FuelCell
Energy Reports Fourth Quarter and Fiscal Year 2007 Results and Latest
Accomplishments
Dec 10, 2007
(PrimeNewswire via COMTEX News Network) --
* Fourth quarter product sales and revenues increased 65 percent
* Product cost-to-revenue ratio improved to 1.57 in the fourth
quarter compared to 3.19 last year
* Product backlog for 2007 increased 107 percent over prior year to
$57.8 million
* Fourth quarter cash use was $13.9 million, in line with Company
expectations.
DANBURY, Conn., Dec.
10, 2007 (PRIME NEWSWIRE) -- FuelCell Energy, Inc. (Nasdaq:FCEL), a leading
manufacturer of high efficiency, ultra-clean power plants using a variety of
fuels for commercial, industrial, government and utility customers, today
reported results and accomplishments for its fourth quarter and fiscal year
ended October 31, 2007.
Financial Results
FuelCell Energy
reported total revenues for the fourth quarter of fiscal 2007 of $16.5
million compared to $9.1 million in the same period last year. Product sales
and revenues were up 65 percent to $11.0 million from $6.7 million in the
2006 fourth quarter. The product cost-to-revenue ratio improved to 1.57,
below last year's 3.19, and 1.91 reported in the prior quarter. The improved
margin is primarily attributable to increased sales of megawatt (MW) class
power plants and the Company's continued reduction of product costs through
value engineering, manufacturing improvements and supply chain enhancements
as part of its cost out program. Research and development contract revenue
was $5.5 million, up from $2.5 million in the 2006 fourth quarter resulting
from increased activity on the Company's multi-MW coal based solid oxide
contract with the U.S. Department of Energy.
The Company's product
backlog as of October 31, 2007, including long-term service agreements, was
$57.8 million, representing a 107 percent increase over last year's $27.9
million, and a 17 percent increase over the third quarter's backlog. For
2007, orders totaled 14.8 MW, a 193 percent increase over the 5.05 MW of
orders in 2006. The increase in backlog was primarily driven by product
orders from South Korea, California and Connecticut. Research and development
contract backlog was $18.5 million as of October 31, 2007 compared to $30.1
million at October 31, 2006.
The net loss to common
shareholders for the fourth quarter of fiscal 2007 was $16.8 million, or
$0.25 per basic and diluted share, compared to a net loss to common
shareholders of $25.1 million, or $0.47 per basic and diluted share, in the
similar period last year. Net results benefited from higher revenues and
improved margins primarily attributable to increased sales of megawatt class
products which have a lower cost per kilowatt (kW).
Total cash and
investments were $153.6 million as of October 31, 2007. Fourth quarter net
cash use was $13.9 million compared to $13.0 million in the same period last
year. Capital spending for the 2007 fourth quarter was approximately $0.9
million and depreciation expense for the period was $2.2 million.
For the fiscal year
ended October 31, 2007, FuelCell Energy reported revenues increased to $48.2
million compared to $33.3 million for 2006. Product sales and revenues were
$32.5 million, an increase of 51.1 percent over the prior year's $21.5
million. Research and development contract revenue was $15.7 million compared
to $11.8 million in 2006.
The product
cost-to-revenue ratio improved to 1.90 in fiscal 2007 compared to 2.86 ratio
reported for last fiscal year on technology advances, value engineering and
supply chain improvements. Net loss to common shareholders was $71.9 million,
or $1.16 per basic and diluted share compared to a net loss to common
shareholders of $84.2 million, or $1.65 per basic and diluted share. Net
results benefited from a more favorable product mix and lower production
costs. The 2006 net loss to common shareholders included a one-time charge of
$4.3 million, or $0.08 per basic and diluted share for the conversion of the
Series B Convertible Preferred Stock. Capital spending totaled $4.4 million
for fiscal 2007 and depreciation expense was $9.2 million.
Corporate Highlights
"We are seeing
very positive customer demand demonstrating our market leadership and the
strong business environment for ultra-clean energy products," said R.
Daniel Brdar, Chairman and CEO. "This demand has resulted in very strong
orders in 2007 and an excellent backlog level going into 2008."
Leadership in Key
Markets
South Korea: FuelCell
Energy's alliance partner, POSCO, ordered 7.8 MW of DFC power plants during
fiscal 2007, of which 7.2 MW are MW-class power plants. South Korea's clean
energy program requires that power first be exported to the utility grid, so
the incentive tends to favor the installation of multi-MW power stations. POSCO
broke ground on its 50 MW fuel cell balance of plant manufacturing facility,
which is scheduled for completion by the end of 2008, and formed a
partnership with the largest electric utility in the country, KEPCO.
