FuelCell Energy, Inc. (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 fourth quarter and fiscal year ended October 31,
2017 and key business highlights.
Financial Results FuelCell Energy (the Company)
reported total revenues for the fourth quarter of 2017 of $47.9
million, compared to $24.5 million for the fourth quarter of 2016,
including:
- Product sales totaled $39.9 million for the fourth quarter of
2017 compared to $8.4 million for the fourth quarter of 2016.
The increase primarily reflects partial deliveries under a 20
megawatt order to a South Korean construction company for a utility
project to be owned by Korea Southern Power Company, with
deliveries beginning in the fourth quarter of 2017 and concluding
in the first quarter of 2018.
- Service agreements and license revenue totaled $2.7 million for
the fourth quarter of 2017 compared to $10.7 million for the fourth
quarter of 2016. The difference between the periods reflects
the timing of scheduled module replacements under service
agreements.
- Generation revenue totaled $1.8 million for the fourth quarter
of 2017 compared to $0.7 million for the fourth quarter of
2016. The increase reflects the growth in the generation
portfolio with 11.2 MW operating as of October 31, 2017.
- Advanced technologies contract revenue totaled $3.5 million for
the fourth quarter of 2017 compared to $4.7 million for the fourth
quarter of 2016. Revenue was lower for the fourth quarter of
2017, reflecting the timing of project milestones under existing
contracts.
The gross profit generated in the fourth quarter of 2017 totaled
$3.2 million and the gross margin for the fourth quarter of 2017
was 6.6 percent, compared to a gross loss of ($0.5) million
incurred for the fourth quarter of 2016 and a gross margin of (1.9)
percent for the fourth quarter of 2016.
Operating expenses for the fourth quarter of 2017 totaled $11.3
million, unchanged from the fourth quarter of 2016. The
increase in Administrative and selling expenses year-over-year
reflected higher business development and professional fees, which
were offset by lower Research and development expenses following
the introduction of the 3.7 MW SureSource 4000 TM.
Net loss attributable to common stockholders for the fourth
quarter of 2017 totaled $10.8 million, or $0.17 per basic and
diluted share, compared to $13.7 million, or $0.41 per basic and
diluted share, for the fourth quarter of 2016.
Adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA, a Non-GAAP measure) in the fourth
quarter of 2017 totaled ($5.0) 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 fourth quarter of 2017 and depreciation
expense was $2.0 million, including depreciation of property, plant
and equipment as well as Project assets.
Backlog and Project AwardsThe Company had a
contract backlog totaling approximately $554.2 million as of
October 31, 2017 compared to $432.3 million as of October 31,
2016.
- Services backlog totaled $182.3 million as of October 31, 2017
compared to $204.8 million as of October 31, 2016. Services
backlog includes future contracted revenue from routine maintenance
and scheduled module exchanges for power plants under service
agreements.
- Generation backlog totaled $296.3 million as of October 31,
2017 compared to $142.5 million as of October 31, 2016.
Generation backlog represents future contracted energy sales under
contracted power purchase agreements between the Company and the
end-user of the power. The previously announced 7.4 megawatt
CMEEC/U.S. Navy project was added to Generation backlog during the
fourth quarter of 2017.
- Product sales backlog totaled $31.3 million as of October 31,
2017 compared to $24.9 million as of October 31, 2016. The increase
relates to the 20 megawatt Korean utility order that the Company is
currently executing on.
- Advanced technologies contracts backlog totaled $44.3 million
as of October 31, 2017 compared to $60.1 million as of October 31,
2016.
Backlog represents firm definitive agreements executed by the
Company and our customers. Project awards referenced by the Company
are notifications that the Company has been selected, typically
through a competitive bidding process, to enter into definitive
agreements. These awards have been publicly disclosed.
Negotiations are in process and if successfully completed,
project awards will become backlog. Project awards that were
not included in backlog as of October 31, 2017 include the 39.8
megawatt LIPA selections, the Toyota Hydrogen / BioMAT project, and
the 20 year service agreement supporting the 20 megawatt Korean
utility project. These awards in total represent approximately
$1.05 billion of future revenue potential if ownership of the
project is retained by the Company.
Cash, restricted cash and borrowing
abilityCash, cash equivalents, restricted cash and
borrowing ability under the NRG Energy revolving project financing
facility totaled $127.4 million as of October 31, 2017,
including:
- Total cash of $87.4 million, including $49.3 million of
unrestricted cash and cash equivalents and $38.1 million of
restricted cash.
- $40.0 million of borrowing ability 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 and cash flow, as well as projects the
Company is developing and expects to retain and operate. Long
term project assets totaled $73.0 million as of October 31, 2017,
consisting of five projects totaling 11.2 megawatts plus costs
incurred to date for an additional 19.5 megawatts of previously
announced projects that are under various stages of
construction.
