FuelCell Energy (Nasdaq:FCEL), a global leader in delivering clean,
innovative and affordable fuel cell solutions for the supply,
recovery and storage of energy, today reported financial results
for its first quarter ended January 31, 2017 and key business
highlights.
Financial Results FuelCell Energy (the Company)
reported total revenues for the first quarter of 2017 of $17.0
million, compared to $33.5 million for the comparable prior year
period. Revenue components include:
- Service and license totaled $6.9 million for the current period
compared to $6.2 million for the first quarter of 2016, with the
increase due to service agreements that commenced subsequent to the
first quarter of 2016.
- Generation totaled $2.1 million for the current period compared
to $0.1 million for the first quarter of 2016. The increase
reflects the growth in the operating portfolio. As of January 31,
2017 the Company’s operating portfolio totaled 11.2 megawatts under
long-term power purchase agreements with five customers.
- Product totaled $1.8 million for the current period compared to
$25.1 million for the first quarter of 2016. There were no
Asian sales in the current quarter unlike the prior year period as
Korean partner, POSCO Energy, is now manufacturing locally under
license and royalty agreements.
- Advanced Technologies totaled $6.2 million for the current
period compared to $2.1 million for the comparable prior year
period as new contracts were added.
The gross profit generated in the first quarter of 2017 totaled
$1.8 million and the gross margin for the period was 10.7 percent,
compared to a gross loss of ($0.2) incurred for the first quarter
of 2016. The increase in gross profit is a result of the
larger operating portfolio, increased service profitability
reflecting the positive impact of exiting legacy projects during
fiscal year 2016, and a favorable mix of Advanced Technology
contracts which more than offset the Product gross loss from
under-absorption of fixed overhead costs.
Operating expenses for the current period totaled $12.7 million,
including $1.3 million for previously announced restructuring
charges related to realigning staffing and production levels.
Restructuring charges are the cash charges associated with the
reduction in force. Operating expenses totaled $11.4 million for
the prior year period.
Net loss attributable to common shareholders for the first
quarter of 2017 totaled $14.5 million, or $0.39 per basic and
diluted share, compared to $12.5 million or $0.48 per basic and
diluted share for the first quarter of 2016.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA, a Non-GAAP measure) in the first quarter of
2017 totaled ($6.5) million. Refer to the discussion of Non-GAAP
financial measures below regarding the Company’s calculation of
Adjusted EBITDA. Capital spending was $6.4 million in the
first quarter of 2017 and depreciation expense was $2.1 million,
including depreciation of property, plant and equipment as well as
the operating portfolio.
Revenue BacklogTotal backlog was $437.3 million
as of January 31, 2017 compared to $403.9 million as of January 31,
2016.
- Services backlog totaled $199.8 million as of January 31, 2017
compared to $218.5 million as of January 31, 2016. Services
backlog includes future contracted revenue from routine maintenance
and scheduled module exchanges for projects not owned by the
Company.
- Generation backlog totaled $169.9 million as of January 31,
2017 representing future contracted energy sales under contracted
power purchase agreements between the Company and the end-user of
the power. Generation backlog for the comparable prior year
period totaled $84.7 million.
- Product sales backlog totaled $13.5 million as of January 31,
2017 compared to $65.7 million as of January 31, 2016.
- Advanced Technologies contracts backlog totaled $54.1 million
as of January 31, 2017 compared to $35.0 million as of January 31,
2016.
In conjunction with adding the “Generation” classification to
revenues, the Company has reclassified prior backlog amounts to be
consistent with future revenue recognition.
Cash, restricted cash and financing
availabilityCash, cash equivalents, restricted cash and
financing availability totaled $141.2 million as of January 31,
2017, including:
- $57.6 million of cash and cash equivalents, and $43.6 million
of restricted cash
- $40.0 million of borrowing availability under the NRG Energy
revolving project financing facility
Project Assets Long term project assets
consists of projects developed by the Company that are structured
with power purchase agreements (PPA), which generate recurring
monthly generation revenue, as well as projects the Company is
developing and expects to retain and operate. Long term
project assets totaled $50.5 million as of January 31, 2017,
consisting of five projects totaling 11.2 megawatts plus costs
incurred to date for two previously announced projects under
construction. Project assets increased $3.4 million from
fiscal year end reflecting costs incurred during the period for two
projects under construction that total 6.5 megawatts.