"POSCO is moving
ahead quickly to develop the market in South Korea for DFC fuel cells,"
said Brdar. "With POSCO's commitment to MW-class ultra-clean power
generation, its global sourcing capabilities and in-country knowledge, we
look forward to continued sales growth throughout South Korea and other Asian
markets."
California: During the
fourth quarter, the Company received orders from Turlock Irrigation District
and M&L Commodities (dba Inland Cold Storage Stockton) for a total of 1.8
MW. Turlock's 1.2 MW DFC1500 will help eliminate 5,200 tons of carbon
annually that would have been generated by a typical power plant. M&L
intends to use its 600 kW in its new refrigerated and frozen storage
facility. Both these operations will not only benefit from the DFC power
plants' low emissions profile but also the efficiency of up to 80 percent
that saves them money on power costs.
In November 2007,
Eastern Municipal Water District (EMWD) in California ordered three DFC300
power plants to provide 750 kW of power for its operations. EMWD processes
11.5 million gallons of wastewater a day and expects to reduce its carbon
footprint by 10,400 tons each year while saving on its electricity and
heating costs.
Also in November, The
Linde Group, the world's largest industrial gases company, ordered four DFC
power plants, adding 3.9 MW to the Company's backlog. Three DFC1500 units
will operate at Linde's customer sites in the San Diego, Calif. area to run
on biogas that Linde will transport from the Pt. Loma Wastewater Treatment
(PLWT) facility. The fourth unit, a DFC300, will be located at PLWT to power
Linde's gas purification operations. Linde will sell the renewable power to
its customers under a power purchase agreement.
Wastewater treatment
facilities now represent 58 percent of FuelCell Energy's California business
and a third of its total business. They represent a particularly strong
application for DFC fuel cells because the biofuel the treatment process
generates, methane, can be used by the fuel cell to produce electricity and
the heat byproduct generated by the fuel cell can be used in the treatment
process. This Combined Heat and Power (CHP) application can provide FuelCell
Energy customers with up to 80 percent efficiency from their DFC systems.
Connecticut:
Pepperidge Farm ordered an additional 1.2 MW DFC1500 during the fourth
quarter to add to the DFC300 that was installed in 2006. The power plants
will provide 70 percent of the electricity for the bakery and the excess heat
from the plant will be used in the bakery process to increase the fuel cell's
total thermal efficiency to approximately 80 percent.
In March, 2007, the
Connecticut Clean Energy Fund announced that it selected 68 MW of FuelCell
Energy projects. The six projects, all comprised of FuelCell Energy's 2.4 MW
DFC3000 power plants, represent a potential for $200 million in sales and
range in size from a 2.4 MW hospital project to 20 MW grid-support power
plants. The utility review and public hearing process are now complete and
the Department of Public Utility Control's (DPUC) is expected to deliver its
draft decision on December 21, 2007 and the final decision on January 9,
2008.
Manufacturing Ramp Up
In response to
increasing backlog and demand, FuelCell Energy announced last quarter that it
began ramping its annual production rate from 11 MW to 25 MW. This increase
in the production rate is scheduled to be complete by January, 2008.
Government Research
and Development Contracts
FuelCell Energy made
significant progress in its government research and development programs
during the fourth quarter:
* FuelCell Energy is currently in the first phase of a 10-year,
three-phased program created by the Department of Energy's Office
of Fossil Energy Solid State Energy Conversion Alliance (SECA) to
develop multi-MW coal-based solid oxide fuel cell power plants to
be used as high efficiency central generation power plant
facilities. In the fourth quarter, the Company's subcontractor,
Versa Power, achieved a four-fold scale-up of its SOFC cell
technology to meet the program requirements while FuelCell Energy
has completed the preliminary design of the MW-class SOFC power
module and balance of plant.
* Under contract to the U.S. Army, Construction Engineering Research
Laboratory (CERL) the Company is developing an electrochemical
hydrogen separation (EHS) system that can be combined with a DFC
fuel cell to cost effectively produce electricity, thermal energy
and hydrogen, which can be used as a fuel for hydrogen vehicles and
industrial uses. During the quarter the active area of the
prototype separation system was scaled up to 1,000 cm2 and
successfully tested for 2,000 hours.
