FuelCell
Energy Reports Second Quarter 2009 Results and Latest Accomplishments
* Announced a 30.8 MW POSCO Power order and pending $25 million
equity investment
* Received 1.4 MW power plant order for County of Sonoma,
California
* Awarded 27.3 MW of projects under Connecticut's Renewable
Portfolio Standard
* Received two government facility orders in the quarter
totaling 600 kW
* New cost reduced products on schedule to begin production in
third quarter
DANBURY, Conn., June
9, 2009 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc. (Nasdaq:FCEL), a leading
manufacturer of high efficiency, ultra-clean power plants using renewable and
other fuels for commercial, industrial, government, and utility customers,
today reported results and accomplishments for its second quarter ended April
30, 2009.
Financial Results
FuelCell Energy
reported total revenues for the second fiscal quarter of 2009 of $22.9
million compared to $31.6 million in the same period last year. Product sales
and revenues were $19.3 million compared to $26.4 million in the 2008 second
quarter and comparable to the first quarter 2009 total of $19.0 million. The
prior year product sales and revenues were unusually high due to timing. The
Company's product sales backlog as of April 30, 2009, including long-term
service agreements, was $59.2 million compared to $70.9 million as of January
31, 2009 and $134.7 million as of April 30, 2008. The current financial
credit crisis caused delays in closing commercial products sales orders in
the U.S. Subsequent to quarter end, the Company added approximately $64.8
million of contracts to backlog.
Research and
development contract revenue was $3.6 million in the second quarter of 2009
compared to $5.2 million in the second quarter of 2008. Research and
development contract backlog was $19.5 million as of April 30, 2009 compared
to $23.1 million as of January 31, 2009, and $8.0 million at April 30, 2008.
The second quarter net
loss to common shareholders improved to $19.9 million or $0.29 per basic and
diluted share compared to $25.8 million or $0.38 per basic and diluted share
in the same period last year. The product cost-to-revenue ratio was 1.48-to-1
comparable to the 1.50-to-1 reported in the prior year quarter, and the
1.52-to-1 in
the first quarter of 2009.
In addition, the Company reduced spending on
internally funded research and development $0.9 million and administrative
and selling $1.0 million.
Cash use in the
quarter totaled $8.4 million resulting in a total cash and investment balance
of $42.4 million as of April 30, 2009. Collection of customer milestone
payments provided a cash benefit compared to the prior quarter which was
partially offset by delays in closing contracts. Depreciation was $2.2
million and capital spending in the quarter totaled $0.8 million.
The credit crisis is
creating delays in order flow affecting the Company's cash estimates for the
quarter and fiscal year. The Company reduced operating costs and cash use in
February 2009. This included a six percent workforce reduction, suspension of
employer contributions to the 401(k) plan, a freeze on the level of salaries
for all employees except for production employees, and other expense
reductions. As a result, the Company expects reduced cash use in 2009
compared to 2008 although cash use for fiscal 2009 may not meet the Company's
previous expectations due to delays in the contract negotiation and closure
process.
For the six months
ended April 30, 2009, FuelCell Energy reported revenue of $44.6 million
compared to $46.7 million for the same period a year ago. Product sales and
revenues were $38.3 million compared to $36.2 million in the prior year
period. The product cost-to-revenue ratio was 1.50 compared to 1.63 for the
same period a year ago. The cost-to-revenue improvement is attributable to
lower cost MW-class power plants. Research and development contract revenue
was $6.2 million compared to $10.5 million for the six months ended April 30,
2008.
FuelCell Energy
reported a net loss to common shareholders for the six months ended April 30,
2009, of $40.6 million or $0.59 per basic and diluted share compared to $45.5
million or $0.67 in the six months ended April 30, 2008.
Cost Out Program
The Company is on
schedule to begin producing megawatt-class (MW-class) products in the third
quarter that it expects to be gross margin profitable. These newly designed
cost-reduced products deliver more power than the current design, and
incorporate improved materials pricing and manufacturing productivity. The
DFC1500 and DFC3000 power plants will produce 1.4 MW and 2.8 MW,
respectively.
Corporate Highlights
"Despite the
financial crisis, we continue to see demand for our products. The POSCO Power
30.8 MW order, recent Connecticut Renewable Portfolio Standards award,
activities in the California market, and government initiatives for green
energy and green jobs are positives for our business," said R. Daniel
Brdar, Chairman and CEO. "Additionally, our cost out programs are
meeting expectations and our new cost-reduced fuel cell power plants are on
schedule for third quarter production."
