Delaware | 1-14204 | 06-0853042 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
3 Great Pasture Road, Danbury, Connecticut |
06813 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |||
99.1 | FuelCell Energy, Inc., Press Release, issued June 6, 2011. |
FUELCELL ENERGY, INC. |
||||
Date: June 7, 2011 | By: | /s/ Joseph G. Mahler | ||
Joseph G. Mahler | ||||
Senior Vice President, Chief Financial
Officer, Corporate Secretary and Treasurer |
||||
Exhibit No. | Description | |||
99.1 | FuelCell Energy, Inc., Press Release, issued June 6, 2011. |
| POSCO Power orders 70 MW of fuel cell kits and other equipment and services totaling $129 million |
| $55 million of cash and investments at April 30, 2011 |
| Continued SECA program funding adding $8.2 million to backlog |
| Fleet repair and upgrade program results in $8.8 million charge |
| Cost ratio of 1.08 before repair and upgrade charge versus 1.47 prior year |
FuelCell Energy Second Quarter 2011 Results | Page 2 |
FuelCell Energy Second Quarter 2011 Results | Page 3 |
FuelCell Energy Second Quarter 2011 Results | Page 4 |
| Solid Oxide Fuel Cell Development: The DOE awarded an $11.7 million cost share contract to the Company for phase three of the Solid State Energy Conversion Alliance (SECA) Program. The objective of phase three is to build and operate a scalable solid oxide fuel cell module with output of 60 kW. |
| Carbon capture: An award from the EPA will fund the initial testing of Direct FuelCells to consume flue gas generated by industrial processes instead of ambient air for the power generation process and evaluate their capability to cost effectively separate the CO2 within the flue gas. Carbon capture potentially represents a large global market. |
| Biogas clean-up cost reduction: The Company received a subcontract award under a DOE program to demonstrate an improved process for cleaning biogas that if successful, could lead to a substantial reduction in the cost of operating fuel cells that utilize renewable biogas. |
FuelCell Energy Second Quarter 2011 Results | Page 5 |
| 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 in the U.S. or Canada can dial 877-303-7005 |
| Outside the U.S. and Canada, please call 678-809-1045 |
| The passcode is FuelCell Energy |
| From the U.S. and Canada please dial 800-642-1687 |
| Outside the U.S. or Canada please call 706-645-9291 |
| Enter confirmation code 69216314 |
FuelCell Energy Second Quarter 2011 Results | Page 6 |
Contact:
|
FuelCell Energy, Inc. | |
Kurt Goddard, Vice President Investor Relations | ||
203-830-7494 | ||
ir@fce.com |
FuelCell Energy Second Quarter 2011 Results | Page 7 |
April 30, | October 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 36,980 | $ | 20,467 | ||||
Investments U.S. treasury securities |
18,067 | 25,019 | ||||||
Accounts receivable, net |
19,879 | 18,066 | ||||||
Inventories, net |
36,199 | 33,404 | ||||||
Other current assets |
7,395 | 5,253 | ||||||
Total current assets |
118,520 | 102,209 | ||||||
Property, plant and equipment, net |
24,289 | 26,679 | ||||||
Investments U.S. treasury securities |
| 9,071 | ||||||
Investment in and loans to affiliate |
9,779 | 9,837 | ||||||
Other assets, net |
5,941 | 2,733 | ||||||
Total assets |
$ | 158,529 | $ | 150,529 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt and other liabilities |
