Shares Outstanding
|
10,090,481 | 10,089,891 | 10,089,508 | 9,605,220 | 9,073,527 | 9,003,960 | 8,963,599 | 8,542,637 |
5
|
Outlook
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 10
|
Hydrogenics Corporation
|
6
|
Liquidity
|
Three months ended
March 31
|
||||||||||||
2015
|
2014
|
$ Change
|
||||||||||
Net loss
|
$ | (3,427 | ) | $ | (3,749 | ) | $ | 322 | ||||
(Increase) decrease in restricted cash
|
537 | (253 | ) | 790 | ||||||||
Changes in non-cash working capital
|
1,249 | (1,972 | ) | 3,221 | ||||||||
Other items not affecting cash
|
277 | 2,158 | (1,881 | ) | ||||||||
Cash used in operating activities
|
$ | (1,364 | ) | $ | (3,816 | ) | $ | 2,452 |
First Quarter 2015 Management’s Discussion and Analysis
|
Page 11
|
Hydrogenics Corporation
|
Three months ended
March 31
|
||||||||||||
2015
|
2014
|
$ Change
|
||||||||||
Proceeds on disposals
|
$ | - | $ | 9 | $ | (9 | ) | |||||
Purchases of property plant and equipment
|
(371 | ) | (306 | ) | (65 | ) | ||||||
Purchase of intangibles
|
- | (80 | ) | 80 | ||||||||
Cash used in investing activities
|
$ | (371 | ) | $ | (377 | ) | $ | 6 |
Three months ended
March 31
|
||||||||||||
2015
|
2014
|
$ Change
|
||||||||||
Proceeds of borrowings
|
$ | 2,151 | $ | 1,722 | 429 | |||||||
Repayment of government contributions
|
- | (50 | ) | 50 | ||||||||
Common shares issued on stock options exercised
|
6 | 109 | (103 | ) | ||||||||
Cash provided by financing activities
|
$ | 2,157 | $ | 1,781 | $ | 376 |
Total
|
Less than
1 year
|
1-3 years
|
4-5 years
|
After 5 years
|
||||||||||||||||
Long-term debt1
|
$ | 5,244 | - | $ | 2,201 | $ | 2,063 | $ | 980 | |||||||||||
Operating borrowings
|
2,151 | 2,151 | - | - | - | |||||||||||||||
Operating leases
|
3,529 | 770 | 1,433 | 948 | 378 | |||||||||||||||
Purchase obligations
|
6,411 | 6,411 | - | - | - | |||||||||||||||
Repayable government contributions
|
621 | 276 | 345 | - | - | |||||||||||||||
Total contractual obligations2
|
$ | 17,956 | $ | 9,608 | $ | 3,979 | $ | 3,011 | $ | 1,358 |
1.
|
Represents the undiscounted amounts payable as disclosed below under “Other Loan Facilities”.
|
2.
|
The table excludes the DSU liability of $1,024 included in our current liabilities which relate to units that are only settled once a director resigns as a director.
