FuelCell Energy, Inc. (Nasdaq: FCEL) -- a global leader in
decarbonizing power and producing hydrogen through its proprietary,
state-of-the-art fuel cell platforms to enable a world empowered by
clean energy -- today reported financial results for its third
quarter ended July 31, 2023.
“For the third quarter of fiscal year 2023,
reported revenues were down versus the comparable prior year
quarter. This was primarily a result of lower product revenues due
to the lack of module sales compared to sales in the comparable
prior year quarter of replacement modules to Korea Fuel Cell Co.,
Ltd. (“KFC”)” said Mr. Jason Few, President and Chief Executive
Officer. “Excluding the revenues generated by the sale of modules
to KFC in the prior year quarter, overall revenues in the third
quarter were up slightly compared to the prior year quarter.”
“We were extremely pleased to announce that we
have completed the commissioning of the Toyota Long Beach project,
and that our Tri-gen platform is producing power, water and
hydrogen that meets the stringent purity specifications required
for mobility applications,” added Mr. Few. “At this time, we are
only waiting on the receipt of the final fire department and
related building permits required to fully declare achievement of
commercial operations. This marks a significant accomplishment in
our technology development in partnership with Toyota. We believe
that our innovative Tri-gen system will help Toyota achieve its
decarbonization goals by producing emissions-free hydrogen,
electricity, and water every day. We are excited to explore
opportunities to apply our Tri-gen technology to additional
projects in the future.”
Mr. Few continued, “We extended the term of our
Joint Development Agreement with ExxonMobil Technology and
Engineering Company (“EMTEC”) through March 2024 to allow us to
continue to derisk our Generation 2 Technology fuel cell module
demonstration prototype and continue our joint marketing and sales
efforts to inform development of a new business framework between
the parties beyond the current joint development agreement
structure. We look forward to the expected future commercialization
of this important technology, which we believe will demonstrate the
ability of our technology to help address one of the world’s
largest environmental challenges. And, on the project construction
front, both projects in Derby, Connecticut being constructed are
advancing on schedule, and we are on track to achieve commercial
operations on the combined 16.8-megawatt (“MW”) installations in
the fourth quarter of calendar year 2023.”
Mr. Few added, “Also during the third quarter,
we were very pleased to expand our presence in the Korean market
with domestic clean energy electric utilities that had previously
installed FuelCell Energy power platforms. We executed a long-term
service agreement with Noeul Green Energy Co., Ltd. (“Noeul Green”)
and a memorandum of understanding with Gyeonggi Green Energy Co.,
Ltd., and are delighted to have the opportunity to help support
stable fuel cell operations and advance eco-friendly power
generation in Korea. The 14-year long-term service agreement with
Noeul Green has added expected significant long-term recurring
revenue to our reported backlog, with a contract value of
approximately $73 million.”
“We ended the quarter on July 31, 2023 with a
total cash and short-term investment position of approximately $414
million,” added Mr. Few. “During the quarter, we added liquidity to
our balance sheet by entering into an $80.5 million non-recourse
project financing facility through a multi-bank financing agreement
with Investec Bank plc, Bank of Montreal (Chicago Branch),
Connecticut Green Bank, Liberty Bank and Amalgamated Bank. The net
proceeds from this transaction added approximately $46.1 million to
the Company’s unrestricted cash position after repayment of
existing project debt obligations and partial repayments of
corporate debt obligations, and the related release of certain
reserves in connection with such repayments. In addition, we were
able to further support our liquidity through sales of shares under
our at-the-market offering program, which raised net proceeds of
approximately $83.3 million during the quarter.”
Mr. Few concluded, “We continue to execute on
our strategy, proving our technologies in critical applications and
supporting decarbonization across the globe. We believe that strong
and growing demand for clean energy technologies combined with
government policy support has generated significant potential in
our markets.”
Consolidated Financial Metrics
In this press release, FuelCell Energy refers to
various GAAP (U.S. generally accepted accounting principles) and
non-GAAP financial measures. The non-GAAP financial measures
may not be comparable to similarly titled measures being used and
disclosed by other companies. FuelCell Energy believes that
this non-GAAP information is useful to an understanding of its
operating results and the ongoing performance of its business. A
reconciliation of EBITDA, Adjusted EBITDA and any other non-GAAP
measures is contained in the appendix to this press release.
