1.Did Andy do most of the review/speculating or did they put the CFO into the front seat like he should be?
Andy did most of the framework discussion with major numbers, Paul did most of the detail numbers. Andy was definitely more prominent
2. Any information on why the miss was so large versus Andy's lack of proper guidance? And yes, it really was an 8 cent miss.
Soroof legal settlement, plus 20-25% of revenue could not be booked because a sale/leaseback transaction could not be put in place in time to report in Q4, hoping for Q1 reporting of that revenue.
3. Any update on an end to the lawsuit settlement or is there more accrual ahead for that?
No indication of closure, but also no indication of additional accruals to come.
4. Any more SOLID information on the new customers or was it more of the same Andy ambiguous wait and see?
Not for the larger ones, but did highlight FreezPak as smaller site demonstrating viability for smaller sites
5.Any indications of what/when they will get these operating costs under control, what is the COO doing specifically?
The general direction is to increase sales and hold costs.
6. Any indication what accountability there is with BLDP on ability to ship stacks and their obvious poor quality, which is effectng service costs and worse, reputation.
None.
Here is a quick and dirty summary of the conference call. I give no guarantees on it's accuracy or completeness, but it should be reasonably good.
Time index
0:36 Teal Vivacqua Safe Harbor statement
2:16 Andy Marsh 2014 Breakout year
-proved commercial viability of FC in material handling industry
-revenue almost 3X to 64M with TV of billable activity 70M
2:48 -bookings exceeded 250M an increase of over 100M over 2013, with Q4 bookings of 45M (slide and release state 150M)
3:05 -introduced GenKey, 90% of customers in 2015 have chosen GenKey
3:27 -executed the largest commercial deployment of PEM FCs with 6 site order valued over 50M from Walmart
3:38 -converted 4 Walmart sites in 2014, have over 100 sites in NA, Walmart continuously converting to GenKey
4:00 -repeat customer Kroger recently converted DCs in Louisville and Denver, soon to convert Atlanta
4:17 -highlight of new customer FreezPak - frozen goods distribution company in NJ
-smaller than most deployments and H2 infrastructure cost has generally been barrier, offered mini GenKey
-exciting because this new offering opens up sites of 25 units are now viable
4:55 -most significant new product offering is GenFuel, built 10 systems in 2014 dispensing 2T of H2/day
5:25 -for products GMs improved for all segments in 2014
5:35 -acquired ReliOn in 2014, provides supplier diversification, Ballard will remain importnt partner
-started development of high powered stack for introduction later this year
6:04 -secured balance sheet - critical for engagement with Fortune 500 customers - $146M at YE 2014 vs. $5M YE 2013
6:23 -now focus on 2015+ 4 objectives
-$100M revenue goal (clear visibility to 85% already)
-$200M bookings
-increase GMs
-increase investment in expanding H2 offering
-expect to deploy 7-10 Walmart sites this year converting Bedford PA, then Wintersville OH, Mancado, MN
7:20 -working with 2 new large retail customers marketing departments to secure release of names
07:59 -some thoughts on GMs
-bucket activities into 4 categories GenDrive, H2 infrastructure, after market service, fuels
-GenDrive went from -7% to +18%, doubled shipments
-H2 infrastructure costs to come down, changes to improve cost, quality, now built on skids in house
09:16 -ultimately expect HW products to achieve 35% GM on GenDrive, H2 infrastructure
09:29 -service can represent higher GM but will be most difficult to improve GMs
-3 items important - performance of units in field, reduction of liquid cooled stack failures, utilisation of service labour force
-as older stacks come out of field newer stacks have lower service cost profile
-only concern we have today is lifetime performance of liquid cooled high powered stacks
10:44 -labour utilisation is low hanging fruit, as deployment of units becomes more centrally located, like 4 sites in OH by end of Q2, costs will go down, we are paying for initial ramp in service team today
-margin opportunity for H2 - business in mat. handling can grow to 500M without expanding into other market segments
-to grow beyond 500M revenue must address cost effective H2 availability to small and large sites
-cost effective and available H2 is barrier to entry in to other markets
13:33 -efforts in this area led by VP Hydrogen Jim Cortes
-3 strategic objectives
-develop viable cost effective solutions to address smaller sites (retail, stationary power) using on site electrolysers, reformers, or new distribution model
-looking to migrate H2 generation on site or to larger facilites to use as hub for distribution
-develop much larger scale system required for transport refrigeration systems using up to 2T/day
15:35 -Andy wrap up
16:16 -Paul Middleton
-financial highlights of Q4
-21.5M revenue (168% growth over 2013)
-all time record 957 GenDrive units ships, sales with over 8 infrastructure installations
-238 units in sale and leaseback transaction could not be booked in Q4, will look to book in Q1 2015
-total GM as percent of sales is -8% vs. -39% in 2013
17:44 -recorded $45M orders in Q4 giving backlog of $130M, compared to $35M orders and $49M backlog YE 2013
-backlog is combination of units and service
-used $9.8M in cash, ended with $146M cash and $167M working capital
-$12.2M revenue in GenDrive units, portion of units will seek sale/leaseback in Q1 2015 vs. $5.7M Q3 2014
-higher concentration of smaller Class 3 units
-product sales GM of $1.8M or +15% vs. -7% in Q4 2013
20:10 -service revenues $8.4 million, with GM of -35% as compared to -112% in Q4 2013 with loss of $2.4M on $2.1M revenue
-improvements in service GMs reflect higher GenDrive reliability
-R&D $2.2M vs. $0.8M in Q4 2013, includes ReliOn acquisition
-SG&A $9.4M vs. $4M in 2013 with increased cost due to Soroof legal professional fees, increased sales costs
22:20 -net operating loss of $13.2M or 62% of sales vs. $8M or 100% of sales in Q4 2013
23:00 -forward guidance
24:50 -break even EBITDAS by Q4 2015
25:41 -Q&A session
I hope that helps.
