Ballard Power Systems Reports Fourth Quarter and 1998 Year End Results.VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--Feb. 25, 1999-- Ballard(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 :BLDPF) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :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 .) 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. Inc. (TSE:BLD) (NASDAQ:BLDPF) today reported its financial results for the fourth quarter and year ended December 31, 1998. All amounts reported are in Canadian dollars. "Ballard ended 1998 in a very strong financial position with over $440 million in cash and short-term investments on hand to continue the commercialization of Ballard's fuel cell products," said Michael Graydon Air Chief Marshal Sir Michael James Graydon, GCB, CBE, ADC (born 24 October 1938) is a former Chief of the Air Staff. Flying career Educated at Wycliffe College and the Royal Air Force College Cranwell Michael Graydon joined the Royal Air Force in January 1957 and was , Ballard's Vice President and Chief Financial Officer. "This reflects investments by Ballard's strategic partners in the Company, as well as in its associated companies, during the year. In addition to financial backing, Ballard's partners have also brought significant marketing, systems development and manufacturing expertise to assist the Company in achieving its aggressive development and commercialization goals." Revenues for the fourth quarter were $6.6 million, compared with $7.3 million a year ago, reflecting lower revenues from transit bus A transit bus (also known as a commuter bus) in the United States is usually operated by an urban-suburban bus line, a governmental public transit agency, or a contractor. A transit bus is normally used on public transit routes. programs which have moved from the construction phase to testing. The net loss for the quarter was $1.4 million, or $0.02 per share, compared with last year's $1.2 million, or $0.02 per share. Results for the latest quarter included gains on the issuance of shares by a subsidiary and associated company, and on the sale of capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) and intellectual property, totaling $21.0 million, or $0.25 per share, which were partially offset by related license fees of $7.8 million, or $0.09 per share. In the fourth quarter of 1997, realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. totaled $3.3 million, or $0.05 per share. For the full year, revenues were $25.1 million, compared with $24.2 million in 1997. Net income was $0.8 million, or $0.01 per share, compared with $2.0 million, or $0.04 per share. Gains in 1998 contributed $53.8 million, or $0.68 per share (partially offset by license fees of $15.5 million, or $0.19 per share), compared with gains of $27.4 million, or $0.49 per share, in 1997. At December 31, Ballard's financial condition remained strong, with shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $627.7 million, and cash and short-term investments totaling $441.3 million. Ballard's financial statements are based on Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and practices (Canadian GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). A table of the differences between Canadian GAAP and United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. generally accepted accounting principles (U.S. GAAP) is included as a note to the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge in Ballard's annual report. In connection with the finalization of the audit for the 1998 financial year, Ballard's auditors reconsidered their advice in respect of the treatment of previously recorded dilution gains (related to gains and losses on the issuance of shares by a subsidiary) under U.S. GAAP and advised the Company that gains in 1996 ($5.9 million) and 1997 ($6.5 million) which had previously been recognized as income on a U.S. basis, as well as gains in 1998 ($45.1 million), should be recorded in equity as an addition to paid-in capital Paid-in capital Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. rather than as income. The differences between Canadian GAAP and U.S. GAAP for 1996 and 1997 are therefore being restated, and the differences between Canadian GAAP and U.S. GAAP for 1998 are stated, in accordance with this advice. As a result, under U.S. GAAP Ballard's net loss for 1998 was $62.5 million, or $0.79 per share, compared with $34.2 million, or $0.62 per share, in 1997 and $12.7 million, or $0.30 per share, in 1996. The previously reported net loss under U.S. GAAP for 1997 was $27.6 million, or $0.50 per share, and for 1996 was $6.8 million, or $0.16 per share. In early January at the Detroit Auto Show An auto show, or motor show, is a public exhibition of current automobile models, debuts, concept cars, or out-of-production classics. It is commonly attended by automobile manufacturers. Most auto shows occur once or twice a year. , Ballard's strategic partners and shareholders, Ford Motor Company and DaimlerChrysler, exhibited new prototype fuel cell vehicles
During the fourth quarter, BC Transit This article is about BC Transit. For B.C. Transit in Broome County, New York, see Broome County Transit. BC Transit is a provincial crown agency responsible for coordinating the delivery of public transportation within British Columbia, Canada, outside of placed three prototype transit buses powered by Ballard Fuel Cells in revenue service, and field testing by the Chicago Transit Authority