* In a parallel effort, FuelCell Energy, under a Small Business
Innovation Research grant from the Department of Energy, is
developing an electrochemical hydrogen compressor that will
electrochemically compress hydrogen for storage or transportation.
This system is expected to be more cost effective and efficient
than competing mechanical technologies. During the quarter,
FuelCell Energy met the program objectives by maintaining pressure
in excess of 2,500 pounds per square inch for 500 hours.
Outlook for 2008
In 2008, the Company
expects product sales orders from POSCO, its alliance partner in South Korea,
the California marketplace and other markets. In Connecticut, the Company is
awaiting the DPUC's final decision, scheduled for January 9, 2008, on the 68
MW of FuelCell Energy projects that were selected by Connecticut's Clean
Energy Fund in 2007.
"Fuel cell
technology is increasingly gaining traction with public policy makers,
municipalities and industrial companies as an ultra-clean, reliable source of
distributed energy. In addition to the positive trends that continue in our
existing geographic markets, global mandates for clean energy will result in
a significantly expanded addressable market for our products, domestically
and internationally," commented Mr. Brdar.
"As we expand in
our markets, we will continue to target 20 percent reductions in the costs of
our MW-class products," said Mr. Brdar. "These cost-out
initiatives, along with the added order volume we expect to see from our
target markets this year, will bring costs very close to grid parity, further
expanding the market for our DFC fuel cells and keeping us solidly on the
path to profitability."
Conference Call
Information
FuelCell Energy will
host a conference call with investors beginning at 10:00 a.m. Eastern Time on
December 11th to discuss the fourth quarter and year-end 2007 results.
The details for
accessing the live call are as follows:
* From the U.S. or Canada please dial 800-839-7875;
* Outside the U.S. and Canada, please call 913-312-1493;
* The passcode is FuelCell Energy;
* The live webcast will be on the Investors section of the Company's
website at www.fuelcellenergy.com.
An audio replay of the
conference call will also be available approximately two hours after the
conclusion of the call until Tuesday, December 18, 2007 at midnight:
* From the U.S. and Canada please dial 888-203-1112;
* Outside the U.S. or Canada please call 719-457-0820;
* Enter confirmation code 1672482;
* The webcast will also be archived on the Investors section of the
Company's website at www.fuelcellenergy.com.
About FuelCell Energy,
Inc.
FuelCell Energy is the
world leader in the development and production of stationary fuel cells for
commercial, industrial, municipal and utility customers. FuelCell Energy's
secure, ultra-clean and high efficiency DFC(r) fuel cells are generating
power at over 60 installations worldwide. The company's power plants have
generated more than 200 million kWh of power using a variety of fuels
including renewable wastewater gas, biogas from beer and food processing as
well as natural gas and other hydrocarbon fuels. FuelCell Energy has
partnerships with major power plant developers, trading companies and power
companies around the world. The company also receives substantial funding
from the U.S. Department of Energy and other government agencies for the
development of leading edge technologies such as hybrid fuel cell/turbine
generators and solid oxide fuel cells. For more information please visit our
website at www.fuelcellenergy.com.
This news release
contains forward-looking statements, including statements regarding the
Company's plans and expectations regarding the continuing development and
commercialization of its fuel cell technology. All forward-looking statements
are subject to risks and uncertainties that could cause actual results to
differ materially from those projected. Factors that could cause such a
difference include, without limitation, the risk that commercial field trials
of the Company's products will not occur when anticipated, general risks
associated with product development, manufacturing, changes in the utility
regulatory environment, potential volatility of energy prices, rapid
technological change, competition, and the Company's ability to achieve its
sales plans and cost reduction targets, as well as other risks set forth in
the Company's filings with the Securities and Exchange Commission. The
forward-looking statements contained herein speak only as of the date of this
press release. The Company expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any such statement to reflect
any change in the Company's expectations or any change in events, conditions
or circumstances on which any such statement is based.
Direct FuelCell, DFC,
DFC/T and FuelCell Energy, Inc. are all registered trademarks of FuelCell
Energy, Inc.
