Hydrogenics Reports Second Quarter 2018 Results

Hydrogenics :(TSX:HYG; NASDAQ:HYGS) has announced its second quarter 2018 financial results.

As quoted in the press release:

Recent Highlights

“While top line results reflected continued lumpiness in orders and delivery timing, gross margins rose significantly year-over-year, reflecting improved product mix as well as our focus on supply chain management and ongoing efficiency initiatives,” said Daryl Wilson, President and Chief Executive Officer. “Our backlog remains solid and the outlook strong as we prepare for anticipated increases in product shipments to China during the second half of 2018. Notably, we also made advances in the quarter expanding our technology penetration into new markets, securing our first development contract for a high-speed marine application. We are delighted to partner with Golden Gate Zero Emission Marine on this important endeavor, which complements and bolsters our existing leadership position providing fuel cell modules for rail, bus and other heavy-duty power systems.

“In addition to the progress experienced in our mobility business, we continue to see momentum across a variety of other renewable hydrogen applications, including energy storage. The impetus of positive regulatory changes, such as the June 15 adoption of the EU’s Renewable Energy Directive Part ii, is driving significant activity within our sales pipeline for large Power-to-Gas projects in the 10-25 MW scale. We remain convinced that the unmatched energy density and size advantage of our industry-leading PEM electrolyzer technology positions us well for these opportunities, and we now have a showcase site – with Enbridge – up and running in North America. Given our unique leadership in the space, increasing demand within the markets where we operate, and our strong relationships with customers and partners worldwide, we’re optimistic about the quarters to come.”

Summary of Results for the Quarter Ended June 30, 2018

• The Company posted revenue of $7.6 million for the second quarter of 2018, comparable to the same period last year.
• Gross margin improved to 27.6% in the second quarter of 2018 compared with to 5.8% last year, as the Company posted gross profit of $2.1 million in the current quarter versus $0.4 million in the prior-year period. The higher gross margin was achieved via cost reductions secured through our supply chain, process efficiency improvements as well as product mix.
• Cash operating costs¹ increased $0.7 million to $4.6 million in the 2018 second quarter compared to $3.9 million in 2017 due to $0.4 million of higher net research and development (“R&D”) expenses, primarily related to ongoing product development initiatives and $0.3 million of higher selling expenses related to a refreshed corporate branding, marketing and business development.

Click here to read the full press release.