FuelCell Energy Reports Second Quarter Results and
Latest Accomplishments
- POSCO
Power orders 70 MW of fuel cell kits and other equipment and services
totaling $129 million
- $55
million of cash and investments at April 30, 2011 �
- Continued
SECA program funding adding $8.2 million to backlog
- Fleet
repair and upgrade program results in $8.8 million charge
- Cost
ratio of 1.08 before repair and upgrade charge versus 1.47 prior year
DANBURY,
Conn., June 6, 2011 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc. (Nasdaq:FCEL),
a leading manufacturer of ultra-clean, efficient and reliable power plants
using renewable and other fuels for commercial, industrial, government, and
utility customers, today reported results for its second quarter ended April
30, 2011 along with its latest accomplishments.
Financial
Results
FuelCell
Energy reported total revenues for the second quarter of 2011 of $28.6
million compared to $16.6 million in the same period last year.
� Product sales and revenues in the second quarter were $26.7 million
compared to $13.0 million in the prior year quarter, increasing as a result
of growing demand for ultra-clean fuel cells.� Product sales and
revenues for the second quarter of 2011 included $21.4 million of power
plants and components, $2.2 million from construction and installation
services and sale of equipment under the 100 kilowatt (kW) joint development
agreement with POSCO Power, and $3.1 million� from long term service and
power purchase agreements.
Cost of
sales and margins for the second quarter of 2011 were negatively impacted by
a charge of $8.8 million from a repair and upgrade program for a select group
of 1.2 MW fuel cell modules produced between 2007 and early 2009. Margins for
product sales and revenues declined $4.7 million compared to the second
quarter of 2010 while the product cost-to-revenue ratio improved to
1.40-to-1.00 from 1.47-to-1.00.�
Excluding
the repair and upgrade program charge incurred in the second quarter of 2011,
margins for product sales and revenues would have improved by $4.1 million
over the prior year quarter and the product cost-to-revenue ratio would have
improved to 1.08-to-1.00, primarily from higher product margins and lower
commissioning and warranty costs.�
Increasing
demand for fuel cells and service agreements drove product sales and service
backlog to $135.5 million as of April 30, 2011 compared to $75.5 million as
of April 30, 2010.� Product order backlog was $60.4 million and $48.1
million and backlog for long-term service agreements was $75.1 million and
$27.4 million as of April 30, 2011 and 2010, respectively.� In May 2011,
the largest order in Company history was announced for an estimated $129
million for 70 MW of fuel cell kits and other equipment and
services.� The value of the fuel cell kits will be added to third
quarter 2011 product backlog. �
Research
and development contract revenue was $1.9 million for the second quarter of
2011 compared to $3.6 million for the second quarter of 2010.� Contract
revenue reflects lower activity under the U.S. Department of Energy (DOE)
solid oxide fuel cell (SOFC) development program compared to the second
quarter of 2010.� The Company's research and development backlog totaled
$15.2 million as of April 30, 2011 compared to $9.9 million as of April 30,
2010.� The award of the phase three SOFC contract by the DOE during the
quarter increased research and development backlog by $8.2 million.�
Loss
from operations for the second quarter of 2011 increased to $19.8 million
compared to $15.4 million for the comparable prior year
period.� Excluding the non-recurring charge, loss from operations would
have improved to $11.1 million. �
Net
loss to common shareholders for the second quarter of 2011 increased to $29.7
million, or $0.24 per basic and diluted share, compared to $16.7 million or
$0.20 per basic and diluted share in the second quarter of 2010.� During
the second quarter of 2011, two items impacted net loss to common
shareholders, including the previously discussed repair and upgrade program
charge of $8.8 million and an adjustment to additional paid in capital and
loss to common shareholders of $9.0 million to adjust the historic carrying
value of the Series I preferred shares to the current fair value.�
During
the second quarter of 2011, the Company entered into an agreement with the
owner of the Series� 1 preferred shares, Enbridge, Inc., that resulted
in a change in the timing of payments due.� Although there was no
material change in future cash flows, the modification required a revaluation
of the instrument to current fair value and a reclassification of amounts due
as short and long term liabilities.