|
|
|
|
|
|
|
Three Months Ended July 31, |
(Amounts in thousands) |
|
2023 |
|
|
|
2022 |
|
|
Change |
Total revenues |
$ |
25,510 |
|
|
$ |
43,104 |
|
|
(41 |
)% |
Gross loss |
|
(8,215 |
) |
|
|
(4,180 |
) |
|
(97 |
)% |
Loss from operations |
|
(41,395 |
) |
|
|
(27,997 |
) |
|
(48 |
)% |
Net loss |
|
(23,601 |
) |
|
|
(28,977 |
) |
|
19 |
% |
Net loss attributable to common stockholders |
|
(25,079 |
) |
|
|
(30,214 |
) |
|
17 |
% |
Net loss per basic and diluted share |
$ |
(0.06 |
) |
|
$ |
(0.08 |
) |
|
25 |
% |
|
|
|
|
|
|
EBITDA |
|
(34,772 |
) |
|
|
(22,731 |
) |
|
(53 |
)% |
Adjusted EBITDA |
$ |
(31,606 |
) |
|
$ |
(20,770 |
) |
|
(52 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Third Quarter of Fiscal 2023
Results
Note: All comparisons between periods are
between the third quarter of fiscal 2023 and the third quarter of
fiscal 2022, unless otherwise specified.
Third quarter revenues of $25.5 million
represent a decrease of 41% from the comparable prior year quarter
primarily due to lower product revenues. A breakdown of revenues
for the quarter compared to the comparable prior year quarter
follows.
- Product revenues
for the prior year quarter included module sales to KFC, for which
the Company recognized $18.0 million compared to no product revenue
recorded for the third quarter of fiscal 2023.
- Service agreements
revenues increased to $9.8 million from $9.0 million. The increase
in service agreements revenues for the third quarter of fiscal 2023
was primarily driven by two new module exchanges at the plant owned
by Korea Southern Power Company in Korea, which achieved commercial
operations in fiscal year 2018, and a module exchange at the plant
at Trinity College.
- Generation
revenues were consistent period over period, increasing to $11.0
million from $10.9 million in the prior year period.
- Advanced
Technologies contract revenues decreased to $4.7 million
from $5.2 million. Compared to the third quarter of fiscal 2022,
Advanced Technologies contract revenues recognized under the Joint
Development Agreement with EMTEC were approximately $0.3 million
higher during the third quarter of fiscal 2023 and revenue
recognized under government and other contracts were approximately
$0.8 million lower during the third quarter of fiscal 2023 as a
result of the allocation of engineering resources during the
quarter.
Gross loss for the third quarter of fiscal 2023
totaled $8.2 million, compared to a gross loss of $4.2 million in
the comparable prior year quarter. The gross loss increased for the
third quarter of fiscal 2023 primarily due to the fact that there
were no module sales during the quarter, compared to the third
quarter of fiscal 2022, which included favorable product margins as
a result of the module sales to KFC.
Operating expenses for the third quarter of
fiscal 2023 increased to $33.2 million from $23.8 million in the
third quarter of fiscal 2022. Administrative and selling expenses
were higher during the third quarter of fiscal 2023 compared to the
third quarter of fiscal 2022, primarily due to an increase in
compensation expense resulting from an increase in headcount in
support of sales and business expansion. Research and development
expenses increased to $15.6 million during the third quarter of
fiscal 2023 compared to $9.7 million in the third quarter of fiscal
2022. The increase in research and development expenses is
primarily due to an increase in spending on the Company’s ongoing
commercial development efforts related to our solid oxide power
generation and electrolysis platforms and carbon separation and
carbon capture solutions compared to the comparable prior year
period.
Net loss was $23.6 million in third quarter
of fiscal 2023, compared to net loss of $29.0 million in the third
quarter of fiscal 2022.
Adjusted EBITDA totaled $(31.6) million in the
third quarter of fiscal 2023, compared to Adjusted EBITDA of
$(20.8) million in the third quarter of fiscal 2022. Please see the
discussion of non-GAAP financial measures, including Adjusted
EBITDA, in the appendix at the end of this release.
The net loss per share attributable to common
stockholders in the third quarter of fiscal 2023 was $0.06,
compared to $0.08 in the third quarter of fiscal 2022.
Cash, Restricted Cash and Short-Term
Investments
Cash and cash equivalents, restricted cash and
cash equivalents, and short-term investments totaled $413.9 million
as of July 31, 2023, compared to $481.0 million as of October 31,
2022. Of the $413.9 million total as of July 31, 2023, cash and
cash equivalents and restricted cash and cash equivalents totaled
$336.4 million as of July 31, 2023, and short-term investments
totaled $77.4 million. Short-term investments represent the
amortized cost of U.S. Treasury Securities outstanding as of July
31, 2023 as part of the Company’s cash management optimization
effort, all of which are expected to be held to maturity.
- As of July 31, 2023, unrestricted
cash and cash equivalents totaled $303.7 million compared to $458.1
million as of October 31, 2022.
