- 59 megawatt (MW) fuel cell park installed by POSCO Energy is
fully operational
- 15 MW Bridgeport fuel cell park commissioned on schedule and
accepted by utility owner
- Groundbreaking for 20 MW fuel cell park in South Korea to
support the electric grid and a railroad depot
- 3.7 MW's of new fuel cell module orders to support Korea market
demand
FuelCell Energy, Inc. (Nasdaq:FCEL), a global leader in the design,
manufacture, operation and service of ultra-clean, efficient and
reliable fuel cell power plants, today reported results for its
first quarter ended January 31, 2014 along with an update on key
business highlights.
Financial Results
FuelCell Energy (the Company) reported total revenues for the
first quarter of 2014 of $44.4 million compared to $36.4 million
for the first quarter of 2013. Product sales for the first quarter
of 2014 totaled $34.5 million, comprising $18.4 million of power
plant revenue and fuel cell kit sales, and $16.1 million of power
plant component sales plus site engineering and construction
services, including 3.4 megawatts of fuel cell module sales to
POSCO Energy that is in addition to the existing multi-year 122
megawatt fuel cell kit order. For the comparable prior year period,
product sales totaled $29.1 million, including $25.1 million of
power plant revenues and fuel cell kit sales and $4.0 million of
power plant component sales and site engineering and construction
services.
Service and license revenues for the first quarter of 2014
totaled $5.0 million comparable to the prior year period.
Advanced technologies contract revenue was $5.0 million for the
first quarter of 2014 compared to $2.3 million for the first
quarter of 2013 with the increase attributable to acceleration of
solid oxide fuel cell development under the U.S. Department of
Energy Solid State Energy Conversion Alliance (SECA) program as
well as revenue recognized under a previously announced data center
project. This demonstration project is converting renewable biogas
from a wastewater treatment facility in Wyoming into zero carbon
ultra-clean electricity to power a data center.
Backlog totaled $326.8 million at January 31, 2014 compared to
$428.3 million at January 31, 2013.
- Product sales backlog was $144.6 million at January 31, 2014
compared to $260.4 million at January 31, 2013. Product backlog in
megawatts (MW) totaled 95.0 MW at January 31, 2014 compared to
150.7 MW at January 31, 2013.
- Service backlog was $164.8 million at January 31, 2014 compared
to $149.9 million at January 31, 2013.
- Advanced technologies contracts backlog was $17.4 million at
January 31, 2014 compared to $18.0 million at January 31,
2013.
The gross profit generated in the first quarter of 2014 totaled
$2.2 million compared to a gross loss of $2.3 million in the first
quarter of 2013. The first quarter 2014 gross margin was 4.9
percent and the year-over-year increase reflected continuing
improvement in revenue mix including Services and continued cost
reductions.
Loss from operations for the first quarter of 2014 was $7.6
million compared to $11.1 million for the first quarter of 2013.
Administrative and selling expenses decreased year-over-year as the
prior year period included business development expenses that were
non-recurring in the current year period. Research and development
expenses increased year-over-year from product development
initiatives that supports the market entry strategy into Europe as
well as continued programs to reduce costs by consolidating select
aspects of the balance of plant functions and integration of heat
recovery equipment for large scale multi-megawatt installations to
further reduce system costs.
Net loss attributable to common shareholders for the first
quarter of 2014 totaled $11.4 million, or $0.06 per basic and
diluted share. Excluding the non-cash adjustment of $2.4 million
for conversion expenses for the Senior Unsecured Convertible notes,
offset by a favorable impact from the fair value adjustment
required on the embedded derivatives in the convertible notes, the
adjusted net loss attributable to common shareholders totaled $9.0
million or $0.04 per basic and diluted share. Please refer to the
accompanying Notes to Reconciliation of GAAP to Non-GAAP
Consolidated Statements of Operations for more detailed information
on these Non-GAAP measures. For the comparable prior year period,
net loss attributable to common shareholders totaled $12.5 million
or $0.07 per basic and diluted share.
Cash and cash equivalents and restricted cash
Cash and cash equivalents and restricted cash totaled $104.6
million at January 31, 2014. Net cash used by operating activities
in the first quarter of 2014 was $5.1 million, which included the
collection of accounts receivable, primarily related to the
Bridgeport fuel cell park project, off-set by other uses of cash.
