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Ballard Reports Third Quarter 2010 Results

October 27, 2010

Strong quarter takes year-to-date revenue growth to 45%

VANCOUVER, Oct. 27 /PRNewswire-FirstCall/ – Ballard Power Systems (TSX: BLD; NASDAQ:
BLDP) announced its financial results for the third quarter ended
September 30, 2010 today. All amounts are consolidated to include
Dantherm Power’s results and are in U.S. dollars, unless otherwise
noted.

John Sheridan, President and CEO said “Our solid third quarter results
provide further evidence that Ballard is building the capability for
strong revenue growth in clean energy fuel cell products and driving
aggressively to profitability. Revenue growth in the quarter was 83%
and, on a year-to-date basis, now stands at 45%.”  He added that, “Our
strong liquidity position, with cash reserves of $72.9 million, will
enable us to deliver on strong growth prospects in our key fuel cell
markets of backup power, distributed generation, material handling and
bus.”

Third Quarter 2010 Highlights

Growth:

  • Revenue of $16.5 million in the quarter and $43.9 million year-to-date,
    representing growth of 83% and 45%, respectively.
  • Total shipments of 683 fuel cell stacks in the quarter and 1,895 fuel
    cell stacks year-to-date, representing growth of 137% and 105%,
    respectively.
    • Backup power shipments grew 87% to 401 fuel cell stacks in the quarter,
      for a total of 1,010 fuel cell stacks year-to-date. This reflects
      shipments to IdaTech, LLC and regional system integrators in South East
      Asia
      and Europe.
    • Material handling shipments more than doubled in the quarter to 211 fuel
      cell stacks. On a year-to-date basis, shipments were 755 fuel cell
      stacks, or more than four times the full-year total of 182 fuel cell
      stacks in 2009.
  • Significant progress in distributed generation, including a sales
    agreement with K2 Pure Solutions for deployment of a CLEARgen(TM) fuel cell generator utilizing by-product hydrogen to be sited at a
    bleach plant in Pittsburg, California, as well as delivery of a
    utility-scale CLEARgen(TM) distributed generation system to FirstEnergy Generation Corp. in Ohio.
  • Twelve-month rolling order book of $30.0 million.

Profitability:

  • EBITDA(1) of ($4.2) million for the quarter and ($22.0) million year-to-date,
    representing improvements of 57% and 6%, respectively.
  • Net loss of $5.6 million for the quarter and $26.5 million year-to-date,
    representing improvements of 51% and 8%, respectively.
  • Cash flow from operations of ($4.8) million. On a comparable
    year-over-year basis, excluding Dantherm Power, cash flow from
    operations was ($3.2) million for a total of ($24.8) million
    year-to-date. This represents improvements of 31% and 13%,
    respectively.
  • Cash reserves of $72.9 million.

Guidance:

  • Ballard reconfirms full-year guidance of revenue growth in excess of 35%
    and improvement in cash flow from operations of 30%, excluding the cash
    flow impact of Dantherm Power and a negative foreign exchange impact.

Growth Milestones in 2010:

  • Delivered three of six milestones.
    • Deployed Dantherm Power hydrogen-based backup power systems in one major
      new network, specifically Wind Mobile in Canada.
    • Delivered a one-megawatt distributed generation system to FirstEnergy
      Generation Corp. in Ohio.
    • Booked the first distributed generation system sale utilizing by-product
      hydrogen, for K2 Pure Solutions.
  • On-track to deliver two of six milestones.
    • More than double the volume of stack shipments in material handling, in
      line with Plug Power’s 2010 shipment target.
    • Book new fuel cell bus contracts to support the deployment of more than
      25 buses.
  • One of six milestones is ‘at risk’.
    • Begin shipments of Ballard’s fuel cell stacks for deployment of
      IdaTech’s reformate-based supplemental power systems for the Indian
      telecoms market. This may be delayed into the first half of 2011.

