FuelCell
Energy Reports First Quarter 2008 Results and Latest Accomplishments
Mar 5, 2008
(PrimeNewswire via COMTEX News Network) --
* $29 million of first quarter orders highest in FuelCell Energy
history
* First quarter product sales and revenues doubled over the prior
year first quarter
* Product backlog increased 131 percent over prior year to
$84.7 million
* First quarter net cash use was $15.1 million, in-line with Company
expectations
DANBURY, Conn., March
5, 2008 (PRIME NEWSWIRE) -- FuelCell Energy, Inc. (Nasdaq:FCEL), a leading
manufacturer of high efficiency, ultra-clean power plants using renewable and
other readily available fuels for commercial, industrial, government and
utility customers, today reported results and accomplishments for its first
quarter ended January 31, 2008.
Financial Results
FuelCell Energy
reported total revenues for the first quarter of fiscal 2008 of $15.0 million
compared to $6.8 million in the same period last year. Product sales and
revenues doubled to $9.8 million from $4.9 million in the 2007 first quarter.
Revenues grew due to increased orders for megawatt-class (MW-class) power plants.
The product cost-to-revenue ratio improved by 27 percent to 1.99 compared to
the 2.73 reported in the prior year quarter. The improved product margin
versus the prior year quarter is primarily attributable to increased sales of
MW-class power plants and reduction of unit costs across all product lines. Compared
to the fourth quarter of 2007, the cost ratio was impacted by product mix,
production ramp related costs, increased inventory levels and service costs.
For the first fiscal
quarter of 2008, orders totaled 9.45 megawatts (MW) representing $28.8
million in product sales. The Company's product backlog as of January 31,
2008, including long-term service agreements, was $84.7 million. This
represents a 131 percent increase over last year's $36.7 million, and a 47
percent increase over the fourth quarter's backlog of $57.8 million. The
increase in backlog was primarily driven by MW-class orders from South Korea
and California customers.
Research and
development contract revenue was $5.3 million, up from $1.9 million in the
2007 first quarter resulting from increased activity on the Company's
multi-MW coal based solid oxide contract with the U.S. Department of Energy. Research
and development contract backlog was $13.2 million as of January 31, 2008 compared
to $29.1 million at January 31, 2007.
The first quarter net
loss to common shareholders improved to $19.7 million, or $0.29 per basic and
diluted share from $20.0 million, or $0.38 per basic and diluted share, in
the same period last year. The Company doubled product sales and revenues but
lowered total net loss due to improving product margins. Loss on product
sales and revenues increased by $1.2 million which was partially offset by a
margin improvement of $0.8 million on research and development contracts. Administrative
and selling expenses were approximately $0.4 million higher due to increased
marketing costs. Research and development expenses were lower by $1.4 million
over the prior year as certain development objectives were met.
Total cash and
investments were $138.6 million as of January 31, 2008. First quarter net
cash use was $15.1 million compared to $22.3 million in the same period last
year. Capital spending for the first quarter was approximately $1.5 million
and depreciation expense for the period was $2.2 million.
Corporate Highlights
"Our $29 million
of orders is a record quarterly performance for FuelCell Energy," said
R. Daniel Brdar, Chairman and CEO. "The repeat order flow in Asia and
California and expanding production capacity create a strong platform for
continued growth."
Leadership in Key
Markets
South Korea: FuelCell
Energy's manufacturing and distribution partner, POSCO Power, ordered two
power plants during the first quarter, totaling 4.8 MW and has ordered 12 MW
of MW-class power plants in the year since it signed the manufacturing and
distribution agreement with FuelCell Energy. POSCO Power plans to open a 50
MW fuel cell balance of plant manufacturing facility by the end of 2008 and
by 2010, intends to have 100 MW of annual production capacity in place. The
balance of plants produced at this facility will be combined with FuelCell
Energy-produced fuel cell modules and sold to POSCO Power customers.
California: Biogas
operations remain a strong vertical market for FuelCell Energy's DFC power
plants. To date, fuel cells operating on renewable fuel represent 56 percent
of the Company's California installations and backlog and 25 percent of its
worldwide installations and backlog. These installations, including food and
beverage operations and wastewater treatment facilities, use anaerobic
digesters to produce methane. Our fuel cells use this biogas to produce
electricity and the fuel cells' byproduct heat facilitates the operation of
the anaerobic digestion process. Customers using fuel cells in this type of
combined heat and power application can achieve efficiencies up to 80
percent. Fuel cells operating on biogas qualify as renewable power generation
in the 28 Renewable Portfolio Standard states and Washington D.C.
Eastern Municipal
Water District (EMWD) in southern California ordered three DFC300 power
plants to provide power for its wastewater operations. By using DFC fuel
cells, EMWD expects to reduce its energy costs, and carbon footprint by
10,400 tons annually.
The Linde Group, the
world's largest industrial gases company, ordered a DFC300 and three DFC1500
power plants, adding 3.9 MW to the Company's backlog this quarter. The three
DFC1500 units will operate at customer sites in the San Diego area on biogas
that Linde transports from the Pt. Loma Wastewater Treatment (PLWT) facility.
