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 third quarter ended July 31, 2016 and key business
highlights.
Financial Results FuelCell Energy (the Company)
reported total revenues for the third quarter of 2016 of $21.7
million, compared to $41.4 million for the comparable prior year
period. Revenue components include:
- Product sales totaled $13.7 million for the current period
compared to $31.1 million for the third quarter of 2015, with the
decrease reflecting lower equipment, procurement and construction
(EPC) revenue and lower Asian sales in the current period compared
to the prior year period.
- Service agreements and license revenues totaled $4.5 million
for the current period compared to $7.0 million for the comparable
prior year period, with the decrease due to fewer service module
replacements in the current period.
- Advanced Technologies contract revenues totaled $3.5 million
for the current period compared to $3.2 million for the comparable
prior year period.
Gross profit for the third quarter of 2016 totaled $0.4 million
and the gross margin for the period was 2.0 percent, compared to
gross profit of $3.6 million and gross margin of 8.7 percent for
the third quarter of 2015. The decrease in gross profit was
due to lower sales and a sales mix oriented towards Asian sales
rather than complete power plants. Prior year service revenue
and gross profit benefitted from an increased number of module
replacements compared to the current period, impacting service
gross margin. Advanced Technology gross margin improved
year-over-year reflecting the transition from government contracts
with cost-share obligations to private-industry contracts.
Operating expenses for the current period totaled $10.8 million
compared to $10.7 million for the prior year period.
Administrative and selling expenses decreased $0.6 million from the
comparable prior year period from lower professional
expenses. R&D expenses increased $0.7 million
year-over-year reflecting continued product enhancement programs
that target specific opportunities, particularly for the utility
and the wastewater treatment markets.
Net loss attributable to common shareholders for the third
quarter of 2016 totaled $11.8 million, or $0.38 per basic and
diluted share, compared to $7.3 million or $0.29 per basic and
diluted share for the third quarter of 2015.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) in the third quarter of 2016 totaled ($9.0)
million. Refer to the discussion of Non-GAAP financial measures
below regarding the Company’s calculation of Adjusted EBITDA.
Capital spending was $1.7 million and depreciation expense was $1.2
million.
Revenue BacklogTotal backlog was $392.1 million
as of July 31, 2016 compared to $338.3 million as of July 31,
2015.
- Services backlog totaled $299.0 million as of July 31, 2016
compared to $225.2 million as of July 31, 2015. Services
backlog includes future contracted revenue from routine
maintenance, scheduled module exchanges, and from power purchase
agreements.
- Product sales backlog totaled $35.0 million as of July 31, 2016
compared to $98.1 million as of July 31, 2015. Product sales
backlog reflects firm orders with executed contracts. Notices
of awards, outstanding bids, and project pipeline are not included
in product backlog.
- Advanced Technologies contracts backlog totaled $58.1 million
as of July 31, 2016 compared to $15.0 million as of July 31,
2015.
Cash, restricted cash and financing
availabilityCash, cash equivalents, restricted cash and
financing availability totaled $179.1 million as of July 31, 2016,
including:
- $94.2 million of cash and cash equivalents, and $34.7 million
of restricted cash
- $29.0 million of borrowing availability under the NRG Energy
revolving project financing facility
- $21.2 million of un-used availability under the PNC Energy
Capital tax equity project finance commitment
In July 2016, the Company completed a securities offering to a
single institutional investor. The transaction included the
sale of stock and the issuance of Series A warrants and Series B
pre-funded warrants resulting in gross proceeds of approximately
$37.3 million. Net proceeds, after deducting the placement
agent fees and other estimated expenses, were approximately $34.8
million. The Series B warrants were pre-funded at closing and
have an exercise price of $0.0001. If the investor chooses to
exercise the Series A warrants at a future date, the Company will
receive additional proceeds at that time at an exercise price of
$5.83 per share. Future exercise of these warrants could lead
to additional cash proceeds of approximately $44.8 million if fully
exercised during the Series A sixty six month term.
Business Highlights
- Decisions are still pending for the 63 megawatt Beacon Falls
Energy Park RFP submission as well as the multiple submissions to
the Connecticut 2 -20 megawatt RFP, and multiple project submittals
are ready for the expected PSEG Long Island 40 megawatt RFP
- Construction to begin in the Fall of 2016 on a 3.7 megawatt
project in Connecticut to showcase an enhanced efficiency fuel cell
configuration targeting utilities and data centers
- Awards received for three different megawatt-class on-site
projects with contracts currently being negotiated
- Four awards received from the U.S. Department of Energy for
solid oxide fuel cell development with contract execution expected
by the end of September 2016
- Construction completed and commercial operations commenced for
3 installations, which includes the Riverside, CA project that was
financed by PNC Energy Capital under an existing financing
facility, with cash proceeds received in September 2016. The
Company retains the Power Purchase Agreement and will recognize
recurring electricity revenue and margin from this project over
twenty years.