Excluding
the repair and upgrade program charge and the adjustment for the modification
of the Series I preferred shares incurred during the second quarter of 2011,
net loss to common shareholders was $12.0 million or $0.10 per basic and
diluted share, compared to $16.7 million or $0.20 per basic and diluted share
in the second quarter of 2010.�
For the
six months ended April 30, 2011, FuelCell Energy reported revenue of $56.7
million compared to $31.2 million for the prior year period.� Product
sales and revenues were $52.4 million compared to $25.8 million for the prior
year period. � Research and development contract revenue was $4.3
million compared to $5.4 million.
Loss
from operations for the six months ended April 30, 2011 was $30.4 million,
compared to $29.7 million for the six months ended April 30,
2010.� Excluding the repair and upgrade program charge, loss from
operations would have improved to $21.7 million.�
Net
loss to common shareholders for the six months ended April 30, 2011 was $41.5
million or $0.35 per basic and diluted share compared to $32.1 million or
$0.38 per basic and diluted share for the six months ended April 30,
2010.� Margins for product sales and revenues decreased $1.8 million
over the prior period, as the repair and upgrade program charge offset the
favorable impact of higher volume.� The product cost-to-revenue ratio
improved to 1.25-to-1.00 compared to 1.44-to-1.00 for the same period one
year ago due to sales of higher margin products and lower commissioning and
warranty costs.
Excluding
the repair and upgrade program charge and adjustment for the modification of
the Series I preferred shares, net loss to common shareholders for the six
months ended April 30, 2011 was $23.7 million or $0.20 per basic and diluted
share compared to $32.1 million or $0.38 per basic and diluted share for the
six months ended April 30, 2010.� Excluding the repair and upgrade
charge, the product cost-to-revenue ratio would have been 1.08-to-1.00
compared to 1.44-to-1.00 in the prior period.
Total
cash, cash equivalents and investments in U.S. Treasuries were $55.0 million
as of April 30, 2011. � Net use of cash, cash equivalents, and
investments for the second quarter of 2011 was $17.1 million, excluding
revolver borrowings of $2.0 million, compared to net use of $13.9 million in
the second quarter of 2010. � The timing of working capital flows and
delays in order closure drove cash utilization higher. Capital spending for
the second quarter of 2011 was $0.5 million and depreciation expense was $1.6
million.
Total
cash use for the six months end April 30, 2011 was $20.3 million compared to
$21.1 million for the prior year, excluding net proceeds of $17.8 million
from the January 2011 registered direct offering, and revolver borrowings of
$3.0 million. � Year to date 2011 cash use is within the Company's plan
and with the closing of the order from POSCO Power in the third quarter, the
Company expects full year cash use to be within the previously reported range
of $24 to $32 million.
Corporate
and Market Highlights
"The
70 MW multi-year order from our South Korean partner, the largest in Company
history, represents the beginning of orders to meet the renewable portfolio
standard," said Chip Bottone, President and CEO of FuelCell Energy,
Inc.� "We expect the market opportunity to continue to grow in
South Korea as fuel cell power plants are purchased to fulfill the need for
clean distributed baseload generation."
The
recently announced $129 million order for 70 MW of fuel cell kits and other
equipment and services represents the beginning of demand related to the
renewable portfolio standard that takes effect in 2012 and mandates
approximately 6,000 MW through 2022.� FuelCell Energy will export 2.8 MW
of fuel cell kits monthly under the contract so that POSCO Power can
efficiently load their new production facility. �
POSCO
Power dedicated their newly built fuel cell module assembly plant at the end
of March, 2011.� The fuel cell module assembly and balance of plant
facilities are designed for 100 MW annual capacity and use fuel cell
components purchased from FuelCell Energy.� To date, POSCO Power has
ordered 140 MW of fuel cell power plants, modules and components since 2007.
�
The
size of the 70 MW order combined with the multi-year term has heightened interest
in Direct FuelCells from prospective partners and customers in the United
States and in Europe since the announcement.
The
Company recently increased annual production levels to 56 MW compared to 35
MW at the end of the first quarter of 2011 and 22 MW for fiscal year
2010.� Increased production provides the opportunity to realize
manufacturing and supply chain efficiencies.� � The order from
POSCO Power allows production levels to be sustained at 56 MW
annually.� � � �
PG&E,
one of the largest utilities in California, purchased two 1.4 MW power plants
in June 2010 for installation at two California universities and contracted
FuelCell Energy to provide the installation services.� The plants are
undergoing final testing and are expected to be operational by summer
2011.�
California
is a leader in the deployment of clean power sources as demonstrated by the
April 2011 enactment of a law requiring the State to obtain 33 percent of its
electricity from renewable resources by the year 2020, increasing the mandate
from the previous level of 20 percent, along with clean power generation
initiatives that value combined heat & power (CHP)
operation.� Direct FuelCells operating on renewable biogas qualify under
the law and fuel cells configured for CHP operation meet the State's need for
ultra-clean distributed baseload
generation.� � � � �
The
Company received three research contracts during the second quarter of 2011,
including an award from the U.S. Department of Energy (DOE), an award from
the U.S. Environmental Protection Agency (EPA), and a subcontract under a DOE
program.