- As of July 31, 2023, restricted
cash and cash equivalents totaled $32.7 million, of which $6.1
million was classified as current and $26.7 million was classified
as non-current, compared to $23.0 million of restricted cash and
cash equivalents as of October 31, 2022, of which $4.4 million was
classified as current and $18.6 million was classified as
non-current.
- As of July 31, 2023, our short-term
investments in U.S. Treasury Securities, all of which are maturing
in fiscal 2023, totaled $77.4 million, and there was no comparable
short-term investment as of October 31, 2022.
Operations Update
In-flight projects: During the
quarter, the Company continued to make progress on projects for
which we have executed power and/or hydrogen purchase agreements,
with updates regarding certain current projects provided below.
Toyota - Port
of Long Beach, CA. This 2.8 MW Tri-gen platform produces
electricity (at a net output of 2.3 MW), hydrogen and water. The
Company has successfully completed the commissioning of this
platform, and it is producing power and water and delivering
hydrogen that meets the stringent purity specifications required
for mobility applications. The plant is currently operating and, at
this time, we are only waiting on the receipt of the final fire
department and related building permits required to fully declare
achievement of commercial operations.
Derby,
CT. On-site construction of this 14.0 MW project continues
to advance and the Company has largely completed the construction
and installation of the majority of the balance of plant components
on site as well as all ten modules required for the project. This
utility scale fuel cell platform will contain five SureSource 3000
fuel cell systems that will be installed on engineered platforms
alongside the Housatonic River. To date, the Company has invested
approximately $52.9 million into the project, and our current
expectation is that this project will commence commercial
operations in the fourth calendar quarter of 2023.
In addition, the
on-site civil construction of the 2.8 MW project located in Derby,
CT is advancing. Our current expectation is that this project will
also commence commercial operations in the fourth calendar quarter
of 2023.
Trinity
College. During fiscal year 2022, we entered into a power
purchase agreement with Trinity College in Hartford, Connecticut,
for our 250 kW solid oxide fuel cell power generation system. Power
and heat produced from the platform will be used at Trinity’s
campus in Hartford, Connecticut, to lower energy cost and enhance
energy reliability and security. This project is currently under
development and the solid oxide fuel cell power generation system
is expected to be installed in the summer of 2024. Modules for our
solid oxide platform are manufactured at our manufacturing and
research and development facility in Calgary, Alberta, Canada, and
the project will be fully assembled and integrated at our
facilities in Connecticut.
Manufacturing Output, Capacity and
Expansion: We have made progress in advancing our
carbonate and solid oxide platform capacity expansion plans.
Carbonate
Platform: During the nine months ended July 31, 2023, we
operated at an annualized production rate of approximately 31.9 MW,
compared to an annualized production rate for the nine months ended
July 31, 2022 of 38.5 MW. This reduction in annualized production
rate is primarily due to reduced staffing levels in our Torrington
facility. The Company continuously evaluates its production rate
and staffing levels and has determined that the current levels are
sufficient to satisfy the current demand for carbonate fuel cell
modules.
The Company continues
to invest in capability with the goal of reducing production
bottlenecks and driving productivity, including investments in
automation, laser welding, and the construction of additional
integrated conditioning capacity. The Company also constructed a
SureSource 1500 in Torrington during fiscal year 2022, which
operates as a testing facility for qualifying new supplier
components and performance testing and validation of continued
platform innovations. During fiscal year 2023, the Company is
investing to add engineered carbon separation capability to the
onsite SureSource 1500. This product enhancement will allow
potential customers to observe the operating plant and, given the
targeted market of food and beverage companies, will allow for the
sampling and testing of separated CO2 to verify quantity, quality
or purity requirements.
Solid Oxide
Platform: The Company continues to invest in product
development and manufacturing scale up for two solid oxide
platforms: power generation and electrolysis. Both platforms are
based on the Company’s differentiated thin, lightweight, electrode
supported cells, which are configured into compact, lightweight
stacks. The thin electrode structure minimizes electrolyte
materials, leading to very low use of rare earth minerals compared
to other solid oxide technologies, and the electrodes do not
require the platinum group materials that lower temperature systems
require. The thin electrodes also have very low electrical
resistance, leading to high efficiency in both power generation and
electrolysis applications. We provide integrated products with the
goal of offering complete customer solutions. Our electrolysis
platform includes integrated steam generation and hydrogen drying
systems, so it will be fed with water, not steam, and will provide
dried hydrogen. A steam supply can optionally be used to increase
the electrical efficiency of the system from 90% to 100% (based on
higher heating value). Our power generation platform can operate on
natural gas, biogas, hydrogen, or fuel blends, and is capable of
combined heat and power operation at up to 80% efficiency (based on
lower heating value).
