FuelCell
Energy Reports Fourth Quarter Results and Latest Accomplishments
- Record
quarterly revenue, up 76 percent from one year ago
- $63
million of cash and investments in U.S Treasuries at October 31, 2011
- Executing
global growth strategy with markets in Asia, Europe, and Latin America
DANBURY,
Conn., Dec. 12, 2011 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc. (Nasdaq:FCEL),
the world's leading manufacturer of ultra-clean, efficient and reliable fuel
cell power plants, today reported results for its fourth quarter and fiscal
year ended October 31, 2011 along with its latest accomplishments.
Financial
Results
Fourth
Quarter 2011
FuelCell Energy
(the Company) reported total revenues for the fourth quarter of 2011 of $34.7
million compared to $19.7 million in the same period last year. Product sales
and revenues in the fourth quarter increased 94 percent to $33.3 million
compared to $17.2 million in the prior year quarter, reflecting higher demand
for megawatt-class Direct FuelCell� (DFC�) power plants. Fourth quarter product
revenue included $25.1 million of power plants and fuel cell kits, revenue from
power plant component sales and installation services of $4.8 million, and
revenue from service and power purchase agreements of $3.4 million.
� � Product sales and service backlog totaled $209.9 million as of
October 31, 2011 compared to $154.3 million as of October 31, 2010.� Product
backlog was $131.8 million and $87.2 million as of October 31, 2011 and 2010,
respectively.� Service agreement backlog was $78.1 million and $67.1
million as of October 31, 2011 and 2010, respectively.� � �
� �
Research
and development contract revenue was $1.4 million for the fourth quarter of
2011 compared to $2.5 million for the fourth quarter of 2010, decreasing due to
lower activity under the solid oxide fuel cell development contract with the
U.S. Department of Energy compared to the prior year period.� The
Company's research and development contract backlog totaled $15.8 million as of
October 31, 2011 compared to $9.7 million as of October 31, 2010 with the
increase due to the awarding of two contracts by the U.S. Department of Energy
during the fourth quarter of 2011, including a $3.0 million carbon capture
contract and a $1.0 million contract to further research on hydrogen separation
and compression.�
Total
gross profit was $0.4 million in the fourth quarter of 2011, compared to a
gross loss of $3.6 million in the fourth quarter of 2010.� The product
cost-to-revenue ratio was 0.98-to-1.00 for the fourth quarter of 2011 compared
to 1.21-to-1.00 for the fourth quarter of 2010. Margins for product sales and
revenues improved $4.3 million compared to the fourth quarter of
2010.� � Improvements in cost ratio and margin compared to the prior
year period are primarily attributable to higher production volume and lower
product costs.�
Loss from
operations for the fourth quarter of 2011 decreased to $7.9 million compared to
$12.1 million for the comparable prior year period as higher sales volume drove
cost improvements.� Net loss to common shareholders for the fourth quarter
of 2011 decreased to $7.9 million, or $0.06 per basic and diluted share,
compared to $12.9 million or $0.11 per basic and diluted share in the fourth
quarter of 2010. � The year-over-year improvements are primarily the
result of increasing volumes of commercial product sales and lower product
costs. �
Full Year 2011
For the fiscal year ended October 31, 2011, FuelCell Energy
reported revenue of $122.6 million compared to $69.8 million for the fiscal
year ended October 31, 2010, an increase of 76 percent.� Product sales and
revenues were $115.1 million compared to $59.2 million for the prior year
period. � Research and development contract revenue was $7.5 million
compared to $10.6 million for the prior year period.
The product cost-to-revenue ratio improved to 1.11-to-1.00
compared to 1.32-to-1.00 for the same period one year ago due to sales of
higher margin products and improved absorption of fixed overhead costs from
increased volume. � Cost of product sales and revenues for the fiscal year
ended October 31, 2011 exceeded product sales and revenues by $12.2 million,
compared to $18.8 million for the comparable prior year period as a result of
higher sales volume and lower product costs.� Cost of product sales and
revenues for the fiscal year ended October 31, 2011 included a charge of $8.3
million recorded in fiscal 2011 related to a repair and upgrade program.�
Loss from operations for the fiscal year ended October 31, 2011
was $45.7 million, compared to $54.4 million for the fiscal year ended October
31, 2010.� Excluding the charges incurred in 2011 related to the repair
and upgrade program, adjusted loss from operations for the fiscal year ended
October 31, 2011 was $37.4 million, an improvement of 31 percent compared to
the prior year period.� The year-over-year improvement is the result of
increasing volumes of commercial product sales, lower product costs and lower
operating expenses.
