FuelCell
Energy Reports Second Quarter 2008 Results and Latest Accomplishments
Jun 4, 2008
(PrimeNewswire via COMTEX News Network) --
* Product Sales and Revenues Tripled Over the Prior Year Quarter
* POSCO Power Orders $70 Million of MW-class Power Plants and Modules
* Product Cost Ratio Improved 19 Percent Over Prior Year Quarter
* Commercial Product Backlog Grows to $135 Million -- Highest in
Company History
DANBURY, Conn., June 4, 2008 (PRIME NEWSWIRE) -- FuelCell
Energy, Inc. (Nasdaq:FCEL), a leading manufacturer of high efficiency
ultra-clean power plants using renewable biogas and other fuels for
commercial, industrial and utility customers, today reported results and
accomplishments for its second fiscal quarter ended April 30, 2008.
Financial Results
FuelCell Energy reported revenues for the second quarter of
fiscal 2008 of $31.6 million, compared to $11.4 million in the same period a
year ago. Product sales and revenues tripled to $26.4 million compared to
$8.9 million in the same period a year ago. Order rates for FuelCell Energy's
largest, megawatt-class (MW-class) power plants increased due to greater
demand for efficient, ultra-clean power generation in its key markets.
Research and development contract revenue was $5.2 million compared to $2.5
million in 2007.
Product costs declined resulting in a product cost-to-revenue
ratio of 1.50 in the second quarter of 2008 compared with 1.85 in the same
period a year ago. 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.
The Company's product backlog, including long-term service
agreements, as of April 30, 2008 was $134.7 million, 266 percent above the
$36.8 million reported as of April 30, 2007. The increase was primarily due
to sales to customers in South Korea and California. The research and development
contract backlog totaled $8.0 million compared to $26.4 million as of April
30, 2007.
In the second quarter of fiscal 2008, net loss to common
shareholders was $25.8 million or $0.38 per basic and diluted share compared
to a net loss to common shareholders of $18.8 million or $0.32 per basic and
diluted share in the same period of the previous year. The higher volume of
product sales and revenues increased the loss over the prior year by $5.8
million. Administrative and selling expenses increased approximately $1.0
million and were offset by lower research and development expenses of $0.7
million. Interest and other income was lower by approximately $0.5 million.
Total cash and investments were $121.7 million as of April 30,
2008. Net use of cash and investments for the second quarter was $16.8
million which included capital spending of approximately $1.6 million.
Depreciation expense for the quarter ended April 30, 2008 was approximately
$2.2 million.
For the six months ended April 30, 2008, FuelCell Energy
reported revenue of $46.7 million compared with $18.2 million in the same
period a year ago. Product sales and revenues were $36.2 million, an increase
of 163 percent over the $13.8 million in 2007. The product cost-to-revenue
ratio was 1.63 compared with 2.16 for the six-month period a year ago,
reflecting lower per-unit production costs. Research and development contract
revenue was $10.5 million compared to $4.5 million in the comparable 2007 period.
For the six months ended April 30, 2008, FuelCell Energy
reported a net loss to common shareholders of $45.5 million or $0.67 per
basic and diluted share compared to $38.8 million or $0.69 per basic and
diluted share in the same period a year ago. Compared to the prior year, net
loss to common shareholders increased by approximately $6.7 million due to
the higher volume of product sales and revenues but at a lower rate than the
increase in revenues as product margins continued to improve.
Key Corporate Developments
"The record revenue for the second quarter is the direct
result of commercial, industrial and utility demand for reliable, 24/7
ultra-clean power generation in our key markets," said R. Daniel Brdar,
FuelCell Energy's Chairman and CEO.
Leadership in Key Markets
South Korea: During the quarter, POSCO Power ordered 25.6 MW of
MW-class power plants for shipment in late 2008 and 2009, bringing its total
orders to date to 38.2 MW. These power plants will be used in grid-support
applications for KEPCO (Korean Electric Power Company) and several
independent power producers.