During the nine
months ended July 31, 2023, Versa Power Systems Ltd. (“Versa
Ltd.”), a subsidiary of FuelCell Energy, entered into a lease
expansion, extension and amending agreement which expanded the
space leased by Versa Ltd. in Calgary, Alberta, Canada to include
an additional approximately 48,000 square feet, for a total of
approximately 80,000 square feet of space. The Company took
possession of part of the additional space on April 1, 2023 and
took possession of the rest of the additional space on June 1, 2023
after certain leasehold improvements were made to support increased
manufacturing. In addition, long-lead process equipment has been
ordered to facilitate the expansion of manufacturing capacity for
the solid oxide platforms in Calgary. Upon the completion of the
Calgary capacity expansion, the Company expects that it will be
able to increase annual production capacity and that it will be
capable of delivering up to 40 MW of annualized solid oxide
electrolysis cell (“SOEC”) production per year. During the
engineering and permitting phase of this initial manufacturing
expansion project, the Company has designed in flexibility that
would allow us to further increase the cell stack manufacturing
capacity at our Calgary facility to facilitate the potential
annualized production of up to an additional 40 MW of SOECs per
year by leasing additional space and investing in various process
optimizations intended to increase throughput and yield. This
approach would allow for the potential to increase our total
annualized SOEC manufacturing capacity to up to 80 MW per year.
Additional investments in our Torrington, CT manufacturing facility
could also be undertaken to provide solid oxide module assembly to
further enhance overall SOEC manufacturing capacity. The Company
has hired and trained additional staff for a 3-shift production
operation to support the initial planned expansion to 40 MW and
would need to add additional staff as required in the future to
realize the potential 80 MW of annualized SOEC production.
During calendar year
2023, our Calgary manufacturing operation was expected to build and
deliver four units: two units that will run internally for advanced
testing and two production units for delivery externally. Of these
commercial units for external delivery, one will be our
electrolysis platform for delivery to Idaho National Laboratory
(“INL”), and the other will be our distributed power platform for
delivery to Trinity College in Hartford, Connecticut for use under
a long-term power purchase agreement. All four of these units are
in the design, fabrication or manufacturing process, with the INL
unit expected to be operational in late calendar year 2023. The
other three units are expected to be completed and delivered during
calendar year 2024 depending on timing of site readiness,
permitting and key component deliveries. If needed to accommodate
future commercial orders, the Company may reallocate one or more of
its planned internal units for commercial delivery.
The expansion of the
Calgary manufacturing facility is phase 1 of the Company’s planned
operational expansion of production capability. While this
expansion is expected to increase our production capacity from 4 MW
per year to 40 MW per year of SOECs, the Company also plans to add
an additional 400 MW of solid oxide manufacturing capacity in the
United States. Early facility design and engineering requirements
have been developed, and the Company has engaged in an extensive
search in the United States for a potential location for a new
manufacturing facility, which would be incremental to the Calgary
facility. We anticipate announcing more details regarding our plans
for solid oxide production expansion into the United States later
in the near term.
Lastly, the Company
is in the process of examining or actively applying for various
financial programs offered by both Canada and the United States to
provide subsidies, investment tax credits and other assistance with
the goal of expanding capacity for clean energy manufacturing.
Backlog
|
|
|
|
|
|
|
|
|
|
|
|
As of July 31, |
|
|
(Amounts in thousands) |
|
2023 |
|
2022 |
|
Change |
Product |
|
$ |
26 |
|
$ |
38,312 |
|
$ |
(38,286 |
) |
Service |
|
|
136,621 |
|
|
112,238 |
|
|
24,383 |
|
Generation |
|
|
915,062 |
|
|
1,103,396 |
|
|
(188,334 |
) |
Advanced Technologies |
|
|
11,552 |
|
|
30,217 |
|
|
(18,665 |
) |
Total Backlog |
|
$ |
1,063,261 |
|
$ |
1,284,163 |
|
$ |
(220,902 |
) |
|
Overall backlog decreased by approximately 17.2%
to $1.06 billion as of July 31, 2023, compared to $1.28 billion as
of July 31, 2022, as a result of a reduction in generation backlog
due to the decision to not move forward with certain generation
projects during the fourth quarter of fiscal 2022, and also due, in
part, to the timing of revenue recognition under Product,
Generation and Service agreements since July 31, 2022. This decline
was partially offset by the new service agreement with Noeul Green
entered into during the three months ended July 31, 2023.
Backlog represents definitive agreements
executed by the Company and our customers. Projects for which we
have an executed power purchase agreement (“PPA”) or hydrogen power
purchase agreement (“HPPA”) are included in generation backlog,
which represents future revenue under long-term PPAs and HPPAs. The
Company’s ability to recognize revenue in the future under a PPA or
HPPA is subject to the Company’s completion of construction of the
project covered by such PPA or HPPA. Should the Company not
complete the construction of the project covered by a PPA or HPPA,
it will forgo future revenues with respect to the project and may
incur penalties and/or impairment charges related to the project.
