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 second quarter ended April 30, 2017 and key business
highlights.
Financial Results FuelCell Energy (the Company)
reported total revenues for the second quarter of 2017 of $20.4
million, compared to $28.6 million for the comparable prior year
period. Revenue components include:
- Service and license totaled $12.6 million for the current
period compared to $10.4 million for the second quarter of 2016,
with the increase reflecting module exchanges in the current
period.
- Generation totaled $1.6 million for the current period compared
to $0.2 million for the second quarter of 2016. The increase
reflects the growth in the operating portfolio. As of April 30,
2017 the Company’s operating portfolio totaled 11.2 megawatts under
long-term power purchase agreements with five customers and 7.9
megawatts under construction at three locations. A 1.4
megawatt project and a 7.4 megawatt letter of intent were announced
subsequent to quarter end and may be added to the Generation
portfolio in future quarters.
- Product totaled $0.7 million for the current period compared to
$15.4 million for the second quarter of 2016. There were no
Asian sales in the current quarter unlike the prior year period as
South Korean partner, POSCO Energy, is now manufacturing locally
under license and royalty agreements.
- Advanced Technologies totaled $5.4 million for the current
period compared to $2.6 million for the comparable prior year
period as new contracts were added.
The gross profit generated in the second quarter of 2017 totaled
$0.4 million and the gross margin for the period was 1.9 percent,
compared to a gross loss of ($0.2) million incurred for the second
quarter of 2016. Margins from the Generation portfolio,
Advanced Technology and Service contracts were partially offset by
Product gross loss from under-absorption of fixed overhead costs
reflecting the low factory production rate.
Operating expenses for the current period totaled $11.9 million
compared to $12.6 million for the prior year period. The
decrease in Administrative and selling expenses was due to lower
professional fees. Research and development expenses
increased nominally, reflecting initiatives supporting new product
introductions.
Net loss attributable to common shareholders for the second
quarter of 2017 totaled $14.0 million, or $0.33 per basic and
diluted share, compared to $16.2 million or $0.56 per basic and
diluted share for the second quarter of 2016.
Adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA, a Non-GAAP measure) in the second
quarter of 2017 totaled ($8.0) million. Refer to the discussion of
Non-GAAP financial measures below regarding the Company’s
calculation of Adjusted EBITDA. Capital spending was $1.9
million in the second quarter of 2017 and depreciation expense was
$2.2 million, including depreciation of property, plant and
equipment as well as Long term project assets.
Revenue BacklogTotal backlog was $434.5 million
as of April 30, 2017 compared to $410.7 million as of April 30,
2016.
- Services backlog totaled $188.3 million as of April 30, 2017
compared to $210.3 million as of April 30, 2016. Services
backlog includes future contracted revenue from routine maintenance
and scheduled module exchanges for power plants under service
agreements.
- Generation backlog totaled $184.4 million as of April 30, 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 $84.5 million.
- Product sales backlog totaled $12.9 million as of April 30,
2017 compared to $51.0 million as of April 30, 2016.
- Advanced Technologies contracts backlog totaled $48.9 million
as of April 30, 2017 compared to $64.9 million as of April 30,
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 $124.1 million as of April 30, 2017,
including:
- Total cash of $84.1 million, including $46.4 million of
unrestricted cash and cash equivalents, and $37.7 million of
restricted cash
- $40.0 million of borrowing availability under the NRG Energy
revolving project financing facility
Subsequent to the end of the second quarter of 2017, the Company
raised net proceeds of $13.8 million from a public offering of
common stock and warrants. The offering was designed to provide
additional capital to the Company if warrants are exercised.
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 $56.3 million as of April 30, 2017,
consisting of five projects totaling 11.2 megawatts plus costs
incurred to date for three previously announced projects under
construction that total 7.9 megawatts.