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 12
|
Hydrogenics Corporation
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 13
|
Hydrogenics Corporation
|
7
|
Capital Resources
|
March 31, 2015
|
December 31,
2014
|
|||||||
Shareholders’ equity
|
$ | 11,112 | $ | 15,476 | ||||
Operating borrowings
|
2,151 | - | ||||||
Long term debt and repayable government contributions
|
3,301 | 3,475 | ||||||
Total
|
16,564 | 18,951 | ||||||
Less cash and cash equivalents and restricted cash
|
9,519 | 10,421 | ||||||
Capital Employed
|
$ | 7,045 | $ | 8,530 |
8
|
Off-Balance Sheet Arrangements
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 14
|
Hydrogenics Corporation
|
9
|
Related Party Transactions
|
10
|
Critical Accounting Estimates
|
11
|
Changes in Accounting Policies and Recent Accounting Pronouncements
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 15
|
Hydrogenics Corporation
|
13
|
Internal Control over Financial Reporting
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 16
|
Hydrogenics Corporation
|
14
|
Reconciliation of Non-IFRS Measures
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 17
|
Hydrogenics Corporation
|
Three months ended
March 31
|
||||||||
2015
|
2014
|
|||||||
Net loss
|
$ | (3,427 | ) | $ | (3,749 | ) | ||
Finance loss (income)
|
979 | 183 | ||||||
Depreciation of property, plant and equipment and intangible assets
|
161 | 140 | ||||||
RSUs and DSUs (recovery) expense
|
(144 | ) | 1,561 | |||||
Stock-based compensation expense (including PSUs)
|
118 | 136 | ||||||
Adjusted EBITDA
|
$ | (2,313 | ) | $ | (1,729 | ) |
Three months ended
March 31
|
||||||||
2015
|
2014
|
|||||||
Selling, general and administrative expenses
|
$ | 2,579 | $ | 4,567 | ||||
Research and product development expenses
|
1,022 | 916 | ||||||
Total operating costs
|
$ | 3,601 | $ | 5,483 | ||||
Less: Depreciation of property, plant and equipment and intangibles
|
93 | 59 | ||||||
Less: RSUs and DSUs
|
(144 | ) | 1,561 | |||||
Less: Stock-based compensation expense (including PSUs)
|
118 | 136 | ||||||
Cash operating costs
|
$ | 3,534 | $ | 3,727 |
First Quarter 2015 Management’s Discussion and Analysis
|
Page 18
|
Hydrogenics Corporation
|
15
|
Risk Factors
|
● |
Our inability to generate sufficient cash flows, raise additional capital and actively manage our liquidity may impair our ability to execute our business plan, and result in our reducing or eliminating product development and commercialization efforts, reducing our sales and marketing efforts, and having to forego attractive business opportunities.
|
● |
The uncertain and unpredictable condition of the global economy could have a negative impact on our business, results of operations and consolidated financial condition, or our ability to accurately forecast our results, and it may cause a number of the risks that we currently face to increase in likelihood, magnitude and duration.
|
● |
We may not be able to implement our business strategy and the price of our common shares may decline.
|
● |
Our quarterly operating results are likely to fluctuate significantly and may fail to meet the expectations of securities analysts and investors and may cause the price of our common shares to decline.
|
● |
We currently depend on a relatively limited number of customers for a majority of our revenues and a decrease in revenue from these customers could materially adversely affect our business, consolidated financial condition and results of operations.
|
● |
Our operating results may be impacted by currency fluctuation.
|
● |
Our insurance may not be sufficient.
|
● |
Certain external factors may affect the value of goodwill, which may require us to recognize an impairment charge.
|
● |
Significant markets for fuel cell and other hydrogen energy products may never develop or may develop more slowly than we anticipate. This would significantly harm our revenues and may cause us to be unable to recover the losses we have incurred and expect to incur in the development of our products.
|
● |
Hydrogen may not be readily available on a cost-effective basis, in which case our fuel cell products may be unable to compete with existing power sources and our revenues and results of operations would be materially adversely affected.
|
● |
Changes in government policies and regulations could hurt the market for our products.
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 19
|
Hydrogenics Corporation
|
● |
Lack of new government policies and regulations for the energy storage technologies could hurt the development of our hydrogen energy storage products.
|
● |
Development of uniform codes and standards for hydrogen powered vehicles and related hydrogen refueling infrastructure may not develop in a timely fashion, if at all.
|
● |
We could be liable for environmental damages resulting from our research, development or manufacturing operations.
|
● |
We currently face and will continue to face significant competition from other developers and manufacturers of fuel cell power products and hydrogen generation systems. If we are unable to compete successfully, we could experience a loss of market share, reduced gross margins for our existing products and a failure to achieve acceptance of our proposed products.
|
● |
We face competition for fuel cell power products from developers and manufacturers of traditional technologies and other alternative technologies.
|
● |
Our strategy for the sale of fuel cell power products depends on developing partnerships with OEMs, governments, systems integrators, suppliers and other market channel partners who will incorporate our products into theirs.
|
● |
We are dependent on third party suppliers for key materials and components for our products. If these suppliers become unable or unwilling to provide us with sufficient materials and components on a timely and cost-effective basis, we may be unable to manufacture our products cost-effectively or at all, and our revenues and gross margins would suffer.
