Problem

Hydrogenics Corporation

This case is a continuation of Cases 2.4 and 3.4.

(a) Open the financial statement analysis template that you saved from the Chapter 3 H ydrogenics Case. Click on the "Cover" tab at the bottom of the screen. Input the check figures for the Cash Flow section of this page. Click on the "Cash Flow" tab and input the data from the cash flow statement included for H ydrogenics in this case. Note 25 includes additional input needed for the operating activities area of the cash flow statement. Be sure to input the amount for interest paid at the bottom of the page (no amount is needed for income taxes paid). When you have finished inputting the data, review the cash flow statement to make sure there are no red blocks indicating that your numbers do not match the cover sheet information check figures. Make any necessary corrections before printing out your input and the summary analysis page that the template automatically creates for you. Save the template on your computer or a disk in order to use it with subsequent problems in later chapters.

(b) Analyze the statement of cash flows for H ydrogenics. Be sure to analyze the cash flows from operating activities, as well as the overall cash inflows and cash outflows for the firm.

Hydrogenics Corporation

Consolidated Statements of Cash Flows

Years ended December 31,

(in thousands of US dollars)

2013

2012

Cash and cash equivalents provided by (used in): Operating activities

Net loss for the year

S (8,908)

$ (12,797)

(Increase) decrease in restricted cash

1,758

(1,607)

Items not affecting cash:

Loss on disposal of assets

3

7

Amortization and depreciation

712

870

Other finance losses, net (note 17)

2,065

438

Unrealized foreign exchange (gains) losses

(120)

(257)

Stock-based compensation (note 13)

631

577

Portion of borrowings recorded as a reduction from research

and product development expenses or fixed assets (note 11)

(934)

(981)

Accreted non-cash interest (note 11)

349

288

Payment of post-retirement benefit liability (note 11)

(97)

(100)

Liabilities for compensation indexed to share price

4,223

768

Net change in non-cash working capital (note 25)

(8,879)

11,631

Cash used in operating activities

(9,197)

(1,163)

Investing activities

Proceeds from disposal of property, plant and equipment

-

26

Purchase of property, plant and equipment

(939)

(424)

Purchase of intangible assets

(32)

(2)

Cash used in investing activities

(971)

(400)

Financing activities

Payment of repayable government contributions (note 11)

(393)

(308)

Proceeds of borrowings, net of transaction costs (note 11)

1,782

1,621

Proceeds of operating borrowings

1,412

1,182

Repayment of operating borrowings

(1,412)

(1,182)

Common shares issued and warrants exercised, net of issuance costs

(note 12)

7,280

5,178

Cash provided by financing activities

8,669

6,491

Effect of exchange rate fluctuations on cash and cash equivalents held

302

307

Increase (decrease) in cash and cash equivalents during the year

(1,197)

5,235

Cash and cash equivalents - Beginning of year

13,020

7,785

Cash and cash equivalents - End of year

S 11,823

$ 13,020

Supplemental disclosure

Income taxes paid

S

$

Interest paid

8

3

Note 25. Consolidated Statements of Cash Flows

Components of the net change in non-cash working capital are as follows:

2013

2012

(Increase) decrease in current assets

Trade and other receivables

$ 384

$ (1,632)

Grants receivable

17

108

Inventories

(973)

(2,678)

Prepaid expenses and other current assets

(64)

(289)

Increase (decrease) in current liabilities

Trade, other payables and provisions

(1,614)

984

Deferred revenue

(6,629)

15,138

Subtotal

$ (8,879)

$ 11,631

Liabilities for compensation indexed to share price

4,223 $ (4,656)

768 $ 12,399