"This latest order, worth $70 million, is confirmation that
in a country with some of the highest fuel prices in the world, FuelCell
Energy provides a solution that is both economical and green," Brdar
said. "South Korea is committed to being a leader in driving down
greenhouse gas emissions and using the most efficient, reliable technology to
do it. Our power plants are more efficient than other distributed generation
power plants, which saves energy costs and decreases CO2 emissions."
POSCO Power's fuel cell balance of plant manufacturing facility
in Pohang City is scheduled for completion by fall 2008 and will initially
have 50 MW of capacity, increasing to 100 MW by 2010. While POSCO Power
brings its facilities online, FuelCell Energy will deliver complete power
plants to POSCO and then transition to supplying fuel cell modules, its core
power plant technology. POSCO will integrate these modules with its
electrical and mechanical subsystems, the balance of plant, at customer
sites.
California: To expand the use of clean distributed power
generation, the California Public Utilities Commission increased the size of
projects eligible for monetary incentives to 3 MW from 1 MW and increased the
total available funds to $179 million. California customers to date have
purchased approximately 19 MW of DFC fuel cells for operation in a wide range
of applications including wastewater treatment and food and beverage
facilities that use biogas, universities, manufacturing, and hotels. This
change provides incentives to bring our multi-MW power plants to market in
California.
Connecticut: Under Connecticut's Renewable Portfolio Standard
(RPS), utilities are required to purchase 20 percent of their power (about
800 MW) from clean energy sources by 2020. Currently, there are 28 states and
Washington D.C. that have RPS mandates, representing an estimated 30,000 MW.
The Connecticut Department of Public Utility Control approval
process for Project 150 (part of the Connecticut RPS) is now complete with
three projects incorporating 16.2 MW of FuelCell Energy DFC3000 power plants.
The Milford LLC 8.7 MW project integrates three DFC3000 power plants with a
turbo expander that generates 1.5 MW of power. With an electrical efficiency
of up to 57 percent, the DFC-ERG(tm) system offers gas utilities with letdown
stations lower operating costs, reduced CO2 emissions, and ultra-clean
electricity. The two remaining projects, Stamford (4.8 MW) and Waterbury (2.4
MW) hospitals, will use by-product heat for space heating, air conditioning,
laundries, and sterilization. These combined heat and power (CHP)
applications will reach up to 60 percent system efficiency, reducing energy
costs and CO2 emissions.
Cost Reduction
FuelCell Energy's cost out program is a key driver to achieve
profitability. In 2008, the Company is targeting continued cost reductions of
20 percent from current levels for the MW-class DFC1500 and DFC3000 power
plants through a power output increase, strategic sourcing, and continued
manufacturing improvements.
Including the orders received in the second quarter,
approximately 60 percent of the product backlog now consists of multi-MW
power plants and modules. Based on the current backlog, we expect the mix of
production to move primarily to DFC3000 power plants and modules in fiscal
2009. Volume increases and design changes incorporated into production in the
latter half of 2009 are expected to drive multi-MW power plants and modules
to gross margin profitability.
Conference Call Information
FuelCell Energy will host a conference call with investors
beginning at 10:00 a.m. Eastern Time on June 5th to discuss the second
quarter 2008 results.
The details for accessing the live call are as follows:
* From the U.S. or Canada please dial 877-627-6544;
* Outside the U.S. and Canada, please call 719-325-4921;
* 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 June
12th 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 3276348;
* 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
registered trademarks of FuelCell Energy, Inc. DFC-ERG is a trademark jointly
owned by FuelCell Energy, Inc. and Enbridge, Inc.