Net loss to common shareholders for the fiscal year ended October
31, 2011 was $57.9 million or $0.47 per basic and diluted share compared to
$58.9 million or $0.63 per basic and diluted share for the fiscal year ended
October 31, 2010.� Excluding the charges incurred in 2011 related to the
repair and upgrade program and the modification and revaluation of the Series 1
Preferred Shares (as explained in our reconciliation of GAAP to non-GAAP
information), net loss to common shareholders for the fiscal year ended October
31, 2011 was $40.6 million or $0.33 per basic and diluted share.�
Cash and investments in U.S. Treasuries
Total cash, cash equivalents and investments in U.S. Treasuries
were $63.4 million as of October 31, 2011. � Net cash, cash equivalents
and investments generated in the fourth quarter of 2011 was $13.9 million,
consisting of $9.5 million net cash generated from operating activities
reflecting milestone payments from contracts in backlog, $2.2 million net cash
used in investing activities, and $6.6 million net cash generated from
financing activities. � Financing activities in the fourth quarter included
net proceeds of approximately $8.7 million from the issuance of 10 million
shares under the Put instrument associated with the January 2011 Registered
Direct common stock offering transaction, common stock sales of $1.7 million,
borrowings on the revolving line of credit of $1.4 million, partially offset by
preferred stock dividends, repayment of debt and return of capital payments
totaling $5.2 million.� Capital spending for the fourth quarter of 2011
was $2.2 million and depreciation expense was $1.6 million.
Net use of cash, cash equivalents and investments for the fiscal
year ended October 31, 2011 was $21.6 million, excluding revolver borrowings of
$4.0 million and net proceeds of $26.5 million from the registered direct
offering of common stock, compared to $42.4 million for the prior year,
excluding net proceeds of $32.1 million from the public offering of common
stock.� Capital spending for fiscal year 2011 was $3.4 million and
depreciation expense was $6.4 million.
Forward-Looking 2012 Financial Guidance
The Company expects to continue the current annual production
run-rate of 56 MW in the first quarter of 2012 and adjust production during the
fiscal year as order flow warrants. � At this annual run-rate, product
sales and revenues are expected to be in the range of approximately $31 million
to $34 million per quarter. Fuel cell kits are being produced at a rate of 2.8
MW per month through October 2013 to fulfill the previously announced 70 MW
order from POSCO Power.� Planned production in fiscal 2012 includes 33.6
MW of fuel cell kits, 10 MW for other backlog and scheduled re-stacks under
long-term service agreements and the balance reserved for projected new orders
requiring delivery in 2012.
Fiscal 2012 operating cash utilization, based on the current production
run-rate and projected order flow, is forecasted to be approximately $17
million to $22 million. Cash used in financing activities in fiscal year 2012
will include approximately $7 million to $8 million of scheduled cash payments
to preferred stockholders. Capital expenditures, primarily to enable capacity
expansion, are estimated to be $3 million to $5 million for fiscal year 2012
and depreciation expense is estimated to be approximately $7 million to $9
million.
Corporate and Market Highlights
"Our business model is well suited for global expansion as
the attributes of our power plants provide financially attractive solutions for
customers and we are able to offer localization of certain aspects of the power
plants, providing sustainable local job creation," said Chip Bottone,
President and CEO of FuelCell Energy, Inc.� "We continue to align
ourselves with a select group of partners that understand the power industry
and are well positioned to drive market growth.� This is illustrated by
our recent partnership announcement with Abengoa to build a market for
renewable biogas and liquid biofuels in Europe and Latin America and our
announcement that POSCO Power is expanding in Southeast Asia."�
"Our installed base has recently grown by more than 19 MW at
nine different sites, including eight installations in the USA, with our
installation services and service agreements diversifying our revenue
sources," continued Mr. Bottone.
