Ballard Announces Plan and Restructuring to Extend Cash to 2007.Business Editors VANCOUVER, British Columbia--(BUSINESS WIRE)--Dec. 9, 2002 DaimlerChrysler and Ford sign MOU (Minutes Of Usage) A metric used to compute billing and/or statistics for telephone calls or other network use. to Fund US $97 Million for Development of Next Generation Fuel Cell Engine Ballard Power Systems Ballard Power Systems (TSX: BLD, NASDAQ: BLDP), located in Burnaby, British Columbia -- a suburb of Vancouver -- is a company that designs, develops, and manufactures zero emission proton-exchange-membrane fuel cells. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BLDP BLDP Ballard Power Systems (stock symbol) ) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BLD BLD Build BLD Blood BLD Blade BLD Blonde BLD Breakfast Lunch Dinner BLD Bukas-Loob Sa Diyos (Filipino: Open In Spirit To God) BLD BASIC Bload Graphics (File Name Extension) BLD Below Limit of Detection ) today announced a five-year plan Five-Year Plan, Soviet economic practice of planning to augment agricultural and industrial output by designated quotas for a limited period of usually five years. that provides for a significant reduction in cash consumption, an organizational restructuring, a reduction of 400 employees, development funding for its next generation fuel cell engine and the further commitment of its automotive alliance partners. As part of Ballard's plan to develop the next generation fuel cell engine, it has obtained DaimlerChrysler and Ford's preliminary agreement to provide combined funding of US $97 million, over the next five years. This is in addition to their support of Ballard's current development programs. To support Ballard's commitment to sustainability, DaimlerChrysler and Ford have also agreed in principle to eliminate the existing requirement to link their follow-on equity investment of CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. $55 Million (US $35 Million) to a larger public equity offering, and to provide that funding on request from Ballard at any time after December 31, 2003. Implementing this agreement in principle will require a formal amendment to Ballard's alliance agreement with DaimlerChrysler and Ford. As part of the reorganization, Ballard will combine three of its four divisions - Transportation, Power Generation and Electric Drives & Power Conversion - into a single, "functional" organization. This leaner, more efficient structure will enable Ballard to focus and accelerate the development of its core technologies and at the same time reduce administrative overhead expense. Ballard's Material Products Division will continue to operate as a stand-alone division. Ballard will continue to have operations in Burnaby, Canada; Dearborn, Michigan Dearborn is a city in the U.S. state of Michigan. It is located in the Detroit metropolitan area and Wayne County, and is the tenth largest city in the U.S. state of Michigan. As of the 2000 census, it had a population of 97,775. ; Lowell, Massachusetts Lowell is a city in Middlesex County, Massachusetts, USA. As of the 2000 census, the city had a total population of 105,167. It is the fourth largest city in the state. It and Cambridge are the county seats of Middlesex County. ; and Nabern, Germany. In implementing its plan, Ballard will decrease its workforce by approximately 250 employees, through normal attrition, transfers and layoffs. The transfers will be accomplished through the intended redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of approximately 100 employees from Ballard's Nabern, Germany operations to DaimlerChrysler to support its strong commitment to fuel cell and alternative powertrain development. Ballard, in cooperation with its Works Council Noun 1. works council - (chiefly Brit) a council representing employer and employees of a plant or business to discuss working conditions etc; also: a committee representing the workers elected to negotiate with management about grievances and wages etc and DaimlerChrysler, intends to effect these transfers over the next 3 to 9 months. The remaining reductions will affect all functional areas of Ballard's global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. except the Material Products Division. Over the next 12 months, Ballard intends to reduce employment by an additional 150 positions. These reductions will result from the centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. of transportation system design in Germany, following the completion of the heavy-duty bus program in Vancouver, and the restructuring of Ballard's fuel processing business. The combined headcount reductions will decrease Ballard's employee base worldwide by about 400 employees to 1,000 employees, or approximately 28%. These changes will result in a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of approximately US $15 million, one-third of which will be non-cash. Approximately US $12 million of the restructuring charge will be recognized in the fourth quarter of 2002. "Our strategy and five-year plan have been reformulated with an emphasis on sustainability, speed and execution," said Dennis Campbell, Ballard's President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "The revised plan provides Ballard with the financial resources into 2007 to advance our current and anticipated commercialization plans, along with a significant concentration on technology research