In stationary power, construction of the first 250 kilowatt kilowatt: see watt. power plants which will be deployed in field trials was begun during the fourth quarter by Ballard Generation Systems (BGS BGS British Geological Survey BGS Below Ground Surface (depth below the ground surface) BGS Bundesgrenzschutz (German: Federal Border Guard) BGS Bachelor of General Studies (degree) ), a majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. . The initial field trial units are expected to be completed and deployed to commence developmental testing in 1999. Customers and sites have been secured for each of the units. The field trials will provide Ballard with operating and performance data in real world conditions for the purpose of making design and engineering improvements as part of the process to develop a commercial product. Also during the quarter, Ballard completed its $47.7 million agreement with EBARA Corporation, which included an investment by EBARA in BGS and the creation of a jointly-owned company to sell, distribute, service, and later manufacture, fuel cell stationary power plants in the Japanese market. As part of its planned scale-up in manufacturing, Ballard has begun to establish strategic supplier relationships for key materials and components. Early in the quarter, Ballard signed a multi-year agreement with Johnson Matthey Johnson Matthey plc (LSE: JMAT) is a British chemical company which has its headquarters near Holborn in central London. It is traded on the London Stock Exchange and is a constituent of the FTSE 100 Index. for the joint development and supply of platinum catalysts and catalysed electrodes. This agreement represents the continuation of a collaboration which began in 1992. Discussions for supply arrangements for other components are underway. Ballard strengthened its management team during the year, adding depth of experience particularly in its executive team. Kip kip 1 n. pl. kip See Table at currency. [Thai.] kip 2 n. 1. Smith, formerly Business Vice President, Specialty Chemicals of The Dow Chemical Company The Dow Chemical Company (NYSE: DOW TYO: 4850 ) is an American multinational corporation headquartered in Midland, Michigan. Overview The Dow Chemical Company is currently the second largest chemical manufacturer in the World (after BASF)[1]. , joined Ballard in September as 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. bringing extensive experience in 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 and strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. . In November, Michael Graydon joined Ballard as Vice President and Chief Financial Officer. Mr. Graydon was previously with Toyota Motor Manufacturing Canada Toyota Motor Manufacturing Canada Inc. is the Canadian automobile manufacturing division of Toyota Motor Corporation. It currently operates a plant in Cambridge, Ontario, and will soon open another in Woodstock, Ontario. Toyota's headquarters is in Toronto, Ontario. , serving as General Manager, Production Control in one of the most highly productive Toyota plants in the world. Paul Lancaster, who had served as Ballard's Acting Chief Financial Officer since June 1998 and as Treasurer and Manager, Investor Relations Investor relations The process by which the corporation communicates with its investors. since 1993, was named Vice President, Corporate Development. In December, Noordin Nanji, a partner in the law firm of Lang Michener Lang Michener LLP is a full-service national law firm founded in 1926. With over 200 professionals and offices in Toronto, Vancouver and Ottawa. The firm provides a complete range of legal services to Canadian and multinational corporations by maintaining close working Lawrence & Shaw and Ballard's senior external legal advisor since 1993, joined Ballard as Vice President and General Counsel. Firoz Rasul, President and Chief Executive Officer, commented, "For Ballard, 1998 was a successful year, marked by the completion of corporate alliances in transportation and stationary power; the first steps towards building world class manufacturing capability; the expansion of the senior management team to include executives with high volume manufacturing experience; and completing the year in a strong financial position. Our annual report, scheduled to be mailed to shareholders in mid-April, will contain the customary review of operations for 1998 and objectives for 1999." This release contains forward-looking statements reflecting Ballard Power Systems' 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 US 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. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including, without limitation, product development delays, changing environmental regulations, the ability to attract and retain business partners, future levels of government funding, competition from other fuel cell manufacturers, competition from other advanced energy technologies, competition from existing energy technologies, evolving markets for electric power and transportation vehicles, and the ability to provide the capital required for product development, operations and marketing. Investors are encouraged to review the section Management Discussion and Analysis in Ballard's 1997 Annual Report titled "Operating Results, Capital Requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. , and Risks" (pages 22 to 26) for a more complete discussion of factors that could affect Ballard's future performance.
