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DANBURY, Conn., Dec. 13, 2010 (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 fourth quarter and fiscal year ended October 31, 2010 along with its latest accomplishments. Financial Results
FuelCell Energy reported total revenues for the fourth quarter of 2010 of $19.7 million compared to $20.4 million in the same period last year. Product sales and revenues in the fourth quarter were $17.2 million compared to $16.7 million in the prior year quarter. Orders and long term service agreements received in the fourth quarter of 2010 increased total product sales and service backlog by 70 percent to $154.3 million at October 31, 2010 compared to $90.7 million as of October 31, 2009.
Margins for product sales and revenues improved over the prior year quarter by $2.8 million, due to lower product and commissioning costs. The product cost-to-revenue ratio was 1.21-to-1.00 in the fourth quarter of 2010 compared to 1.39-to-1.00 in the fourth quarter of 2009 due to product cost reductions.
Research and development contract revenue was $2.5 million for the fourth quarter of 2010 compared to $3.7 million for the fourth quarter of 2009 as phase II of the solid oxide fuel cell development contract with the U.S. Department of Energy (DOE) neared conclusion. The Company's research and development backlog totaled $9.7 million as of October 31, 2010 compared to $14.2 million as of October 31, 2009. The Company submitted a proposal to the DOE of approximately $34 million to participate in the third phase of the solid oxide fuel cell development program and expects a decision by early 2011.
Net loss to common shareholders for the fourth quarter of 2010 of $12.9 million, or $0.11 per basic and diluted share, compared to net loss to common shareholders of $15.6 million or $0.20 per basic and diluted share in the fourth quarter of 2009. Higher product margins drove this improvement.
For the year ended October 31, 2010, FuelCell Energy reported revenue of $69.8 million compared to $88.0 million for the comparable prior year. Product sales and revenues were $59.2 million compared to $73.8 million for the comparable prior year due to decreased order activity in the first half of 2010 and the sales mix weighted towards fuel cell modules from complete power plants. Research and development contract revenue was $10.6 million compared to $14.2 million for the year ended October 31, 2009.
Net loss to common shareholders for the year ended October 31, 2010 was $58.9 million or $0.63 per basic and diluted share compared to $71.9 million or $0.99 per basic and diluted share for the year ended October 31, 2009. Margins for product sales and revenues improved by $14.4 million over the prior year, primarily due to lower product costs. The product cost-to-revenue ratio was 1.32-to-1.00 for fiscal year 2010 compared to 1.45-to-1.00 for the prior fiscal year.
Total cash, cash equivalents and investments in U.S. Treasuries were $54.6 million as of October 31, 2010. Net cash use for the fourth quarter was $13.3 million. Total cash use in fiscal year 2010 was $42.4 million compared to total cash use of $79.5 million in fiscal year 2009, excluding proceeds of public offerings of common stock. The favorable impact of improved product margins and the timing of customer payments received in 2010 drove lower cash utilization. Capital spending for the fourth quarter was $0.5 million and depreciation expense was $1.9 million. Corporate Highlights
"Recent order activity combined with a growing order pipeline caused us to increase annual production levels to 35 megawatts by the end of the fourth quarter," said R. Daniel Brdar, Chairman and CEO of FuelCell Energy, Inc. "The U.S. market was very active with orders from multiple end markets including installations at major California water treatment facilities, a University of California campus and a US Navy base. We expect the fuel cell market to remain strong domestically from both municipal and commercial customers, and the South Korean market to expand based on the adoption of the renewable portfolio standard." Market Activity
FuelCell Energy is a world leader in the development and production of stationary fuel cells. Direct FuelCell (DFC®) power plants are generating power at more than 50 locations globally and have cumulatively generated over 650 million kilowatt hours (kWh) of clean power. Key geographic and vertical markets are driving sales of DFC power plants. California: Clean energy deployment remains a focus in California with 12.1 MW of orders announced during the fourth quarter of 2010. These orders will utilize a variety of fuels, including renewable biogas, directed biogas and natural gas:
The financing used for these projects included publicly issued bonds, equity and debt investments by investors and commercial bank financing.