The Company completed a public offering during the first quarter of
2014 issuing 25.3 million shares of common stock with net proceeds
of $29.5 million. Capital spending was $0.8 million and
depreciation expense was $1.1 million for the first quarter of
2014.
8.0% Senior Unsecured Convertible Notes (Convertible Notes)
During the first quarter of 2014, the Company received $15.0
million of conversion notices under the Convertible Notes. As a
result, the Company issued approximately 12.0 million shares of
common stock to settle the conversions. Net expense of $2.4 million
was recorded to the Statement of Operations to adjust the fair
value of the make whole liability embedded derivative to the fair
value of the consideration provided to settle the make whole
obligation related to converted Convertible Notes partially offset
by the favorable impact from the fair value adjustment required on
embedded derivatives.
Subsequent to January 31, 2014, the Company received conversion
notices for an additional $22.0 million of principal, resulting in
the issuance of approximately 17.5 million shares of common stock.
The remaining principal balance of the Convertible Notes is $1.0
million as of March 10, 2014.
Business Highlights
"We remain on track for closing multiple megawatts of orders and
my confidence level is high as we have negotiated contracts for
projects where we are waiting on final customer or regulatory
approval," said Chip Bottone, President and Chief Executive
Officer, FuelCell Energy, Inc. "Inquiries and activity levels
globally remain high as we work to convert pipeline into backlog,
supported by the validation from on-time completion of
multi-megawatt fuel cell parks on two different continents."
The Company maintained an annual production run-rate at the
Torrington, Connecticut production facility of approximately 70
megawatts during the first quarter of 2014, producing 17.5 MW of
cell components for fuel cell kits and fuel cell power plants.
"We had 74 megawatts of fuel cell parks become fully operational
during the first quarter of 2014, supplying ultra-clean baseload
power to electric grids and demonstrating the capability for
stationary fuel cell power plants to address power generation
challenges facing utilities and governments around the world,"
continued Mr. Bottone.
In North America, the 14.9 megawatt Bridgeport fuel cell park
was completed on schedule in December, 2013 and accepted by
Dominion, the project owner. A 1.4 megawatt power plant at Hartford
Hospital in Connecticut is beginning commissioning in March and is
expected to be supplying ultra-clean electricity to the hospital
and steam to both the hospital and a district heating system by
early April.
In Asia, the Gyeonggi Green Energy 59 megawatt fuel cell park in
South Korea composed of 21 DFC3000® power plants is fully
operational, delivering ultra-clean electricity to the grid and
high quality heat to a district heating system. The fuel cell park
was installed by POSCO Energy using fuel cell components supplied
by FuelCell Energy. Separately, a groundbreaking was held in
February 2014 for a 19.6 megawatt fuel cell park located at a
railroad depot in Seoul City. The power will be supplied to the
electric grid except that in the event of a grid disruption, the
power will be used to support rail operations. The high quality
heat will be supplied to a district heating system. The Company
closed orders of 3.7 MW of modules to POSCO Energy during the first
quarter of 2014 to support the strong demand in South Korea.
Construction of the fuel cell component manufacturing facility
in South Korea by POSCO Energy is progressing on schedule. Growing
demand for multi-megawatt fuel cell parks supports the need for
additional global manufacturing capacity.
In Europe, the Fenchurch office tower in London's financial
district is nearing completion and the fuel cell energy power plant
is expected to be commissioned during the second quarter of
2014.
Advanced Technology update
Distributed or on-site hydrogen generation represents an
attractive market opportunity for Direct FuelCell® power plants as
the versatile carbonate fuel cell technology provides multiple
value streams including electricity, heat and hydrogen. The market
opportunity for on-site hydrogen generation includes both
industrial applications as well as transportation fueling. An
existing pilot installation for transportation fueling in
California is providing ultra-clean and renewable hydrogen for fuel
cell powered vehicles in the Los Angeles area, as a DFC® plant
converts renewable biogas from a wastewater treatment facility into
hydrogen and electricity.