Projects sold to customers (and not retained by the Company) are
included in product sales and service agreements backlog, and the
related generation backlog is removed upon sale. Together, the
service and generation portion of backlog had a weighted average
term of approximately 17 years, with weighting based on the dollar
amount of backlog and utility service contracts of up to 20 years
in duration at inception.
Conference Call Information
FuelCell Energy will host a conference call
today beginning at 10:00 a.m. ET to discuss third quarter results
for fiscal year 2023 as well as key business highlights.
Participants can access the live call via webcast on the Company
website or by telephone as follows:
- The live webcast of the call and
supporting slide presentation will be available at
www.fuelcellenergy.com. To listen to the call, select “Investors”
on the home page located under the “Our Company” pull-down menu,
proceed to the “Events & Presentations” page and then click on
the “Webcast” link listed under the September 11th earnings call
event, or click here.
- Alternatively, participants can
dial 646-960-0699 and state FuelCell Energy or the conference ID
number 1099808.
The replay of the conference call will be
available via webcast on the Company’s Investors’ page
atwww.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 regarding future
events or our future financial performance that involve certain
contingencies and uncertainties, including those discussed in our
Annual Report on Form 10-K for the fiscal year ended October 31,
2022 in the section entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations”. The
forward-looking statements include, 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
current and future fuel cell technologies, the expected timing of
completion of the Company’s ongoing projects, the Company’s
business plans and strategies, the Company’s capacity expansion and
the markets in which the Company expects to operate. Projected and
estimated numbers contained herein are not forecasts and may not
reflect actual results. These forward-looking statements are not
guarantees of future performance, and 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:
general risks associated with product development and
manufacturing; general economic conditions; changes in interest
rates, which may impact project financing; supply chain
disruptions; changes in the utility regulatory environment; changes
in the utility industry and the markets for distributed generation,
distributed hydrogen, and fuel cell power plants configured for
carbon capture or carbon separation; potential volatility of
commodity prices that may adversely affect our projects;
availability of government subsidies and economic incentives for
alternative energy technologies; our ability to remain in
compliance with U.S. federal and state and foreign government laws
and regulations and the listing rules of The Nasdaq Stock Market;
rapid technological change; competition; the risk that our bid
awards will not convert to contracts or that our contracts will not
convert to revenue; market acceptance of our products; changes in
accounting policies or practices adopted voluntarily or as required
by accounting principles generally accepted in the United States;
factors affecting our liquidity position and financial condition;
limitations on our ability to raise capital in the equity markets
due to the limited number of shares of common stock currently
available for issuance; government appropriations; the ability of
the government and third parties to terminate their development
contracts at any time; the ability of the government to exercise
“march-in” rights with respect to certain of our patents; our
ability to successfully market and sell our products
internationally; our ability to develop new products to achieve our
long-term revenue targets; our ability to implement our strategy;
our ability to reduce our levelized cost of energy and deliver on
our cost reduction strategy generally; our ability to protect our
intellectual property; litigation and other proceedings; the risk
that commercialization of our new products will not occur when
anticipated or, if it does, that we will not have adequate capacity
to satisfy demand; our need for and the availability of additional
financing; our ability to generate positive cash flow from
operations; our ability to service our long-term debt; our ability
to increase the output and longevity of our platforms and to meet
the performance requirements of our contracts; our ability to
expand our customer base and maintain relationships with our
largest customers and strategic business allies; and concerns with,
threats of, or the consequences of, pandemics, contagious diseases
or health epidemics, including the novel coronavirus, and resulting
supply chain disruptions, shifts in clean energy demand, impacts to
our customers’ capital budgets and investment plans, impacts to our
project schedules, impacts to our ability to service existing
projects, and impacts on the demand for our products, as well as
other risks set forth in the Company’s filings with the Securities
and Exchange Commission, including the Company’s Annual Report on
Form 10-K for the fiscal year ended October 31, 2022 and the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter
ended July 31, 2023. 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 contained
or incorporated by reference herein 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 Energy
FuelCell Energy, Inc. (NASDAQ: FCEL): FuelCell Energy is a
global leader in sustainable clean energy technologies that address
some of the world’s most critical challenges around energy access,
security, safety and environmental stewardship. As a leading global
manufacturer of proprietary fuel cell technology platforms,
FuelCell Energy is uniquely positioned to serve customers worldwide
with sustainable products and solutions for industrial and
commercial businesses, utilities, governments, and
municipalities.