In the United States during the fourth quarter of 2011, we
received an order for a 1.4 MW power plant from a renewable energy investor for
installation at a university.� The University will reduce its operating
costs and the investor earns attractive returns, partially driven by the
ability of the power plant to provide both electricity and steam from the same
unit of fuel.�
In Asia, POSCO Power continues to expand the fuel cell market in
South Korea as they grow utility-scale installations, pursue commercial
building opportunities with a demonstration 100 kilowatt (kW) unit, and develop
export opportunities in Southeast Asia, beginning with Indonesia.� As the
South Korean government implements a compulsory mandate for fuel cell power
plants in the new construction of government, office and apartment buildings in
excess of 1,000 square meters (about 11,000 square feet), the market potential
for a small scale power plant is significant.� The Company completed and
shipped the two demonstration 100 kW fuel cell modules under the joint
development agreement with POSCO Power. One plant was installed at a hospital
and the second plant is being installed at a public park.
The European power generation market values efficiency and low
emissions, and represents an untapped market for ultra-clean baseload
distributed generation fuel cell power plants. � Abengoa is an attractive
partner as they understand the power industry, possess sufficient scale and
reach to develop and grow a fuel cell market in the targeted geographies, and
have the appropriate relationships to help educate regulatory bodies on the
advantages of ultra-clean baseload distributed generation. �
Production and Installation Updates
The Company continued production levels at an annual run-rate of
56 MW during the fourth quarter of 2011, consistent with production levels at
the end of the prior quarter.� � In total, the Company produced 46 MW
in fiscal year 2011 compared to 22 MW in fiscal year 2010. � �
Fuel cell kit shipments commenced during the fourth quarter of
2011 to begin fulfilling the 70 MW order from POSCO Power and shipments are on
schedule at a rate of 2.8 MW per month.�
The Company has completed approximately 50 percent of the repairs
related to the previously announced repair and upgrade program for a select
group of fuel cell stacks produced between 2007 and early 2009.� The
program is on schedule and the Company has reduced its estimate of remaining
costs by $0.5 million based on actual costs incurred through the end of fiscal
year 2011. �
FuelCell Energy has recently completed installation and
commissioning of a number of DFC plants including:
- 2.8 MW of plants sold to Pacific Gas & Electric are
installed and operating including 1.4 MW at California State University,
East Bay and 1.4 MW at San Francisco State University
- 4.5 MW of plants sold to a project investor are
undergoing commissioning including two plants located at municipal
locations in San Diego, CA and the third at the University of California �
San Diego
- Two 300 kW plants sold to Eastern Municipal Water
District, CA are installed and operating�
- 300 kW plant installed and operating at U.S. Army Base
Camp Parks, in San Jose, CA
- 300 kW plant installed at Carla's Pasta, a frozen food
processor in CT, is undergoing commissioning
POSCO Power completed installation of DFC power plants at two fuel
cell parks during the fourth quarter of 2011, using fuel cell modules provided
by FuelCell Energy including:
- 5.6 MW installed and commissioned in Daegu City, South
Korea to complete an 11.2 MW fuel cell park, owned by an investor that
sells the power to the Korea Electric Power Corporation (KEPCO) and the
heat to a neighboring municipal wastewater treatment facility
- 5.6 MW project in Busan, South Korea, owned by the same
investor with power sold to KEPCO
Advanced Technology Programs
During the fourth quarter of 2011, the Company received two awards
from the U.S. Department of Energy (DOE) including a $3.0 million award to
evaluate the use of Direct FuelCell technology to efficiently and cost
effectively separate carbon dioxide (CO2) from the emissions of existing coal
fired power plants.� Coal is an abundant, low cost, domestic resource
which is widely used to generate electricity, but with a large carbon
footprint. � Cost effective and efficient carbon capture from coal-fired
power plants potentially represents a large global market as it could enable
clean use of this domestic fuel.