Municipal water treatment operations are an attractive market opportunity as the renewable baseload power attributes of fuel cells meet their need for clean power around-the-clock and help to solve pollutant emission challenges. Clean air permitting is a significant hurdle in some regions of California. Due to the electrochemical reaction that replaces combustion, virtually no pollutants are released by the fuel cell, simplifying and accelerating the clean air permitting process. The 2.8 MW DFC3000 was recently certified under the California Air Resources Board's distributed generation standards demonstrating the ability of the plant to meet challenging clean air standards. U.S. Department of Defense: The Company continues to expand its relationship with the U.S. Department of Defense (DoD), announcing two contracts during the fourth quarter of 2010. The need for
ultra-clean and reliable distributed generation by the DoD drove an order for two 300 kilowatt (kW) DFC300 power plants, which will be installed at U.S. Navy Submarine Base New London. The Company will also install and service a 300 kW DFC300 owned by the DoD under a demonstration program at U.S. Army Base Camp Parks, California. South Korea: The South Korean Government passed a Renewable Portfolio Standard (RPS) beginning in 2012 that mandates 350 MW of renewable energy per year through 2016, and 700 MW per year through 2022. Fuel cells operating on natural gas and biogas fully qualify under the mandates of the program.
In response to the RPS, POSCO Power is investing in local fuel cell production capacity in South Korea. The 100 MW fuel cell stack module assembly plant is expected to begin production in early 2011 using fuel cell components shipped from the United States. This localization strategy allows FuelCell Energy to reduce costs, and ensure that products meet the needs of individual markets.
Under a joint development agreement announced subsequent to the fiscal year ended October 31, 2010, POSCO Power will fund the development of a small-scale Direct FuelCell power plant targeted at the commercial/apartment building market in Asia. The $5.8 million contract will be funded in stages as performance milestones are reached. Connecticut: The Company continues active discussions with private and government financing sources for the 43.5 MW of fuel cell projects selected and approved by the Connecticut Department of Utility Control (CDUC). Government Research and Development Contracts Advanced Hydrogen Programs: Hydrogen Compression: The Company was awarded approximately $2.0 million during the fourth quarter of 2010 by the DOE to further develop and demonstrate a highly efficient and reliable method for compressing hydrogen utilizing its solid-state Electrochemical Hydrogen Compressor (EHC) technology. The EHC technology can be utilized to compress hydrogen for storage, transport and
subsequent use for vehicle refueling or other industrial applications. Solid Oxide Fuel Cell Development: The Company continues to partner with Versa Power Systems Inc., for the development of a Large Scale Coal-Based Solid Oxide Fuel Cell under the U.S. Department of Energy Solid State Energy Conversion Alliance (SECA) Program. The FuelCell Energy/Versa team met cost and performance objectives for a minimum 25 kW fuel cell stack in Phase II of the program. The full scale advanced fuel cell system to be demonstrated in Phase III is expected to incorporate an SOFC module with an output of up to 250 kW to efficiently convert the energy contained in coal to ultra-clean grid electrical power. Conference Call Information
FuelCell Energy will host a conference call with investors beginning at 10:00 a.m. Eastern Time on December 14, 2010 to discuss the fourth quarter and year-end 2010 results.
Participants can access the live call via webcast on the Company website or by telephone as follows:
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, December 20, 2010: About FuelCell Energy
DFC® fuel cells are generating power at over 50 locations worldwide. The Company's power plants have generated over 650 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 (Amounts in thousands, except share and per share amounts)
October 31,
2010
(Unaudited)October 31,
2009 ASSETS
Current assets:
Cash and cash equivalents
$20,467
$57,823
Investments -- U.S. treasury securities
25,019
7,004
Accounts receivable, net
18,066
22,920
Inventories, net
33,404
25,433
Other current assets
5,253
6,499
Total current assets
102,209
119,679
Property, plant and equipment, net
26,679
32,394
Investments -- U.S. treasury securities
9,071
--
Investment in and loans to affiliate
9,837
10,064
Other assets, net
2,733
551
Total assets
$150,529
$162,688
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt and other liabilities
$976
$997
Accounts payable
10,267
8,484
Accounts payable due to affiliate
575
1,584
Accrued liabilities
16,721
13,808
Deferred revenue, royalty income and customer deposits
25,499
17,013
Total current liabilities
54,038
41,886
Long-term deferred revenue and royalty income
8,042
10,124
Long-term debt and other liabilities
4,056
4,410
Total liabilities
66,136
56,420
Redeemable preferred stock of subsidiary
16,849
14,976
Redeemable preferred stock (liquidation preference of $64,020 at October 31, 2010 and
$64,120 at October 31, 2009)
59,857
59,950
Total Equity:
Shareholders' equity
Common stock ($.0001 par value); 150,000,000 shares authorized; 112,965,725 and
84,387,741 shares issued and outstanding at October 31, 2010 and October 31, 2009,
respectively.