- Solid
Oxide Fuel Cell Development: The DOE awarded an $11.7
million cost share contract to the Company for phase three of the Solid
State Energy Conversion Alliance (SECA) Program.� The objective of
phase three is to build and operate a scalable solid oxide fuel cell
module with output of 60 kW.�
- Carbon
capture: An award from the EPA will fund the initial
testing of Direct FuelCells to consume flue gas generated by industrial
processes instead of ambient air for the power generation process and
evaluate their capability to cost effectively separate the CO2 within
the flue gas.� Carbon capture potentially represents a large global
market.
- Biogas
clean-up cost reduction: � The Company received a subcontract
award under a DOE program to demonstrate an improved process for
cleaning biogas that if successful, could lead to a substantial
reduction in the cost of operating fuel cells that utilize renewable
biogas.
The
DFC300-H2 power plant installed at the Orange County Wastewater treatment
facility is fully operational, converting biogas into renewable hydrogen for
vehicle refueling and ultra-clean electricity for the water treatment
process.� This demonstration, the first co-production of renewable
hydrogen by a fuel cell at commercial scale, is being performed under
sub-contract to Air Products and Chemicals, Inc, with the majority of funding
provided by the DOE.
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.
Conference
Call Information
FuelCell
Energy will host a conference call with investors beginning at 10:00 a.m. Eastern
Time on June 7, 2011 to discuss the Second Quarter 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 Monday, June 13, 2011:
- From
the U.S. and Canada please dial 800-642-1687
- Outside
the U.S. or Canada please call 706-645-9291
- Enter confirmation code 69216314
About FuelCell Energy
DFC�
fuel cells are generating power at over 50 locations worldwide. The Company's
power plants have generated over 750 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, 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, 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.
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.
FUELCELL ENERGY, INC.
|
Consolidated Balance Sheets
|
(Unaudited)
|
(Amounts
in thousands, except share and per share amounts)
|
�
|
�
|
�
|
�
|
April 30,
2011
|
October 31,
2010
|
ASSETS
|
�
|
�
|
Current assets:
|
�
|
�
|
� Cash and cash equivalents
|
$36,980
|
$20,467
|
� Investments -- U.S. treasury securities
|
18,067
|
25,019
|
� Accounts receivable, net
|
19,879
|
18,066
|
� Inventories, net
|
36,199
|
33,404
|
� Other current assets
|
7,395
|
5,253
|
Total current assets
|
118,520
|
102,209
|
�
|
�
|
�
|
Property, plant and equipment, net
|
24,289
|
26,679
|
Investments -- U.S. treasury securities
|
--
|
9,071
|
Investment in and loans to affiliate
|
9,779
|
9,837
|
Other assets, net
|
5,941
|
2,733
|
Total assets
|
$158,529
|
$150,529
|
�
|
�
|
�
|
LIABILITIES AND EQUITY
|
�
|
�
|
Current liabilities:
|
�
|
�
|
� Current portion of long-term debt and other liabilities
|
$4,017
|
$976
|
� Accounts payable
|
11,764
|
10,267
|
� Accounts payable due to affiliate
|
275
|
575
|
� Accrued liabilities
|
26,335
|
16,721
|
� Deferred revenue
|
31,218
|
25,499
|
� Preferred stock obligation of subsidiary
|
8,992
|
--
|
Total current liabilities
|
82,601
|
54,038
|
�
|
�
|
�
|
Long-term deferred revenue
|
7,500
|
8,042
|
Long-term preferred stock obligation of subsidiary
|
14,564
|
--
|
Long-term debt and other liabilities
|
4,124
|
4,056
|
Total liabilities
|
108,789
|
66,136
|
Redeemable preferred stock of subsidiary
|
--
|
16,849
|
Redeemable preferred stock (liquidation preference of $64,020 at
April 30, 2011
and October 31, 2010)
|
59,857
|
59,857
|
Total Equity:
|
�
|
�
|
� Shareholders' equity
|
�
|
�
|
Common stock ($.0001 par value); 225,000,000 shares authorized;
126,692,525 and 112,965,725 shares issued and outstanding at April 30, 2011
and October 31, 2010, respectively.
