Hydrogenics strong sales result in 28% increase in order backlog

Hydrogenics Corporation, a leading developer and manufacturer of hydrogen generation and fuel cell products, today reported third quarter 2011 results. Results are reported in US dollars and are prepared in accordance with International Financial Reporting Standards (IFRS)1.

"A 117% increase in orders received in the quarter caused our backlog to grow 28% as compared with the third quarter of 2010. This development positions the Corporation for strong growth heading into 2012," said Daryl Wilson, President and Chief Executive Officer. "Our OnSite Generation unit has seen robust demand not only for industrial hydrogen and fueling stations but also, very importantly, for contracts tied to our patented renewable energy storage applications. As communicated in the past, storing energy in the form of hydrogen generated from intermittent renewable power installations is a compelling opportunity for Hydrogenics. We are winning on this application due to our advanced water electrolysis technology and reputation for durability. Specifically, the increased interest in Europe for combined wind/hydrogen energy systems that can provide both clean power and reliable electricity is showing real promise. We are focused on a large number of contracts that should show results in the quarters to come. In support of onging growth, we secured an interest-free CA$6.0 million loan received from the Government of Ontario. This financing enables us to scale up operations and create strong product positions."

Third Quarter 2011 Highlights (compared to the three months ended September 30, 2010, unless otherwise noted)

The Corporation secured $12.8 million of orders for renewable energy storage, hydrogen fueling, industrial gas and fuel cell applications, an increase of 117% over the previous year.
At the end of the quarter, order backlog was $24.8 million, an increase of 28%.
Revenues were $4.9 million, a decrease of 12%, primarily as a result of timing of project deliveries in the Corporation's OnSite Generation business unit.
Gross profit was $0.9 million, or 18% of revenues, a 7.9 percentage point decrease resulting from additional costs incurred on two custom product development projects and lower overhead absorption.
Cash Operating Costs2 were $2.9 million, a decrease of 10%.
EBITDA3 loss decreased by 5% to $1.9 million.
Hydrogenics ended the quarter with cash resources of $9.2 million, a $1.8 million decrease from June 30, 2011.
The Corporation signed a loan agreement to realize up to CA$6.0 million to advance commercialization of products for telecommunications, vehicles and utility-scale energy storage markets.

Nine Months Ended September 30, 2011 Highlights (compared to the nine months ended September 30, 2010, unless otherwise noted)

Revenues were $16.2 million, an increase of 7%, primarily as a result of increased order bookings in the Corporation's OnSite Generation business unit.
Gross profit was $3.4 million, or 21% of revenues, a 1.8 percentage point decrease over the prior year, the result of lower gross margins in the Corporation's Power Systems business unit resulting from additional costs incurred on two custom product development projects.
Cash operating costs2 were $9.1 million, a decrease of 9%.
EBITDA3 loss increased $0.8 million or 13%.
Cash used in operations decreased 56% to $3.2 million.