Business Highlights
- Shipments begun in the fourth quarter of 2017 and completed in
the first quarter of 2018 for the 20 megawatt Korean utility
project to be owned by Korea Southern Power Company. Installation
of this project is now in process. The Company will begin
commissioning activities in the spring of 2018 and the plant is
expected to be operational in late summer 2018.
- Executed renewable distributed hydrogen agreement for
transportation with Toyota.
- PPA executed for 7.4 megawatt project in the fourth quarter of
2017 with Connecticut Municipal Electric Energy
Cooperative (CMEEC) for the long-term supply of power to the
U.S. Navy Submarine Base in Groton, Connecticut.
- Connecticut Department of Energy and Environmental Protection
issued a draft Request for Proposals (RFP) on December 15, 2017 for
the procurement of clean energy with a focus on enhancing the
reliability and resiliency of energy supply and in a manner that
promotes in-state economic development. The Company expects to
submit multiple proposals in response to this RFP.
- The Company’s North American manufacturing plant building
expansion was completed in December 2017. This will support cost
reductions by consolidating facilities and enabling manufacturing
efficiencies while positioning for future capacity expansion as
backlog supports.
“We are well-positioned for delivering projects in 2018
supported by expanding backlog and announced project awards that
exceed $1.6 billion,” said Chip Bottone, President and Chief
Executive Officer, FuelCell Energy. “We are continuing to
pursue large projects on a global basis.”
Conference Call InformationFuelCell Energy
management will host a conference call with investors beginning at
10:00 a.m. Eastern Time on Thursday, January 11, 2018 to discuss
the fourth quarter and fiscal 2017 results.
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 January 11th earnings call event listed, or click
here.
- Alternatively, participants can dial 647-689-4106 and state
FuelCell Energy or the conference ID number 1498669.
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, Inc.
(NASDAQ:FCEL) delivers efficient, affordable and clean solutions
for the supply, recovery and storage of energy. We design,
manufacture, undertake project development of, install, operate and
maintain megawatt-scale fuel cell systems, serving utilities and
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
@FuelCell_Energy
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.
Contact: |
FuelCell Energy, Inc.Shawn
Severson, EnergyTech Investor,
LLC Office: 415.233.7094ir@fce.com |
Source: FuelCell Energy
FUELCELL ENERGY,
INC.Consolidated Balance
Sheets(Unaudited)(Amounts in thousands, except
share and per share amounts) |
|
|
|
|
|
|
|
|
October 31, 2017 |
|
|
October 31, 2016 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash
equivalents |
$ |
49,294 |
|
|
$ |
84,187 |
|
Restricted cash
and cash equivalents – short-term |
|
4,628 |
|
|
|
9,437 |
|
Accounts
receivable, net |
|
68,521 |
|
|
|
24,593 |
|
Inventories |
|
74,496 |
|
|
|
73,806 |
|
Other current
assets |
|
6,571 |
|
|
|
10,181 |
|
Total current
assets |
|
203,510 |
|
|
|
202,204 |
|
|
|
|
|
|
|
Restricted cash and
cash equivalents – long-term |
|
33,526 |
|
|
|
24,692 |
|
Project assets
noncurrent |
|
73,001 |
|
|
|
47,111 |
|
Property, plant and
equipment, net |
|
43,565 |
|
|
|
36,640 |
|
Goodwill |
|
4,075 |
|
|
|
4,075 |
|
Intangible assets |
|
9,592 |
|
|
|
9,592 |
|
Other assets, net |
|
16,517 |
|
|
|
16,415 |
|
Total assets |
$ |
383,786 |
|
|
$ |
340,729 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Current
portion of long-term debt |
$ |
28,281 |
|
|
$ |
5,010 |
|
Accounts