|
12
|
11
|
Additional paid-in capital
|
677,157
|
663,951
|
Accumulated deficit
|
(686,517)
|
(655,623)
|
Accumulated other comprehensive income �
|
15
|
11
|
Treasury stock, Common, at cost (5,679 shares at April 30, 2011 and
October 31, 2010)
|
(53)
|
�
(53)
|
Deferred compensation
|
53
|
53
|
Total shareholders' (deficit)
equity
|
(9,333)
|
8,350
|
� Noncontrolling interest
in subsidiaries
|
(784)
|
(663)
|
Total equity
|
(10,117)
|
7,687
|
Total liabilities and equity
|
$158,529
|
$150,529
|
�
|
�
|
FUELCELL ENERGY, INC.
|
Consolidated Statements of Operations
|
(Unaudited)
|
(Amounts
in thousands, except share and per share amounts)
|
�
|
�
|
�
|
Three Months Ended
April 30,
|
�
|
2011
|
2010
|
Revenues:
|
�
|
�
|
� Product sales and revenues
|
$� 26,673
|
$ 13,007
|
� Research and development contracts
|
1,934
|
3,580
|
� Total revenues
|
28,607
|
16,587
|
�
|
�
|
�
|
Costs and expenses:
|
�
|
�
|
� Cost of product sales and revenues
|
37,460
|
19,120
|
� Cost of research and development contracts
|
2,017
|
3,267
|
� Administrative and selling expenses
|
4,454
|
4,547
|
� Research and development expenses
|
4,498
|
5,089
|
Total costs and expenses
|
48,429
|
32,023
|
�
|
�
|
�
|
Loss from operations
|
(19,822)
|
(15,436)
|
�
|
�
|
�
|
� Interest expense
|
(928)
|
(45)
|
� Income/(loss) from equity investment
|
143
|
(245)
|
� Interest and other income, net
|
634
|
364
|
�
|
�
|
�
|
Loss before redeemable preferred stock of subsidiary
|
(19,973)
|
(15,362)
|
�
|
�
|
�
|
� Accretion of redeemable preferred stock of subsidiary
|
--
|
(603)
|
�
|
�
|
�
|
Loss before provision for income taxes
|
(19,973)
|
(15,965)
|
�
|
�
|
�
|
Provision for income taxes
|
(35)
|
(13)
|
�
|
�
|
�
|
Net loss
|
(20,008)
|
(15,978)
|
�
|
�
|
�
|
Net loss attributable to noncontrolling interest
|
52
|
96
|
�
|
�
|
�
|
Net loss attributable to FuelCell Energy, Inc.
|
(19,956)
|
(15,882)
|
�
|
�
|
�
|
� Adjustment for modification of redeemable preferred stock of
subsidiary
|
(8,987)
|
--
|
� Preferred stock dividends
|
(800)
|
(800)
|
�
|
�
|
�
|
Net loss to common shareholders
|
$ (29,743)
|
$ (16,682)
|
�
|
�
|
�
|
Net loss per share to common shareholders
|
�
|
�
|
Basic
|
$ (0.24)
|
$ (0.20)
|
Diluted
|
$ (0.24)
|
$ (0.20)
|
�
|
�
|
�
|
Weighted average shares
outstanding
|
�
|
�
|
Basic
|
125,009,180
|
84,515,979
|
Diluted
|
125,009,180
|
84,515,979
|
�
|
FUELCELL ENERGY, INC.