|
● |
We may not be able to manage successfully the anticipated expansion of our operations.
|
● |
If we do not properly manage foreign sales and operations, our business could suffer.
|
● |
We will need to recruit, train and retain key management and other qualified personnel to successfully expand our business.
|
● |
We may acquire technologies or companies in the future, and these acquisitions could disrupt our business and dilute our shareholders’ interests.
|
● |
We have no experience manufacturing our fuel cell products on a large scale basis and if we do not develop adequate manufacturing processes and capabilities to do so in a timely manner, we will be unable to achieve our growth and profitability objectives.
|
● |
We may never complete the development of commercially viable fuel cell power products and/or commercially viable hydrogen generation systems for new hydrogen energy applications, and if we fail to do so, we will not be able to meet our business and growth objectives.
|
● |
We must continue to lower the cost of our fuel cell and hydrogen generation products and demonstrate their reliability or consumers will be unlikely to purchase our products and we will therefore not generate sufficient revenues to achieve and sustain profitability.
|
● |
Any failures or delays in field tests of our products could negatively affect our customer relationships and increase our manufacturing costs.
|
● |
The components of our products may contain defects or errors that could negatively affect our customer relationships and increase our development, service and warranty costs.
|
● |
Rapid technological advances or the adoption of new codes and standards could impair our ability to deliver our products in a timely manner and, as a result, our revenues would suffer.
|
● |
We depend on intellectual property and our failure to protect that intellectual property could adversely affect our future growth and success.
|
● |
Our involvement in intellectual property litigation could negatively affect our business.
|
● |
Our products use flammable fuels that are inherently dangerous substances and could subject us to product liabilities.
|
● |
If at any time we are classified as a passive foreign investment company under United State tax laws, our US shareholders may be subject to adverse tax consequences.
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 20
|
Hydrogenics Corporation
|
● |
As a result of a strategic alliance entered into with a significant minority shareholder, they own a significant portion of our common shares and may act, or prevent corporate actions, to the detriment of other shareholders.
|
● |
If we fail to maintain the requirements for continued listing on NASDAQ, our common shares could be delisted from trading on NASDAQ, which would materially adversely affect the liquidity of our common shares, the price of our common shares, and our ability to raise additional capital. Future sales of common shares by our principal shareholders could cause our share price to fall and reduce the value of a shareholder’s investment.
|
● |
Our articles of incorporation authorize us to issue an unlimited number of common and preferred shares. Significant issuances of common or preferred shares could dilute the share ownership of our shareholders, deter or delay a takeover of us that our shareholders may consider beneficial or depress the trading price of our common shares.
|
● |
US investors may not be able to enforce US civil liability judgments against us or our directors and officers.
|
● |
Our share price is volatile and we may continue to experience significant share price and volume fluctuations.
