- 7.4 megawatts of orders closed in the first quarter of
2015
- $112 million of Cash and Restricted Cash
- Fuel cell project placed into a yieldco
- Carbon capture solution meeting cost and effectiveness
targets
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 financial results
for its first quarter ended January 31, 2015.
Financial Results
FuelCell Energy (the Company) reported total revenues for the
first quarter of 2015 of $41.7 million compared to $44.4 million
for the comparable prior year period. Revenue components
include:
- Product sales of $33.4 million for the current period compared
to $34.5 million for the comparable prior year period
- Service agreements and license revenues of $3.9 million for the
current period compared to $5.0 million for the comparable prior
year period
- Advanced technologies contract revenues of $4.4 million for the
current period compared to $5.0 million for the comparable prior
year period
The gross profit generated in the first quarter of 2015 totaled
$4.0 million and the gross margin for the period was 9.6 percent,
compared to gross profit of $2.2 million and gross margin of 4.9
percent for the first quarter of 2014. The year-over year margin
improvement reflects cost reduction actions and sales mix.
Operating expenses for the current period totaled $9.1 million
compared to $9.8 million for the prior year period. Administrative
and selling expenses increased year-over-year from expanding
proposal and development activity associated with the growing
project pipeline, but were more than offset by lower research and
development expenses. Net loss attributable to common shareholders
for the first quarter of 2015 totaled $4.9 million, or $0.02 per
basic and diluted share, compared to $11.4 million or $0.06 per
basic and diluted share for the first quarter of 2014.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) in the first quarter of 2015 totaled ($4.1)
million. Refer to the discussion of Non-GAAP financial measures
below regarding the Company's calculation of EBITDA. Net cash used
by operating activities in the first quarter of 2015 was $2.3
million. Capital spending was $1.6 million and depreciation expense
was $1.0 million.
Revenue Backlog
Total backlog was $337.0 million at January 31, 2015 compared to
$326.9 million at January 31, 2014.
- Product sales backlog totaled $109.0 million at January 31,
2015 compared to $144.6 million at January 31, 2014
- Service backlog totaled $207.5 million at January 31, 2015
compared to $164.9 million at January 31, 2014
- Advanced technologies contracts backlog totaled $20.5 million
at January 31, 2015 compared to $17.4 million at January 31,
2014
Liquidity and Capital Resources
Liquidity totaled $155.0 million at January 31, 2015,
including:
- $111.9 million of Cash and Restricted Cash
- $3.1 million of borrowing availability under the JPMorgan
revolver
- $40.0 million of borrowing availability under the NRG Energy
revolving financing facility
Business Highlights
- 3.4 megawatt utility gas let-down station order closed with UIL
Holdings (NYSE: UIL) during first quarter of 2015
- 4.0 megawatts of fuel cell modules ordered by South Korean
partner POSCO Energy during first quarter and 3.1 megawatts shipped
and revenue recognized
- 8.4 megawatts of fuel cell kits under pre-existing multi-year
contract shipped to POSCO Energy during first quarter
- Progressing with development of numerous multi-megawatt fuel
cell parks
- 1.4 megawatt university project placed into NRG Yield (NYSE:
NYLD)
- Greater than 95 percent availability reported for first year
operating performance of 15 megawatt Dominion Bridgeport fuel cell
park
- Five separate North American projects currently being installed
in excess of 11 megawatts
- On-balance sheet hospital project in California progressing
towards commissioning and expected sale and revenue recognition in
late fiscal 2015
- Carbon capture performance milestones reached with up to 90
percent capture at a cost per ton below U.S. Department of Energy
target, and added benefit of destroying smog producing nitrogen
oxide (NOx)
"The gross margin nearly doubled this quarter compared to the
prior year period on lower revenue, as we align the operating model
of the business with market opportunities, including cost
reductions, production efficiency improvements, and enhancing the
profitability profile of the Services and Advanced Technology
groups ," said Chip Bottone, President and Chief Executive Officer,
FuelCell Energy, Inc. "We remain focused on top-line revenue
growth with projects progressing in our utility and on-site
markets, as well as measurable progress being made with
commercializing both our carbon capture and distributed hydrogen
solutions."