Key Markets
South Korea: POSCO
Power ordered 30.8 megawatts (MW) of FuelCell Energy Direct FuelCell(r)
(DFC(r)) modules and components in June 2009 valued at approximately $58
million. This brings total orders to over 68 MW since the initiation of its
alliance with FuelCell Energy in 2007. POSCO Power and FuelCell Energy also
signed a Memorandum of Agreement whereby the parties agree to pursue a
licensing agreement to allow POSCO Power to assemble FuelCell Energy cell and
module components into stack modules. POSCO Power will purchase $25 million
in FuelCell Energy common stock at $3.59 per share once the licensing
agreement is complete.
In South Korea fuel cells help meet government objectives for
low-carbon, green technology. POSCO Power already has 18 MW operating or
being installed primarily in utility grid support applications. Its 50 MW
manufacturing facility began production of balance-of-plant systems, which
will be integrated with FuelCell Energy's fuel cell modules at customer sites
to provide power for the electric grid.
California: In May, the Company sold a 1.4 MW power plant to
Aircon Energy. The power plant will provide power to Sonoma County's jail and
several county office buildings. The heat produced by the plant will replace
approximately half the natural gas the county currently purchases to heat hot
water for space heating, cleaning, and cooking. With total energy efficiency
in excess of 80 percent, combined heat and power installations can achieve
significant reductions in greenhouse gas emissions.
Connecticut: Under the state's Renewable Portfolio Standards
program, the Connecticut Department of Public Utility Control (DPUC) issued a
final decision approving 27.3 MW bringing the total to 43.5 MW of projects
incorporating FuelCell Energy power plants awarded. These include: a 14.3 MW
power plant for grid support, 18.8 MW of DFC-ERG power plants to be located
at four natural gas distribution stations, a 3.2 MW DFC/Turbine (DFC/T) for
an electrical substation, and 7.2 MW at two hospitals. The DFC-ERG and DFC/T
power plants are FuelCell Energy's highest-efficiency products and are twice as
efficient as the average U.S. fossil fuel power plant.
Government Facilities: The U.S. government has initiated
programs to ensure that it deploys energy efficient technologies to lower its
carbon footprint and save energy costs. FuelCell Energy sold two 300 kilowatt
(kW) power plants to the U.S. government during the second quarter of 2009.
The unit for the U.S. Marine Corps Air Ground Combat Center at Twentynine
Palms, Calif. will provide baseload electricity and heat to the base's main
steam line. The unit for Barksdale Air Force Base in Louisiana will provide
baseload power that can be operated independently of the grid, increasing
reliability and security.
Government Research and Development Contracts
During the quarter, two FuelCell Energy/Versa Power 10 kW fuel
cell stacks surpassed several of the Department of Energy's Office of Fossil
Energy Solid State Energy Conversion Alliance (SECA) technical and
performance requirements. The new stacks form the basis of a proof-of-concept
system that will operate on coal-derived synthesis gas -- fuel created by
reacting coal at high temperatures. FuelCell Energy is teamed with Versa
Power Systems, Inc. to develop solid oxide fuel cell stack technology that
meets SECA requirements for both performance and manufacturing costs.
Conference Call Information
FuelCell Energy will host a conference call with investors
beginning at 10 a.m.
Eastern Time on June 9, 2009 to discuss these results.
The details for accessing the live call are as follows:
* From the U.S. or Canada please dial 877-857-6176
* Outside the U.S. and Canada, please call 719-325-4770
* 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 be available
approximately two hours after the conclusion of the call until June 16, 2009
at midnight eastern time:
* 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 2345441
* The webcast will be archived for 30 days on the Investors'
section of the Company's website at www.fuelcellenergy.com.
About FuelCell Energy
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 50 locations worldwide. The Company's
power plants have generated over 315 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 and power companies around
the world. The Company also receives funding from the U.S. Department of
Energy and other government agencies for the development of leading edge
technologies such as 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. DFC-ERG is a trademark jointly
owned by Enbridge, Inc. and FuelCell Energy, Inc.