|
16
|
Outstanding Share Data
|
2015
|
2014
|
|||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||
Balance at January 1
|
10,090,325 | $ | 348,259 | 9,017,617 | $ | 333,312 | ||||||||||
Warrants exercised
|
- | - | 57,144 | 1,217 | ||||||||||||
Stock options exercised
|
1,000 | 9 | 13,861 | 169 | ||||||||||||
At March 31,
|
10,091,325 | $ | 348,268 | 9,088,622 | $ | 334,698 |
17
|
Forward Looking Statements
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 21
|
Hydrogenics Corporation
|
First Quarter 2015 Management’s Discussion and Analysis
|
Page 2
|
Hydrogenics Corporation
|
Hydrogenics Corporation
|
March 31,
2015
|
December 31,
2014
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 6,207 | $ | 6,572 | ||||
Restricted cash
|
2,495 | 3,228 | ||||||
Trade and other receivables (note 4)
|
11,839 | 12,900 | ||||||
Inventories
|
14,164 | 14,698 | ||||||
Prepaid expenses
|
728 | 747 | ||||||
35,433 | 38,145 | |||||||
Non-current assets
|
||||||||
Restricted cash
|
817 | 621 | ||||||
Investment in joint venture (note 5)
|
2,134 | 2,150 | ||||||
Property, plant and equipment
|
2,085 | 1,873 | ||||||
Intangible assets
|
143 | 157 | ||||||
Goodwill
|
4,096 | 4,609 | ||||||
9,275 | 9,410 | |||||||
Total assets
|
$ | 44,708 | $ | 47,555 | ||||
Liabilities
|
||||||||
Current Liabilities
|
||||||||
Operating borrowings (note 6)
|
$ | 2,151 | $ | - | ||||
Trade and other payables
|
10,885 | 13,156 | ||||||
Warranty provisions (note 7)
|
667 | 1,392 | ||||||
Deferred revenue
|
9,490 | 6,771 | ||||||
23,193 | 21,319 | |||||||
Non-current liabilities
|
||||||||
Other non-current liabilities
|
3,229 | 3,464 | ||||||
Non-current warranty provisions (note 7)
|
1,457 | 1,155 | ||||||
Non-current deferred revenue
|
5,717 | 6,141 | ||||||
10,403 | 10,760 | |||||||
Total liabilities
|
33,596 | 32,079 | ||||||
Equity
|
||||||||
Share capital
|
348,268 | 348,259 | ||||||
Contributed surplus
|
19,042 | 18,927 | ||||||
Accumulated other comprehensive loss
|
(3,169 | ) | (2,108 | ) | ||||
Deficit
|
(353,029 | ) | (349,602 | ) | ||||
Total equity
|
11,112 | 15,476 | ||||||
Total equity and liabilities
|
$ | 44,708 | $ | 47,555 |
Douglas Alexander
Chairman
|
Don Lowry
Director
|
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 2 |
Hydrogenics Corporation
|
2015
|
2014
|
|||||||
Revenues
|
$ | 7,531 | $ | 8,059 | ||||
Cost of sales
|
6,378 | 6,142 | ||||||
Gross profit
|
1,153 | 1,917 | ||||||
Operating expenses
|
||||||||
Selling, general & administrative expenses
|
2,579 | 4,567 | ||||||
Research and product development expenses (note 9)
|
1,022 | 916 | ||||||
3,601 | 5,483 | |||||||
Loss from operations
|
(2,448 | ) | (3,566 | ) | ||||
Finance income (expenses)
|
||||||||
Interest expense, net
|
(127 | ) | (132 | ) | ||||
Foreign currency losses, net(1)
|
(836 | ) | 89 | |||||
Loss from joint venture (note 5)
|
(16 | ) | - | |||||
Other finance losses, net (note 10)
|
- | (140 | ) | |||||
Finance income (loss), net
|
(979 | ) | (183 | ) | ||||
Loss before income taxes
|
(3,427 | ) | (3,749 | ) | ||||
Income tax expense (note 11)
|
- | - | ||||||
Net loss for the period
|
(3,427 | ) | (3,749 | ) | ||||
Items that may be reclassified subsequently to net loss
|
||||||||
Exchange differences on translating foreign operations
|
(1,061 | ) | (5 | ) | ||||
Comprehensive loss for the period
|
$ | (4,488 | ) | $ | (3,754 | ) | ||
Net loss per share
|
||||||||
Basic and diluted (note 12)
|
$ | (0.34 | ) | $ | (0.41 | ) |
(1)
|
Of which, a gain of $294 (2014 – a gain of $134) relates to foreign exchange on borrowings.
