FuelCell Energy, Inc. has reported results and accomplishments for its third fiscal quarter and nine months ended July 31, 2007.
FuelCell Energy reported revenues for the third quarter of fiscal 2007 of $13.5 million, compared to $8.7 million in the same period a year ago. Product sales and revenues were up 45 percent to $7.8 million compared to $5.4 million in the same period a year ago. The product cost-to-revenue ratio was 1.91 compared with 2.83 in the same period a year ago resulting in improved margins over the prior year.
Product cost reductions were realized from the Company’s cost out program and increased production of megawatt (MW) class power plants, which have a lower product cost per kilowatt (kW) of capacity. Research and development contract revenue was $5.7 million compared to $3.3 million in 2006 on higher activity in the Company’s solid oxide fuel cell program.
The Company’s product backlog as of July 31, 2007, including long-term service agreements more than doubled to $49.6 million compared to $20.0 million as of July 31, 2006. Research and development contract backlog totaled $22.1 million compared to $9.8 million as of July 31, 2006.
In the third quarter of fiscal 2007, net loss to common shareholders was $16.2 million or $0.24 per basic and diluted share compared to a net loss to common shareholders of $19.8 million or $0.37 per basic and diluted share in the same period of the previous year. The improvements were the result of lower product costs, a shift toward lower unit cost MW class products, higher interest from invested balances, and higher income from state research and development tax credits of $1.0 million.
Total cash and investments were $167.5 million as of July 31, 2007. Third quarter net cash use was $11.2 million compared to $17.0 million used in the third quarter of 2006. Cash use in the quarter benefited from an increase in deferred revenue and customer deposits of approximately $8.7 million related to new orders signed in the quarter offset by increased inventory. Capital spending totaled approximately $0.8 million and depreciation expense for the quarter ended July 31, 2007 was approximately $2.3 million.
For the nine months ended July 31, 2007, FuelCell Energy reported revenue of $31.8 million compared with $24.2 million in the same period a year ago. Product sales and revenues were $21.6 million, compared to $14.9 million in 2006. The product cost-to-revenue ratio improved to 2.07 compared with 2.71 for the nine month period a year ago on declining product costs. Research and development contract revenue was $10.2 million compared to $9.3 million in 2006, primarily reflecting higher activity in the Company’s solid oxide fuel cell program.
For the nine months ended July 31, 2007, FuelCell Energy reported a net loss to common shareholders of $55.1 million or $0.92 per basic and diluted share compared to a loss of $60.0 million or $1.19 per basic and diluted share in the same period a year ago. Improvement over the prior year is attributable to the shift toward lower cost MW class products and the realization of lower product costs through our cost out program offset by increased research and development spending. The 2006 net loss to common shareholders included a one time charge of $4.3 million or $0.09 per basic and diluted share for the conversion of shares of the Series B Redeemable preferred stock.
“These results are driven by our continuing focus on cost reduction and higher sales of MW class products — consistent with our strategy,’ said R. Daniel Brdar, FuelCell Energy’s Chairman and CEO. “In response to greater demand for our products, we are currently ramping our annual production from 11 MW to 25 MW.’
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