Hydrogenics Corporation (NASDAQ:HYGS) Q2 2019 Earnings Conference Call - Final Transcript

Aug 12, 2019 • 10:00 am ET

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Hydrogenics Corporation (NASDAQ:HYGS) Q2 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to Hydrogenics 2019 Second Quarter Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's call, Marc Beisheim, CFO. You may begin.

Executive
Marc Beisheim

Thank you, operator. Good morning, ladies and gentlemen, and welcome to Hydrogenics' 2019 Second Quarter Conference Call. With me today is Daryl Wilson, President and Chief Executive Officer. The Company's second quarter press release and PowerPoint presentation are available on our website under the Investor page at www.hydrogenics.com. We also uploaded the report this morning on both SEDAR and EDGAR and would refer you to those sites for our disclosure documents. As indicated in our press release this morning, all financial references are US dollars, unless otherwise indicated.

I would now like to provide a brief Safe Harbor statement. This call and the accompanying presentation may contain statements that are forward-looking. These statements are based on our current expectations and assumptions that are subject to risk and uncertainty. Actual results could differ materially because of factors discussed in today's press release, in the MD&A section of our most recent financial statements or in other reports and filings with the Securities and Exchange Commission and applicable Canadian securities regulators. We do not undertake any duty to update any forward-looking statements.

And with that, I'll turn the call over to Daryl Wilson. Please go ahead.

Executive
Daryl Wilson

Thank you, Marc. Good day, and thanks, everyone, for joining us on Hydrogenics 2019 second quarter conference call. We will focus today's call on our quarterly earnings, but I wanted to briefly discuss our proposed transaction with Cummins. As you know, Cummins agreed to acquire all of our outstanding shares other than the shares owned by the Hydrogen Company for $15 US in cash. The Hydrogen Company, a unit of L'Air Liquide agreed to exchange its shares with Cummins in lieu of receiving the cash consideration. The Board and an independent special committee of the Board unanimously approved the transaction and recommended that shareholders vote for the transaction for a number of reasons.

The consideration represented a premium of 21.6% over the 30-day volume weighted average price of our shares on the Nasdaq and 38.8% over the 90-day volume weighted average price for the period ending June 27, 2019, which was the day before the transaction was announced. Any questions concerning the Cummins transaction should be addressed to our management team separately from this earnings call. We look forward to the upcoming August 29 special meeting, when our shareholders will vote on the proposal to approve the transaction with Cummins.

With that, I'll move on to discuss our quarterly earnings. Please refer to the presentation on our website for today's discussion. Beginning with Slide 3, let me review some highlights from the past quarter, after which I'll provide additional information on recent developments in our near-term areas of focus. Second quarter sales were $10.4 million, up 37% year-over-year as the Company saw a significant increase in shipments