$ | 4,017 | $ | 976 | ||||
Accounts payable |
11,764 | 10,267 | ||||||
Accounts payable due to affiliate |
275 | 575 | ||||||
Accrued liabilities |
26,335 | 16,721 | ||||||
Deferred revenue |
31,218 | 25,499 | ||||||
Preferred stock obligation of subsidiary |
8,992 | | ||||||
Total current liabilities |
82,601 | 54,038 | ||||||
Long-term deferred revenue |
7,500 | 8,042 | ||||||
Long-term preferred stock obligation of subsidiary |
14,564 | | ||||||
Long-term debt and other liabilities |
4,124 | 4,056 | ||||||
Total liabilities |
108,789 | 66,136 | ||||||
Redeemable preferred stock of subsidiary |
| 16,849 | ||||||
Redeemable preferred stock (liquidation preference of
$64,020 at April 30, 2011 and October 31, 2010) |
59,857 | 59,857 | ||||||
Total Equity: |
||||||||
Shareholders equity |
||||||||
Common stock ($.0001 par value); 225,000,000
shares authorized; 126,692,525 and 112,965,725
shares issued and outstanding at April 30, 2011
and October 31, 2010, respectively |
12 | 11 | ||||||
Additional paid-in capital |
677,157 | 663,951 | ||||||
Accumulated deficit |
(686,517 | ) | (655,623 | ) | ||||
Accumulated other comprehensive income |
15 | 11 | ||||||
Treasury stock, Common, at cost (5,679 shares at
April 30, 2011 and October 31, 2010) |
(53 | ) | (53 | ) | ||||
Deferred compensation |
53 | 53 | ||||||
Total shareholders (deficit) equity |
(9,333 | ) | 8,350 | |||||
Noncontrolling interest in subsidiaries |
(784 | ) | (663 | ) | ||||
Total equity |
(10,117 | ) | 7,687 | |||||
Total liabilities and equity |
$ | 158,529 | $ | 150,529 | ||||
FuelCell Energy Second Quarter 2011 Results | Page 8 |
Three Months Ended | ||||||||
April 30, | ||||||||
2011 | 2010 | |||||||
Revenues: |
||||||||
Product sales and revenues |
$ | 26,673 | $ | 13,007 | ||||
Research and development contracts |
1,934 | 3,580 | ||||||
Total revenues |
28,607 | 16,587 | ||||||
Costs and expenses: |
||||||||
Cost of product sales and revenues |
37,460 | 19,120 | ||||||
Cost of research and development contracts |
2,017 | 3,267 | ||||||
Administrative and selling expenses |
4,454 | 4,547 | ||||||
Research and development expenses |
4,498 | 5,089 | ||||||
Total costs and expenses |
48,429 | 32,023 | ||||||
Loss from operations |
(19,822 | ) | (15,436 | ) | ||||
Interest expense |
(928 | ) | (45 | ) | ||||
Income/(loss) from equity investment |
143 | (245 | ) | |||||
Interest and other income, net |
634 | 364 | ||||||
Loss before redeemable preferred stock of subsidiary |
(19,973 | ) | (15,362 | ) | ||||
Accretion of redeemable preferred stock of subsidiary |
| (603 | ) | |||||
Loss before provision for income taxes |
(19,973 | ) | (15,965 | ) | ||||
Provision for income taxes |
(35 | ) | (13 | ) | ||||
Net loss |
(20,008 | ) | (15,978 | ) | ||||
Net loss attributable to noncontrolling interest |
52 | 96 | ||||||
Net loss attributable to FuelCell Energy, Inc. |
(19,956 | ) | (15,882 | ) | ||||
Adjustment for modification of redeemable preferred
stock of subsidiary |
(8,987 | ) | | |||||
Preferred stock dividends |
(800 | ) | (800 | ) | ||||
Net loss to common shareholders |
$ | (29,743 | ) | $ | (16,682 | ) | ||
Net loss per share to common shareholders |
||||||||
Basic |
$ | (0.24 | ) | $ | (0.20 | ) | ||
Diluted |
$ | (0.24 | ) | $ | (0.20 | ) | ||
Weighted average shares outstanding |
||||||||
Basic |
125,009,180 | 84,515,979 | ||||||
Diluted |