The Company recently announced further market development for
distributed hydrogen with funding for an installation to provide
hydrogen for industrial applications. A tri-generation fuel cell
plant will be installed at the Company manufacturing facility in
Torrington, Connecticut during 2014 under a U.S. Department of
Energy Advanced Manufacturing Office program to demonstrate
distributed hydrogen generation for industrial applications. The
ultra-clean electricity, usable high quality heat, and
industrial-grade hydrogen will support the fuel cell component
manufacturing process and the installation will act as a showcase
for prospective customers and partners.
The previously announced data center project in Wyoming that is
converting renewable biogas from wastewater to power for a data
center and heat for the wastewater treatment process is undergoing
commissioning. The project is demonstrating zero-carbon power
generation.
The tri-generation fuel cell installation at the Vancouver,
Canada landfill is expected to be commissioned during the second
quarter of 2014. The cleaned landfill gas will be used by the fuel
cell power plant to generate multiple revenue streams, including
ultra-clean electricity, usable high quality heat and renewable
hydrogen.
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 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, unanticipated manufacturing issues that impact power
plant performance, 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 more than 300 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 more than two
billion kilowatt hours of ultra-clean 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 www.fuelcellenergy.com
See us on YouTube
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 management will host a conference call with
investors beginning at 10:00 a.m. Eastern Time on March 11, 2014 to
discuss the first quarter 2014 results. An accompanying slide
presentation for the earnings call will be available at
http://fcel.client.shareholder.com/events.cfm immediately prior to
the call.
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 available 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 Friday, March 14, 2014:
- From the U.S. and Canada please dial 855-859-2056 or
800-585-8367
- Outside the U.S. or Canada please call 404-537-3406
- Enter confirmation code 4223698
|
FUELCELL ENERGY,
INC. |
Consolidated Balance
Sheets |
(Unaudited) |
(Amounts in thousands,
except share and per share amounts) |
|
|
|
|
January 31,
2014 |
October 31,
2013 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents -
unrestricted |
$ 78,468 |
$ 67,696 |
Restricted cash and cash equivalents –
short-term |
6,194 |
5,053 |
Accounts receivable, net |
33,831 |
49,116 |
Inventories, net |
51,852 |
56,185 |
Other current assets |
6,871 |
11,279 |
Total current
assets |
177,216 |
189,329 |
|
|
|
Restricted cash and cash equivalents –
long-term |
19,950 |
4,950 |
Property, plant and equipment, net |
23,947 |
24,225 |
Goodwill |
4,075 |
4,075 |
Intangible assets |
9,592 |
9,592 |
Other assets, net |
5,944 |
5,465 |
Total
assets |
$ 240,724 |
$ 237,636 |
|
|
|
LIABILITIES AND
EQUITY |
|
|
Current liabilities: |
|
|
Current portion of long-term debt |
$ 6,914 |
$ 6,931 |
Accounts payable |
18,397 |
24,535 |
Accrued liabilities |
10,599 |
21,912 |
Deferred revenue |
47,630 |
51,857 |
Preferred stock obligation of
subsidiary |
962 |
1,028 |
Total current
liabilities |
84,502 |
106,263 |
|
|
|
Long-term deferred revenue |
20,248 |
18,763 |
Long-term preferred stock obligation of
subsidiary |
12,610 |
13,270 |
Long-term debt and other liabilities |
37,173 |
52,675 |
Total
liabilities |
154,533 |
190,971 |
Redeemable preferred stock (liquidation
preference of $64,020 at January 31, 2014 and October 31,
2013) |
59,857 |
59,857 |
Total Equity (Deficit): |
|
|
Shareholders' equity (deficit) |
|
|
Common stock ($.0001 par
value; 275,000,000 shares authorized; 236,457,199