The DFC300 will operate on biogas produced at PLWT and power Linde's
processing operations.
Connecticut: In
January 2008, Connecticut's Department of Public Utility Control (DPUC)
approved 16.2 MW of projects under Project 150 that include six of the
Company's DFC3000 power plants. These projects represent an estimated $43
million in potential product sales that can be added to backlog after project
developers finalize electricity purchase agreements and project financing. The
DPUC also gave contingent approval to an additional fuel cell project, the
19.6 MW Danbury "Triangle" project.
Cost Out
FuelCell Energy's cost
out program is a key part of its strategy to achieve profitability. During
the first quarter, the Company's new five-year stack went into production
which extends the life of the DFC fuel cell's core technology by two years
and significantly reduces cost of operation. In 2008, FuelCell Energy is
targeting cost reductions of 20 percent for the MW-class DFC1500 and DFC3000
power plants through a power output increase, strategic sourcing and
continued manufacturing improvements.
Manufacturing
In January 2008,
FuelCell Energy increased its manufacturing production rate to 25 MW annually
from 11 MW to meet demand from South Korea, California and Connecticut
customers. The Company is also increasing production capacity to 60 MW
annually from 50 MW. In connection with this project, the Connecticut
Development Authority approved a $4 million loan to expand the Company's
Torrington, Connecticut manufacturing facility, expand its workforce, and
extend its Torrington facility lease through 2015.
Conference Call
Information
FuelCell Energy will
host a conference call with investors beginning at 10:00 a.m. Eastern Time on
March 6th to discuss the first quarter 2008 results.
The details for
accessing the live call are as follows:
* From the U.S. or Canada please dial 877-627-6580;
* Outside the U.S. and Canada, please call 719-325-4916;
* 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 Thursday March 13th 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 3740989;
* 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 ultra-clean and high efficiency DFC(r)
fuel cells are generating power at over 40 locations 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, 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 Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)
Three Months Ended
January 31,
2008 2007
---------- ----------
Revenues:
Product sales and revenues $ 9,768 $ 4,899
Research and development contracts 5,251 1,935
---------- ----------
Total revenues 15,019 6,834
---------- ----------
Costs and expenses:
Cost of product sales and revenues 19,410 13,382
Cost of research and development contracts 4,440 1,944
Administrative and selling expenses 4,812 4,417
Research and development expenses 5,485 6,855
---------- ----------
Total costs and expenses 34,147 26,598
---------- ----------
Loss from operations (19,128) (19,764)
License fee income, net -- 34
Interest expense (32) (27)
Loss from equity investments (444) (217)
Interest and other income, net 1,125 1,129
---------- ----------
Loss before redeemable minority interest (18,479) (18,845)
Redeemable minority interest (438) (391)
---------- ----------
Loss before provision for income taxes (18,917) (19,236)
Provision for income taxes -- --
---------- ----------
Net loss (18,917) (19,236)
Preferred stock dividends (802) (802)
---------- ----------
Net loss to common shareholders $ (19,719) $ (20,038)
========== ==========
Loss per share basic and diluted:
Net loss per share to common shareholders $ (0.29) $ (0.38)
Basic and diluted weighted average shares
outstanding 68,204,735 53,172,189
FUELCELL ENERGY, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
January 31,
2008 October 31,
Unaudited 2007
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 81,865 $ 92,997
Investments: U.S. treasury securities 54,635 60,634
Accounts receivable, net of allowance for
doubtful accounts of $37 and $63,
respectively 10,402 10,063
Inventories, net 35,411 29,581
Other current assets 7,513 7,730
---------- ----------
Total current assets 189,826 201,005
Property, plant and equipment, net 38,761 39,612
Investments: U.S. treasury securities 2,079 --
Investment and loan to affiliate 11,792 12,216
Other assets, net 404 355
---------- ----------
Total assets $ 242,862 $ 253,188
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and other
liabilities $ 849 $ 924
Accounts payable 9,746 9,516
Accounts payable due to affiliate 1,372 2,881
Accrued liabilities 9,471 8,511
Deferred license fee income 600 --
Deferred revenue and customer deposits 27,139 20,486
---------- ----------
Total current liabilities 49,177 42,318
Long-term deferred revenue 3,948 4,401
Long-term debt and other liabilities 579 613
---------- ----------
Total liabilities 53,704 47,332
---------- ----------
Redeemable minority interest 12,322 11,884
Redeemable preferred stock ($0.01 par value,
liquidation preference of $64,120 at
January 31, 2008 and October 31, 2007.) 59,950 59,950
Shareholders' equity:
Common stock ($.0001 par value); 150,000,000
shares authorized at January 31, 2008 and
October 31, 2007; 68,291,750 and 68,085,059
shares issued and outstanding at
January 31, 2008 and October 31, 2007,
respectively 7 7
Additional paid-in capital 573,725 571,944
Accumulated deficit (456,846) (437,929)
Treasury stock, Common, at cost (12,282
shares at January 31, 2008 and
October 31, 2007.) (126) (126)
Deferred compensation 126 126
---------- ----------
Total shareholders' equity 116,886 134,022
---------- ----------
Total liabilities and shareholders'
equity $ 242,862 $ 253,188
========== ==========
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