Business Highlights
- Numerous multi-megawatt fuel cell projects offered under a
utility-issued 40 megawatt fuel cell-only RFP for Long
Island, New York
- Continuing development of a portfolio of Connecticut fuel
cell park projects
- New Utility Scale Ownership bill to enhance grid reliability
using fuel cells under consideration in Connecticut
legislature
- Commissioned utility-owned power plant that will be configured
for a town-wide micro-grid
- Meaningful margin contributions from the Company’s 11.2
megawatt operating portfolio
- Progressing 3.7 megawatt project construction in Danbury, CT to
showcase a market leading efficiency fuel cell configuration
- Executed another fuel cell plant project with EON for
utility-owned installation
“Our efforts targeting all areas of our cost structure are
visible with higher margins this quarter, including from our
operating portfolio of retained projects,” said Chip Bottone,
President and Chief Executive Officer, FuelCell Energy, Inc.
“We are advancing multiple opportunities in a broad range of
markets and applications.”
Conference Call InformationFuelCell Energy
management will host a conference call with investors beginning at
10:00 a.m. Eastern Time on Thursday, March 9, 2017 to discuss the
first quarter 2017 results. An accompanying slide
presentation for the earnings call will be available at
http://investor.fce.com/events/default.aspx 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 at
www.fuelcellenergy.com. To listen to the call, select
‘Investors’ on the home page, proceed to the ‘Events &
presentations’ page and then click on the ‘Webcast’ link listed
under the March 9th earnings call event listed.
- Alternatively, participants can dial 678-809-1045
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 EnergyFuelCell Energy
(NASDAQ:FCEL) delivers efficient, affordable and clean solutions
for the supply, recovery and storage of energy. We design,
manufacture, undertake project development, install, operate and
maintain megawatt-scale fuel cell systems, serving utilities,
industrial and large municipal power users with solutions that
include both utility-scale and on-site power generation, carbon
capture, local hydrogen production for transportation and industry,
and long duration energy storage. With installations on three
continents and millions of megawatt hours of ultra-clean power
produced, FuelCell Energy is a global leader with environmentally
responsible power solutions. Visit us online at
www.fuelcellenergy.com and follow us on Twitter.
SureSource, SureSource 1500, SureSource 3000, SureSource 4000,
SureSource Recovery, SureSource Capture, SureSource Hydrogen,
SureSource Storage, SureSource Service, SureSource Capital,
FuelCell Energy, and FuelCell Energy logo are all trademarks of
FuelCell Energy, Inc.
|
FUELCELL ENERGY, INC. |
Consolidated Balance Sheets |
(Unaudited) |
(Amounts in thousands, except share and per
share amounts) |
|
|
|
January 31, 2017 |
|
|
October 31, 2016 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash
equivalents |
$ |
57,646 |
|
|
$ |
84,187 |
|
Restricted cash
and cash equivalents – short-term |
|
9,439 |
|
|
|
9,437 |
|
Accounts
receivable, net |
|
25,619 |
|
|
|
24,593 |
|
Inventories |
|
82,268 |
|
|
|
73,806 |
|
Other current
assets |
|
5,509 |
|
|
|
10,181 |
|
Total current
assets |
|
180,481 |
|
|
|
202,204 |
|
|
|
|
|
|
|
Restricted cash and
cash equivalents – long-term |
|
34,211 |
|
|
|
24,692 |
|
Long-term project
assets |
|
50,530 |
|
|
|
47,111 |
|
Property, plant and
equipment, net |
|
39,315 |
|
|
|
36,640 |
|
Goodwill |
|
4,075 |
|
|
|
4,075 |
|
Intangible assets |
|
9,592 |
|
|
|