- Three installations in process in North America, including 5.6
megawatt Pfizer project
- Progressing with the first of a two phase North American
capacity expansion.
- Over 5 billion kilowatt hours of ultra-clean power produced,
adequate to power more than 470,000 average homes in the USA or
1,173,000 in Germany or 1,446,000 in South Korea, and this level of
low carbon fuel cell power generation is equivalent to removing
more than 638,000 cars from the road.
“Our expanding installed base supports future committed service
revenue and we are continuing to advance the development of a broad
range of projects in different geographies that we are working hard
to close near-term,” said Chip Bottone, President and Chief
Executive Officer, FuelCell Energy, Inc. “I am particularly
excited to begin construction of this recently announced enhanced
efficiency fuel cell configuration as it provides the high
efficiency advantages of a large-scale combined cycle gas plant
with the benefits of clean distributed generation that can be
easily sited on minimal land.”
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 MeasuresFinancial 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 July 31, |
(Amounts in
thousands) |
|
2016 |
|
|
|
2015 |
|
Net loss attributable to FuelCell
Energy, Inc. |
$ |
(11,010 |
) |
|
$ |
(6,539 |
) |
Depreciation |
|
1,241 |
|
|
|
1,054 |
|
Provision for income taxes |
|
120 |
|
|
|
84 |
|
Other (income)/expense, net
(1) |
|
(749 |
) |
|
|
(1,464 |
) |
Interest expense |
|
1,373 |
|
|
|
905 |
|
Adjusted EBITDA |
$ |
(9,025 |
) |
|
$ |
(5,960 |
) |
|
(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. |
Adjusted 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. This
information is included to assist investors with understanding the
results of operations on a comparative basis.
About FuelCell EnergyDirect FuelCell® power
plants are generating ultra-clean, efficient and reliable power on
three continents, affordably providing continuous distributed power
generation to a variety of industries including utilities,
commercial and municipal customers. The Company’s power
plants have generated billions of kilowatt hours of ultra-clean
power using a wide variety of fuels including renewable biogas from
wastewater treatment and food processing, as well as clean natural
gas. For additional information, please visit
www.fuelcellenergy.com and follow us on Twitter
Direct FuelCell, DFC, DFC/T, DFC-H2, DFC-ERG and FuelCell Energy
logo are all registered trademarks of FuelCell Energy, Inc.
Conference Call InformationFuelCell Energy
management will host a conference call with investors beginning at
10:00 a.m. Eastern Time on Thursday, September 8, 2016 to discuss
the third quarter 2016 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 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 webcast’
- Alternatively, participants can dial 678-809-1045
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) |
|
|
|
July 31, 2016 |
|
|
October 31, 2015 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
|
94,150 |
|
|
$ |
|
58,852 |
|
Restricted cash and cash
equivalents – short-term |
|
|
9,436 |
|
|
|
|
6,288 |
|
Accounts receivable, net |
|
|
29,290 |
|
|
|
|
60,790 |
|
Inventories |
|
|
78,204 |
|
|
|
|
65,754 |
|
Project assets |
|
|
15,632 |
|
|
|
|
5,260 |
|
Other current assets |
|
|
7,252 |
|
|
|
|
6,954 |
|
Total current assets |
|
