Ballard Power Systems Reports Third Quarter Results.VANCOUVER Vancouver, city, Canada Vancouver, city (1991 pop. 471,844), SW British Columbia, Canada, on Burrard Inlet of the Strait of Georgia, opposite Vancouver Island and just N of the Wash. border. , British Columbia--(BUSINESS WIRE)--Nov. 6, 1998--Ballard Power(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. today reported financial results for the third quarter and nine months ended September September: see month. 30, 1998 and reviewed achievements in its fuel cell commercialization programs. Revenues for the third quarter were $4.5 million, compared with $5.0 million a year ago. The decrease reflects 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. demonstration and development programs that have now moved into the testing phase. The net loss for the quarter was ($10.5 million), or ($0.13) per share, compared with net income of $10.9 million, or $0.19 per share, a year earlier. However, results for the 1997 period included gains on the sale of intellectual property and on the issuance of shares in a subsidiary, totaling $22.7 million, or $0.39 per share. For the nine-month period, revenues rose 9 percent to $18.5 million from $16.9 million. Net income was $2.2 million, or $0.03 per share, including gains totaling $32.7 million, or $0.42 per share, as well as associated expenses of $7.7 million, or $0.10 per share, related to the formation of Ballard's alliance with ALSTOM. In the corresponding period last year, net income was $3.3 million, or $0.06 per share, including gains of $24.1 million, or $0.48 per share. At September 30, 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. was $628.2 million, including cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments of $430.1 million. During the quarter, Ballard strengthened its senior management team with the appointment of Layle K. (Kip kip 1 n. pl. kip See Table at currency. [Thai.] kip 2 n. 1. ) Smith 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. . Prior to joining Ballard, Mr. Smith was Business Vice President in the Specialty Chemical A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. division at 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]. , and previously held several other positions in business and commercial development at Dow (Direct OverWrite) See magneto-optic disk. . Firoz Rasul, President and Chief Executive Officer stated, "Kip's experience and leadership will contribute to Ballard's evolution from a primary focus on product development to one focused on commercial manufacturing." Ballard's transportation business continued progress during the quarter. Ballard's affiliate, dbb Fuel Cell Engines, delivered its first light duty fuel cell system to Ford Motor Company, and Ballard secured a follow-on order from long time customer General Motors Corporation for fuel cell test equipment and services. Also, dbb Fuel Cell Engines and Shell International Oil Products signed an agreement to conduct joint research using Shell's liquid fuel processing technology. In heavy duty transportation engine applications, the Ballard Fuel Cell bus demonstration and test program with the Chicago Transit Authority
BC Transit is a provincial crown agency responsible for coordinating the delivery of public transportation within British Columbia, Canada, outside of program in Vancouver also moved forward, completing driver training and beginning pre-revenue road tests shortly after the end of the quarter. Soon after the end of the third quarter, BC Transit has placed its demonstration fleet into revenue service. In its stationary Stationary can mean:
BGS Below Ground Surface (depth below the ground surface) BGS Bundesgrenzschutz (German: Federal Border Guard) BGS Bachelor of General Studies (degree) ) broke ground on its new headquarters in Burnaby, BC and continued working with Tokyo-based EBARA Corporation to complete their transactions announced in the second quarter. These transactions are expected to close by the end of this year. "Following a succession of major corporate accomplishments in the first nine months of the year, we enter the fourth quarter with many of our annual objectives for 1998 achieved and with considerable positive momentum towards achievement of the others" noted Mr. Rasul. "We look forward to reporting our accomplishments following the year's end." 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. 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. -0-
Consolidated Balance Sheets
unaudited
expressed in thousands of Canadian dollars
September 30 1998 1997
ASSETS
Current assets
Cash and cash equivalents $356,565 $146,967
Short-term investments 73,572 21,282
Accounts receivable 9,255 8,713
Inventories 3,957 1,937
Prepaid expenses 1,262 355
--------------------
444,611 179,254
Property, plant and equipment 41,238 22,069
Fuel cell technology acquired 51,008 54,911
Investments in associated companies 135,186 74,573
--------------------
$672,043 $330,807
--------------------
LIABILITIES
Current liabilities
Accounts payable and
accrued liabilities $14,516 $9,640
Current portion of capital
