FuelCell Energy, Inc. reported results for its first quarter ended January 31, 2009. The company reported a 45% increase in total revenues for the first fiscal quarter of 2009 to $21.7 million from $15.0 million in the same period last year. Product sales and revenues increased 95% to $19.0 million from $9.8 million in the 2008 first quarter. Revenues improved due to increased production of megawatt-class (MW-class) power plants compared to the prior year period. The company’s product sales backlog as of January 31, 2009, including long-term service agreements, was $70.9 million compared to $84.7 million as of January 31, 2008 and $87.6 million as of October 31, 2008.
Research and development contract revenue was $2.7 million in the first quarter of 2009 compared to $5.3 million in the first quarter of 2008, primarily due to the completion of several government programs in the second half of fiscal 2008. In January, the U.S. Department of Energy (DOE) awarded the Company Phase II of the MW-class coal-based solid oxide fuel cell (SOFC) contract - a $30.2 million contract of which $21.0 million will be funded by the DOE. Research and development contract backlog was $23.1 million as of January 31, 2009 compared to $13.2 million at January 31, 2008.
The first quarter net loss to common shareholders was $20.7 million or $0.30 per basic and diluted share compared to $19.7 million or $0.29 per basic and diluted share in the same period last year. Net loss increased as higher volumes of product sales and revenues resulted in increased operating losses. The product cost-to-revenue ratio improved by 24% to 1.52-to-1 compared to the 1.99-to-1 reported in the prior year quarter, and was comparable to the 1.54-to-1 in the fourth quarter of 2008. The improved product margin is primarily attributable to increased production of lower cost MW-class power plants.
The company had high cash use in the first quarter which is expected to be offset by lower cash use in the second quarter. Timing of customer milestone payments increased accounts receivable to $30.4 million as of January 31, 2009 compared to $16.1 million at October 31, 2008. The Company also experienced delays closing contracts in the first quarter that it now expects to close in the second quarter. As a result, use of cash and investments in the quarter was $36.1 million compared to $15.1 million in the first quarter of 2008. Total cash and investments in U.S. treasuries were $50.8 million as of January 31, 2009. The company expects to manage cash and investments at or above this level in the second quarter of 2009.
The company has received the delayed milestone payments and it expects to receive new customer milestone payments as it adds contracts to backlog. Capital spending in the quarter totaled $1.2 million.
"We have a strong backlog, products that will be gross margin positive by the end of the year, and we see near-term opportunities for new orders in our key markets," said R. Daniel Brdar, Chairman and CEO. "The recently passed Recovery Act should create demand for many more clean energy projects and we have positioned the Company to capitalize on these opportunities."
