Hydrogenics Corp. (TSX:HYG.TO; NASDAQ:HYGS), a Canadian fuel cell manufacturer, said its third-quarter loss widened primarily due to an impairment charge.
The company reported a loss of $90.7 million, or 99 cents per share, compared with a loss of $7.5 million, or 8 cents per share, in the prior year.
HYGS attributes the poor results to a $79.9 million impairment charge related to the company’s OnSite Generation and Test Systems businesses. Its research and development costs also surged to $2.7 million from $908,000.
Q3 revenue droppd 14% to $9 million, down from $10.5 million last year because of production delays in its OnSite Generation unit.
Said Pierre Rivard, President and CEO, “On the operational side, we resolved the substantial majority of supply chain and component quality issues identified earlier in the year in our Belgian-based OnSite Generation business. We are now initiating product deliveries on a case by case basis and anticipate returning to historical levels by the first quarter of 2007, assuming no further issues are identified.
On the business development side, we completed a number of initiatives with the highlight being the signing of a three-year manufacturing and supply agreement with American Power Conversion (NASDAQ:APCC) to deliver 500 HyPM® XR 12 kW Fuel Cell Power Modules for integration into APC’s backup power solutions. We also announced plans to bring in a new Chief Executive Officer at which time I will assume a new role, as Hydrogenics’ Executive Chair.”
“In the third quarter, we commenced a comprehensive assessment of our business and operating plans. As a result of this assessment and changes in strategy, we revised our previous estimates of the growth and development of our Onsite Generation business. In addition, we determined that the revenues of the Test Systems business would be lower than previously anticipated as a result of slower adoption of fuel cell technology in end user markets. Due to the significance of these changes, we recorded $79.9 million of impairment charges relating to our OnSite Generation and Test Systems businesses,” added Rivard.
Loading...