lease obligation 91 91
Deferred revenue 10,235 301
Allowance for warranty 12,742 8,151
--------------------
37,584 18,183
Capital lease obligation 468 565
Minority interest 5,784 346
--------------------
43,836 19,094
Shareholders' equity
Share capital 655,117 339,583
Accumulated deficit (26,910) (27,870)
--------------------
628,207 311,713
--------------------
$672,043 $330,807
--------------------
Consolidated Statements of Operations and Accumulated Deficit
unaudited
expressed in thousands of Canadian dollars except per share amounts
Three months Nine months
ended ended
September 30 September 30
1998 1997 1998 1997
Revenues $4,505 $4,954 $18,451 $16,934
Investment income 6,313 990 13,858 2,218
Gain on sale of shares of
former subsidiary - - - 1,433
Gain on issuance of shares by
subsidiary and affiliates - 3,303 27,121 3,303
Gain on sale of
intellectual property - 19,412 5,606 19,412
--------------------------------------
10,818 28,659 65,036 43,300
COST OF REVENUES AND EXPENSES
Cost of revenues 6,354 7,738 14,728 17,230
Research and product
development 9,405 7,055 24,146 16,486
General and
administrative 2,011 1,447 5,241 3,640
Marketing 857 719 1,987 1,903
Interest 11 13 36 41
Minority interest (346) (193) (662) (403)
Capital taxes 126 198 393 357
Equity in loss
of investees 1,988 463 6,575 463
Amortization of
fuel cell technology 916 305 2,749 305
License fee - - 7,653 -
--------------------------------------
21,322 17,745 62,846 40,022
Net income (loss)
for period (10,504) 10,914 2,190 3,278
Accumulated deficit,
beginning of period (16,406) (38,784) (29,100) (31,148)
--------------------------------------
Accumulated deficit,
end of period ($26,910) ($27,870) ($26,910) ($27,870)
--------------------------------------
Net income (loss)
per share ($0.13) $0.19 $0.03 $0.06
--------------------------------------
Weighted average number of common
shares outstanding
83,037,973 57,958,731 78,073,779 50,751,606
-------------------------------------------
Consolidated Statements of Changes in Financial Position
unaudited
expressed in thousands of Canadian dollars
Nine months ended September 30 1998 1997
Cash provided by (used for) operating activities
OPERATIONS
Net income for period $2,190 $3,278
ITEMS NOT AFFECTING CASH
Depreciation and amortization 6,064 2,536
Minority interest (662) (403)
Gain on sale of shares of
former subsidiary - (1,433)
Gain on issuance of shares by
subsidiary and affiliates (27,121) (3,303)
Gain on sale of intellectual property (5,606) (19,412)
License fee 7,653 -
Equity in loss of investees 6,575 463
--------------------
(10,907) (18,274)
CHANGES IN NON-CASH WORKING CAPITAL
Accounts receivable 12,185 1,971
Inventories (2,638) 482
Prepaid expenses (761) (191)
Accounts payable and accrued liabilities 150 (1,268)
Deferred revenue 2,991 (430)
Allowance for warranty 3,514 3,477
--------------------
15,441 4,041
--------------------
4,534 (14,233)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Net proceeds on issuance
of share capital 317,266 219,952
Proceeds on sale of shares
of former subsidiary - 1,433
Proceeds on issuance of shares
by subsidiary and affiliates 25,410 3,441
Proceeds on sale of
intellectual property 5,606 20,285
Repayment of long-term debt - (1,101)
Capital lease obligation (74) 34
--------------------
348,208 244,044
CASH USED IN INVESTING ACTIVITIES
Net changes in short-term investments (48,276) (12,405)
Additions to property, plant
and equipment (21,427) (7,821)
Investment in fuel cell technology - (55,218)
Investments in associated companies (70,999) (75,036)
--------------------
(140,702) (150,480)
--------------------
Increase (decrease) in cash and
cash equivalents 212,040 79,331
Cash and cash equivalents,
beginning of period 144,525 67,636
--------------------
Cash and cash equivalents,
end of period $356,565 $146,967
--------------------
Ballard Power Systems is the world leader in the development of 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 cell power systems. At the heart of its products is the Ballard Fuel Cell, a proprietary zero-emission engine that converts natural gas, methanol methanol, methyl alcohol, or wood alcohol, CH3OH, a colorless, flammable liquid that is miscible with water in all proportions. Methanol is a monohydric alcohol. It melts at −97. , gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by , or hydrogen fuel into electricity without combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. . Ballard Fuel Cells are currently being used by leading international companies including Daimler-Benz, Ford, General Motors, Chrysler, Nissan, Honda honda a quick release metal eyelet for the end of a lariat. When the restrained animal is no longer required it is not necessary to slacken off the loop and pull it over the head—a very great advantage when working with wild cattle or unbroken horses. , 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. , GPU GPU: see secret police. (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, EBARA, and Cinergy to develop zero-emission engines for vehicles and clean stationary power plants. |
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