and product development necessary to ensure our success. Ballard expects to achieve profitability by the end of the plan period." Ballard's strategy is focused on the following key objectives: -- delivering world leading fuel cell products to its customers -- preserving and extending its cash reserves -- strengthening and expanding its technical leadership -- accelerating its product commercialization -- developing products with capabilities that conventional power generation devices cannot offer. To accomplish this, Ballard will: -- simplify and streamline its organization to reduce costs and accelerate decision-making -- narrow the scope of its development activities - do fewer things better and faster -- leverage relationships with suppliers for the development of non-core technologies -- develop derivative product lines to build a recurring revenue base and create distribution channels -- consolidate its technology development efforts to gain speed and efficiency. "An overriding objective of our plan is to complete the transformation of Ballard from a technology-focused research and development organization into a customer-focused production organization," said Dennis Campbell, Ballard's President and Chief Operating Officer. "To accomplish this we must develop and introduce commercial products that fulfill customer needs. The steps we are taking now will strengthen and extend our cash position, assist us in expanding our technology leadership, and provide the "staying power" to execute our new product development and introduction plans. Despite the always difficult decisions to reduce employment, we are committed to taking the necessary steps to realize our vision and deliver sustainable, long-term value for our shareholders." In reorganizing its executive team along functional lines, Ballard is creating a global sales and marketing team with a regional market focus. All product development which was formerly managed at the divisional level will be consolidated under the Chief Technology Officer. These changes are expected to result in stronger customer relationships, increased speed of development, and reduced costs. Mr. Michael Murry, Vice President and General Manager, Power Generation Division will be leaving Ballard. Mr. Paul Lancaster, Vice President, Finance will also leave the company as Ballard consolidates financial responsibility under a single Chief Financial Officer. Dr. Andreas Truckenbrodt, Vice President and General Manager, Transportation Division will return to DaimlerChrysler to lead its fuel cell and alternative powertrain efforts. Mr. Murry, Mr. Lancaster, and Dr. Truckenbrodt are working with Ballard to ensure a smooth transfer of their responsibilities to other members of the executive team. "Ballard's executive team, led by Dennis Campbell, supports our succession plan announced earlier this year, and places executives into a structure and in expanded roles which will better enable us to execute our plan, setting the stage for mass commercialization," said Firoz Rasul, Ballard's Chairman and Chief Executive Officer. "As we reshape our executive team, we would like to recognize the significant contributions that Andreas, Mike and Paul have made to Ballard, including the development of our plan." The executive team has been reorganized, effective immediately, and will continue to report to Mr. Campbell: -- Mr. Lee Craft, formerly Vice President, Manufacturing, is appointed Vice President, Operations with responsibility for worldwide manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , supply chain, and quality functions. -- Mr. Noordin Nanji, formerly Vice President, Strategic Development, is appointed Vice President, Corporate Strategy & Development with responsibility for corporate strategy, mergers and acquisitions, corporate relations, intellectual property and legal matters. -- Mr. Dave Smith Dave Smith is the name of:
appointed Chief Financial Officer with responsibility for internal and external finance, treasury and information technology. -- Mr. Fred Vasconcelos will continue as Vice President and Chief Technology Officer with responsibility for research and product development. Mr. Vasconcelos will assume direct responsibility for all new product development, including the design and development activities at Nabern, Germany and Dearborn, Michigan. -- Mr. Ross Witschonke, formerly Vice President and General Manager, Electric Drives & Power Conversion Division, is appointed Vice President, Sales & Marketing with responsibility for worldwide sales, marketing and customer support for all products and services. In January 2003 Ballard will add a new member to the executive team - Mr. Peter Stickler stick·ler n. 1. One who insists on something unyieldingly: a stickler for neatness. 2. Something puzzling or difficult. , Vice President, Human Resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. . Mr. Stickler comes to Ballard from Ford Motor Company, where his career spanned 27 years, most recently as Director, Human Resources, Business Operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets for North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and before that, as Vice President Human Resources, Visteon Automotive Systems See ITS, embedded system, drive-by-wire, adaptive cruise control, collision avoidance system, autonomous vehicle, heads-up display, DSRC, lane departure system, CAN bus, FlexRay and SYNC. .