125,009,180 | 84,515,979 |
FuelCell Energy Second Quarter 2011 Results | Page 9 |
Six Months Ended | ||||||||
April 30, | ||||||||
2011 | 2010 | |||||||
Revenues: |
||||||||
Product sales and revenues |
$ | 52,433 | $ | 25,815 | ||||
Research and development contracts |
4,254 | 5,388 | ||||||
Total revenues |
56,687 | 31,203 | ||||||
Costs and expenses: |
||||||||
Cost of product sales and revenues |
65,519 | 37,133 | ||||||
Cost of research and development contracts |
4,354 | 5,363 | ||||||
Administrative and selling expenses |
8,504 | 8,703 | ||||||
Research and development expenses |
8,744 | 9,709 | ||||||
Total costs and expenses |
87,121 | 60,908 | ||||||
Loss from operations |
(30,434 | ) | (29,705 | ) | ||||
Interest expense |
(982 | ) | (108 | ) | ||||
Loss from equity investment |
(55 | ) | (393 | ) | ||||
Interest and other income, net |
1,034 | 683 | ||||||
Loss before redeemable preferred stock of subsidiary |
(30,437 | ) | (29,523 | ) | ||||
Accretion of redeemable preferred stock of subsidiary |
(525 | ) | (1,160 | ) | ||||
Loss before provision for income taxes |
(30,962 | ) | (30,683 | ) | ||||
Provision for income taxes |
(53 | ) | (13 | ) | ||||
Net loss |
(31,015 | ) | (30,696 | ) | ||||
Net loss attributable to noncontrolling interest |
121 | 182 | ||||||
Net loss attributable to FuelCell Energy, Inc. |
(30,894 | ) | (30,514 | ) | ||||
Adjustment for modification of redeemable preferred
stock of subsidiary |
(8,987 | ) | | |||||
Preferred stock dividends |
(1,600 | ) | (1,602 | ) | ||||
Net loss to common shareholders |
$ | (41,481 | ) | $ | (32,116 | ) | ||
Net loss per share to common shareholders |
||||||||
Basic |
$ | (0.35 | ) | $ | (0.38 | ) | ||
Diluted |
$ | (0.35 | ) | $ | (0.38 | ) | ||
Weighted average shares outstanding |
||||||||
Basic |
119,963,394 | 84,459,926 | ||||||
Diluted |
119,963,394 | 84,459,926 |
FuelCell Energy Second Quarter 2011 Results | Page 10 |
Three Months Ended April 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
GAAP | Non-GAAP | Non-GAAP | GAAP | |||||||||||||
As Reported | Adjustments | As Adjusted | As Reported (3) | |||||||||||||
Revenues: |
||||||||||||||||
Product sales and revenues |
$ | 26,673 | $ | | $ | 26,673 | $ | 13,007 | ||||||||
Research and development contracts |
1,934 | | 1,934 | 3,580 | ||||||||||||
Total revenues |
28,607 | | 28,607 | 16,587 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sales and revenues |
37,460 | (8,752 | )(1) | 28,708 | 19,120 | |||||||||||
Cost of research and development contracts |
2,017 | | 2,017 | 3,267 | ||||||||||||
Administrative and selling expenses |
4,454 | | 4,454 | 4,547 | ||||||||||||
Research and development expenses |
4,498 | | 4,498 | 5,089 | ||||||||||||
Total costs and expenses |
48,429 | (8,752 | ) | 39,677 | 32,023 | |||||||||||
Loss from operations |
(19,822 | ) | 8,752 | (11,070 | ) | (15,436 | ) | |||||||||
Interest expense |
(928 | ) | | (928 | ) | (45 | ) | |||||||||
Income/(Loss) from equity investment |
143 | | 143 | (245 | ) | |||||||||||
Interest and other income, net |
634 | | 634 | 364 | ||||||||||||
Loss before redeemable preferred stock of subsidiary |
(19,973 | ) | 8,752 | (11,221 | ) | (15,362 | ) | |||||||||
Accretion of redeemable preferred stock of subsidiary |
| | | (603 | ) | |||||||||||
Loss before provision for income taxes |
(19,973 | ) | 8,752 | (11,221 | ) | (15,965 | ) | |||||||||
