Ballard Power Systems, Inc. (BLDP,BLD.TO) said it will not achieve its 2014 revenue and adjusted EBITDA guidance due to breaches of two contracts by Azure Hydrogen and the subsequent termination of these contracts. The Canada-based company added that it will provide further details on its conference call in late February, when it discusses its 2014 audited financial statements and 2015 outlook.
Further, Ballard Power said it has given termination notice on the two licensing agreements in the China market due to material breaches of these agreements by Azure Hydrogen. As a result of Azure's breaches under both contracts, Ballard Power has provided notice of termination of both contracts and will consider its legal remedies.
Ballard Power noted that Azure's breaches and the resultant contract terminations will negatively impact its 2014 financial performance. The company had previously expected to collect about $4.5 million of cash from Azure and also recognize additional revenue of more than $3 million under the Azure contracts in the fourth quarter of 2014.
The company will not book any revenue under these contracts in the fourth quarter of 2014 and expects to record an impairment of about $4.5 million for the outstanding receivables owed by Azure.
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