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.ir@fce.com203.205.2491
Source: FuelCell Energy
FUELCELL ENERGY, INC. |
Consolidated Balance Sheets |
(Unaudited) |
(Amounts in thousands, except share and per share
amounts) |
|
|
|
July 31, |
|
|
October 31, |
|
|
2023 |
|
|
2022 |
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents, unrestricted |
$ |
303,679 |
|
|
$ |
458,055 |
|
Restricted cash and cash equivalents – short-term |
|
6,078 |
|
|
|
4,423 |
|
Investments – short-term |
|
77,431 |
|
|
|
- |
|
Accounts receivable, net |
|
10,102 |
|
|
|
4,885 |
|
Unbilled receivables |
|
18,986 |
|
|
|
11,019 |
|
Inventories |
|
85,561 |
|
|
|
90,909 |
|
Other current assets |
|
12,832 |
|
|
|
10,989 |
|
Total current assets |
|
514,669 |
|
|
|
580,280 |
|
|
|
|
|
|
|
Restricted cash
and cash equivalents – long-term |
|
26,665 |
|
|
|
18,566 |
|
Inventories –
long-term |
|
7,549 |
|
|
|
7,549 |
|
Project assets,
net |
|
248,223 |
|
|
|
232,886 |
|
Property, plant
and equipment, net |
|
79,533 |
|
|
|
58,137 |
|
Operating lease
right-of-use assets, net |
|
8,690 |
|
|
|
7,189 |
|
Goodwill |
|
4,075 |
|
|
|
4,075 |
|
Intangible assets,
net |
|
16,400 |
|
|
|
17,373 |
|
Other assets |
|
39,449 |
|
|
|
13,662 |
|
Total assets (1) |
$ |
945,253 |
|
|
$ |
939,717 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Current portion of long-term debt |
$ |
9,763 |
|
|
$ |
13,198 |
|
Current portion of operating lease liabilities |
|
668 |
|
|
|
650 |
|
Accounts payable |
|
22,404 |
|
|
|
28,196 |
|
Accrued liabilities |
|
23,046 |
|
|
|
27,415 |
|
Deferred revenue |
|
3,114 |
|
|
|
16,341 |
|
Total current liabilities |
|
58,995 |
|
|
|
85.800 |
|
|
|
|
|
|
|
Long-term deferred
revenue and customer deposits |
|
- |
|
|
|
9,095 |
|
Long-term
operating lease liabilities |
|
9,277 |
|
|
|
7,575 |
|
Long-term debt and
other liabilities |
|
109,130 |
|
|
|
82,863 |
|
Total liabilities (1) |
|
177,402 |
|
|
|
185,333 |
|
|
|
|
|
|
|
Redeemable Series
B preferred stock (liquidation preference of $64,020 as of July 31,
2023 and October 31, 2022) |
|
59,857 |
|
|
|
59,857 |
|
Redeemable
noncontrolling interest |
|
- |
|
|
|
3,030 |
|
Total equity: |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Common stock ($0.0001 par value); 500,000,000 shares authorized as
of July 31, 2023 and October 31, 2022; 444,704,081 and 405,562,988
shares issued and outstanding as of July 31, 2023 and October 31,
2022, respectively |
|
44 |
|
|
|
41 |
|
Additional paid-in capital |
|
2,186,405 |
|
|
|
2,094,076 |
|
Accumulated deficit |
|
(1,485,177 |
) |
|
|
(1,407,973 |
) |
Accumulated other comprehensive loss |
|
(1,620 |
) |
|
|
(1,752 |
) |
Treasury stock, Common, at cost (206,544 and 142,837 shares as of
July 31, 2023 and October 31, 2022, respectively) |
|
(1,026 |
) |
|
|
(855 |
) |
Deferred compensation |
|
1,026 |
|
|
|
855 |
|
Total stockholder’s equity |
|
699,652 |
|
|
|
684,392 |
|
Noncontrolling interests |
|
8,342 |
|
|
|
7,105 |
|
Total equity |
|
707,994 |
|
|
|
691,497 |
|
Total liabilities,
redeemable Series B preferred stock, redeemable noncontrolling
interest and total equity |
$ |
945,253 |
|
|
$ |
939,717 |
|
|
|
(1) |
As of July 31,
2023 and October 31, 2022, the combined assets of the variable
interest entities (“VIEs”) were $126,041 and $119,223,
respectively, that can only be used to settle obligations of the
VIEs. These assets include cash of $3,222, unbilled accounts
receivable of $1,865, operating lease right of use assets of
$1,176, other current assets of $21,289, restricted cash and cash
equivalents of $500, project assets of $96,852 and other assets of
$1,138 as of July 31, 2023, and cash of $2,149, unbilled accounts
receivable of $1,070, other current assets of $14,373, operating
lease right of use assets of $1,184 and project assets of $100,448
as of October 31, 2022. The combined liabilities of the VIEs as of