FUELCELL ENERGY, INC.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands, except share and per share amounts)
April 30, October 31,
2009 2008
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 17,071 $ 38,043
Investments: U.S.
treasury securities 25,302 30,406
Accounts receivable, net 14,359 16,096
Inventories, net 22,833 24,523
Other current assets 8,572 8,952
------------ ------------
Total current assets 88,137 118,020
Property, plant and equipment, net 35,891 38,259
Investments: U.S. treasury securities -- 18,434
Investment and loan to affiliate 10,491 10,405
Other assets, net 439 358
------------ ------------
Total assets $ 134,958 $ 185,476
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt
and other liabilities $ 826 $ 795
Accounts payable 7,849 16,287
Accounts payable due to affiliate 1,282 724
Accrued liabilities 10,210 11,023
Deferred revenue and
customer deposits 23,041 29,585
------------ ------------
Total current liabilities 43,208 58,414
Long-term deferred revenue 1,804 2,672
Long-term debt and other liabilities 4,479 4,075
------------ ------------
Total liabilities 49,491 65,161
------------ ------------
Redeemable minority interest 14,073 13,307
Redeemable preferred stock ($0.01
par value, liquidation preference
of $64,120 at April 30, 2009 and
October 31, 2008.) 59,950 59,950
Shareholders' equity:
Common stock ($.0001 par value);
150,000,000 shares authorized at
April 30, 2009 and October 31,
2008; 70,254,465 and
68,782,446 shares issued and
outstanding at April 30, 2009 and
October 31, 2008, respectively 7 7
Additional paid-in capital 581,726 578,337
Accumulated deficit (570,285) (531,286)
Foreign currency translation (4) --
Treasury stock, Common, at cost
(5,679 and 8,981 shares at April
30, 2009 and October 31, 2008.) (53) (90)
Deferred compensation 53 90
------------ ------------
Total shareholders' equity 11,444 47,058
------------ ------------
Total liabilities and
shareholders' equity $ 134,958 $ 185,476
============ ============
FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)
Three Months Ended
April 30,
2009 2008
------------ ------------
Revenues:
Product sales and revenues $ 19,308 $ 26,440
Research and development contracts 3,556 5,203
------------ ------------
Total revenues 22,864 31,643
------------ ------------
Costs and expenses:
Cost of product sales and revenues 28,614 39,787
Cost of research and
development contracts 2,837 4,831
Administrative and selling expenses 4,755 5,798
Research and development expenses 5,053 5,931
------------ ------------
Total costs and expenses 41,259 56,347
------------ ------------
Loss from operations (18,395) (24,704)
Interest expense (66) (17)
Loss from equity investments (216) (607)
Interest and other income, net 130 824
------------ ------------
Loss before redeemable
minority interest (18,547) (24,504)
Redeemable minority interest (533) (473)
------------ ------------
Loss before provision for
income taxes (19,080) (24,977)
Provision for income taxes -- --
------------ ------------
Net loss (19,080) (24,977)
Preferred stock dividends (802) (802)
------------ ------------
Net loss to common shareholders $ (19,882) $ (25,779)
============ ============
Loss per share basic and diluted:
Net loss per share to
common shareholders $ (0.29) $ (0.38)
Basic and diluted weighted
average shares outstanding 69,521,575 68,540,701
FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share and per share amounts)
Six Months Ended
April 30,
2009 2008
------------ ------------
Revenues:
Product sales and revenues $ 38,339 $ 36,208
Research and development contracts 6,248 10,454
------------ ------------
Total revenues 44,587 46,662
------------ ------------
Costs and expenses:
Cost of product sales and revenues 57,551 59,197
Cost of research and
development contracts 5,075 9,271
Administrative and selling expenses 9,001 10,610
Research and development expenses 10,790 11,416
------------ ------------
Total costs and expenses 82,417 90,494
------------ ------------
Loss from operations (37,830) (43,832)
Interest expense (126) (49)
Loss from equity investments (562) (1,050)
Interest and other income, net 545 1,949
------------ ------------
Loss before redeemable
minority interest (37,973) (42,982)
Redeemable minority interest (1,026) (911)
------------ ------------
Loss before provision for
income taxes (38,999) (43,893)
Provision for income taxes -- --
------------ ------------
Net loss (38,999) (43,893)
Preferred stock dividends (1,604) (1,604)
------------ ------------
Net loss to common shareholders $ (40,603) $ (45,497)
============ ============
Loss per share basic and diluted:
Net loss per share to
common shareholders $ (0.59) $ (0.67)
Basic and diluted weighted
average shares outstanding 69,178,940 68,396,064
CONTACT: FuelCell Energy
Lisa Lettieri
(203) 830-7494
ir@fce.com