|
233,964 |
|
|
|
|
203,898 |
|
|
|
|
|
|
|
Restricted cash and
cash equivalents – long-term |
|
|
25,225 |
|
|
|
|
20,600 |
|
Long-term project
assets |
|
|
18,370 |
|
|
|
|
6,922 |
|
Property, plant and
equipment, net |
|
|
30,485 |
|
|
|
|
29,002 |
|
Goodwill |
|
|
4,075 |
|
|
|
|
4,075 |
|
Intangible assets |
|
|
9,592 |
|
|
|
|
9,592 |
|
Other assets |
|
|
7,917 |
|
|
|
|
3,142 |
|
Total assets |
$ |
|
329,628 |
|
|
$ |
|
277,231 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Current portion of long-term
debt |
$ |
|
13,995 |
|
|
$ |
|
7,358 |
|
Accounts payable |
|
|
16,002 |
|
|
|
|
15,745 |
|
Accrued liabilities |
|
|
19,720 |
|
|
|
|
19,175 |
|
Deferred revenue |
|
|
17,999 |
|
|
|
|
31,787 |
|
Preferred stock obligation of
subsidiary |
|
|
824 |
|
|
|
|
823 |
|
Total current liabilities |
|
|
68,540 |
|
|
|
|
74,888 |
|
|
|
|
|
|
|
Long-term deferred
revenue |
|
|
21,101 |
|
|
|
|
22,646 |
|
Long-term preferred
stock obligation of subsidiary |
|
|
12,763 |
|
|
|
|
12,088 |
|
Long-term debt and
other liabilities |
|
|
42,603 |
|
|
|
|
12,998 |
|
Total liabilities |
|
|
145,007 |
|
|
|
|
122,620 |
|
Redeemable preferred
stock (liquidation preference of $64,020 at July 31, 2016 and
October 31, 2015) |
|
|
59,857 |
|
|
|
|
59,857 |
|
Total Equity: |
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
Common stock ($0.0001 par value;
75,000,000 and 39,583,333 shares authorized at July 31, 2016 and
October 31, 2015, respectively; 33,527,673 and 25,964,710 shares
issued and outstanding at July 31, 2016 and October 31, 2015,
respectively) |
|
|
3 |
|
|
|
|
3 |
|
Additional paid-in capital |
|
|
1,002,784 |
|
|
|
|
934,488 |
|
Accumulated deficit |
|
|
(876,768 |
) |
|
|
|
(838,673 |
) |
Accumulated other comprehensive
loss |
|
|
(535 |
) |
|
|
|
(509 |
) |
Treasury stock, Common, at cost
(21,527 and 5,845 shares at July 31, 2016 and October 31, 2015,
respectively) |
|
|
(179 |
) |
|
|
|
(78 |
) |
Deferred compensation |
|
|
179 |
|
|
|
|
78 |
|
Total shareholders’ equity |
|
|
125,484 |
|
|
|
|
95,309 |
|
Noncontrolling interest
in subsidiaries |
|
|
(720 |
) |
|
|
|
(555 |
) |
Total equity |
|
|
124,764 |
|
|
|
|
94,754 |
|
Total liabilities and
equity |
$ |
|
329,628 |
|
|
$ |
|
277,231 |
|
|
FUELCELL ENERGY, INC. |
Consolidated Statements of
Operations |
Unaudited |
(Amounts in thousands, except share and per
share amounts) |
|
|
Three Months EndedJuly
31, |
|
2016 |
|
2015 |
Revenues: |
|
|
|
|
|
Product
sales |
$ |
|
13,681 |
|
|
$ |
|
31,130 |
|
Service
agreements and license revenues |
|
|
4,480 |
|
|
|
|
7,017 |
|
Advanced
technologies contract revenues |
|
|
3,555 |
|
|
|
|
3,209 |
|
Total revenues |
|
|
21,716 |
|
|
|
|
41,356 |
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
Cost of product
sales |
|
|
13,740 |
|
|
|
|
28,849 |
|
Cost of service
agreements and license revenues |
|
|
4,284 |
|
|
|
|
5,719 |
|
Cost of advanced
technologies contract revenues |
|
|
3,258 |
|
|
|
|
3,193 |
|
Total cost of revenues |
|
|
21,282 |
|
|
|
|
37,761 |
|
|
|
|
|
|
|
Gross profit |
|
|
434 |
|
|
|
|
3,595 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Administrative
and selling expenses |
|
|
5,458 |
|
|
|
|
6,101 |
|
Research and
development expenses |
|
|
5,299 |
|
|
|
|
4,597 |
|
Total operating expenses |
|
|
10,757 |
|
|
|
|
10,698 |
|
|
|
|
|
|
|
Loss from
operations |
|
|
(10,323 |
) |
|
|
|
(7,103 |
) |
|
|
|
|
|
|
Interest