Business Highlights
- Expanding generation portfolio by 10.2 megawatts of recent
announcements with two distributed generation utility projects
including a 1.4 megawatt project for a Long Island utility and a
7.4 megawatt letter of intent with a municipal utility to power a
U.S. Navy base, plus a 1.4 megawatt project at a university
- Numerous multi-megawatt fuel cell projects offered under a
utility-issued 40 megawatt fuel cell-only RFP for Long Island, New
York
- Bill 7036 was recently passed by the Connecticut Legislature
that potentially enables over 100 megawatts of fuel cell
projects
- Executed a Memorandum of Understanding with partner POSCO
Energy to engage in discussions to modify and enter into new
agreements to accelerate business activity in Asia, and regained
marketing rights to the Asian market and now marketing the entire
product solutions portfolio including carbon capture, distributed
hydrogen and storage solutions
- Completed Alberta Innovates engineering study for fuel cell
carbon capture application at Canadian oil sands
- Progressing site engineering of fuel cell carbon capture pilot
site at Plant Barry, Alabama
- Advancing solid oxide fuel cell energy storage with $3.0
million award from the Advanced Research Projects Agency-Energy
(ARPA-E) division of the U.S. Department of Energy
“We are continuing to expand our ownership model in North
America as we announced projects with two new utility customers as
well as a university,” said Chip Bottone, President and Chief
Executive Officer, FuelCell Energy. “We regained marketing
rights to the Asian market and have already submitted
multi-megawatt proposals to prospective customers and are having
discussions with our partner POSCO Energy regarding a long term
module procurement agreement for FuelCell Energy to supply modules
for the existing installed fleet in South Korea.”
Conference Call InformationFuelCell Energy
management will host a conference call with investors beginning at
10:00 a.m. Eastern Time on Thursday, June 8, 2017 to discuss the
second quarter results for 2017.
Participants can access the live call via webcast on the Company
website or by telephone as follows:
- The live webcast of this call and supporting slide presentation
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 June 8th earnings call event listed, or click
here
- Alternatively, participants can dial 647-788-4901 and state
FuelCell Energy or the conference ID number 23330623
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.
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.
[Source: FuelCell Energy]
FUELCELL ENERGY, INC. |
Consolidated Balance Sheets |
(Unaudited) |
(Amounts in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
April
30, 2017 |
|
|
October
31, 2016 |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
46,454 |
|
|
$ |
84,187 |
|
Restricted cash and cash equivalents – short-term |
|
|
4,591 |
|
|
|
9,437 |
|
Accounts
receivable, net |
|
|
24,836 |
|
|
|
24,593 |
|
Inventories |
|
|
75,585 |
|
|
|
73,806 |
|
Other
current assets |
|
|
6,588 |
|
|
|
10,181 |
|
Total current
assets |
|
|
158,054 |
|
|
|
202,204 |
|
|
|
|
|
|
|
|
Restricted cash and
cash equivalents – long-term |
|
|
33,088 |
|
|
|
24,692 |
|
Long-term project
assets |
|
|
56,288 |
|
|
|
47,111 |
|
Property, plant and
equipment, net |
|
|
40,895 |
|
|
|
36,640 |
|
Goodwill |
|
|
4,075 |
|
|
|
4,075 |
|
Intangible assets |
|
|
9,592 |
|
|
|
9,592 |
|
Other assets, net |
|
|
17,551 |
|
|
|
16,415 |
|
Total assets |
|
$ |
319,543 |
|
|
$ |
340,729 |
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Current