|
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 3 |
Hydrogenics Corporation
|
Common shares
|
Accumulated other
|
|||||||||||||||||||||||
Number
|
Amount
|
Contributed surplus
|
Deficit
|
comprehensive loss(1)
|
Total equity
|
|||||||||||||||||||
Balance at December 31, 2014
|
10,090,325 | $ | 348,259 | $ | 18,927 | $ | (349,602 | ) | $ | (2,108 | ) | $ | 15,476 | |||||||||||
Net loss
|
- | - | - | (3,427 | ) | - | (3,427 | ) | ||||||||||||||||
Other comprehensive loss
|
- | - | - | - | (1,061 | ) | (1,061 | ) | ||||||||||||||||
Total comprehensive loss
|
- | - | - | (3,427 | ) | (1,061 | ) | (4,488 | ) | |||||||||||||||
Issuance of common shares on exercise of stock options
|
1,000 | 9 | (3 | ) | - | - | 6 | |||||||||||||||||
Stock-based compensation expense (note 8)
|
- | - | 118 | - | - | 118 | ||||||||||||||||||
Balance at March 31, 2015
|
10,091,325 | $ | 348,268 | $ | 19,042 | $ | (353,029 | ) | $ | (3,169 | ) | $ | 11,112 |
Common shares
|
Accumulated other
|
|||||||||||||||||||||||
Number
|
Amount
|
Contributed surplus
|
Deficit
|
comprehensive loss(1)
|
Total equity
|
|||||||||||||||||||
Balance at December 31, 2013
|
9,017,617 | $ | 333,312 | $ | 18,449 | $ | (345,351 | ) | $ | (249 | ) | $ | 6,161 | |||||||||||
Net loss
|
- | - | - | (3,749 | ) | - | (3,749 | ) | ||||||||||||||||
Other comprehensive loss
|
- | - | - | - | (5 | ) | (5 | ) | ||||||||||||||||
Total comprehensive loss
|
- | - | - | (3,749 | ) | (5 | ) | (3,754 | ) | |||||||||||||||
Issuance of common shares on exercise of warrants
|
57,144 | 1,217 | - | - | - | 1,217 | ||||||||||||||||||
Issuance of common shares on exercise of stock options
|
13,861 | 169 | (60 | ) | - | - | 109 | |||||||||||||||||
Stock-based compensation expense (note 8)
|
- | - | 136 | - | - | 136 | ||||||||||||||||||
Balance at March 31, 2014
|
9,088,622 | $ | 334,698 | $ | 18,525 | $ | (349,100 | ) | $ | (254 | ) | $ | 3,869 |
(1)
|
Accumulated other comprehensive loss represents currency translation adjustments.
|
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 4 |
Hydrogenics Corporation
|
2015
|
2014
|
|||||||
Cash and cash equivalents provided by (used in):
|
||||||||
Operating activities
|
||||||||
Net loss for the period
|
$ | (3,427 | ) | $ | (3,749 | ) | ||
(Increase) decrease in restricted cash
|
537 | (253 | ) | |||||
Items not affecting cash:
|
||||||||
Amortization and depreciation
|
161 | 140 | ||||||
Other finance losses, net (note 10)
|
- | 140 | ||||||
Unrealized foreign exchange losses
|
5 | 87 | ||||||
Unrealized loss on joint venture (note 5)
|
16 | - | ||||||
Accreted non-cash interest
|
121 | 118 | ||||||
Payment of post-retirement benefit liability
|
- | (24 | ) | |||||
Stock-based compensation (note 8)
|
118 | 136 | ||||||
Stock based compensation – RSUs and DSUs (note 8)
|
(144 | ) | 1,561 | |||||
Net change in non-cash working capital (note 13)
|
1,249 | (1,972 | ) | |||||
Cash used in operating activities
|
(1,364 | ) | (3,816 | ) | ||||
Investing activities
|
||||||||
Proceeds from disposals
|
- | 9 | ||||||
Purchase of property, plant and equipment
|
(371 | ) | (306 | ) | ||||
Purchase of intangible assets
|
- | (80 | ) | |||||
Cash used in investing activities
|
(371 | ) | (377 | ) | ||||
Financing activities
|
||||||||
Repayment of repayable government contributions
|
- | (50 | ) | |||||
Proceeds of operating borrowings (note 6)
|
2,151 | 1,722 | ||||||
Common shares issued
|
6 | 109 | ||||||
Cash provided by financing activities
|
2,157 | 1,781 | ||||||
Effect of exchange rate fluctuations on cash and cash equivalents held
|
(787 | ) | (68 | ) | ||||
Decrease in cash and cash equivalents during the period
|
(365 | ) | (2,480 | ) | ||||