and 196,310,402 shares issued and outstanding at January 31,
2014 and October 31, 2013, respectively) |
24 |
20 |
Additional paid-in
capital |
809,013 |
758,656 |
Accumulated deficit |
(781,793) |
(771,189) |
Accumulated other
comprehensive income |
81 |
101 |
Treasury stock, Common, at
cost (5,679 shares at January 31, 2014 and October 31, 2013) |
(53) |
(53) |
Deferred compensation |
53 |
53 |
Total
shareholders' equity (deficit) |
27,325 |
(12,412) |
Noncontrolling interest in
subsidiaries |
(991) |
(780) |
Total equity
(deficit) |
26,334 |
(13,192) |
Total
liabilities and equity (deficit) |
$ 240,724 |
$ 237,636 |
|
|
|
|
FUELCELL ENERGY,
INC. |
Consolidated Statements
of Operations |
(unaudited) |
(Amounts in thousands,
except share and per share amounts) |
|
|
|
|
Three Months
Ended January 31, |
Revenues: |
2014 |
2013 |
Product sales |
$ 34,460 |
$ 29,065 |
Service agreements and license
revenues |
4,960 |
4,969 |
Advanced technologies contract
revenues |
5,014 |
2,324 |
Total revenues |
44,434 |
36,358 |
|
|
|
Costs of revenues: |
|
|
Cost of product sales |
33,028 |
29,944 |
Cost of service agreements and license
revenues |
4,157 |
6,485 |
Cost of advanced technologies contract
revenues |
5,050 |
2,240 |
Total cost of revenues |
42,235 |
38,669 |
|
|
|
Gross profit (loss) |
2,199 |
(2,311) |
|
|
|
Operating expenses: |
|
|
Administrative and selling expenses |
4,854 |
5,432 |
Research and development expenses |
4,915 |
3,327 |
Total operating
expenses |
9,769 |
8,759 |
|
|
|
Loss from operations |
(7,570) |
(11,070) |
|
|
|
Interest expense |
(1,361) |
(566) |
Income from equity investment |
-- |
46 |
Other income (expense), net |
(1,774) |
(282) |
|
|
|
Loss before provision for income taxes |
(10,705) |
(11,872) |
|
|
|
Provision for income taxes |
(110) |
(7) |
|
|
|
Net loss |
(10,815) |
(11,879) |
|
|
|
Net loss attributable to noncontrolling
interest |
211 |
198 |
|
|
|
Net loss attributable to FuelCell Energy,
Inc. |
(10,604) |
(11,681) |
|
|
|
Preferred stock dividends |
(800) |
(800) |
|
|
|
Net loss to common shareholders |
$ (11,404) |
$ (12,481) |
|
|
|
Loss per share basic and diluted |
|
|
Basic |
$ (0.06) |
$ (0.07) |
Diluted |
$ (0.06) |
$ (0.07) |
|
|
|
Weighted average shares outstanding |
|
|
Basic |
200,637,819 |
187,553,306 |
Diluted |
200,637,819 |
187,553,306 |
|
|
|
|
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 January 31, |
|
2014 |
2013 |
|
GAAP As Reported |
Non-GAAP Adjustments |
Non-GAAP As Adjusted |
GAAP As Reported |
Non-GAAP Adjustments |
Non-GAAP As
Adjusted |
Loss before provision for income taxes |
$ (10,705) |
$ 2,443 (1) |
$ (8,262) |
$ (11,872) |
$ -- |
$ (11,872) |
Net loss |
$ (10,815) |
$ 2,443 |
$ (8,372) |
$ (11,879) |
$ -- |
$ (11,879) |
Net loss to common shareholders |
$ (11,404) |
$ 2,443 |
$ (8,961) |
$ (12,481) |
$ -- |
$ (12,481) |
|
|
|
|
|
|
|
Net loss per share to common
shareholders |
|
|
|
|
|
|
Basic |
$ (0.06) |
|
$ (0.04) |
$ (0.07) |
|
$ (0.07) |
|
Diluted |
$ (0.06) |
|
$ (0.04) |
$ (0.07) |
|
$ (0.07) |
|
Notes to Reconciliation of GAAP to
Non-GAAP Consolidated Statements of Operations
For the Three Months Ended January 31,
2014 and 2013
Results of Operations are presented in accordance with
accounting principles generally accepted in the United States
("GAAP"). 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 reconciliation of GAAP to non-GAAP Consolidated
Statements of Operations information are as follows:
(1) Adjustment for the three months ended January 31, 2014
represents expense associated with the conversion of $15.0 million
of the $38.0 million Senior Unsecured Convertible notes offset by a
favorable impact from the fair value adjustment required on the
embedded derivatives in the Senior Unsecured Convertible notes in
accordance with Accounting Standards Codification (ASC) 815 –
Derivatives and Hedging.
CONTACT: FuelCell Energy, Inc.
Kurt Goddard, Vice President Investor Relations
203-830-7494
ir@fce.com
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