portion of long-term debt |
|
$ |
14,564 |
|
|
$ |
5,010 |
|
Accounts
payable |
|
|
10,215 |
|
|
|
18,475 |
|
Accrued
liabilities |
|
|
15,003 |
|
|
|
20,900 |
|
Deferred
revenue |
|
|
8,388 |
|
|
|
6,811 |
|
Preferred
stock obligation of subsidiary |
|
|
787 |
|
|
|
802 |
|
Total current
liabilities |
|
|
48,957 |
|
|
|
51,998 |
|
|
|
|
|
|
|
|
Long-term deferred
revenue |
|
|
19,944 |
|
|
|
20,974 |
|
Long-term preferred
stock obligation of subsidiary |
|
|
12,889 |
|
|
|
12,649 |
|
Long-term debt and
other liabilities |
|
|
77,394 |
|
|
|
80,855 |
|
Total liabilities |
|
|
159,184 |
|
|
|
166,476 |
|
|
|
|
|
|
|
|
|
|
Redeemable
preferred stock (liquidation preference of $64,020 at April 30,
2017 and October 31, 2016) |
|
|
59,857 |
|
|
|
59,857 |
|
|
|
|
|
|
|
|
|
|
Total Shareholders’
Equity: |
|
|
|
|
|
|
Common
stock ($0.0001 par value; 125,000,000 and 75,000,000 shares
authorized at April 30, 2017 and October 31, 2016, respectively;
47,575,606 and 35,174,424 shares issued and outstanding at April
30, 2017 and October 31, 2016, respectively) |
|
|
5 |
|
|
|
4 |
|
Additional paid-in
capital |
|
|
1,017,632 |
|
|
|
1,004,566 |
|
Accumulated
deficit |
|
|
(916,553 |
) |
|
|
(889,630 |
) |
Accumulated other
comprehensive loss |
|
|
(582 |
) |
|
|
(544 |
) |
Treasury stock, Common,
at cost (88,861 and 21,527 shares at April 30, 2017 and October 31,
2016, respectively) |
|
|
(280 |
) |
|
|
(179 |
) |
Deferred
compensation |
|
|
280 |
|
|
|
179 |
|
Total
Shareholders’ equity |
|
|
100,502 |
|
|
|
114,396 |
|
Total
liabilities and Shareholders’ equity |
|
$ |
319,543 |
|
|
$ |
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 $1.1 million 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 EndedApril
30, |
|
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
|
|
Product |
|
$ |
737 |
|
|
$ |
15,424 |
|
Service
and license |
|
|
12,592 |
|
|
|
10,353 |
|
Generation |
|
|
1,634 |
|
|
|
220 |
|
Advanced
technologies |
|
|
5,454 |
|
|
|
2,584 |
|
Total
revenues |
|
|
20,417 |
|
|
|
28,581 |
|
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
|
Product |
|
|
3,204 |
|
|
|
15,118 |
|
Service
and license |
|
|
12,159 |
|
|
|
10,821 |
|
Generation |
|
|
1,294 |
|
|
|
167 |
|
Advanced
technologies |
|
|
3,377 |
|
|
|
2,632 |
|
Total
cost of revenues |
|
|
20,034 |
|
|
|
28,738 |
|
|
|
|
|
|
|
|
Gross profit
(loss) |
|
|
383 |
|
|
|
(157 |
) |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
Administrative and selling expenses |
|
|
6,483 |
|
|
|
7,441 |
|
Research
and development expenses |
|
|
5,386 |
|
|
|
5,110 |
|
Restructuring expense |
|
|
10 |
|
|
|
- |
|
Total
operating expenses |
|
|
11,879 |
|
|
|
12,551 |
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(11,496 |
) |
|
|
(12,708 |
) |
|
|
|
|
|
|
|
Interest
expense |
|
|
(2,310 |
) |
|
|
(982 |
) |
Other
(expense) income, net |
|
|
532 |
|
|
|
(1,547 |
) |
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
|
(13,274 |
) |
|
|
(15,237 |
) |
|
|
|
|
|
|
|
Benefit
(provision) for income taxes |
|
|
36 |
|
|
|
(177 |
) |
|
|
|
|
|
|
|
Net loss |
|
|
(13,238 |
) |
|
|
(15,414 |
) |
|
|
|
|
|
|
|
Net loss
attributable to noncontrolling interest |
|
|
- |
|
|
|
41 |
|
|
|
|
|
|
|
|
Net loss attributable
to FuelCell Energy, Inc. |
|
|
(13,238 |
) |
|
|
(15,373 |
) |
|
|
|
|
|
|
|
Preferred
stock dividends |
|
|
(800 |
) |
|
|
(800 |
) |
|
|
|
|
|
|
|
Net loss to common
shareholders |
|
$ |
(14,038 |
) |
|
$ |
(16,173 |
) |
|
|
|
|
|
|
|
Loss per share basic
and diluted |
|
|
|
|
|
|
Basic |
|
$ |
(0.33 |
) |
|
$ |
(0.56 |
) |
Diluted |
|
$ |
(0.33 |
) |
|
$ |
