Using the Hydrogenics income statement, the common size-income statement, growth rate analysis sheet and the excerpts from the notes and management discussion and analysis, analyze the profitability of Hydrogenics.

Annual Common Size Income Statement
	31-Dec-13	31-Dec-12
Net Sales	100.0%	100.0%
Less: Cost of goods sold	71.6%	83.4%
Gross Profit	28.4%	16.6%
Sales, general and administrative	38.4%	41.1%
Research and Development	6.1%	14.0%
Restructuring, implement and amortization	0.0%	0.0%
Purchased in-process R&D	0.0%	0.0%
Other Operating expenses	0.0%	0.0%
Total Operating expenses	44.4%	55.1%
Operating profit(loss)	16.0%	38.6%
Other income (expenses), Net excluding interest expense	4.0%	0.8%
Earnings(loss) before interest and taxes	20.0%	39.3%
Interest expense	1.0%	1.0%
Earnings(loss) before taxes	21.0%	40.4%
Provision for(benefit from) income taxes	0.0%	0.0%
Earnings(loss) after taxes	21.0%	40.4%
Extraordinary items, net	0.0%	0.0%
Discontinued operations, net	0.0%	0.0%
Cumulative effect of changes in accounting principles, net	0.0%	0.0%
Other after-tax income(loss), net	0.0%	0.0%
Net Profit(loss)	21.0%	40.4%
Effective Tax Rate	NM	NM
Company:	Hydrogenics
Stock Symbol	HYGS
Stock Exhchange:	NASDAQ
Statement Tear-end Dates:	12/31/13	12/31/12
Financial Repeorts rounded to:	Thousands
Supplemental Ratio Requirements:	2013	2012
Rent expense(in thousands)	$845	$906
Dividends per share:
End of year stock price(adjusted for splits)	$19.15	$6.77
Check Figures
Balance Sheet
Current Assets	$31,649	$34,607
TotalAssets	$40,070	$41,877
Current Liabilities	$22,528	$26,054
Total Stockholders' Equity	$6,161	$4,307
Income Statement
Gross Profit	$12,061	$5,249
Operating Profit	$6,783	$12,225
Net Profit	$8,908	$12,797
Cash Flow
Net Flows from Operations	$9,197	$1,163
Net Flows from Investing Activity	$971	$400
Net Flows from Financing Activity	$8,669	$6,491
Hydrogenics Corporation MDA	2013	2012
Consolidated Statements of Operations and Comprehensive Loss
Years ended December 31,
(in thousands of US dollars, except for share and per share amounts
Revenue	$42,413	$31,697
Cost of sales (notes 14 and 15)	30,352	26,448
Gross profit	12,061	5,249
Operating expenses
Selling, general and administrative expenses	16,275	13,027
Research and product development expenses	2,566	4,452
Other (gains) losses	3	(5)
	18,844	17,474
Loss from operations	(6,783)	(12,225)
Finance income (expenses)
Interest income	11	26
Interest expense	-426	-329
Foreign currency gains	517	755
Foreign currency losses	-162	-586
Other finance (losses) gains, net	(2,065)	(438)
Finance (loss) gain, net	(2,125)	(572)
Loss before income taxes	-8,908	-12,797
Income tax expense	-	-
Net loss for the year	-8,908	-12,797
Items that will not be reclassified to net loss:
Re-measurements of actuarial losses	-	241
Items that will be reclassified subsequently to net loss:
Exchange differences on translating foreign operations	509	126
Comprehensive loss for the year	$(8,399)	$ (12,430)
Net loss per share
Basic and diluted	$(1.04)	$ (1.74)
	8,592,600	7,371,908
Weighted average number of common shares outstanding
The accompanying notes form an integral part of these consolidated financial statements.
Expense By Nature	2013	2012
Raw materials and consumables used	$22,597	$22,923
Employee benefits (note 15)	21,087	15,217
Facilities	1,508	1,348
Shareholder communications and other corporate communications	515	889
Depreciation and amortization	712	870
Professional services	606	759
Insurance	576	527
Other	1,592	1,389
	$49,193	$43,922
Employee Benefits Expense	2013	2012
Salaries and wages	$15,077	$12,811
Stock-based compensation	631	577
Medical, dental and insurance	674	506
Pension costs	108	122
Compensation indexed to share price	4,223	771
Other	375	430
	$21,087	$15,217
Research and Product Development Expense
Research and product development expenses	$5,534	$6,073
Government research and product development funding	-2,968	-1,467