Cash and cash equivalents - Beginning of period
|
6,572 | 11,823 | ||||||
Cash and cash equivalents - End of period
|
$ | 6,207 | $ | 9,343 |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 5 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 6 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
|
March 31,
2015
|
December 31,
2014
|
||||||
Trade accounts receivables
|
$ | 4,619 | $ | 4,469 | ||||
Less: Allowance for doubtful accounts
|
(128 | ) | (133 | ) | ||||
Net trade accounts receivable
|
4,491 | 4,336 | ||||||
Accrued receivables
|
5,198 | 6,049 | ||||||
Other receivables (including VAT receivables)
|
2,150 | 2,515 | ||||||
Total receivables
|
$ | 11,839 | $ | 12,900 |
March 31,
2015
|
||||
Balance January 1, 2015
|
$ | 2,150 | ||
Share in loss of the joint venture
|
(16 | ) | ||
Investment in joint venture
|
$ | 2,134 |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 7 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
2015
|
2014
|
|||||||
At January 1,
|
$ | 2,547 | $ | 2,893 | ||||
Additional provisions
|
185 | 648 | ||||||
Utilized during the period
|
(327 | ) | (434 | ) | ||||
Unused amounts reversed
|
(68 | ) | (41 | ) | ||||
Foreign currency translation
|
(213 | ) | - | |||||
Total warranty provision at March 31,
|
2,124 | 3,066 | ||||||
Less current portion
|
(667 | ) | (2,268 | ) | ||||
Long-term warranty provision at March 31,
|
$ | 1,457 | $ | 798 |
2015
|
2014
|
|||||||||||||||
Number of
shares
|
Weighted
average
exercise price
C$
|
Number of
shares
|
Weighted
average
exercise price
C$
|
|||||||||||||
Outstanding, beginning of period
|
481,403 | $ | 6.99 | 503,907 | $ | 8.63 | ||||||||||
Granted
|
56,821 | 16.14 | - | - | ||||||||||||
Exercised
|
(1,000 | ) | 8.49 | (13,861 | ) | 8.74 | ||||||||||
Expired
|
- | - | (296 | ) | 89.50 | |||||||||||
Outstanding, end of period
|
537,224 | $ | 7.96 | 489,750 | $ | 8.58 |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 8 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
2015
|
||||
Risk-free interest rate (%)
|
1.39 | % | ||
Expected volatility (%)
|
69 | % | ||
Expected life in years
|
5 | |||
Expected dividend
|
Nil
|
2015
|
2014
|
|||||||
Balance at January 1,
|
192,320 | 154,493 | ||||||
Forfeited
|
(25,218 | ) | - | |||||
PSUs granted
|
32,670 | 37,827 | ||||||
At March 31,
|
199,772 | 192,320 |
2015
|
2014
|
|||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||
Balance at January 1,
|
87,850 | $ | 1,168 | 131,320 | $ | 2,521 | ||||||||||
DSU redemptions
|
- | - | (49,442 | ) | (1,472 | ) | ||||||||||
DSU compensation expense
|
2,182 | 25 | 964 | 26 | ||||||||||||
DSU fair value adjustments
|
- | (169 | ) | - | 1,177 | |||||||||||
At March 31,
|
90,032 | $ | 1,024 | 82,842 | $ | 2,252 |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 9 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
2015
|
2014
|
|||||||||||||||
Number
|
Amount
|
Number
|
Amount
|
|||||||||||||
Balance at January 1,
|
- | - | 46,885 | $ | 660 | |||||||||||
RSU amortization expense
|
- | - | - | 84 | ||||||||||||
RSU fair value adjustments
|
- | - | - | 275 | ||||||||||||
At March 31,
|
- | $ | - | 46,885 | $ | 1,019 |
Three months ended March 31,
|
2015
|
2014
|
||||||
Research and product development expenses
|
$ | 1,676 | $ | 1,569 | ||||
Government research and product development funding
|
(654 | ) | (653 | ) | ||||
Total
|
$ | 1,022 | $ | 916 |
Three months ended March 31,
|
2015
|
2014
|
||||||
Loss from change in fair value of exercised warrants
|
$ | - | $ | (140 | ) | |||
Total
|
$ | - | $ | (140 | ) |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 10 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
2015
|
2014
|
|||||||
Net loss
|
$ | (3,427 | ) | $ | (3,749 | ) | ||