(0.56 |
) |
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
Basic |
|
|
42,568,818 |
|
|
|
28,782,066 |
|
Diluted |
|
|
42,568,818 |
|
|
|
28,782,066 |
|
FUELCELL ENERGY, INC. |
Consolidated Statements of Operations |
(Unaudited) |
(Amounts in thousands, except share and per share
amounts) |
|
|
|
|
|
Six Months EndedApril
30, |
|
|
2017 |
|
2016 |
Revenues: |
|
|
|
|
|
|
Product |
|
$ |
2,544 |
|
|
$ |
40,497 |
|
Service
and license |
|
|
19,528 |
|
|
|
16,560 |
|
Generation |
|
|
3,719 |
|
|
|
333 |
|
Advanced
technologies |
|
|
11,628 |
|
|
|
4,673 |
|
Total
revenues |
|
|
37,419 |
|
|
|
62,063 |
|
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
|
Product |
|
|
7,259 |
|
|
|
39,507 |
|
Service
and license |
|
|
18,425 |
|
|
|
17,440 |
|
Generation |
|
|
2,409 |
|
|
|
399 |
|
Advanced
technologies |
|
|
7,130 |
|
|
|
5,040 |
|
Total
cost of revenues |
|
|
35,223 |
|
|
|
62,386 |
|
|
|
|
|
|
|
|
Gross profit
(loss) |
|
|
2,196 |
|
|
|
(323 |
) |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
Administrative and selling expenses |
|
|
12,487 |
|
|
|
13,481 |
|
Research
and development expenses |
|
|
10,778 |
|
|
|
10,421 |
|
Restructuring expense |
|
|
1,355 |
|
|
|
- |
|
Total
operating expenses |
|
|
24,620 |
|
|
|
23,902 |
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(22,424 |
) |
|
|
(24,225 |
) |
|
|
|
|
|
|
|
Interest
expense |
|
|
(4,577 |
) |
|
|
(1,827 |
) |
Other
(expense) income, net |
|
|
123 |
|
|
|
(859 |
) |
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
|
(26,878 |
) |
|
|
(26,911 |
) |
|
|
|
|
|
|
|
Provision
for income taxes |
|
|
(45 |
) |
|
|
(282 |
) |
|
|
|
|
|
|
|
Net loss |
|
|
(26,923 |
) |
|
|
(27,193 |
) |
|
|
|
|
|
|
|
Net loss
attributable to noncontrolling interest |
|
|
- |
|
|
|
108 |
|
|
|
|
|
|
|
|
Net loss attributable
to FuelCell Energy, Inc. |
|
|
(26,923 |
) |
|
|
(27,085 |
) |
|
|
|
|
|
|
|
Preferred
stock dividends |
|
|
(1,600 |
) |
|
|
(1,600 |
) |
|
|
|
|
|
|
|
Net loss to common
shareholders |
|
$ |
(28,523 |
) |
|
$ |
(28,685 |
) |
|
|
|
|
|
|
|
Loss per share basic
and diluted |
|
|
|
|
|
|
Basic |
|
$ |
(0.71 |
) |
|
$ |
(1.04 |
) |
Diluted |
|
$ |
(0.71 |
) |
|
$ |
(1.04 |
) |
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
Basic |
|
|
40,049,948 |
|
|
|
27,500,236 |
|
Diluted |
|
|
40,049,948 |
|
|
|
27,500,236 |
|
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-recurring.
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 April 30, |
|
Six Months Ended April 30, |
|
|
|
|
|
|
|
|
|
(Amounts in
thousands) |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net loss attributable
to FuelCell Energy, Inc. |
|
$ |
(13,238 |
) |
|
$ |
(15,373 |
) |
|
$ |
(26,923 |
) |
|
$ |
(27,085 |
) |
Depreciation |
|
|
2,239 |
|
|
|
1,191 |
|
|
|
4,296 |
|
|
|
2,342 |
|
Benefit/(Provision) for
income taxes |
|
|
(36 |
) |
|
|
177 |
|
|
|
45 |
|
|
|
282 |
|
Other (income)/expense,
net(1) |
|
|
(532 |
) |
|
|
1,547 |
|
|
|
(123 |
) |
|
|
859 |
|
Interest expense |
|
|
2,310 |
|
|
|
982 |
|
|
|
4,577 |
|
|
|
1,827 |
|
EBITDA |
|
$ |
(9,257 |
) |
|
$ |
(11,476 |
) |
|
$ |
(18,128 |
) |
|
$ |
(21,775 |
) |
Stock-based
compensation expense |
|
|
1,213 |
|
|
|
805 |
|
|
|
2,226 |
|
|
|
1,663 |
|
Restructuring
expense |
|
|
10 |
|
|
|
- |
|
|
|
1,355 |
|
|
|
- |
|
Adjusted
EBITDA |
|
$ |
(8,034 |
) |
|
$ |
(10,671 |
) |
|
$ |
(14,547 |
) |
|
$ |
(20,112 |
) |
(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.
Contact:
FuelCell Energy, Inc.
Kurt Goddard, Vice President Investor Relations
203-830-7494
ir@fce.com
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