Provision for income taxes |
(35 | ) | | (35 | ) | (13 | ) | |||||||||
Net loss |
(20,008 | ) | 8,752 | (11,256 | ) | (15,978 | ) | |||||||||
Net loss attributable to noncontrolling interest |
52 | | 52 | 96 | ||||||||||||
Net loss attributable to FuelCell Energy, Inc. |
(19,956 | ) | 8,752 | (11,204 | ) | (15,882 | ) | |||||||||
Adjustment for modification of redeemable preferred
stock of subsidiary |
(8,987 | ) | 8,987 | (2) | | | ||||||||||
Preferred stock dividends |
(800 | ) | | (800 | ) | (800 | ) | |||||||||
Net loss to common shareholders |
$ | (29,743 | ) | $ | 17,739 | $ | (12,004 | ) | $ | (16,682 | ) | |||||
Net loss per share to common shareholders |
||||||||||||||||
Basic |
$ | (0.24 | ) | $ | 0.14 | $ | (0.10 | ) | $ | (0.20 | ) | |||||
Diluted |
$ | (0.24 | ) | $ | 0.14 | $ | (0.10 | ) | $ | (0.20 | ) | |||||
Weighted average shares outstanding |
||||||||||||||||
Basic |
125,009,180 | | 125,009,180 | 84,515,979 | ||||||||||||
Diluted |
125,009,180 | | 125,009,180 | 84,515,979 |
FuelCell Energy Second Quarter 2011 Results | Page 11 |
Six Months Ended April 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
GAAP | Non-GAAP | Non-GAAP | GAAP | |||||||||||||
As Reported | Adjustments | As Adjusted | As Reported (3) | |||||||||||||
Revenues: |
||||||||||||||||
Product sales and revenues |
$ | 52,433 | $ | | $ | 52,433 | $ | 25,815 | ||||||||
Research and development contracts |
4,254 | | 4,254 | 5,388 | ||||||||||||
Total revenues |
56,687 | | 56,687 | 31,203 | ||||||||||||
Costs and expenses: |
||||||||||||||||
Cost of product sales and revenues |
65,519 | (8,752 | )(1) | 56,767 | 37,133 | |||||||||||
Cost of research and development contracts |
4,354 | | 4,354 | 5,363 | ||||||||||||
Administrative and selling expenses |
8,504 | | 8,504 | 8,703 | ||||||||||||
Research and development expenses |
8,744 | | 8,744 | 9,709 | ||||||||||||
Total costs and expenses |
87,121 | (8,752 | ) | 78,369 | 60,908 | |||||||||||
Loss from operations |
(30,434 | ) | 8,752 | (21,682 | ) | (29,705 | ) | |||||||||
Interest expense |
(982 | ) | | (982 | ) | (108 | ) | |||||||||
Loss from equity investment |
(55 | ) | | (55 | ) | (393 | ) | |||||||||
Interest and other income, net |
1,034 | | 1,034 | 683 | ||||||||||||
Loss before redeemable preferred stock of subsidiary |
(30,437 | ) | 8,752 | (21,685 | ) | (29,523 | ) | |||||||||
Accretion of redeemable preferred stock of subsidiary |
(525 | ) | | (525 | ) | (1,160 | ) | |||||||||
Loss before provision for income taxes |
(30,962 | ) | 8,752 | (22,210 | ) | (30,683 | ) | |||||||||
Provision for income taxes |
(53 | ) | | (53 | ) | (13 | ) | |||||||||
Net loss |
(31,015 | ) | 8,752 | (22,263 | ) | (30,696 | ) | |||||||||
Net loss attributable to noncontrolling interest |
121 | | 121 | 182 | ||||||||||||
Net loss attributable to FuelCell Energy, Inc. |
(30,894 | ) | 8,752 | (22,142 | ) | (30,514 | ) | |||||||||
Adjustment for modification of redeemable preferred
stock of subsidiary |
(8,987 | ) | 8,987 | (2) | | | ||||||||||
Preferred stock dividends |
(1,600 | ) | | (1,600 | ) | (1,602 | ) | |||||||||
Net loss to common shareholders |
$ | (41,481 | ) | $ | 17,739 | $ | (23,742 | ) | $ | (32,116 | ) | |||||
Net loss per share to common shareholders |
||||||||||||||||
Basic |
$ | (0.35 | ) | $ | 0.15 | $ | (0.20 | ) | $ | (0.38 | ) | |||||