The second award for approximately $1.0 million is to further
develop and demonstrate existing solid-state electrochemical hydrogen
separation and compression (EHSC) technology.� The Company is developing a
modification of the DFC power plant system to allow separation and purification
of excess hydrogen as a means of distributed hydrogen production.� The
EHSC technology advances the concept of using DFC power plants to co-produce
hydrogen as well as electricity and heat more cost effectively than
conventional hydrogen separation, purification, and compression
equipment.�
Presentation Changes to the Consolidated
Statement of Operations
Effective for the fourth quarter of 2011, Gross profit/(loss) is
included in the Consolidated Statement of Operations as a separate line item to
assist investors with analyzing and understanding the financial performance of
the Company.�
Presentation of Non-GAAP Information
This press release presents certain results both with and without
non-recurring charges related to a repair and upgrade program and the Series 1
Preferred Modification. The presentation of results that exclude these items
are non-GAAP financial measures that should be considered in addition to, and
should not be considered superior to, or as a substitute for, the presentation
of results determined in accordance with generally accepted accounting
principals (GAAP). � Reconciliations of the non-GAAP financial measures to
the most directly comparable GAAP financial measures are provided below.
Management believes that the non-GAAP financial measures presented provide a
better comparison to prior periods because the adjustments do not affect the
on-going operations of the Company. Management uses these non-GAAP financial
measures to evaluate the operating results of the Company's business against
prior year results and its operating plan, and to forecast and analyze future
periods. In addition, Management presents the most comparable GAAP measures
ahead of non-GAAP measures and provides a reconciliation that indicates and
describes the adjustments made.
Cautionary Language�
This news release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, including, without limitation, statements with respect to
the Company's anticipated financial results for fiscal 2012 and statements
regarding the Company's plans and expectations regarding the continuing
development, commercialization and financing of its fuel cell technology and
business plans. 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, changes to projected deliveries and order flow, changes to
production rate and product costs, general risks associated with product
development, manufacturing, changes in the regulatory environment, customer
strategies, changes in critical accounting policies,� 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.
About FuelCell Energy
Direct FuelCell� power plants are generating ultra-clean,
efficient and reliable power at more than 50 locations worldwide.� With
over 180 megawatts of power generation capacity installed or in backlog,
FuelCell Energy is a global leader in providing ultra-clean baseload
distributed generation to utilities, industrial operations, universities,
municipal water treatment facilities, government installations and other
customers around the world.� The Company's power plants have generated
over 950 million kWh of power using a variety of fuels including renewable
biogas from wastewater treatment and food processing, as well as clean natural
gas.� For more information please visit our website at www.fuelcellenergy.com
Direct FuelCell, DFC, DFC/T, DFC-H2 and FuelCell Energy, Inc. are
all registered trademarks of FuelCell Energy, Inc. � DFC-ERG is a
registered trademark jointly owned by Enbridge, Inc. and FuelCell Energy, Inc.
Conference Call Information
FuelCell Energy will host a conference call with investors
beginning at 10:00 a.m. Eastern Time on December 13, 2011 to discuss the Fourth
Quarter and fiscal year 2011 results.
Participants can access the live call via webcast on the Company
website or by telephone as follows:
- The live webcast of this call will be available on the
Company website at www.fuelcellenergy.com.�
To listen to the call, select 'Investors' on the home page, then click on
'events & presentations' and then click on 'Listen to the webcast'
- Alternatively, participants in the U.S. or Canada can
dial 877-303-7005
- Outside the U.S. and Canada, please call 678-809-1045
- The passcode is 'FuelCell Energy'
The webcast of the conference call will be archived on the
Company's Investors' page at www.fuelcellenergy.com.� Alternatively, the replay of
the conference call will be available approximately two hours after the
conclusion of the call until midnight Eastern Time on December 19, 2011:
- From the U.S. and Canada please dial 855-859-2056
- Outside the U.S. or Canada please call 404-537-3406
- Enter confirmation code 31578693
FUELCELL ENERGY, INC.