|
Consolidated Statements of Operations
|
(Unaudited)
|
(Amounts
in thousands, except share and per share amounts)
|
�
|
�
|
�
|
Six Months Ended
April 30,
|
�
|
2011
|
2010
|
Revenues:
|
�
|
�
|
� Product sales and revenues
|
$ 52,433
|
$ 25,815
|
� Research and development contracts
|
4,254
|
5,388
|
� Total revenues
|
56,687
|
31,203
|
�
|
�
|
�
|
Costs and expenses:
|
�
|
�
|
� Cost of product sales and revenues
|
65,519
|
37,133
|
� Cost of research and development contracts
|
4,354
|
5,363
|
� Administrative and selling expenses
|
8,504
|
8,703
|
� Research and development expenses
|
8,744
|
9,709
|
Total costs and expenses
|
87,121
|
60,908
|
�
|
�
|
�
|
Loss from operations
|
(30,434)
|
(29,705)
|
�
|
�
|
�
|
� Interest expense
|
(982)
|
(108)
|
� Loss from equity investment
|
(55)
|
(393)
|
� Interest and other income, net
|
1,034
|
683
|
�
|
�
|
�
|
Loss before redeemable preferred stock of subsidiary
|
(30,437)
|
(29,523)
|
�
|
�
|
�
|
� Accretion of redeemable preferred stock of subsidiary
|
(525)
|
(1,160)
|
�
|
�
|
�
|
Loss before provision for income taxes
|
(30,962)
|
(30,683)
|
�
|
�
|
�
|
Provision for income taxes
|
(53)
|
(13)
|
�
|
�
|
�
|
Net loss
|
(31,015)
|
(30,696)
|
�
|
�
|
�
|
Net loss attributable to noncontrolling interest
|
121
|
182
|
�
|
�
|
�
|
Net loss attributable to FuelCell Energy, Inc.
|
(30,894)
|
(30,514)
|
�
|
�
|
�
|
� Adjustment for modification of redeemable preferred stock of
� subsidiary
|
(8,987)
|
----
|
� Preferred stock dividends
|
(1,600)
|
(1,602)
|
�
|
�
|
�
|
Net loss to common shareholders
|
$ (41,481)
|
$ (32,116)
|
�
|
�
|
�
|
Net loss per share to common shareholders
|
�
|
�
|
Basic
|
$ (0.35)
|
$ (0.38)
|
Diluted
|
$ (0.35)
|
$ (0.38)
|
�
|
�
|
�
|
Weighted average shares
outstanding
|
�
|
�
|
Basic
|
119,963,394
|
84,459,926
|
Diluted
|
119,963,394
|
84,459,926
|
�
|
�
|
FUELCELL ENERGY, INC.
|
Reconciliation
of GAAP to Non-GAAP Consolidated Statements of Operations
|
(Unaudited)
|
(Amounts
in thousands, except share and per share amounts)
|
�
|
�
|
�
|
Three Months Ended April 30,
|
�
|
2011
|
2010
|
�
|
GAAP
As Reported
|
Non-GAAP
Adjustments
|
�
|
Non-GAAP
As Adjusted
|
GAAP
As Reported (3)
|
�
|
�
|
�
|
�
|
�
|
�
|
Revenues:
|
�
|
�
|
�
|
�
|
�
|
� Product sales and revenues
|
$26,673
|
$--
|
�
|
$26,673
|
$13,007
|
� Research and development contracts
|
1,934
|
--
|
�
|
1,934
|
3,580
|
� Total revenues
|
28,607
|
--
|
�
|
28,607
|
16,587
|
�
|
�
|
�
|
�
|
�
|
�
|
Costs and expenses:
|
�
|
�
|
�
|
�
|
�
|
� Cost of product sales and revenues
|
37,460
|
(8,752)
|
(1)
|
28,708
|
19,120
|
� Cost of research and development contracts
|
2,017
|
--
|
�
|
2,017
|
3,267
|
� Administrative and selling expenses
|
4,454
|
--
|
�
|
4,454
|
4,547
|
� Research and development expenses
|
4,498
|
--
|
�
|
4,498
|
5,089
|
Total costs and expenses
|
48,429
|
(8,752)
|
�
|
39,677
|
32,023
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss from operations
|
(19,822)
|
8,752
|
�
|
(11,070)
|
(15,436)
|
�
|
�
|
�
|
�
|
�
|
�
|
� Interest expense
|
(928)
|
--
|
�
|
(928)
|
(45)
|
� Income/(Loss) from equity investment
|
143
|
--
|
�
|
143
|
(245)
|
� Interest and other income, net
|
634
|
--
|
�
|
634
|
364
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss before redeemable preferred stock of subsidiary
|
(19,973)
|
8,752
|
�
|
(11,221)
|
(15,362)
|
�
|
�
|
�
|
�
|
�
|
�
|
� Accretion of redeemable preferred stock of subsidiary
|
--
|
--
|
�
|
--
|
(603)
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss before provision for income taxes
|
(19,973)
|
8,752
|
�
|
(11,221)
|
(15,965)
|
�
|
�
|
�
|
�
|
�
|
�
|
Provision for income taxes
|
(35)
|
--
|
�
|
(35)
|
(13)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss
|
(20,008)
|
8,752
|
�
|
(11,256)
|
(15,978)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss attributable to noncontrolling interest
|
52
|
--
|
�
|
52
|
96
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss attributable to FuelCell Energy, Inc.
