Ballard Power Systems (TSX:BLD) stock took a 14% bounce after the company posted fourth quarter earnings that surpassed analyst expectations and put the company closer to its goal of breaking even.
Ballard CEO John Sheridan, who announced he plans to retire as CEO at the end of this year, said he expects to see the company at the break-even point – on an earnings before interest, taxes, depreciation and amortization (EBITDA) basis – by the time he leaves.
"We're coming off a good year, where revenue is up 40%, the bottom line improved 63% and we ended with a very solid cash position of US$30 million," Sheridan told Business in Vancouver.
Ballard posted a US$20 million loss for2013 (US$8 million on an adjusted EBITDA basis), but posted a US$200,000 profit on an EBITDA basis in the final quarter.
"Our guidance for 2014 is break-even EBITDA, and in Q4 we achieved that," Sheridan said. "We're slightly positive or break-even."
The market's reaction to the company's financials was positive. The company's stock increased 14% February 26 to $3.73 on the TSX (US$3.35 on the Nasdaq).
"We are not declaring victory yet but we're pleased with our process," said Sheridan.
Ballard's stock had dropped to below $0.60 per share at the end of 2012.
The hydrogen fuel cell maker is projecting it will end 2014 by breaking even, with the goal of turning a profit in 2015. If that happens, it will be the first time in the company's history that it turned a profit.
Originally focused on making hydrogen fuel cells for cars, Ballard divested itself of that business a few years ago to focus more on other fuel cell products, its backup power systems for telecoms being the most profitable.
The company saw 40% revenue growth in 2013 and the company's telecom backup business accounted for a sizable portion of that revenue growth.
After eight years as CEO, Sheridan, 59, said he decided it is time to hand over the reins.
"At that point I think it's the right time for an organization to renew in terms of leadership, new blood, new energy, new perspective."
He said he hasn't decided yet what he plans to do after he leaves Ballard.
"At the end of the year, I'm going to sit back and look at options," he said.