Consolidated Balance
Sheets
(unaudited)
(Amounts in thousands, except
share and per share amounts)
|
�
|
�
|
�
|
�
|
October 31,
2011
|
�
|
October 31,
2010
|
|
|
|
ASSETS
|
�
|
�
|
�
|
|
|
|
Current assets:
|
�
|
�
|
�
|
|
|
|
Cash and cash equivalents
|
$ 51,415
|
�
|
$ 20,467
|
|
|
|
Investments � U.S. treasury
securities
|
12,016
|
�
|
25,019
|
|
|
|
Accounts receivable, net
|
21,950
|
�
|
18,066
|
|
|
|
Inventories, net
|
40,101
|
�
|
33,404
|
|
|
|
Other current assets
|
7,466
|
�
|
5,253
|
|
|
|
Total current assets
|
132,948
|
�
|
102,209
|
|
|
|
�
|
�
|
�
|
�
|
|
|
|
Property, plant and equipment, net
|
23,925
|
�
|
26,679
|
|
|
|
Investments � U.S. treasury
securities
|
�
|
�
|
9,071
|
|
|
|
Investment in and loans to
affiliate
|
10,466
|
�
|
9,837
|
|
|
|
Other assets, net
|
16,291
|
�
|
2,733
|
|
|
|
Total assets
|
$ 183,630
|
�
|
$ 150,529
|
|
|
|
�
|
�
|
�
|
�
|
|
|
|
LIABILITIES AND EQUITY
|
�
|
�
|
�
|
|
|
|
Current liabilities:
|
�
|
�
|
�
|
|
|
|
Current portion of long-term debt
and other liabilities
|
$ 5,056
|
�
|
$ 976
|
|
|
|
Accounts payable
|
14,143
|
�
|
10,267
|
|
|
|
Accounts payable due to affiliate
|
104
|
�
|
575
|
|
|
|
Accrued liabilities
|
26,894
|
�
|
16,721
|
|
|
|
Deferred revenue
|
64,114
|
�
|
25,499
|
|
|
|
Preferred stock obligation of
subsidiary
|
� 3,854
|
�
|
�
|
|
|
|
Total current liabilities
|
114,165
|
�
|
54,038
|
|
|
|
�
|
�
|
�
|
�
|
|
|
|
Long-term deferred revenue
|
7,000
|
�
|
8,042
|
|
|
|
Long-term preferred stock
obligation of subsidiary
|
12,878
|
�
|
�
|
|
|
|
Long-term debt and other
liabilities
|
� 4,105
|
�
|
4,056
|
|
|
|
Total liabilities
|
138,148
|
�
|
66,136
|
|
|
|
Redeemable preferred stock of
subsidiary
|
�
|
�
|
16,849
|
|
|
|
Redeemable preferred stock
(liquidation preference of $64,020 at October 31, 2011 and October 31, 2010)
|
59,857
|
�
|
59,857
|
|
|
|
Total (Deficit) Equity:
|
�
|
�
|
�
|
|
|
|
Shareholders' (deficit) equity
|
�
|
�
|
�
|
|
|
|
Common stock ($.0001 par value;
225,000,000 shares authorized; 138,400,497 and 112,965,725 shares issued and
outstanding at October 31, 2011 and October 31, 2010, respectively)
|
13
|
�
|
11
|
|
|
|
Additional paid-in capital
|
687,857
|
�
|
663,951
|
|
|
|
Accumulated deficit
|
(701,336)
|
�
|
(655,623)
|
|
|
|
Accumulated other comprehensive
income
|
15
|
�
|
11
|
|
|
|
Treasury stock, Common, at cost
(5,679 shares at October 31, 2011 and October 31, 2010)
|
�
(53)
|
�
|
�
(53)
|
|
|
|
Deferred compensation
|
� � 53
|
�
|
53
|
|
|
|
Total shareholders' (deficit)
equity
|
(13,451)
|
�
|
8,350
|
|
|
|
Noncontrolling interest in
subsidiaries
|
(924)
|
�
|
(663)
|
|
|
|
Total (deficit) equity
|
(14,375)
|
�
|
7,687
|
|
|
|
Total liabilities and (deficit)
equity
|
$ 183,630
|
�
|
$ 150,529
|
|
|
|
�
|
FUELCELL ENERGY, INC.