|
(19,956)
|
8,752
|
�
|
(11,204)
|
(15,882)
|
�
|
�
|
�
|
�
|
�
|
�
|
Adjustment for modification of redeemable preferred stock of
subsidiary
|
(8,987)
|
8,987
|
(2)
|
--
|
--
|
� Preferred stock dividends
|
(800)
|
--
|
�
|
(800)
|
(800)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss to common shareholders
|
$ (29,743)
|
$17,739
|
�
|
$ (12,004)
|
$ (16,682)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss per share to common shareholders
|
�
|
�
|
�
|
�
|
�
|
Basic
|
$ (0.24)
|
$ 0.14
|
�
|
$ (0.10)
|
$ (0.20)
|
Diluted
|
$ (0.24)
|
$ 0.14
|
�
|
$ (0.10)
|
$ (0.20)
|
�
|
�
|
�
|
�
|
�
|
�
|
Weighted average shares
outstanding
|
�
|
�
|
�
|
�
|
�
|
Basic
|
125,009,180
|
--
|
�
|
125,009,180
|
84,515,979
|
Diluted
|
125,009,180
|
--
|
�
|
125,009,180
|
84,515,979
|
�
|
�
|
FUELCELL ENERGY, INC.
|
Reconciliation
of GAAP to Non-GAAP Consolidated Statements of Operations
|
(Unaudited)
|
(Amounts
in thousands, except share and per share amounts)
|
�
|
�
|
�
|
Six Months Ended April 30,
|
�
|
2011
|
2010
|
�
|
GAAP
As Reported
|
Non-GAAP
Adjustments
|
�
|
Non-GAAP
As Adjusted
|
GAAP
As Reported (3)
|
Revenues:
|
�
|
�
|
�
|
�
|
�
|
� Product sales and revenues
|
$ 52,433
|
$ --
|
�
|
$ 52,433
|
$ 25,815
|
� Research and development contracts
|
4,254
|
--
|
�
|
4,254
|
5,388
|
� Total revenues
|
56,687
|
--
|
�
|
56,687
|
31,203
|
�
|
�
|
�
|
�
|
�
|
�
|
Costs and expenses:
|
�
|
�
|
�
|
�
|
�
|
� Cost of product sales and
revenues
|
65,519
|
(8,752)
|
(1)
|
56,767
|
37,133
|
� Cost of research and
development contracts
|
4,354
|
--
|
�
|
4,354
|
5,363
|
� Administrative and
selling expenses
|
8,504
|
--
|
�
|
8,504
|
8,703
|
� Research and development
expenses
|
8,744
|
--
|
�
|
8,744
|
9,709
|
Total costs and expenses
|
87,121
|
(8,752)
|
�
|
78,369
|
60,908
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss from operations
|
(30,434)
|
8,752
|
�
|
(21,682)
|
(29,705)
|
�
|
�
|
�
|
�
|
�
|
�
|
� Interest expense
|
(982)
|
--
|
�
|
(982)
|
(108)
|
� Loss from equity
investment
|
(55)
|
--
|
�
|
(55)
|
(393)
|
� Interest and other
income, net
|
1,034
|
--
|
�
|
1,034
|
683
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss before redeemable preferred
stock of subsidiary
|
(30,437)
|
8,752
|
�
|
(21,685)
|
(29,523)
|
�
|
�
|
�
|
�
|
�
|
�
|
� Accretion of redeemable
preferred stock of subsidiary
|
(525)
|
--
|
�
|
(525)
|
(1,160)
|
�
|
�
|
�
|
�
|
�
|
�
|
Loss before provision for income
taxes
|
(30,962)
|
8,752
|
�
|
(22,210)
|
(30,683)
|
�
|
�
|
�
|
�
|
�
|
�
|
Provision for income taxes
|
(53)
|
--
|
�
|
(53)
|
(13)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss
|
(31,015)
|
8,752
|
�
|
(22,263)
|
(30,696)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss attributable to
noncontrolling interest
|
121
|
--
|
�
|
121
|
182
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss attributable to
FuelCell Energy, Inc.