Financial Highlights:

             
(Millions of U.S. dollars) Three months ended September 30, Nine months ended September 30,
  2010 2009 % Improvement 2010 2009 % Improvement
GROWTH            
Revenue:            
  Fuel Cell Products $8.0 $2.9 178% $19.4 $16.4 18%
  Contract Automotive 3.3 1.9 69% 7.9 4.7 68%
  Material Products 5.2 4.2 24% 16.6 9.1 83%
  Total Revenue $16.5 $9.0 83% $43.9 $30.2 45%
Fuel Cell Stack Shipments* (units) 683 288 137% 1,895 925 105%
12-Month Rolling Order Book $30.0 n/a n/a n/a n/a n/a
PROFITABILITY            
EBITDA(1) ($4.2) ($9.6) 57% ($22.0) ($23.5) 6%**
Net Income (Loss) ($5.6) ($11.4) 51% ($26.5) ($28.9) 8%
Cash Flow from Operations, Excluding Dantherm Power ($3.2) ($4.6) 31% ($24.8) ($28.5) 13%
LIQUIDITY            
Cash Reserves $72.9 n/a n/a n/a n/a n/a

* Total fuel cell stack shipments, including backup power, distributed
generation, material handling, bus and automotive applications.

** Adjusting for Dantherm Power, one-time gains (losses), restructuring
and foreign exchange impacts, EBITDA improvement would have been ~40%.

For a more detailed discussion of Ballard Power Systems’ third quarter
2010 results, please see the company’s financial statements and
management’s discussion & analysis, which are available at www.ballard.com, www.sedar.com and www.sec.gov/edgar.shtml.

Conference Call

Ballard will hold a conference call on Thursday, October 28, 2010 at
8:00 a.m. PST (11:00 a.m. EST) to review third quarter 2010 operating
results. The live call can be accessed by calling +1.604.638.5340.
Alternatively, a live audio webcast can be accessed through a link on
Ballard’s homepage (www.ballard.com). Following the call, the audio webcasts will be archived in the
Investor Events & Conference Calls section of Ballard’s website.

About Ballard Power Systems

Ballard Power Systems (TSX: BLD; NASDAQ: BLDP) provides clean energy
fuel cell products enabling optimized power systems for a range of
applications. To learn more about Ballard, please visit www.ballard.com.

This release contains forward-looking statements, including
estimated revenue and cash flow from operations, expected product
shipments and anticipated sales, which are provided to enable external
stakeholders to understand Ballard’s expectations as at the date of
this release and may not be appropriate for other purposes.  These
forward-looking statements are based on the beliefs and assumptions of
Ballard’s management and reflect Ballard’s current expectations as
contemplated under section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such assumptions relate to Ballard’s financial forecasts and
expectations regarding its product development efforts, manufacturing
capacity, and market demand, and include matters such as generating new
sales, producing, delivering and selling the expected number of units,
and controlling its costs.  These statements involve risks and
uncertainties that may cause Ballard’s actual results to be materially
different, including, without limitation, the condition of the global
economy, the rate of mass adoption of its products, product development
delays, changing environmental regulations, its ability to attract and
retain business partners and customers, its access to funding,
increased competition, its ability to protect its intellectual
property, changes in its customers’ requirements, foreign exchange
impacts on its net monetary assets and its ability to provide the
capital required for product development, operations and marketing. For
a detailed discussion of these risk factors and other risk factors that
could affect Ballard’s future performance, please refer to Ballard’s
most recent Annual Information Form. Readers should not place undue
reliance on Ballard’s forward-looking statements and Ballard assumes no
obligation to update or release any revisions to these forward looking
statements, other than as required under applicable legislation.

Endnotes:

(1) EBITDA is a non-GAAP measure used to assist in assessing Ballard’s
financial performance and liquidity. Non-GAAP measures do not have any
standardized meaning prescribed by GAAP and are therefore unlikely to
be comparable to similar measures presented by other companies. EBITDA
measures net loss after excluding interest expense, income tax expense,
depreciation of property, plant and equipment, amortization of
intangible assets, and goodwill impairment charges. EBITDA includes the
impact attributable to Ballard’s controlling interest in Dantherm
Power. Ballard believes that EBITDA assists investors in assessing
actual and future performance. For a reconciliation of EBITDA to the
Consolidated Financial Statements, please refer to Ballard’s
Management’s Discussion & Analysis.

CONTACT: <table valign=”top” border=”0″><tr><td>Investor Relations:  </td> <td>Lori Rozali     </td> <td>Public Relations: </td> <td> Guy McAree</td></tr> <tr><td> </td> <td>+1.604.412.3195            </td> <td> </td> <td>+1.604.412.7919</td></tr> <tr><td> </td> <td><a href=”mailto:investors@ballard.com”>investors@ballard.com</a>         </td> <td> </td> <td> <a href=”mailto:media@ballard.com”>media@ballard.com</a></td></tr></table>

SOURCE Ballard Power Systems Inc.


Source: newswire



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