FUELCELL ENERGY, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
October 31, October 31,
2007 2006
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 92,997 $ 26,247
Investments: U.S. treasury securities 60,634 81,286
Accounts receivable, net of allowance for
doubtful accounts of $63 and $43,
respectively 10,063 9,402
Inventories, net 29,581 14,121
Other current assets 7,730 2,653
--------- ---------
Total current assets 201,005 133,709
Property, plant and equipment, net 39,612 48,136
Investments: U.S. treasury securities -- 13,054
Investment and loan to affiliate 12,216 11,483
Other assets, net 355 270
--------- ---------
Total assets $ 253,188 $ 206,652
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and other
liabilities $ 924 $ 653
Accounts payable 12,397 12,508
Accrued liabilities 8,511 6,418
Deferred license fee income -- 38
Deferred revenue and customer deposits 20,486 9,785
--------- ---------
Total current liabilities 42,318 29,402
Long-term deferred revenue 4,401 5,162
Long-term debt and other liabilities 613 678
--------- ---------
Total liabilities 47,332 35,242
--------- ---------
Redeemable minority interest 11,884 10,665
Redeemable preferred stock ($0.01 par value,
liquidation preference of $64,120 at
October 31, 2007 and 2006.) 59,950 59,950
Shareholders' equity:
Common stock ($.0001 par value); 150,000,000
shares authorized at October 31, 2007 and
2006; 68,085,059 and 53,130,901 shares
issued and outstanding at October 31, 2007
and 2006, respectively 7 5
Additional paid-in capital 571,946 470,045
Accumulated deficit (437,931) (369,255)
Treasury stock, Common, at cost (12,282 and
15,583 shares in 2007 and 2006,
respectively.) (126) (158)
Deferred compensation 126 158
--------- ---------
Total shareholders' equity 134,022 100,795
--------- ---------
Total liabilities and shareholders' equity $ 253,188 $ 206,652
========= =========
FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Dollars in thousands, except share and per share amounts)
Three Months Ended
October 31,
2007 2006
---- ----
Revenues:
Product sales and revenues $ 10,950 $ 6,651
Research and development contracts 5,523 2,476
---------- ----------
Total revenues 16,473 9,127
---------- ----------
Costs and expenses:
Cost of product sales and revenues 17,148 21,194
Cost of research and development contracts 4,680 2,047
Administrative and selling expenses 4,759 4,521
Research and development expenses 7,002 6,816
---------- ----------
Total costs and expenses 33,589 34,578
---------- ----------
Loss from operations (17,116) (25,451)
License fee income, net -- (3)
Interest expense (12) (27)
Loss from equity investments (231) (113)
Interest and other income, net 1,783 1,227
---------- ----------
Loss before redeemable minority interest (15,576) (24,367)
Redeemable minority interest (420) 107
---------- ----------
Loss before provision for income taxes (15,996) (24,260)
Provision for income taxes -- --
---------- ----------
Net loss (15,996) (24,260)
Preferred stock dividends (802) (802)
---------- ----------
Net loss to common shareholders $ (16,798) $ (25,062)
========== ==========
Loss per share basic and diluted:
Net loss per share to common shareholders $ (0.25) $ (0.47)
Basic and diluted weighted average shares
outstanding 67,994,829 52,931,316
FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Dollars in thousands, except share and per share amounts)
Fiscal Year Ended
October 31,
2007 2006
---- ----
Revenues:
Product sales and revenues $ 32,517 $ 21,514
Research and development contracts 15,717 11,774
---------- ----------
Total revenues 48,234 33,288
---------- ----------
Costs and expenses:
Cost of product sales and revenues 61,827 61,526
Cost of research and development contracts 13,438 10,330
Administrative and selling expenses 18,625 17,759
Research and development expenses 27,489 24,714
---------- ----------
Total costs and expenses 121,379 114,329
---------- ----------
Loss from operations (73,145) (81,041)
License fee income, net 34 42
Interest expense (84) (103)
Loss from equity investments (1,263) (828)
Interest and other income, net 7,437 5,718
---------- ----------
Loss before redeemable minority interest (67,021) (76,212)
Redeemable minority interest (1,653) 107
---------- ----------
Loss before provision for income taxes (68,674) (76,105)
Provision for income taxes -- --
---------- ----------
Net loss (68,674) (76,105)
Preferred stock dividends (3,208) (8,117)
---------- ----------
Net loss to common shareholders $ (71,882) $ (84,222)
========== ==========
Loss per share basic and diluted:
Net loss per share to common shareholders $ (1.16) $ (1.65)
Basic and diluted weighted average shares
outstanding 61,990,555 51,046,843
This news release was distributed by PrimeNewswire, www.primenewswire.com
SOURCE: FuelCell Energy, Inc.
FuelCell Energy, Inc.
Lisa Lettieri
203-830-7494
ir@fce.com