|Wednesday January 10, 5:08 pm Eastern Time|
H Power Reports Second Quarter Results
H Power Meets Milestones By Shipping Beta Unit In December
And Signing Lease For 80,000 Square Foot Manufacturing
CLIFTON, N.J.--(BUSINESS WIRE)--Jan. 10, 2001--H Power Corp. (NASDAQ:HPOW - news), a
leading fuel cell development company, today reported financial results for the second fiscal quarter
and six months ended November 30, 2000.
H. Frank Gibbard, chief executive officer of H Power Corp., also announced that the company met
two key milestones by shipping its first beta unit to ECO Fuel Cells, LLC (ECO) in December and
by signing a lease for an 80,000 square foot manufacturing facility.
Net revenues for the quarter were $776,000, compared with $1,084,000 for the second quarter of
last year. The company reported a second quarter net loss attributable to common stockholders of
$3,532,000, or seven cents per share, versus a comparable net loss a year ago of $2,268,000, or
seven cents per share. Compared with the same period last year, second quarter revenues from
product sales rose 51 percent to $473,000, while revenues from contracts decreased to $303,000,
reflecting the company's emphasis on commercialization.
On a consecutive quarter basis, H Power's net loss attributable to common stockholders decreased
from the first quarter's net loss of $4,045,000, or 10 cents per share. Revenues for the period were
also lower compared with first quarter revenues of $1,214,000. Low- power product sales increased
slightly in the second quarter over the first quarter.
For the first six months of fiscal 2001, net revenues rose four percent to $1,990,000, up from
$1,909,000 for the first half of last year. For the period, the company reported a net loss attributable
to common stockholders of $7,577,000, or 16 cents per share, compared with a net loss of
$3,781,000, or 12 cents per share, a year ago. First half product sales rose substantially to
$1,125,000, while revenues from contracts decreased to $865,000.
In December, the company shipped its first prototype beta unit for evaluation and testing to ECO, an
association of over 300 rural electric cooperatives. H Power had previously granted ECO the right to
market its products to more than 900 cooperatives whose service territory includes 83 percent of
U.S. counties in 47 states. Additional beta units are expected to be shipped to ECO over the next
``We continue to make steady progress toward our primary goal of commercial fuel cell production
in the second half of calendar 2001,'' said Gibbard. ``Beginning shipment of the beta units before the
end of calendar 2000 was an important milestone for H Power.''
Due to enhancements made to the fuel cell system by H Power and ECO, principally increasing the
fuel cell system capacity by 50 percent to 4.5 kW, and simultaneously decreasing the system size by
25 percent, the shipment of the first beta unit was extended from October to December. This had the
effect of shifting beta unit revenue from the second quarter to the second half of fiscal 2001.
``We are continuing our aggressive cost-reduction program to reduce our fuel cell subsystem and
component costs. The initial costs for certain system components are higher than originally estimated
as is common with developmental products. We already signed an agreement with SGL Carbon that
is intended to reduce the cost of graphite plates up to 90 percent and we are currently seeking other
similar strategic supplier partnerships,'' Gibbard concluded.
H Power intends to meet its milestone of commencing commercial shipments of fuel cell systems to
ECO in the second half of calendar 2001. H Power also expects to adhere to the company's contract
with ECO for delivery of 12,300 units within 30 months following delivery of its tenth commercial
unit, which the company plans to ship in the second half of calendar 2001. H Power expects its
delivery schedule to accelerate over this 30 month period.
Gibbard also noted that H Power met another important milestone by signing a lease for an 80,000
square foot manufacturing facility in Monroe, North Carolina. H Power expects this facility to be
ready for commercial production in the second half of calendar 2001 in order to meet its delivery
obligations to ECO and other customers. This lease culminates an extended search and selection
process for the most favorable location for H Power's first manufacturing facility.
Balance Sheet Highlights
As of November 30, 2000, the company's balance sheet included cash, cash equivalents and
marketable securities of $105,391,000, compared with $110,694,000, at the end of the first quarter.