|
Consolidated Statements of Operations
|
(unaudited)
|
(Amounts in thousands, except share and per share amounts)
|
�
|
�
|
�
|
�
|
Three Months Ended
October 31,
|
�
|
2011
|
2010
|
Revenues:
|
�
|
�
|
Product sales and revenues
|
$ 33,289
|
$ 17,193
|
Research and development contracts
|
1,434
|
2,508
|
Total revenues
|
34,723
|
19,701
|
�
|
�
|
�
|
Costs of revenues:
|
�
|
�
|
Cost of product sales and revenues
|
32,698
|
20,877
|
Cost of research and development
contracts�
|
1,586
|
2,428
|
Total cost of revenues
|
34,284
|
23,305
|
�
|
�
|
�
|
Gross profit/(loss)
|
439
|
(3,604)
|
�
|
�
|
�
|
Operating expenses:
|
�
|
�
|
Administrative and selling
expenses
|
4,217
|
4,262
|
Research and development expenses
|
4,106
|
4,235
|
Total operating expenses
|
8,323
|
8,497
|
�
|
�
|
�
|
Loss from operations
|
(7,884)
|
(12,101)
|
�
|
�
|
�
|
Interest expense
|
(749)
|
(9)
|
Income (loss) from equity
investment
|
207
|
(154)
|
Interest and other income, net
|
1,331
|
375
|
�
|
�
|
�
|
Loss before redeemable preferred
stock of subsidiary
|
(7,095)
|
(11,889)
|
�
|
�
|
�
|
Accretion of redeemable preferred
stock of subsidiary�
|
�
|
(604)
|
�
|
�
|
�
|
Loss before provision for income
taxes
|
(7,095)
|
(12,493)
|
�
|
�
|
�
|
Provision for income taxes
|
(34)
|
(23)
|
�
|
�
|
�
|
Net loss�
|
(7,129)
|
(12,516)
|
�
|
�
|
�
|
Net loss attributable to
noncontrolling interest
|
64
|
393
|
�
|
�
|
�
|
Net loss attributable to FuelCell
Energy, Inc.
|
(7,065)
|
(12,123)
|
�
|
�
|
�
|
Preferred stock dividends
|
(800)
|
(800)
|
�
|
�
|
�
|
Net loss to common shareholders
|
$ (7,865)
|
$ (12,923)
|
�
|
�
|
�
|
Net loss per share to common
shareholders
|
�
|
�
|
Basic
|
$ (0.06)
|
$ (0.11)
|
Diluted
|
$ (0.06)
|
$ (0.11)
|
�
|
�
|
�
|
Weighted average shares
outstanding
|
�
|
�
|
Basic
|
131,000,920
|
112,962,059
|
Diluted
|
131,000,920
|
112,962,059
|
�
|
FUELCELL ENERGY, INC.
|
Consolidated Statements of Operations
|
(unaudited)
|
(Amounts in thousands, except share and per share amounts)
|
�
|
�
|
�
|
�
|
Twelve Months Ended
October 31,
|
�
|
2011
|
2010
|
Revenues:
|
�
|
�
|
Product sales and revenues
|
$ 115,104
|
$ 59,226
|
Research and development contracts
|
7,466
|
10,551
|
Total revenues
|
122,570
|
69,777
|
�
|
�
|
�
|
Costs of revenues:
|
�
|
�
|
Cost of product sales and revenues
|
127,350
|
78,060
|
Cost of research and development
contracts�
|
7,830
|
10,370
|
Total cost of revenues
|
135,180
|
88,430
|
�
|
�
|
�
|
Gross loss
|
(12,610)
|
(18,653)
|
�
|
�
|
�
|
Operating expenses:
|
�
|
�
|
Administrative and selling
expenses
|
16,299
|
17,150
|
Research and development expenses
|
16,768
|
18,562
|
Total operating expenses
|
33,067
|
35,712
|
�
|
�
|
�
|
Loss from operations
|
(45,677)
|
(54,365)
|
�
|
�
|
�
|
Interest expense
|
(2,578)
|
(127)
|
Income (loss) from equity
investment
|
58
|
(730)
|
Interest and other income, net
|
2,861
|
1,354
|
�
|
�
|
�
|
Loss before redeemable preferred
stock of subsidiary
|
(45,336)
|
(53,868)
|
�
|
�
|
�
|
Accretion of redeemable preferred
stock of subsidiary�
|
(525)
|
(2,367)
|
�
|
�
|
�
|
Loss before provision for income
taxes
|
(45,861)
|
(56,235)
|
�
|
�
|
�
|
Provision for income taxes
|
(113)
|
(91)
|
�
|
�
|
�
|
Net loss�
|
(45,974)
|
(56,326)
|
�
|
�
|
�
|
Net loss attributable to
noncontrolling interest
|
261
|
663
|
�
|
�
|
�
|
Net loss attributable to FuelCell
Energy, Inc.