Diluted |
$ | (0.35 | ) | $ | 0.15 | $ | (0.20 | ) | $ | (0.38 | ) | |||||
Weighted average shares outstanding |
||||||||||||||||
Basic |
119,963,394 | | 119,963,394 | 84,459,926 | ||||||||||||
Diluted |
119,963,394 | | 119,963,394 | 84,459,926 |
FuelCell Energy Second Quarter 2011 Results | Page 12 |
(1) | FuelCell Energy, Inc. has committed to a repair and upgrade program to fix a product defect for a select group of 1.2 MW fuel cell modules produced between 2007 and early 2009. Second quarter 2011 earnings was impacted by a charge of approximately $8.8 million, which was accounted for as an increase to cost of goods sold. Our product sales, gross margin and cost to revenue ratio and cost of revenues for the three and six months ended April 30, 2011 and 2010 were as follows: |
Three Months Ended | Six Months Ended | |||||||||||||||
April 30, | April 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
GAAP Revenue and Cost of Sales |
||||||||||||||||
Product sales and revenues |
$ | 26,673 | $ | 13,007 | $ | 52,433 | $ | 25,815 | ||||||||
Cost of product sales and revenues |
37,460 | 19,120 | 65,519 | 37,133 | ||||||||||||
Gross margin from product sales
and revenues |
$ | (10,787 | ) | $ | (6,113 | ) | $ | (13,086 | ) | $ | (11,318 | ) | ||||
Product Sales
Cost-to-revenue
ratio(a) |
1.40 | 1.47 | 1.25 | 1.44 | ||||||||||||
Non-GAAP Adjustment to cost of
product sales and revenues: |
||||||||||||||||
Repair and Upgrade Cost |
$ | (8,752 | ) | $ | | $ | (8,752 | ) | $ | | ||||||
Gross Margin (non-GAAP): |
||||||||||||||||
Gross margin from
product sales and
revenues |
$ | (2,035 | ) | $ | (6,113 | ) | $ | (4,334 | ) | $ | (11,318 | ) | ||||
Gross margin from
research and
development contracts |
(83 | ) | 313 | (100 | ) | 25 | ||||||||||
Total |
$ | (2,118 | ) | $ | (5,800 | ) | $ | (4,434 | ) | $ | (11,293 | ) | ||||
Product
Sales
Cost-to-revenue
ratio(a) |
1.08 | 1.47 | 1.08 | 1.44 |
(a) | Cost-to-revenue ratio is calculated as cost of product sales and revenues divided by product sales and revenues. | |
(2) | As previously announced, the Company entered into an agreement with Enbridge, Inc. to modify an agreement for the Series 1 preferred shares. While this modification did not result in a material change to future cash flows, it did result in a revaluation of the instrument and a reclassification of amounts due as short and long term liabilities. An adjustment to additional paid in capital and loss to common shareholders of $9.0 million was incurred in the second quarter of 2011 to adjust the historic carrying value of the Series I preferred shares to the current fair value | |
The reason for the change in the value of the obligation was that the original obligation had been accounted for under purchase price accounting at the time of the acquisition of Global Thermoelectric Inc. in 2003. This valuation included a market risk discount and a foreign exchange rate which was fixed at the time of the acquisition. Under the new valuation under debt accounting, the future estimated cash flows were discounted using the dividend rate in the modified agreement and the current foreign exchange rate resulting in the adjustment. This accounting accelerated the prior accretion model. | ||
(3) | Note that there were no adjustments to GAAP results as reported for the three and six months ended April 30, 2010. |