FUELCELL ENERGY, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
April 30,
2008 October 31,
(Unaudited) 2007
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 68,940 $ 92,997
Investments: U.S. treasury securities 44,557 60,634
Accounts receivable, net of allowance
for doubtful accounts of $17 and $63,
respectively 12,861 10,063
Inventories, net 30,953 29,581
Other current assets 8,588 7,730
------------ ------------
Total current assets 165,899 201,005
Property, plant and equipment, net 38,169 39,612
Investments: U.S. treasury securities 8,251 --
Investment and loan to affiliate 11,177 12,216
Other assets, net 446 355
------------ ------------
Total assets $ 223,942 $ 253,188
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt
and other liabilities $ 781 $ 924
Accounts payable 14,021 9,516
Accounts payable due to affiliate 3,003 2,881
Accrued liabilities 8,257 8,511
Deferred license fee income 600 --
Deferred revenue and customer deposits 26,140 20,486
------------ ------------
Total current liabilities 52,802 42,318
Long-term deferred revenue 3,495 4,401
Long-term debt and other liabilities 1,105 613
------------ ------------
Total liabilities 57,402 47,332
------------ ------------
Redeemable minority interest 12,559 11,884
Redeemable preferred stock ($0.01 par
value, liquidation preference of
$64,120 at April 30, 2008 and
October 31, 2007) 59,950 59,950
Shareholders' equity:
Common stock ($.0001 par value);
150,000,000 shares authorized at
April 30, 2008 and October 31, 2007;
68,620,459 and 68,085,059 shares
issued and outstanding at
April 30, 2008 and October 31, 2007,
respectively 7 7
Additional paid-in capital 575,846 571,944
Accumulated deficit (481,822) (437,929)
Treasury stock, Common, at cost
(8,981 and 12,282 shares at
April 30, 2008 and
October 31, 2007, respectively) (90) (126)
Deferred compensation 90 126
------------ ------------
Total shareholders' equity 94,031 134,022
------------ ------------
Total liabilities and
shareholders' equity $ 223,942 $ 253,188
============ ============
FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)
Three Months Ended
April 30,
2008 2007
------------ ------------
Revenues:
Product sales and revenues $ 26,440 $ 8,861
Research and development contracts 5,203 2,522
------------ ------------
Total revenues 31,643 11,383
------------ ------------
Costs and expenses:
Cost of product sales and revenues 39,787 16,394
Cost of research and
development contracts 4,831 2,096
Administrative and selling expenses 5,798 4,773
Research and development expenses 5,931 6,654
------------ ------------
Total costs and expenses 56,347 29,917
------------ ------------
Loss from operations (24,704) (18,534)
Interest expense (17) (21)
Loss from equity investments (607) (401)
Interest and other income, net 824 1,373
------------ ------------
Loss before redeemable
minority interest (24,504) (17,583)
Redeemable minority interest (473) (421)
------------ ------------
Loss before provision for income taxes (24,977) (18,004)
Provision for income taxes -- --
------------ ------------
Net loss (24,977) (18,004)
Preferred stock dividends (802) (802)
------------ ------------
Net loss to common shareholders $ (25,779) $ (18,806)
============ ============
Loss per share basic and diluted:
Net loss per share to common
shareholders $ (0.38) $ (0.32)
Basic and diluted weighted average
shares outstanding 68,540,701 58,750,006
FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)
Six Months Ended
April 30,
2008 2007
------------ ------------
Revenues:
Product sales and revenues $ 36,208 $ 13,760
Research and development contracts 10,454 4,457
------------ ------------
Total revenues 46,662 18,217
------------ ------------
Costs and expenses:
Cost of product sales and revenues 59,197 29,776
Cost of research and
development contracts 9,271 4,040
Administrative and selling expenses 10,610 9,190
Research and development expenses 11,416 13,509
------------ ------------
Total costs and expenses 90,494 56,515
------------ ------------
Loss from operations (43,832) (38,298)
License fee income, net -- 34
Interest expense (49) (48)
Loss from equity investments (1,050) (618)
Interest and other income, net 1,949 2,502
------------ ------------
Loss before redeemable
minority interest (42,982) (36,428)
Redeemable minority interest (911) (812)
------------ ------------
Loss before provision for income taxes (43,893) (37,240)
Provision for income taxes -- --
------------ ------------
Net loss (43,893) (37,240)
Preferred stock dividends (1,604) (1,604)
------------ ------------
Net loss to common shareholders $ (45,497) $ (38,844)
============ ============
Loss per share basic and diluted:
Net loss per share to
common shareholders $ (0.67) $ (0.69)
Basic and diluted weighted average
shares outstanding 68,396,064 55,914,872
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