|
(30,894)
|
8,752
|
�
|
(22,142)
|
(30,514)
|
�
|
�
|
�
|
�
|
�
|
�
|
Adjustment for modification of
redeemable preferred stock of subsidiary
|
(8,987)
|
8,987
|
(2)
|
--
|
--
|
� Preferred stock dividends
|
(1,600)
|
--
|
�
|
(1,600)
|
(1,602)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss to common shareholders
|
$ (41,481)
|
$ 17,739
|
�
|
$ (23,742)
|
$ (32,116)
|
�
|
�
|
�
|
�
|
�
|
�
|
Net loss per share to common
shareholders
|
�
|
�
|
�
|
�
|
�
|
Basic
|
$ (0.35)
|
$ 0.15
|
�
|
$ (0.20)
|
$ (0.38)
|
Diluted
|
$ (0.35)
|
$ 0.15
|
�
|
$ (0.20)
|
$ (0.38)
|
�
|
�
|
�
|
�
|
�
|
�
|
Weighted average shares
outstanding
|
�
|
�
|
�
|
�
|
�
|
Basic
|
119,963,394
|
--
|
�
|
119,963,394
|
84,459,926
|
Diluted
|
119,963,394
|
--
|
�
|
119,963,394
|
84,459,926
|
�
|
�
|
�
|
�
|
�
|
�
|
Notes to
Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations
For the
Three and Six Months Ended � April 30, 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 operating
periodic 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 above referenced reconciliations are as follows:
(1) � FuelCell Energy, Inc. has � committed to a
repair and upgrade program to fix a product defect 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. Our product
sales, gross margin and cost to revenue ratio and cost of revenues for the
three and six months ended April 30, 2011 and 2010 were as follows:
�
|
Three Months Ended
April 30,
|
Six Months Ended
April 30,
|
�
|
2011
|
2010
|
2011
|
2010
|
GAAP Revenue and Cost of Sales
|
�
|
�
|
�
|
�
|
� Product sales and
revenues
|
$� 26,673
|
� $� 13,007
|
$� 52,433
|
� $� 25,815
|
� Cost of product sales and
revenues
|
� 37,460
|
� � 19,120
|
� 65,519
|
� � 37,133
|
� Gross margin from product
sales and revenues
|
$� (10,787)
|
� $� (6,113)
|
$� (13,086)
|
� $� (11,318)
|
� Product Sales
Cost-to-revenue ratio(a)
|
� 1.40
|
� 1.47
|
� � 1.25
|
� 1.44
|
Non-GAAP Adjustment to cost of
product sales and revenues:
|
�
|
�
|
�
|
�
|
Repair and Upgrade Cost
|
$� (8,752)
|
$� �
|
$� (8,752)
|
$� �
|
Gross Margin (non-GAAP):
|
�
|
�
|
�
|
�
|
Gross margin from product sales
and revenues
|
$� (2,035)
|
$� (6,113)
|
$� (4,334)
|
$� (11,318)
|
Gross margin from� research
and development contracts
|
(83)
|
313
|
(100)
|
25
|
Total
|
$� (2,118)
|
$� (5,800)
|
$� (4,434)
|
� $� (11,293)
|
� Product Sales
Cost-to-revenue ratio(a)
|
1.08
|
1.47
|
1.08
|
1.44
|
a)� � � � �
Cost-to-revenue ratio is calculated as cost of product sales and revenues
divided by product sales and revenues.
|
�
|
�
|
�
|
�
|
(2)� As previously announced, 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 historic carrying value of the Series I preferred shares
to the current fair value
The reason for the change in the value of the obligation was
that the original obligation had been accounted for under purchase price
accounting at the time of the acquisition of Global Thermoelectric Inc. in
2003. This valuation included a market risk discount and a foreign exchange
rate which was fixed at the time of the acquisition. Under the new valuation
under debt accounting, the future estimated cash flows were discounted using
the dividend rate in the modified agreement and the current foreign exchange
rate resulting in the adjustment. This accounting accelerated the prior
accretion model.
(3) Note that there were no adjustments to GAAP results as reported for the
three and six months ended April 30, 2010.
CONTACT: FuelCell Energy, Inc. �������� Kurt Goddard, Vice President Investor Relations �������� 203-830-7494 ��� �����ir@fce.com
|