FuelCell Energy Reports Fourth Quarter & Fiscal Year 2008 Results

News Dec 10, 2008 by Jeff Shepard

FuelCell Energy, Inc. reported results and accomplishments for its fourth quarter and fiscal year ended October 31, 2008.

FuelCell Energy reported total revenues for the fourth quarter of 2008 of $26.2 million compared to $16.5 million in the same period last year. Product sales and revenues in the fourth quarter increased 113% to $23.3 million from $11.0 million. The product cost-to-revenue ratio was 1.54-to-1 in the fourth quarter, an improvement over the third quarter and in-line with the company’s objectives. Research and development contract revenue was $2.8 million compared to $5.5 million.

FuelCell Energy’s product backlog, including long-term service agreements, was 52% higher at $87.6 million compared to last year’s $57.8 million. Orders increased 118% to 32.3MW in 2008 compared to 2007. Research and development contract backlog was $4.8 million as of October 31, 2008 compared to $18.5 million on October 31, 2007.

Net loss to common shareholders for the fourth quarter of 2008 was $24.3 million or $0.35 per basic and diluted share compared to a net loss to common shareholders of $16.8 million or $0.25 per basic and diluted share in the fourth quarter of 2007. Losses expanded as higher volumes of product sales and revenues resulted in increased operating losses.

Fourth quarter net cash use was $17.5 million compared to $13.9 million in the same period last year. Total cash and investments in U.S. Treasuries were $86.9 million as of October 31, 2008. Capital spending for the 2008 fourth quarter was approximately $1.7 million and depreciation expense for the period was $2.2 million.

For the year ended October 31, 2008, FuelCell Energy revenues were $100.7 million, a 109% increase from the $48.2 million reported in 2007. Product sales and revenues were $82.7 million, an increase of 154% over the prior year’s $32.5 million. Research and development contract revenue was $18.0 million compared to $15.7 million in 2007.

The product cost-to-revenue ratio improved to 1.62-to-1 in 2008 compared to the 1.90-to-1 in 2007 due to cost reductions across all product lines and higher production of megawatt-class products compared to the prior year. Net loss to common shareholders was $96.6 million or $1.41 per basic and diluted share compared to a net loss to common shareholders of $71.9 million or $1.16 per basic and diluted share. Losses expanded as higher volumes of product sales and revenues resulted in increased operating losses, although at a lower rate than in the prior year as product margins improved.

"This past year, we doubled revenues, tripled our production rate, and achieved our cost out goals, putting us firmly on the path to profitability," said R. Daniel Brdar, Chairman and CEO of FuelCell Energy. "Customers are demanding low-carbon, green technology, which is driving sales of our products in South Korea and the U.S."