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.
Non-GAAP Financial Measures
Financial Results are presented in accordance with accounting
principles generally accepted in the United States ("GAAP").
Management also uses non-GAAP measures to analyze the business.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) is an alternate measure of cash utilization. The
table below calculates Adjusted EBITDA and reconciles these figures
to the GAAP financial statement measure Net loss attributable to
FuelCell Energy, Inc.
|
Three
Months Ended January 31, |
(Amounts in thousands) |
2015 |
2014 |
Net loss attributable to
FuelCell Energy, Inc. |
$ (4,066) |
$ (10,604) |
Depreciation |
963 |
1,068 |
Provision for income taxes |
40 |
110 |
Other income (expense), net
(1) |
(1,680) |
1,774 |
Interest expense |
664 |
1,361 |
EBITDA |
$ (4,079) |
$ (6,291) |
(1) Other income (expense),
net includes gains and losses from transactions denominated in
foreign currencies, fair value changes in embedded derivatives, and
other items incurred periodically which are not the result of the
Company's normal business operations such as the impact from the
conversion of the Senior Unsecured Convertible notes or receipt of
research and development tax credits. |
EBITDA is a non-GAAP measure of financial performance and should
not be considered as an alternative to net income or any other
performance measure derived in accordance with GAAP, or as an
alternative to cash flows from operating activities.
The Company also calculates net loss and earnings per share
which exclude non-recurring items in order to measure operating
periodic performance. This is described in more detail in the
Reconciliation of GAAP to Non-GAAP Consolidated Statements of
Operations following the Financial Statements.
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 three 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, 2015 to
discuss the first quarter 2015 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 can dial 678-809-1045
- The passcode is 'FuelCell Energy'
The replay of the conference call will be available via webcast
on the Company's Investors' page at www.fuelcellenergy.com
approximately two hours after the conclusion of the call.
FUELCELL ENERGY,
INC. |
Consolidated Balance
Sheets |
(Unaudited) |
(Amounts in
thousands, except share and per share amounts) |
|
|
|
|
January 31, |
October 31, |
|
2015 |
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents -
unrestricted |
$ 84,664 |
$ 83,710 |
Restricted cash and cash
equivalents – short-term |
5,625 |
5,523 |
Accounts receivable, net |
60,628 |
64,375 |
Inventories, net |
56,620 |
55,895 |
Project assets |
5,712 |
784 |
Other current assets |
9,880 |
7,528 |
Total current
assets |
223,129 |
217,815 |
|
|
|
Restricted cash and cash equivalents –
long-term |
21,642 |
19,600 |
Property, plant and equipment, net |
26,589 |
25,825 |
Goodwill |
4,075 |
4,075 |
Intangible assets |
9,592 |
9,592 |
Other assets, net |
3,634 |
3,729 |
Total assets |
$ 288,661 |
$ 280,636 |
|
|
|
LIABILITIES AND
EQUITY |
|
|
Current liabilities: |
|
|
Current portion of long-term
debt |
$ 1,484 |
$ 1,439 |
Accounts payable |
22,501 |
22,969 |
Accrued liabilities |
11,779 |
12,066 |
Deferred revenue |
42,859 |
37,626 |
Preferred stock obligation of
subsidiary |
849 |
961 |
Total current
liabilities |
79,472 |
75,061 |
|
|
|
Long-term deferred revenue |
22,190 |
20,705 |
Long-term preferred stock obligation of
subsidiary |
11,857 |
13,197 |
Long-term debt and other liabilities |
13,273 |
13,367 |
Total liabilities |
