Hydrogenics Provides Market Update and Confirms 2014 Outlook
MISSISSAUGA, Ontario, April 4, 2014 (GLOBE NEWSWIRE) -- Hydrogenics Corporation (Nasdaq:HYGS -3.03%, news) (TSX:HYG), ("Hydrogenics" or "the Company") a leading developer and manufacturer of hydrogen generation and hydrogen-based power modules, today announced that customer-driven timing of deliveries have impacted revenue for the first quarter of 2014. Hydrogenics expects to realize between $7.0 and $7.5 million of revenue for the three months ended March 31, 2014.
However, the Company re-iterates the previously announced 2014 outlook that it will exceed $50 million in revenue and will surpass break-even Adjusted EBITDA1 for the year. This view is supported as follows:
The Company finished 2013 with $57 million in backlog;
Approximately $40 million of the current contracted backlog will be realized as revenue in calendar 2014; and
Other sales pipeline opportunities closing into backlog in the first and second quarters will have revenue potential for the second half of 2014.
The most recent analysis of contracted backlog and sales pipeline indicates that the revenue growth to achieve the targeted outlook will be predominantly in the second half of 2014 based on anticipated customer delivery requirements.
Hydrogenics also remains positive on larger scale opportunities that will provide order intake for 2014 and revenue for 2015 and future years. The Company has also provided proposals on multiple energy storage applications for installations in the 5-15 MW class size. The normal gestation on these projects is typically prolonged since the application is new to utility and industrial customers. For these larger opportunities it will not be possible to realize revenue in 2014 but rather will provide strong growth into 2015 and future years.
1 Adjusted EBITDA is defined as net loss excluding stock based compensation (both cash settled long term compensation indexed to share price and share based compensation), other finance income and expenses.
I see this as a short term negative, at least as perceived by the market. I am using it as a buying opportunity and just doubled my position (nearly). If these delayed customer shipments are in the pipeline, they will only make future earnings reports look that much stronger.
My take is a reduction in 1st quarter revenues to $7 to $7.5 million, yet maintaining full year guidance of $50 million. "Customer driven timing of deliveries" may mean postponed from 1st quarter to later?