|
(45,713)
|
(55,663)
|
�
|
�
|
�
|
Adjustment for modification of
redeemable preferred stock of� subsidiary
|
(8,987)
|
�
|
Preferred stock dividends
|
(3,200)
|
(3,201)
|
�
|
�
|
�
|
Net loss to common shareholders
|
$ (57,900)
|
$ (58,864)
|
�
|
�
|
�
|
Net loss per share to common
shareholders
|
�
|
�
|
Basic
|
$ (0.47)
|
$ (0.63)
|
Diluted
|
$ (0.47)
|
$ (0.63)
|
�
|
�
|
�
|
Weighted average shares
outstanding
|
�
|
�
|
Basic
|
124,498,073
|
93,925,863
|
Diluted
|
124,498,073
|
93,925,863
|
�
|
FUELCELL ENERGY, INC.
|
Reconciliation of GAAP to Non-GAAP Consolidated Statements
of Operations Information
|
(unaudited)
|
(Amounts in thousands, except share and per share amounts)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Three Months Ended October 31,
|
�
|
2011
|
�
|
2010
|
�
|
GAAP
As Reported
|
Non-GAAP
Adjustments
|
Non-GAAP
As Adjusted
|
�
|
GAAP
As Reported (3)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Cost of product sales and revenues
|
� $32,698
|
$ 471
|
(1)
|
$ 33,169
|
�
|
$ 20,877
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Gross profit/(loss)
|
$ 439
|
$ (471)
|
�
|
$ (32)
|
�
|
$ (3,604)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss from operations
|
$ (7,884)
|
$ (471)
|
�
|
$ (8,355)
|
�
|
$ (12,101)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss before redeemable preferred
stock of subsidiary
|
$ (7,095)
|
$ (471)
|
�
|
$ (7,566)
|
�
|
$ (11,889)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss�
|
$ (7,129)
|
$ (471)
|
�
|
$ (7,600)
|
�
|
$ (12,516)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss to common shareholders
|
$ (7,865)
|
$ (471)
|
�
|
$ (8,336)
|
�
|
$ (12,923)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss per share to common
shareholders
|
�
|
�
|
�
|
�
|
�
|
�
|
Basic
|
$ (0.06)
|
$ �
|
�
|
$ (0.06)
|
�
|
$ (0.11)
|
Diluted
|
$ (0.06)
|
$ �
|
�
|
$ (0.06)
|
�
|
$ (0.11)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Twelve Months Ended October 31,
|
�
|
2011
|
�
|
2010
|
�
|
GAAP
As Reported
|
Non-GAAP
Adjustments
|
Non-GAAP
As Adjusted
|
�
|
GAAP
As Reported (3)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Cost of product sales and revenues
|
$ 127,350
|
$ (8,281)
|
(1)
|
$ 119,069
|
�
|
$ 78,060
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Gross profit/(loss)
|
$ (12,610)
|
$ 8,281
|
�
|
$ (4,329)
|
�
|
$ (18,653)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss from operations
|
$ (45,677)
|
$ 8,281
|
�
|
$ (37,396)
|
�
|
$ (54,365)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss
before redeemable preferred stock of subsidiary
|
$ (45,336)
|
$ 8,281
|
�
|
$ (37,055)
|
�
|
$ (53,868)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss�
|
$ (45,974)
|
$ 8,281
|
�
|
$ (37,693)
|
�
|
$ (56,326)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Adjustment
for modification of redeemable preferred stock of subsidiary
|
$ (8,987)
|
$ 8,987
|
(2)
|
$ �
|
�
|
$ �
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss
to common shareholders
|
$ (57,900)
|
$ 17,268
|
�
|
$ (40,632)
|
�
|
$ (58,864)
|
�
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss
per share to common shareholders
|
�
|
�
|
�
|
�
|
�
|
�
|
Basic
|
$ (0.47)
|
$ 0.14
|
�
|
$ (0.33)
|
�
|
$ (0.63)
|
Diluted
|
$ (0.47)
|
$ 0.14
|
�
|
$ (0.33)
|
�
|
$ (0.63)
|
Notes to Reconciliation of GAAP to Non-GAAP
Consolidated Statements of Operations