Working capital was $107,137,000, compared with $110,907,000 at August 31, 2000. Shareholders'
equity at the end of the second fiscal quarter was $107,751,000, compared with $111,353,000 at the
end of the first quarter. H Power's initial public offering (IPO) in August 2000 netted the company
$104.2 million to fund the company's plan to commercialize fuel cell production.
H Power's goal is to establish fuel cells as a major alternative energy source and to become the
leading commercial provider of fuel cells and systems. The company focuses primarily on existing
markets for stationary power products such as the rural residential market. Going forward, the
company intends to strengthen and expand strategic relationships, penetrate the markets for portable
and mobile fuel cell products and develop low-cost, state-of-the-art manufacturing capabilities. In
addition, H Power plans to capitalize on its technological advantages over other fuel cell developers
and other potential alternative power sources, and develop and acquire advanced complementary
About H Power Corp.
H Power Corp. is a leading fuel cell development company and one of the first to complete a
commercial sale of a proton-exchange membrane (PEM) fuel cell system. PEM fuel cells generate
electricity efficiently and cleanly from the electrochemical reaction of hydrogen and oxygen.
Hydrogen is typically derived from conventional fuels such as natural gas or propane, and oxygen is
drawn from the air. H Power's fuel cells are designed to provide electricity for a wide range of
stationary, portable and mobile applications including residential cogeneration products for rural,
remote homes, and backup power units for mobile applications.
For additional information, please visit our website at www.hpower.com
Certain expectations and projections regarding the future performance of H Power discussed in this
news release are forward-looking and are made under the ``safe harbor'' provisions of the Private
Securities Litigation Reform Act of 1995. These expectations are based on currently available
competitive, financial and economic data along with the Company's operating plans and are subject
to future events and uncertainties. Management cautions the reader that the following factors,
amongst others, may cause H Power's plans to differ or results to vary from those expected, including
the impact of competition, pricing, market demand and marketplace acceptance, and other risks set
forth from time to time in H Power's filings with the Securities and Exchange Commission, including,
but not limited to the risks set forth in H Power's Registration Statement on Form S-1. H Power
undertakes no obligation to publicly release the results of any revisions to forward-looking
statements, which may be made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events. The events highlighted herein should not be assumed to be
items that could affect the future performance of the Company.
H Power will hold a conference call discussion of second quarter results tomorrow morning, January
11, 2001 at 11 a.m. eastern time. To listen, please visit www.hpower.com. A replay of the call will
be available until 1/25/01. To listen to the replay, please visit www.hpower.com or call (800) 642 -
1687, and use the reference code No. 416602.
H Power Corp.
Second Quarter And Six Month Financial Results (unaudited)
Three Months Ended Six Months Ended
Income Statement Data: November 30, November 30,
2000 1999 2000 1999
---- ---- ---- ----
Net revenues $776,000 $1,084,000 $1,990,000 $1,909,000
operations ($4,892,000) ($2,324,000) ($9,375,000) ($3,783,000)
Net loss ($3,532,000) ($2,216,000) ($7,536,000) ($3,676,000)
shareholders ($3,532,000) ($2,268,000) ($7,577,000) ($3,781,000)
Loss per share,
diluted ($0.07) ($0.07) ($0.16) ($0.12)
diluted 53,233,000 34,020,000 47,436,000 31,668,000
Balance Sheet Data: November 30, 2000 May 31, 2000
Cash, cash equivalents and
marketable securities $105,391,000 $11,257,000
Working capital 107,137,000 13,213,000
Total assets 113,354,000 18,650,000
Long-term debt 65,000 67,000
Minority interest 0 5,000,000
preferred stock 0 15,327,000
equity (deficit) 107,751,000 (6,938,000)
H Power Corp.
Thomas Michael, 973/249-5444 x 500
The Dilenschneider Group
Ken Di Paola/Reid Gearhart, 212/922-0900