Consolidated Balance Sheets
expressed in thousands of Canadian dollars
December 31 1998 1997
Assets
Current assets
Cash and cash equivalents $348,397 $144,525
Short-term investments 92,906 25,296
Accounts receivable 13,722 21,440
Inventories 6,616 1,319
Prepaid expenses 836 501
--------------------
462,477 193,081
Capital assets 45,398 23,127
Fuel cell technology acquired 50,091 53,756
Investments in associated companies 132,382 70,762
--------------------
$690,348 $340,726
--------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities $22,200 $14,366
Current portion of capital lease obligation 91 91
Deferred revenue 9,052 7,244
Allowance for warranty 13,698 9,228
--------------------
45,041 30,929
Capital lease obligation 442 542
Minority interest 17,173 504
--------------------
62,656 31,975
Shareholders' equity
Share capital 656,027 337,851
Accumulated deficit (28,335) (29,100)
--------------------
627,692 308,751
--------------------
$690,348 $340,726
--------------------
Consolidated Statements of Income and Accumulated Deficit
expressed in thousands of Canadian dollars
except per share amounts
Three months Year ended
ended December 31 December 31
1998 1997 1998 1997 1996
Revenues $ 6,627 $ 7,258 $25,078 $ 24,192 $ 25,784
Investment income 6,355 1,845 20,213 4,064 2,690
Gain on sale of
shares of former
subsidiary - 7 - 1,440 4,015
Gain on issuance of
shares by
subsidiary and
associated company 17,988 3,233 45,109 6,536 5,881
Gain on sale of
capital assets and
intellectual
property 3,059 19 8,665 19,431 -
--------------------------------------------
34,029 12,362 99,065 55,663 38,370
Cost of revenues and expenses
Cost of revenues 5,626 5,556 20,354 22,786 23,202
Research and product
development 12,185 1,642 36,331 18,126 15,445
General and
administrative 2,347 2,034 7,588 5,674 3,756
Marketing 1,054 649 3,041 2,552 1,977
Interest 12 13 48 55 42
Minority interest (1,608) (42) (2,270) (445) (132)
Capital taxes 116 145 326 283 222
Equity in loss of
associated
companies 5,866 2,444 12,441 2,907 -
Amortization of fuel
cell technology 916 920 3,665 1,227 -
License fee 7,821 - 15,474 - -
--------------------------------------------
34,335 13,361 96,998 53,165 44,512
--------------------------------------------
Earnings (loss)
before income taxes (306) (999) 2,067 2,498 (6,142)
Income taxes 1,119 231 1,302 450 -
--------------------------------------------
Net earnings (loss)
for period (1,425) (1,230) 765 2,048 (6,142)
Accumulated deficit,
beginning of
period (26,910) (27,870) (29,100) (31,148) (25,006)
--------------------------------------------
Accumulated deficit,
end of period $(28,335)$(29,100)$(28,335)$(29,100)$(31,148)
--------------------------------------------
Net earnings (loss)
per share $(0.02) $(0.02) $0.01 $0.04 $(0.14)
--------------------------------------------
Consolidated Statements of Changes in Financial Position
expressed in thousands of Canadian dollars
Year ended December 31
1998 1997 1996
Cash provided by (used for) operating activities
Operations
Net earnings (loss) for year $ 765 $ 2,048 $ (6,142)
Items not affecting cash
Amortization 8,538 4,420 2,063
Minority interest (2,270) (445) (132)
Gain on sale of shares
of former subsidiary - (1,440) (4,015)
Gain on issuance of shares by
subsidiary and associated
company (45,109) (6,536) (5,881)
Gain on sale of capital assets
and intellectual property (8,665) (19,431) -
Equity in loss of
associated companies 12,441 2,907 -
License fee 15,474 - -
------------------------------
(18,826) (18,477) (14,107)
Changes in non-cash working capital
Accounts receivable 7,718 (10,756) (4,173)
Inventories (5,297) 1,100 311
Prepaid expenses (335) (337) 325
Accounts payable and
accrued liabilities 7,834 3,458 3,157
Deferred revenue 1,808 6,513 (743)
Allowance for warranty 4,470 4,554 1,393
------------------------------
16,198 4,532 270
------------------------------
(2,628) (13,945) (13,837)
Cash provided by (used in) financing activities
Net proceeds on issuance of
share capital 318,176 218,220 60,618
Proceeds on sale of shares
of former subsidiary - 1,440 3,415
Proceeds on issuance of shares
by subsidiary and associated
company 48,574 6,874 6,563
Proceeds on sale of capital
assets and intellectual
property 8,665 21,238 -
Repayment of long-term debt - (1,099) (25)
Capital lease obligation (100) 9 622
------------------------------
375,315 246,682 71,193
Cash provided by (used in) investing activities
Net changes in short-term
investments (67,610) (16,419) (541)
Additions to capital assets (27,144) (10,777) (10,061)
Investment in fuel cell
technology - (54,983) -
Investments in associated
companies (74,061) (73,669) -
------------------------------
(168,815) (155,848) (10,602)
------------------------------
Increase in cash and
cash equivalents 203,872 76,889 46,754
Cash and cash equivalents,
beginning of year 144,525 67,636 20,882
------------------------------
Cash and cash equivalents,
end of year $348,397 $144,525 $67,636
------------------------------
Ballard Power Systems is 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. (PEM (Privacy Enhanced Mail) A standard for secure e-mail on the Internet. It supports encryption, digital signatures and digital certificates as well as both private and public key methods. Not widely used, work on PEM later evolved into S/MIME. See MIME. ) fuel cells for use in transportation, electricity generation and portable products. Ballard Power Systems' proprietary fuel cell technology is enabling automobile, 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
(Graphics Processing Unit) A specialized logic chip devoted to rendering 2D or 3D images. Display adapters contain one or more GPUs for fast graphics rendering. International, ALSTOM and EBARA to commercialize the Ballard Fuel Cell. Additional customers using the Ballard Fuel Cell include General Motors, Nissan, Honda, Volkswagen, Volvo, Matsushita Electric Works Matshushita Electric Works (MEW), Ltd. can trace its beginnings to a company that was founded in 1918 by Konosuke Matsushita. Matshushita began making the flashlight components for bicyles, then progressed to making lighting fixtures. , and Cinergy. |
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