For the Three and Twelve
Months Ended� October 31, 2011
Results
of Operations are presented in accordance with accounting principles generally
accepted in the United States ("GAAP") and as adjusted for certain
items referenced below.� Management also uses non-GAAP measures which
exclude non-recurring items in order to measure periodic operating
performance.� We have added this information because we believe it helps
in understanding the results of our operations on a comparative basis.�
This adjusted information supplements and is not intended to replace performance
measures required by U.S. GAAP disclosure. Notes to the Reconciliation of GAAP
to Non-GAAP Consolidated Statements of Operations Information are as follows:
(1)
� FuelCell Energy, Inc. has committed to a repair and upgrade program to
fix a performance shortfall for a select group of 1.2 MW fuel cell modules
produced between 2007 and early 2009.� Second quarter 2011 earnings was
impacted by a charge of approximately $8.8 million, which was accounted for as
an increase to cost of goods sold. � The estimate for this repair and
upgrade program was revised in the fourth quarter of 2011 resulting in a
decrease to cost of goods sold of approximately $0.5 million.� The full
fiscal year 2011 impact was a charge of $8.3 million.� Our product sales, cost
of product sales and revenues, gross margin and cost to revenue ratio and for
the three and twelve months ended October 31, 2011 and 2010 were as follows:
�
|
Three Months Ended
October 31,
|
Twelve Months Ended
October 31,
|
�
|
2011
|
2010
|
2011
|
2010
|
GAAP Revenue and Cost of Sales�
|
�
|
�
|
�
|
�
|
Product sales and revenues
|
$ 33,289
|
$ 17,193
|
$ 115,104
|
$ 59,226
|
Cost of
product sales and revenues
|
32,698
|
20,877
|
127,350
|
78,060
|
Gross
profit/(loss) from product sales� and revenues
|
$ 591
|
$ (3,684)
|
$ (12,246)
|
$ (18,834)
|
Product
Sales Cost-to-revenue ratio(a)
|
0.98
|
1.21
|
1.11
|
1.32
|
�
|
�
|
�
|
�
|
�
|
Non-GAAP Adjustment to cost of product sales and
revenues:
|
�
|
�
|
�
|
Repair and Upgrade Cost
|
$ 471
|
$ �
|
$ (8,281)
|
$ �
|
�
|
�
|
�
|
�
|
�
|
Gross Profit/(Loss) (non-GAAP):
|
�
|
�
|
�
|
�
|
Gross
profit/(loss) from product sales and Revenues
|
$ 120
|
$ (3,684)
|
$ (3,965)
|
$ (18,834)
|
Gross profit/(loss)
from� research and development contracts
|
(152)
|
80
|
(364)
|
181
|
Total
|
$ (32)
|
$ (3,604)
|
$ (4,329)
|
$ (18,653)
|
Product Sales Cost-to-revenue
ratio(a)
|
1.00
|
1.21
|
1.03
|
1.32
|
�
|
�
|
�
|
�
|
�
|
(a)� Cost-to-revenue ratio
is calculated as cost of product sales and revenues divided by product sales
and revenues.
|
�
|
�
|
�
|
(2)� During the three months ended April 30, 2011 the Company
entered into an agreement with Enbridge, Inc. to modify an agreement for the
Series� 1 preferred shares.� While this modification did not result
in a material change to future cash flows, it did result in a revaluation of
the instrument and a reclassification of amounts due as short and long term
liabilities.� An adjustment to additional paid in capital and loss to
common shareholders of $9.0 million was incurred in the second quarter of 2011
to adjust the carrying value of the Series I preferred shares on the
modification date to the current fair value of the modified instrument.
(3) Note that there were no adjustments to GAAP results as
reported for the three and twelve months ended October 31, 2010.