Press Release

Ballard Power sees signs of progress in fuel cells

Fuel-cell developer Ballard Power Systems (TSX:BLD) will focus on expanding its current partnerships and not acquisitions as the alternative power industry begins to see signs of progress,the company's chief executive said Tuesday.

John Sheridan, president and CEO of the Vancouver-based company, said while he won't rule out striking a deal, right now it seems pretty clear -- the way we keep assessing the market -- far more important to keep driving execution and stay focused on the path we are on.

Sheridan made the comments during Ballard's quarterly conference call Tuesday, while confirming the company's guidance to ship more than 1,700 fuel-cell units in 2008, double last year's total.
I think we are finally seeing signs of progress in the sector,Sheridan said.

This sector has lived with a lot of promises (but was) short on delivery . . . for a lot of years. We think the critical thing for us is to get continued momentum on the execution front -- to excel production development, to ramp up in terms of orders, volume, revenue.

Earlier this year, Ballard sold its automotive fuel cell development business to Daimler AG (NYSE:DAI) and Ford Motor Co. (NYSE:F), leaving it to focus more on what it sees as other promising businesses, such as providing fuel cells for forklifts as well as making portable power units and small cogeneration plants to power residential homes.

In its financial report, the company reiterated its 2008 sales guidance of between $65 and $75 million in revenues and operating cash consumption of $20 million to $30 million.
Late Monday night, the company reported a second-quarter loss of US$13.5 million, deepening from $11.1 million a year earlier as revenue declined 14 per cent to $12.4 million.

The company, which reports in U.S. dollars, said the net loss was worth 16 cents per share, compared with 10 cents per share in the year-ago quarter, when revenue was $14.3 million.
The increased loss was primarily driven by changes in foreign exchange and investment income, the company said.
Ballard said product shipments were up 15 per cent this quarter compared to last year, and that it expects the second half of the year to be stronger than the first, especially in the fourth quarter.

Operating expenses were reduced by 31 per cent to $14 million in the second quarter as a result of the company's sale of its automotive fuel cell development business to Daimler and Ford.
The quarterly cash burn was $5.1 million, compared with $3.8 million a year earlier.

Ballard said it held $64 million in cash at June 30 and believes current cash reserves are sufficient to meet planned growth and development activities to the end of 2010.
Ballard shares traded up two cents at C$4.10, off its 52-week low of $3.28 earlier this month, which is compared to high of $5.71 in March.