Weighted average number of shares outstanding – basic and diluted
|
10,090,481 | 9,073,527 | ||||||
Net loss per share – basic and diluted
|
$ | (0.34 | ) | $ | (0.41 | ) |
March 31,
|
2015
|
2014
|
||||||
Decrease (increase) in current assets
|
||||||||
Trade and other receivables
|
$ | 1,092 | $ | (2,801 | ) | |||
Inventories
|
534 | (3,814 | ) | |||||
Prepaid expenses
|
19 | (351 | ) | |||||
Increase (decrease) in current liabilities
|
||||||||
Trade and other payables, including warranty provision
|
(2,691 | ) | 2,511 | |||||
Deferred revenue
|
2,295 | 2,483 | ||||||
Total
|
$ | 1,249 | $ | (1,972 | ) |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 11 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
Three months ended March 31, 2015
|
On-Site Generation
|
Power Systems
|
Corporate
and Other
|
Total
|
||||||||||||
Revenues from external customers
|
$ | 3,335 | $ | 4,196 | $ | - | $ | 7,531 | ||||||||
Gross profit
|
277 | 876 | - | 1,153 | ||||||||||||
Selling, general and administrative expenses
|
635 | 920 | 1,024 | 2,579 | ||||||||||||
Research and product development expenses
|
424 | 579 | 19 | 1,022 | ||||||||||||
Segment loss
|
(782 | ) | (623 | ) | (1,043 | ) | (2,448 | ) | ||||||||
Interest expense, net
|
- | - | (127 | ) | (127 | ) | ||||||||||
Foreign currency losses, net
|
- | - | (836 | ) | (836 | ) | ||||||||||
Loss in joint venture
|
- | - | (16 | ) | (16 | ) | ||||||||||
Loss before income taxes
|
$ | (782 | ) | $ | (623 | ) | $ | (2,022 | ) | $ | (3,427 | ) |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 12 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
Three months ended March 31, 2014
|
On-Site Generation
|
Power Systems
|
Corporate
and Other
|
Total
|
||||||||||||
Revenues from external customers
|
$ | 5,963 | $ | 2,096 | $ | - | $ | 8,059 | ||||||||
Gross profit
|
767 | 1,150 | - | 1,917 | ||||||||||||
Selling, general and administrative expenses
|
841 | 1,055 | 2,671 | 4,567 | ||||||||||||
Research and product development expenses
|
382 | 532 | 2 | 916 | ||||||||||||
Segment loss
|
(456 | ) | (437 | ) | (2,673 | ) | (3,566 | ) | ||||||||
Interest expense, net
|
- | - | (132 | ) | (132 | ) | ||||||||||
Foreign currency gains, net
|
- | - | 89 | 89 | ||||||||||||
Other finance losses, net
|
- | - | (140 | ) | (140 | ) | ||||||||||
Loss before income taxes
|
$ | (456 | ) | $ | (437 | ) | $ | (2,856 | ) | $ | (3,749 | ) |
At March 31, 2015
|
On-Site Generation
|
Power Systems
|
Corporate
and Other
|
Total
|
||||||||||||
Cash and cash equivalents and restricted cash
|
$ | 4,732 | $ | 136 | $ | 4,651 | $ | 9,519 | ||||||||
Trade and other receivables
|
4,183 | 7,656 | - | 11,839 | ||||||||||||
Inventories
|
8,079 | 6,085 | - | 14,164 | ||||||||||||
Investment in joint venture
|
- | - | 2,134 | 2,134 | ||||||||||||
Property, plant and equipment
|
417 | 1,668 | - | 2,085 | ||||||||||||
Goodwill and intangibles
|
4,116 | - | 123 | 4,239 | ||||||||||||
Prepaid expenses
|
285 | 364 | 79 | 728 | ||||||||||||
Total Assets
|
$ | 21,812 | $ | 15,909 | $ | 6,987 | $ | 44,708 | ||||||||
Current liabilities
|
$ | 13,133 | $ | 8,254 | $ | 1,806 | $ | 23,193 | ||||||||
Non-current liabilities
|
1,414 | 8,723 | 266 | 10,403 | ||||||||||||
Total Liabilities
|
$ | 14,547 | $ | 16,977 | $ | 2,072 | $ | 33,596 |
At March 31, 2014
|
On-Site Generation
|
Power Systems
|
Corporate
and Other
|
Total
|
||||||||||||
Cash and cash equivalents and restricted cash
|
$ | 8,658 | $ | 831 | $ | 2,131 | $ | 11,620 | ||||||||
Trade and other receivables
|
4,207 | 3,998 | - | 8,205 | ||||||||||||
Inventories
|
9,950 | 6,685 | - | 16,635 | ||||||||||||
Property, plant and equipment
|
653 | 1,185 | - | 1,838 | ||||||||||||