payable |
|
42,616 |
|
|
|
18,475 |
|
Accrued
liabilities |
|
18,381 |
|
|
|
20,900 |
|
Deferred
revenue |
|
7,964 |
|
|
|
6,811 |
|
Preferred
stock obligation of subsidiary |
|
836 |
|
|
|
802 |
|
Total current
liabilities |
|
98,078 |
|
|
|
51,998 |
|
|
|
|
|
|
|
Long-term deferred
revenue |
|
18,915 |
|
|
|
20,974 |
|
Long-term preferred
stock obligation of subsidiary |
|
14,221 |
|
|
|
12,649 |
|
Long-term debt and
other liabilities |
|
63,759 |
|
|
|
80,855 |
|
Total liabilities |
|
194,973 |
|
|
|
166,476 |
|
Redeemable preferred stock (liquidation preference of
$64,020 at October 31, 2017 and October 31, 2016) |
|
59,857 |
|
|
|
59,857 |
|
Redeemable Series C
preferred stock (liquidation preference of $33,300 as of October
31, 2017) |
|
27,700 |
|
|
|
- |
|
|
|
|
|
|
|
Total
Equity: |
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
Common
stock ($0.0001 par value; 125,000,000 and 75,000,000 shares
authorized at October 31, 2017 and October 31, 2016, respectively;
69,492,816 and 35,174,424 shares issued and outstanding at October
31, 2017 and October 31, 2016, respectively) |
|
7 |
|
|
|
4 |
|
Additional paid-in capital |
|
1,045,197 |
|
|
|
1,004,566 |
|
Accumulated deficit |
|
(943,533 |
) |
|
|
(889,630 |
) |
Accumulated other comprehensive loss |
|
(415 |
) |
|
|
(544 |
) |
Treasury
stock, Common, at cost (88,861 and 21,527 shares at October 31,
2017 and October 31, 2016, respectively) |
|
(280 |
) |
|
|
(179 |
) |
Deferred
compensation |
|
280 |
|
|
|
179 |
|
Total
stockholders’ equity |
|
101,256 |
|
|
|
114,396 |
|
Total
liabilities and stockholders’ equity |
$ |
383,786 |
|
|
$ |
340,729 |
|
|
|
|
|
|
|
|
FUELCELL ENERGY,
INC.Consolidated Statements of
Operations(Unaudited)(Amounts in thousands, except
share and per share amounts) |
|
|
|
Three Months EndedOctober
31, |
|
2017 |
|
|
2016 |
|
Revenues: |
|
|
|
|
|
Product
sales |
$ |
39,892 |
|
|
$ |
8,385 |
|
Service
agreements and license revenues |
|
2,713 |
|
|
|
10,651 |
|
Generation
revenues |
|
1,824 |
|
|
|
734 |
|
Advanced
technologies contract revenue |
|
3,460 |
|
|
|
4,703 |
|
Total revenues |
|
47,889 |
|
|
|
24,473 |
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
Cost of product
sales |
|
38,318 |
|
|
|
10,227 |
|
Cost of service
agreements and license revenues |
|
2,407 |
|
|
|
11,065 |
|
Cost of
generation revenues |
|
1,167 |
|
|
|
68 |
|
Cost of advanced
technologies contract revenues |
|
2,833 |
|
|
|
3,581 |
|
Total cost of revenues |
|
44,725 |
|
|
|
24,941 |
|
|
|
|
|
|
|
Gross profit
(loss) |
|
3,164 |
|
|
|
(468 |
) |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Administrative
and selling expenses |
|
7,119 |
|
|
|
6,211 |
|
Research and
development expenses |
|
4,226 |
|
|
|
5,126 |
|
Total
operating expenses |
|
11,345 |
|
|
|
11,337 |
|
|
|
|
|
|
|
Loss from
operations |
|
(8,181 |
) |
|
|
(11,805 |
) |
|
|
|
|
|
|
Interest
expense |
|
(2,315 |
) |
|
|
(1,758 |
) |
Other income,
net |
|
517 |
|
|
|
732 |
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
(9,979 |
) |
|
|
(12,831 |
) |
|
|
|
|
|
|
Provision
for income taxes |
|
- |
|
|
|
(117 |
) |
|
|
|
|
|
|
Net loss |
|
(9,979 |
) |
|
|
(12,948 |
) |
|
|
|
|
|
|
Net loss
attributable to noncontrolling interest |
|
- |
|
|
|
86 |
|
|
|
|
|
|
|
Net loss attributable
to FuelCell Energy, Inc. |
|
(9,979 |
) |
|
|
(12,862 |
) |
|
|
|
|
|
|
Preferred stock
dividends |
|
(800 |
) |
|
|
(800 |
) |
|
|
|
|
|
|
Net loss to common
stockholders |
$ |
(10,779 |
) |
|
$ |
(13,662 |
) |
|
|
|
|
|
|
Net loss to common
shareholders per share |
|
|
|
|
|
Basic |
$ |
(0.17 |
) |
|
$ |
(0.41 |
) |
Diluted |
$ |
(0.17 |
) |
|
$ |
(0.41 |
) |
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
Basic |
|