126,792 |
122,330 |
Redeemable preferred stock (liquidation
preference of $64,020 at January 31, 2015 and October 31,
2014) |
59,857 |
59,857 |
Total Equity: |
|
|
Shareholders' equity |
|
|
Common stock
($.0001 par value; 400,000,000 shares authorized at January 31,
2015 and October 31, 2014; 291,990,254 and 287,160,003 shares
issued and outstanding at January 31, 2015 and October 31, 2014,
respectively) |
29 |
29 |
Additional
paid-in capital |
917,436 |
909,431 |
Accumulated
deficit |
(813,380) |
(809,314) |
Accumulated other
comprehensive loss |
(447) |
(159) |
Treasury stock,
Common, at cost (41,357 and 45,550 shares at January 31, 2015 and
October 31, 2014, respectively) |
(56) |
(95) |
Deferred
compensation |
56 |
95 |
Total shareholders' equity |
103,638 |
99,987 |
Noncontrolling interest in subsidiaries |
(1,626) |
(1,538) |
Total equity |
102,012 |
98,449 |
Total liabilities
and equity |
$ 288,661 |
$ 280,636 |
|
|
|
|
|
|
FUELCELL ENERGY,
INC. |
Consolidated Statements
of Operations |
(unaudited) |
(Amounts in thousands,
except share and per share amounts) |
|
|
|
|
Three Months
Ended |
|
January 31, |
|
2015 |
2014 |
Revenues: |
|
|
Product sales |
$ 33,418 |
$ 34,460 |
Service agreements and license
revenues |
3,871 |
4,960 |
Advanced technologies contract
revenues |
4,381 |
5,014 |
Total
revenues |
41,670 |
44,434 |
|
|
|
Costs of revenues: |
|
|
Cost of product sales |
30,348 |
33,028 |
Cost of service agreements and
license revenues |
3,568 |
4,157 |
Cost of advanced technologies
contract revenues |
3,740 |
5,050 |
Total cost of
revenues |
37,656 |
42,235 |
|
|
|
Gross profit |
4,014 |
2,199 |
|
|
|
Operating expenses: |
|
|
Administrative and selling
expenses |
5,640 |
4,854 |
Research and development
expenses |
3,504 |
4,915 |
Total operating
expenses |
9,144 |
9,769 |
|
|
|
Loss from operations |
(5,130) |
(7,570) |
|
|
|
Interest expense |
(664) |
(1,361) |
Other income (expense),
net |
1,680 |
(1,774) |
|
|
|
Loss before provision for income taxes |
(4,114) |
(10,705) |
|
|
|
Provision for income taxes |
(40) |
(110) |
|
|
|
Net loss |
(4,154) |
(10,815) |
|
|
|
Net loss attributable to
noncontrolling interest |
88 |
211 |
|
|
|
Net loss attributable to FuelCell Energy,
Inc. |
(4,066) |
(10,604) |
|
|
|
Preferred stock dividends |
(800) |
(800) |
|
|
|
Net loss to common shareholders |
$ (4,866) |
$ (11,404) |
|
|
|
Loss per share basic and diluted |
|
|
Basic |
$ (0.02) |
$ (0.06) |
Diluted |
$ (0.02) |
$ (0.06) |
|
|
|
Weighted average shares outstanding |
|
|
Basic |
285,584,931 |
200,637,819 |
Diluted |
285,584,931 |
200,637,819 |
|
|
|
|
|
|
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, |
|
2015 |
2014 |
|
GAAP |
Non-GAAP |
Non-GAAP As |
GAAP |
Non-GAAP |
|
Non-GAAP As |
|
As Reported |
Adjustments |
Adjusted |
As Reported |
Adjustments |
|
Adjusted |
Loss before provision for income taxes |
$ (4,114) |
$ -- |
$ (4,114) |
$ (10,705) |
$ 2,443 |
(1) |
$ (8,262) |
Net loss |
$ (4,154) |
$ -- |
$ (4,154) |
$ (10,815) |
$ 2,443 |
|
$ (8,372) |
Net loss to common shareholders |
$ (4,866) |
$ -- |
$ (4,866) |
$ (11,404) |
$ 2,443 |
|
$ (8,961) |
|
|
|
|
|
|
|
|
Net loss per share to common
shareholders |
|
|
|
|
|
|
|
Basic |
$ (0.02) |
|
$ (0.02) |
$ (0.06) |
|
|
$ (0.04) |
Diluted |
$ (0.02) |
|
$ (0.02) |
$ (0.06) |
|
|
$ (0.04) |
|
|
|
|
|
|
|
|
Notes to Reconciliation of GAAP to
Non-GAAP Consolidated Statements of Operations For
the Three Months Ended January 31, 2015 and 2014
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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