Goodwill and intangibles
|
5,250 | - | 167 | 5,417 | ||||||||||||
Prepaid expenses
|
498 | 742 | 90 | 1,330 | ||||||||||||
Total Assets
|
$ | 29,216 | $ | 13,441 | $ | 2,388 | $ | 45,045 | ||||||||
Current liabilities
|
16,993 | 8,750 | 4,656 | 30,399 | ||||||||||||
Non-current liabilities
|
1,528 | 9,249 | - | 10,777 | ||||||||||||
Total Liabilities
|
$ | 18,521 | $ | 17,999 | $ | 4,656 | $ | 41,176 |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 13 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
(i)
|
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
(ii)
|
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
|
(iii)
|
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
March 31,
2015
|
December 31, 2014
|
|||||||
Cash and cash equivalents
|
$ | 6,207 | $ | 6,572 | ||||
Restricted cash
|
2,495 | 3,228 | ||||||
Restricted cash – non current
|
817 | 621 | ||||||
Trade and other receivables
|
11,839 | 12,900 | ||||||
Loans and receivables
|
$ | 21,358 | $ | 23,321 | ||||
Trade and other payables
|
$ | 10,885 | $ | 13,156 | ||||
Operating borrowings
|
2,151 | - | ||||||
Long-term debt
|
2,777 | 2,922 | ||||||
Non-current repayable government contributions
|
267 | 334 | ||||||
Post-retirement benefit liabilities
|
185 | 208 | ||||||
Other financial liabilities
|
$ | 16,265 | $ | 16,620 |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 14 |
Hydrogenics Corporation
|
Hydrogenics Corporation
Notes to Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2015
(in thousands of US dollars, except share and per share amounts)
(unaudited)
|
March 31, 2015
|
December 31,
2014
|
|||||||
Shareholders’ equity
|
$ | 11,112 | $ | 15,476 | ||||
Operating borrowings
|
2,151 | - | ||||||
Long term debt and repayable government contributions
|
3,301 | 3,475 | ||||||
Total
|
16,564 | 18,951 | ||||||
Less cash and cash equivalents and restricted cash
|
9,519 | 10,421 | ||||||
Total Capital Employed
|
$ | 7,045 | $ | 8,530 |
2015 Q1 Condensed Interim Consolidated Financial Statements
|
Page 15 |
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Hydrogenics Corporation (the “issuer”) for the interim period ended March 31, 2015.
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2
|
ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness related to design existing at the end of the interim period
|
(a)
|
a description of the material weakness
|
(b)
|
the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
|
(c)
|
the issuers current plans, if any, or any actions already taken, for remediating the current weakness.
|
5.3
|
N/A
|
6.
|
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2015 and ended on March 31, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
/s/ Daryl Wilson
|
|
Daryl Wilson
President and Chief Executive Officer
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Hydrogenics Corporation (the “issuer”) for the interim period ended March 31, 2015.
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.
|
5.
|
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
|
5.2
|
ICFR – material weakness relating to design: The issuer has disclosed in its interim MD&A for each material weakness related to design existing at the end of the interim period
|
(a)
|
a description of the material weakness
|
(b)
|
the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
|
(c)
|
the issuers current plans, if any, or any actions already taken, for remediating the current weakness.
|
5.3
|
N/A
|
6.
|
Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2015 and ended on March 31, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
/s/ Robert Motz
|
|
Robert Motz
Chief Financial Officer
|
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