Hydrogenics (HYG) revenue down, loss up: BUYING Opportunity

FROM CANADIAN PRESS

MISSISSAUGA — Hydrogenics Corp. (TSX: HYG), a developer and manufacturer of hydrogen and fuel cell products, widened its net losses slightly in the second quarter on a 15 per cent revenue drop as operating and quality problems persisted in the company's key division.

The Toronto-area company reported Tueday it lost $9.6 million US or 11 cents a share in the three months ended June 30, up from a loss of $9.5 million or 10 cents for the same period in 2005.

Revenues at the company, which reports in U.S. dollars, fell 15 per cent to $5.4 million from $6.3 million. That was primarily due to previously announced production delays in the company's OnSite Generation division, which makes hydrogen units used in industry.

"Over the course of the second quarter we made progress towards resolving the supply chain and component quality issues that we identified earlier this year within our OnSite Generation group," said Pierre Rivard, president and chief executive of the company.

"However . . . we have now identified further operational and production quality issues which we believe we are addressing through appropriate corrective measures. While optimistic that we will have these issues resolved in the latter half of the year, we cannot be definitive as to when deliveries by our OnSite Generation business unit will return to historical levels."

At the end of the second quarter, Hydrogenics had $73.1 million in cash and cash equivalents and short-term investments.

Hydrogenics develops clean energy technology such as hydrogen and fuel cell products. The company is based in Mississauga, just west of Toronto, and has operations in North America, Europe and Asia.