9,592 |
|
Other assets, net |
|
10,020 |
|
|
|
16,415 |
|
Total assets |
$ |
328,224 |
|
|
$ |
340,729 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Current portion
of long-term debt |
$ |
9,428 |
|
|
$ |
5,010 |
|
Accounts
payable |
|
9,508 |
|
|
|
18,475 |
|
Accrued
liabilities |
|
18,388 |
|
|
|
20,900 |
|
Deferred
revenue |
|
8,101 |
|
|
|
6,811 |
|
Preferred stock obligation of subsidiary |
|
822 |
|
|
|
802 |
|
Total current
liabilities |
|
46,247 |
|
|
|
51,998 |
|
|
|
|
|
|
|
Long-term deferred
revenue |
|
20,459 |
|
|
|
20,974 |
|
Long-term preferred
stock obligation of subsidiary |
|
13,207 |
|
|
|
12,649 |
|
Long-term debt and
other liabilities |
|
82,772 |
|
|
|
80,855 |
|
Total liabilities |
|
162,685 |
|
|
|
166,476 |
|
Redeemable preferred
stock (liquidation preference of $64,020 at January 31, 2017 and
October 31, 2016) |
|
59,857 |
|
|
|
59,857 |
|
Total Shareholders’
Equity: |
|
|
|
|
|
Common stock
($.0001 par value; 75,000,000 shares authorized at January 31, 2017
and October 31, 2016; 41,219,345 and 35,174,424 shares issued and
outstanding at January 31, 2017 and October 31, 2016,
respectively) |
|
4 |
|
|
|
4 |
|
Additional
paid-in capital |
|
1,009,607 |
|
|
|
1,004,566 |
|
Accumulated
deficit |
|
(903,315 |
) |
|
|
(889,630 |
) |
Accumulated
other comprehensive loss |
|
(614 |
) |
|
|
(544 |
) |
Treasury stock,
Common, at cost (21,527 at January 31, 2017 and October 31,
2016) |
|
(179 |
) |
|
|
(179 |
) |
Deferred
compensation |
|
179 |
|
|
|
179 |
|
Total
Shareholders’ equity |
|
105,682 |
|
|
|
114,396 |
|
Total
liabilities and Shareholders’ equity |
$ |
328,224 |
|
|
$ |
340,729 |
|
|
|
|
|
|
|
Deferred Finance Costs. Accounting
Standards Update 2015-03, Simplifying the Presentation of Debt
Issuance Costs, requires that deferred finance costs related to a
recognized debt liability be presented in the balance sheet as a
direct deduction from the carrying amount of that debt.
Retrospective application is required which resulted in a
reclassification in our Consolidated Balance Sheet as of October
31, 2016 of $0.3 million of debt issuance costs from Current assets
to be a direct deduction of Current portion of debt and a
reclassification of $1.1million of debt issuance costs from Other
assets, net to be a direct deduction of Long-term debt and Other
liabilities. |
|
FUELCELL ENERGY, INC. |
Consolidated Statements of
Operations |
(Unaudited) |
(Amounts in thousands, except share and per
share amounts) |
|
|
Three Months EndedJanuary
31, |
|
2017 |
|
|
2016 |
|
Revenues: |
|
|
|
|
|
Product |
$ |
1,807 |
|
|
$ |
25,073 |
|
Service and
license |
|
6,936 |
|
|
|
6,207 |
|
Generation |
|
2,085 |
|
|
|
113 |
|
Advanced
technologies |
|
6,174 |
|
|
|
2,089 |
|
Total
revenues |
|
17,002 |
|
|
|
33,482 |
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
Product |
|
4,055 |
|
|
|
24,389 |
|
Service and
license |
|
6,266 |
|
|
|
6,619 |
|
Generation |
|
1,115 |
|
|
|
232 |
|
Advanced
technologies |
|
3,753 |
|
|
|
2,408 |
|
Total
cost of revenues |
|
15,189 |
|
|
|
33,648 |
|
|
|
|
|
|
|
Gross profit
(loss) |
|
1,813 |
|
|
|
(166 |
) |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Administrative
and selling expenses |
|
6,004 |
|
|
|
6,040 |
|
Research and
development expenses |
|
5,392 |
|
|
|
5,311 |
|
Restructuring
expense |
|
1,345 |
|
|
|
- |
|
Total operating expenses |
|
12,741 |
|
|
|
11,351 |
|
|
|
|
|
|
|
Loss from
operations |
|
(10,928 |
) |
|
|
(11,517 |
) |
|
|
|
|
|
|
Interest
expense |
|
(2,267 |
) |
|
|
(845 |
) |
Other (expense)
income, net |
|
(409 |
) |
|
|
688 |
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
(13,604 |
) |
|
|
(11,674 |