July 31, 2023 include short-term operating lease liabilities of
$157, accounts payable of $88,384, long-term operating lease
liability of $1,476 and other non-current liabilities of $184 and,
as of October 31, 2022, include short-term operating lease
liabilities of $157, accounts payable of $76,050, accrued
liabilities of $824 and long-term operating lease liability of
$1,478. |
FUELCELL ENERGY, INC. |
Consolidated Statements of Operations and Comprehensive
Loss |
(Unaudited) |
(Amounts in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
Three Months Ended July 31, |
|
2023 |
|
2022 |
Revenues: |
|
|
|
|
|
Product |
$ |
- |
|
|
$ |
18,000 |
|
Service |
|
9,841 |
|
|
|
9,049 |
|
Generation |
|
10,982 |
|
|
|
10,877 |
|
Advanced Technologies |
|
4,687 |
|
|
|
5,178 |
|
Total revenues |
|
25,510 |
|
|
|
43,104 |
|
|
Costs of revenues: |
|
|
|
|
|
Product |
|
2,910 |
|
|
|
17,919 |
|
Service |
|
9,575 |
|
|
|
7,718 |
|
Generation |
|
17,483 |
|
|
|
18,136 |
|
Advanced Technologies |
|
3,757 |
|
|
|
3,511 |
|
Total costs of revenues |
|
33,725 |
|
|
|
47,284 |
|
|
|
|
|
|
|
|
|
Gross loss |
|
(8,215 |
) |
|
|
(4,180 |
) |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Administrative and selling expenses |
|
17,560 |
|
|
|
14,158 |
|
Research and development expenses |
|
15,620 |
|
|
|
9,659 |
|
Total costs and expenses |
|
33,180 |
|
|
|
23,817 |
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(41,395 |
) |
|
|
(27,997 |
) |
|
|
|
|
|
|
|
|
Interest expense |
|
(1,912 |
) |
|
|
(1,622 |
) |
Interest income |
|
3,966 |
|
|
|
932 |
|
Gain on early extinguishment of finance obligations and debt,
net |
|
15,337 |
|
|
|
- |
|
Other income, net |
|
403 |
|
|
|
204 |
|
|
|
|
|
|
|
|
|
Loss before provision for
income taxes |
|
(23,601 |
) |
|
|
(28,483 |
) |
Provision for income taxes |
|
- |
|
|
|
(494 |
) |
|
|
|
|
|
|
|
|
Net loss |
|
(23,601 |
) |
|
|
(28,977 |
) |
Net income attributable to noncontrolling interest |
|
678 |
|
|
|
437 |
|
|
|
|
|
|
|
|
|
Net loss attributable to
FuelCell Energy, Inc. |
|
(24,279 |
) |
|
|
(29,414 |
) |
Series B preferred stock dividends |
|
(800 |
) |
|
|
(800 |
) |
|
|
|
|
|
|
|
|
Net loss attributable to
common stockholders |
$ |
(25,079 |
) |
|
$ |
(30,214 |
) |
|
|
|
|
|
|
Loss per share basic and
diluted: |
|
|
|
|
|
Net loss per share attributable to common stockholders |
$ |
(0.06 |
) |
|
$ |
(0.08 |
) |
Basic and diluted weighted average shares outstanding |
|
415,867,594 |
|
|
|
387,465,758 |
|
FUELCELL ENERGY, INC. |
Consolidated Statements of Operations and Comprehensive
Loss |
(Unaudited) |
(Amounts in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
Nine Months EndedJuly 31, |
|
|
2023 |
|
2022 |
Revenues: |
|
|
|
|
|
|
Product |
|
$ |
9,095 |
|
|
$ |
36,000 |
|
Service |
|
|
49,913 |
|
|
|
13,855 |
|
Generation |
|
|
28,979 |
|
|
|
27,423 |
|
Advanced Technologies |
|
|
12,945 |
|
|
|
14,005 |
|
Total revenues |
|
|
100,932 |
|
|
|
91,283 |
|
|
|
|
|
|
|
|
Costs of revenues: |
|
|
|
|
|
|
Product |
|
|
7,425 |
|
|
|
39,159 |
|
Service |
|
|
40,633 |
|
|
|
13,123 |
|
Generation |
|
|
51,166 |
|
|
|
42,978 |
|
Advanced Technologies |
|
|
10,779 |
|
|
|
10,408 |
|
Total costs of revenues |
|
|
110,003 |
|
|
|
105,668 |
|
|
|
|
|
|
|
|
|
|
Gross loss |
|
|
(9,071 |
) |
|
|
(14,385 |
) |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Administrative and selling expenses |
|
|
47,637 |
|
|
|
64,357 |
|
Research and development expenses |
|
|
43,000 |
|
|
|
22,316 |
|
Total costs and expenses |
|
|
90,637 |
|
|
|
86,673 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(99,708 |
) |
|
|
(101,058 |
) |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(4,926 |
) |
|
|
(4,757 |
) |
Interest income |
|
|
11,064 |
|
|
|
1,025 |
|
Gain on extinguishment of finance obligations and debt, net |
|
|
15,337 |
|
|
|
- |
|
Other income, net |
|
|
216 |
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