expense |
|
|
(1,373 |
) |
|
|
|
(905 |
) |
Other income,
net |
|
|
749 |
|
|
|
|
1,464 |
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
|
(10,947 |
) |
|
|
|
(6,544 |
) |
|
|
|
|
|
|
Provision for
income taxes |
|
|
(120 |
) |
|
|
|
(84 |
) |
|
|
|
|
|
|
Net loss |
|
|
(11,067 |
) |
|
|
|
(6,628 |
) |
|
|
|
|
|
|
Net loss
attributable to noncontrolling interest |
|
|
57 |
|
|
|
|
89 |
|
|
|
|
|
|
|
Net loss attributable
to FuelCell Energy, Inc. |
|
|
(11,010 |
) |
|
|
|
(6,539 |
) |
|
|
|
|
|
|
Preferred stock
dividends |
|
|
(800 |
) |
|
|
|
(800 |
) |
|
|
|
|
|
|
Net loss to common
shareholders |
$ |
|
(11,810 |
) |
|
$ |
|
(7,339 |
) |
|
|
|
|
|
|
Loss per share basic
and diluted |
|
|
|
|
|
Basic |
$ |
|
(0.38 |
) |
|
$ |
|
(0.29 |
) |
Diluted |
$ |
|
(0.38 |
) |
|
$ |
|
(0.29 |
) |
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
Basic |
|
|
31,015,658 |
|
|
|
|
24,884,103 |
|
Diluted |
|
|
31,015,658 |
|
|
|
|
24,884,103 |
|
|
FUELCELL ENERGY, INC. |
Consolidated Statements of
Operations |
Unaudited |
(Amounts in thousands, except share and per
share amounts) |
|
|
Nine Months EndedJuly
31, |
|
2016 |
|
2015 |
Revenues: |
|
|
|
|
|
Product
sales |
$ |
|
54,178 |
|
|
$ |
|
84,769 |
|
Service
agreements and license revenues |
|
|
21,373 |
|
|
|
|
15,506 |
|
Advanced
technologies contract revenues |
|
|
8,228 |
|
|
|
|
11,351 |
|
Total revenues |
|
|
83,779 |
|
|
|
|
111,626 |
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
Cost of product
sales |
|
|
53,247 |
|
|
|
|
77,308 |
|
Cost of service
agreements and license revenues |
|
|
22,123 |
|
|
|
|
13,720 |
|
Cost of advanced
technologies contract revenues |
|
|
8,298 |
|
|
|
|
10,966 |
|
Total cost of revenues |
|
|
83,668 |
|
|
|
|
101,994 |
|
|
|
|
|
|
|
Gross profit |
|
|
111 |
|
|
|
|
9,632 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Administrative
and selling expenses |
|
|
18,939 |
|
|
|
|
18,002 |
|
Research and
development expenses |
|
|
15,720 |
|
|
|
|
12,656 |
|
Total operating expenses |
|
|
34,659 |
|
|
|
|
30,658 |
|
|
|
|
|
|
|
Loss from
operations |
|
|
(34,548 |
) |
|
|
|
(21,026 |
) |
|
|
|
|
|
|
Interest
expense |
|
|
(3,200 |
) |
|
|
|
(2,195 |
) |
Other income
(expense), net |
|
|
(110 |
) |
|
|
|
2,621 |
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
|
(37,858 |
) |
|
|
|
(20,600 |
) |
|
|
|
|
|
|
Provision for
income taxes |
|
|
(402 |
) |
|
|
|
(179 |
) |
|
|
|
|
|
|
Net loss |
|
|
(38,260 |
) |
|
|
|
(20,779 |
) |
|
|
|
|
|
|
Net loss
attributable to noncontrolling interest |
|
|
165 |
|
|
|
|
280 |
|
|
|
|
|
|
|
Net loss attributable
to FuelCell Energy, Inc. |
|
|
(38,095 |
) |
|
|
|
(20,499 |
) |
|
|
|
|
|
|
Preferred stock
dividends |
|
|
(2,400 |
) |
|
|
|
(2,400 |
) |
|
|
|
|
|
|
Net loss to common
shareholders |
$ |
|
(40,495 |
) |
|
$ |
|
(22,899 |
) |
|
|
|
|
|
|
Loss per share basic
and diluted |
|
|
|
|
|
Basic |
$ |
|
(1.41 |
) |
|
$ |
|
(0.94 |
) |
Diluted |
$ |
|
(1.41 |
) |
|
$ |
|
(0.94 |
) |
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
Basic |
|
|
28,680,596 |
|
|
|
|
24,312,330 |
|
Diluted |
|
|
28,680,596 |
|
|
|
|
24,312,330 |
|
|
|
|
|
|
|
|
|
|
|
Contact:
FuelCell Energy, Inc.
Kurt Goddard, Vice President Investor Relations
203-830-7494
ir@fce.com
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FuelCell Energy (NASDAQ:FCEL)
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From Apr 2023 to Apr 2024