- Execution under 20 MW Korean utility order with Korea Southern Power Company
- Launched first MW-class renewable hydrogen project for transportation with Toyota
- Finalized 7.4 MW utility project power purchase agreement to power a U.S. Navy base
- Record backlog and project awards of $1.6 billion
DANBURY, Conn. -- 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.
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 Awards
The 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 ability
Cash, 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.
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.
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."