61,730,835 |
|
|
|
33,029,247 |
|
Diluted |
|
61,730,835 |
|
|
|
33,029,247 |
|
FUELCELL ENERGY,
INC.Consolidated Statements of
Operations(Unaudited)(Amounts in thousands, except
share and per share amounts) |
|
|
|
Year EndedOctober
31, |
|
2017 |
|
|
2016 |
|
Revenues: |
|
|
|
|
|
Product
sales |
$ |
43,047 |
|
|
$ |
62,563 |
|
Service
agreements and license revenues |
|
27,050 |
|
|
|
31,491 |
|
Generation
revenues |
|
7,233 |
|
|
|
1,267 |
|
Advanced
technologies contract revenue |
|
18,336 |
|
|
|
12,931 |
|
Total revenues |
|
95,666 |
|
|
|
108,252 |
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
Cost of product
sales |
|
49,843 |
|
|
|
63,474 |
|
Cost of service
agreements and license revenues |
|
25,285 |
|
|
|
32,592 |
|
Cost of
generation revenues |
|
5,076 |
|
|
|
664 |
|
Cost of advanced
technologies contract revenues |
|
12,728 |
|
|
|
11,879 |
|
Total cost of revenues |
|
92,932 |
|
|
|
108,609 |
|
|
|
|
|
|
|
Gross profit
(loss) |
|
2,734 |
|
|
|
(357 |
) |
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Administrative
and selling expenses |
|
25,916 |
|
|
|
25,150 |
|
Research and
development expenses |
|
20,398 |
|
|
|
20,846 |
|
Restructuring
expense |
|
1,355 |
|
|
|
- |
|
Total
operating expenses |
|
47,669 |
|
|
|
45,996 |
|
|
|
|
|
|
|
Loss from
operations |
|
(44,935 |
) |
|
|
(46,353 |
) |
|
|
|
|
|
|
Interest
expense |
|
(9,171 |
) |
|
|
(4,958 |
) |
Other income,
net |
|
247 |
|
|
|
622 |
|
|
|
|
|
|
|
Loss before provision
for income taxes |
|
(53,859 |
) |
|
|
(50,689 |
) |
|
|
|
|
|
|
Provision
for income taxes |
|
(44 |
) |
|
|
(519 |
) |
|
|
|
|
|
|
Net loss |
|
(53,903 |
) |
|
|
(51,208 |
) |
|
|
|
|
|
|
Net loss
attributable to noncontrolling interest |
|
- |
|
|
|
251 |
|
|
|
|
|
|
|
Net loss attributable
to FuelCell Energy, Inc. |
|
(53,903 |
) |
|
|
(50,957 |
) |
|
|
|
|
|
|
Preferred stock
dividends |
|
(3,200 |
) |
|
|
(3,200 |
) |
|
|
|
|
|
|
Net loss to common
shareholders |
$ |
(57,103 |
) |
|
$ |
(54,157 |
) |
|
|
|
|
|
|
Net loss to common
stockholders per share |
|
|
|
|
|
Basic |
$ |
(1.14 |
) |
|
$ |
(1.82 |
) |
Diluted |
$ |
(1.14 |
) |
|
$ |
(1.82 |
) |
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
Basic |
|
49,914,904 |
|
|
|
29,773,700 |
|
Diluted |
|
49,914,904 |
|
|
|
29,773,700 |
|
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 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 the 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 and project assets. Adjusted EBITDA adjusts EBITDA for
stock-based compensation and restructuring charges, which are
considered either non-cash or 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 October 31, |
|
Year Ended October 31, |
(Amounts in
thousands) |
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
Net loss attributable
to FuelCell Energy, Inc. |
$ |
(9,979 |
) |
|
$ |
(12,862 |
) |
|
$ |
(53,903 |
) |
|
$ |
(50,957 |
) |
Depreciation |
|
2,016 |
|
|
|
1,366 |
|
|
|
8,518 |
|
|
|
4,949 |
|
(Benefit)/Provision for
income taxes |
|
- |
|
|
|
117 |
|
|
|
44 |
|
|
|
519 |
|
Other (income)/expense,
net(1) |
|
(517 |
) |
|
|
(732 |
) |
|
|
(247 |
) |
|
|
(622 |
) |
Interest expense |
|
2,315 |
|
|
|
1,758 |
|
|
|
9,171 |
|
|
|
4,958 |
|
EBITDA |
$ |
(6,165 |
) |
|
$ |
(10,353 |
) |
|
$ |
(36,417 |
) |
|
$ |
(41,153 |
) |
Stock-based
compensation expense |
|
1,153 |
|
|
|
895 |
|
|
|
4,585 |
|
|
|
3,425 |
|
Restructuring
expense |
|
- |
|
|
|
- |
|
|
|
1,355 |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
(5,012 |
) |
|
$ |
(9,458 |
) |
|
$ |
(30,477 |
) |
|
$ |
(37,728 |
) |
(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.
FuelCell Energy (NASDAQ:FCEL)
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