Ballard also announced its goals for 2003. They are:
1. Achieve revenue and cash flow targets.
2. Supply fuel cell engines to DaimlerChrysler and Ford and fuel
cells to Honda to support their initial customer fleet vehicle
introductions.
3. Supply fuel cells to an additional automotive original equipment
manufacturer to support its initial customer fleet vehicle
introduction.
4. Deliver remaining heavy-duty fuel cell engines to
DaimlerChrysler for the European Fuel Cell Bus Project.
5. Complete a transaction for Ballard's fuel processing business.
6. Deliver, for field testing by Ebara Ballard, pre-commercial
prototype combined heat and power 1 kW power plants.
7. Introduce a commercial stationary fuel cell power generator.
8. Support an original equipment manufacturer's launch of a
Nexa(TM) power module based product.
9. Develop the commercial internal combustion engine genset and power
converter business by expanding the product line and distribution
network.
10. Demonstrate a next generation membrane electrode assembly that
will enable a 50% cost reduction in the Nexa(TM) power module for
2004 sales.
"Our goal is to become the company known for replacing the internal combustion engine Internal combustion engine A prime mover, the fuel for which is burned within the engine, as contrasted to a steam engine, for example, in which fuel is burned in a separate furnace. ," said Dennis Campbell, Ballard's President and Chief Operating Officer. "On our path to this goal, we must be accountable to our customers and stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. , encourage creativity and teamwork, and continue to do everything with urgency so that we can achieve our vision and deliver -- Power to Change the World(R). The 2003 goals we announced today support this vision." "Our 2002 guidance for revenue of US $82 million and cash consumption of between US $122 million and US $142 million, plus an additional US $36 million related to integration activities, remains unchanged," said Dave Smith, Ballard's Chief Financial Officer. "Based on the plan we announced today, in 2003 Ballard expects its cash requirements from ongoing operations and capital expenditures, excluding restructuring costs and merger and acquisition activities, to be approximately US $80 million. We expect that our revenues, excluding investment income, in 2003 will increase to be between US $110 million and US $120 million. We will achieve these targets by building on our established customer relationships, expanding our power generation product lines, focusing on core programs, leveraging relationships with suppliers and streamlining operations." A conference call will be held to discuss Ballard's plan on Monday, December 9, 2002 at 9:30 a.m. PST PST Paroxysmal supraventricular tachycardia, see there (12:30 p.m. EST). Access to the call may be obtained by calling the operator at 416.640.1907 before the scheduled start time. A playback version of the call will be available for 24 hours Adv. 1. for 24 hours - without stopping; "she worked around the clock" around the clock, round the clock after the call at 416.640.1917. The confirmation number to access the playback is 224325#. The audio web cast can be accessed on Ballard's web site at www.ballard.com and will be archived for replay. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are based on the beliefs of Ballard's management and reflect Ballard's current expectations as contemplated under the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the U.S. Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Law of 1995. When used in this release, the words "estimate", "project", "believe", "anticipate", "intend", "expect", "plan", "predict", "may", "should", "will", the negative of these words or such other variations thereon or comparable terminology are intended to identify forward-looking statements. Such statements reflect the current views of Ballard with respect to future events based on currently available information and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in those forward-looking statements. Ballard Power Systems is recognized as the world leader in developing, manufacturing and marketing zero-emission proton exchange membrane A proton exchange membrane (PEM) is a semipermeable membrane generally made from ionomers and designed to conduct protons while being impermeable to gases such as oxygen or hydrogen. fuel cells. Ballard is commercializing fuel cell engines for transportation applications and fuel cell systems for portable and stationary products. Ballard is also commercializing electric drives for fuel cell and other electric vehicles, power conversion products, natural gas and hydrogen generator sets and is a Tier 1 automotive supplier of friction materials for power train components. Ballard's proprietary technology is enabling automobile, bus, electrical equipment A piece of electrical equipment is a machine, powered by electricity and usually consists of an enclosure, a variety of electrical components and often a power switch. Examples of Electrical Equipment
Ballard, the Ballard logo and Power to Change the World are registered trademarks of Ballard Power Systems Inc. Nexa is a trademark of Ballard Power Systems Inc. |
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