11
8
Additional paid-in capital
663,951
631,296
Accumulated deficit
(655,623)
(599,960)
Accumulated other comprehensive income (loss)
11
(2)
Treasury stock, Common, at cost (5,679 shares at October 31, 2010 and 2009)
(53)
(53)
Deferred compensation
53
53
Total shareholders' equity
8,350
31,342
Noncontrolling interest in subsidiaries
(663)
--
Total equity
7,687
31,342
Total liabilities and equity
$150,529
$162,688
FUELCELL ENERGY, INC. Consolidated Statements of Operations (unaudited) (Amounts in thousands, except share and per share amounts)
Three Months Ended
October 31,
2010 2009
Revenues:
Product sales and revenues
$17,193
$16,727
Research and development contracts
2,508
3,685
Total revenues
19,701
20,412
Costs and expenses:
Cost of product sales and revenues
20,877
23,213
Cost of research and development contracts
2,428
2,941
Administrative and selling expenses
4,262
4,086
Research and development expenses
4,235
4,220
Total costs and expenses
31,802
34,460
Loss from operations
(12,101)
(14,048)
Interest expense
(9)
(74)
Loss from equity investment
(154)
(235)
Interest and other income, net
375
130
Loss before redeemable preferred stock of subsidiary
(11,889)
(14,227)
Accretion of redeemable preferred stock of subsidiary
(604)
(533)
Loss before provision for income taxes
(12,493)
(14,760)
Provision for income taxes
(23)
--
Net loss
(12,516)
(14,760)
Net loss attributable to noncontrolling interest
393
--
Net loss attributable to FuelCell Energy, Inc.
(12,123)
(14,760)
Preferred stock dividends
(800)
(802)
Net loss to common shareholders
$(12,923)
$(15,562)
Net loss per share to common shareholders
Basic
$(0.11)
$(0.20)
Diluted
$(0.11)
$(0.20)
Weighted average shares outstanding
Basic
112,962,059
77,625,323
Diluted
112,962,059
77,625,323
FUELCELL ENERGY, INC. Consolidated Statements of Operations (Amounts in thousands, except share and per share amounts)
Twelve Months Ended
October 31,
2010
(Unaudited) 2009
Revenues:
Product sales and revenues
$59,226
$73,804
Research and development contracts
10,551
14,212
Total revenues
69,777
88,016
Costs and expenses:
Cost of product sales and revenues
78,060
107,033
Cost of research and development contracts
10,370
10,994
Administrative and selling expenses
17,150
17,194
Research and development expenses
18,562
19,160
Total costs and expenses
124,142
154,381
Loss from operations
(54,365)
(66,365)
Interest expense
(127)
(265)
Loss from equity investment
(730)
(812)
Interest and other income, net
1,354
860
Loss before redeemable preferred stock of subsidiary
(53,868)
(66,582)
Accretion of redeemable preferred stock of subsidiary
(2,367)
(2,092)
Loss before provision for income taxes
(56,235)
(68,674)
Provision for income taxes
(91)
--
Net loss
(56,326)
(68,674)
Net loss attributable to noncontrolling interest
663
--
Net loss attributable to FuelCell Energy, Inc.
(55,663)
(68,674)
Preferred stock dividends
(3,201)
(3,208)
Net loss to common shareholders
$(58,864)
$(71,882)
Net loss per share to common shareholders
Basic
$(0.63)
$(0.99)
Diluted
$(0.63)
$(0.99)
Weighted average shares outstanding
Basic
93,925,863
72,392,928
Diluted
93,925,863
72,392,928 CONTACT: FuelCell Energy, Inc.
Kurt Goddard, Vice President Investor Relations
203-830-7494
ir@fce.com
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