) |
|
|
|
|
|
|
Provision
for income taxes |
|
(81 |
) |
|
|
(105 |
) |
|
|
|
|
|
|
Net loss |
|
(13,685 |
) |
|
|
(11,779 |
) |
|
|
|
|
|
|
Net loss
attributable to noncontrolling interest |
|
- |
|
|
|
67 |
|
|
|
|
|
|
|
Net loss attributable
to FuelCell Energy, Inc. |
|
(13,685 |
) |
|
|
(11,712 |
) |
|
|
|
|
|
|
Preferred stock
dividends |
|
(800 |
) |
|
|
(800 |
) |
|
|
|
|
|
|
Net loss to common
shareholders |
$ |
(14,485 |
) |
|
$ |
(12,512 |
) |
|
|
|
|
|
|
Loss per share basic
and diluted |
|
|
|
|
|
Basic |
$ |
(0.39 |
) |
|
$ |
(0.48 |
) |
Diluted |
$ |
(0.39 |
) |
|
$ |
(0.48 |
) |
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
Basic |
|
37,613,216 |
|
|
|
26,246,271 |
|
Diluted |
|
37,613,216 |
|
|
|
26,246,271 |
|
Non-GAAP Financial MeasuresFinancial Results
are presented in accordance with accounting principles generally
accepted in the United States (“GAAP”). Management also uses
non-GAAP measures to analyze and make operating decisions on the
business. Earnings before interest, taxes, depreciation and
amortization (EBITDA) and Adjusted EBITDA are alternate, non-GAAP,
measures of cash utilization use by the Company.
These supplemental non-GAAP measures are provided to assist
readers in determining operating performance. Management believes
EBITDA and Adjusted EBITDA are useful in assessing performance and
highlighting trends on an overall basis. Management also believes
these measures are used by companies in the fuel cell sector and by
securities analysts and investors when comparing results of
FuelCell Energy with those of other companies. EBITDA differs from
the most comparable GAAP measure, net loss attributable to FuelCell
Energy, Inc., primarily because it does not include finance
expense, income taxes and depreciation of property, plant and
equipment. Adjusted EBITDA adjusts EBITDA for stock-based
compensation and restructuring charges, which are considered
non-cash and non-recurring, respectively.
While management believes that the non-GAAP financial measures
provide useful supplemental information to investors, there are
limitations associated with the use of these measures. The measures
are not prepared in accordance with GAAP and may not be directly
comparable to similarly titled measures of other companies due to
potential differences in the exact method of calculation. The
Company's non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP
financial measures, and should be read only in conjunction with the
Company's consolidated financial statements prepared in accordance
with GAAP.
The following table calculates EBITDA and 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) |
|
2017 |
|
|
|
|
2016 |
|
|
Net loss
attributable to FuelCell Energy, Inc. |
$ |
(13,685 |
) |
|
|
$ |
(11,712 |
) |
|
Depreciation |
|
2,057 |
|
|
|
|
1,151 |
|
|
Provision
for income taxes |
|
81 |
|
|
|
|
105 |
|
|
Other
(income)/expense, net (1) |
|
409 |
|
|
|
|
(688 |
) |
|
Interest
expense |
|
2,267 |
|
|
|
|
845 |
|
|
EBITDA |
$ |
(8,871 |
) |
|
|
$ |
(10,299 |
) |
|
Stock-based compensation expense |
|
1,013 |
|
|
|
|
858 |
|
|
Restructuring expense |
|
1,345 |
|
|
|
|
- |
|
|
Adjusted EBITDA |
$ |
(6,513 |
) |
|
|
$ |
(9,441 |
) |
|
(1) Other income (expense), net includes gains and losses from
transactions denominated in foreign currencies, changes in fair
value of embedded derivatives, and other items incurred
periodically, which are not the result of the Company’s normal
business operations.
[Source: FuelCell Energy]
Contact:
FuelCell Energy, Inc.
Kurt Goddard, Vice President Investor Relations
203-830-7494
ir@fce.com
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