Loss before provision for
income taxes |
|
|
(78,017 |
) |
|
|
(104,729 |
) |
Provision for income taxes |
|
|
(581 |
) |
|
|
(494 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(78,598 |
) |
|
|
(105,223 |
) |
Net loss attributable to noncontrolling interest |
|
|
(1,394 |
) |
|
|
(4,968 |
) |
|
|
|
|
|
|
|
|
|
Net loss attributable to
FuelCell Energy, Inc. |
|
|
(77,204 |
) |
|
|
(100,255 |
) |
Series B preferred stock dividends |
|
|
(2,400 |
) |
|
|
(2,400 |
) |
|
|
|
|
|
|
|
|
|
Net loss attributable to
common stockholders |
|
$ |
(79,604 |
) |
|
$ |
(102,655 |
) |
|
|
|
|
|
|
|
Loss per share basic and
diluted: |
|
|
|
|
|
|
Net loss per share attributable to common stockholders |
|
$ |
(0.19 |
) |
|
$ |
(0.27 |
) |
Basic and diluted weighted average shares outstanding |
|
|
409,361,826 |
|
|
|
375,638,293 |
|
|
|
|
|
|
|
|
|
|
Appendix
Non-GAAP Financial Measures
Financial 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 non-GAAP measures of operations and operating
performance by the Company.
These supplemental non-GAAP measures are
provided to assist readers in assessing 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 the Company with those of other companies.
EBITDA differs from the most comparable GAAP measure, net loss
attributable to the Company, 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, restructuring charges and other
unusual items such as the non-recurring legal expense related to
the settlement of the POSCO Energy legal proceedings recorded
during the first quarter of fiscal 2022, which are considered
either non-cash or non-recurring.
While management believes that these 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.
|
Three Months Ended July 31, |
|
Nine Months Ended July 31, |
(Amounts in thousands) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
Net loss |
$ |
(23,601 |
) |
|
$ |
(28,977 |
) |
|
$ |
(78,598 |
) |
|
$ |
(105,223 |
) |
Depreciation and amortization
(1) |
|
6,623 |
|
|
|
5,266 |
|
|
|
18,659 |
|
|
|
16,369 |
|
Provision for income
taxes |
|
- |
|
|
|
494 |
|
|
|
581 |
|
|
|
494 |
|
Other income, net (2) |
|
(403 |
) |
|
|
(204 |
) |
|
|
(216 |
) |
|
|
(61 |
) |
Gain on extinguishment of
finance obligations and debt, net (3) |
|
(15,337 |
) |
|
|
- |
|
|
|
(15,337 |
) |
|
|
- |
|
Interest income |
|
(3,966 |
) |
|
|
(932 |
) |
|
|
(11,064 |
) |
|
|
(1,025 |
) |
Interest expense |
|
1,912 |
|
|
|
1,622 |
|
|
|
4,926 |
|
|
|
4,757 |
|
EBITDA |
$ |
(34,772 |
) |
|
$ |
(22,731 |
) |
|
$ |
(81,049 |
) |
|
$ |
(84,689 |
) |
Stock-based compensation
expense |
|
3,166 |
|
|
|
1,961 |
|
|
|
8,997 |
|
|
|
5,126 |
|
Legal fees incurred for a
legal settlement (4) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
24,000 |
|
Adjusted EBITDA |
$ |
(31,606 |
) |
|
$ |
(20,770 |
) |
|
$ |
(72,052 |
) |
|
$ |
(55,563 |
) |
(1) |
Includes depreciation and amortization on our Generation portfolio
of $5.4 million and $14.9 million for the three and nine months
ended July 31, 2023, respectively, and $4.1 million and $11.8
million for the three and nine months ended July 31, 2022,
respectively. |
(2) |
Other income, net includes
gains and losses from transactions denominated in foreign
currencies, changes in fair value of derivatives, and other items
incurred periodically, which are not the result of the Company’s
normal business operations. |
(3) |
The gain on extinguishment of
finance obligations and debt, net was $15.3 million for the three
and nine months ended July 31, 2023 and represents a one-time gain
on the payoff of the PNC finance obligations in conjunction with a
new project financing facility entered into in May 2023. |
(4) |
The Company recorded legal
fees of $24 million related to a legal settlement during the nine
months ended July 31, 2022, which was recorded as an administrative
and selling expense. |
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