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14.12.2004: Meldung: FuelCell Energy: Fourth Quarter and Fiscal Year 2004 Results
FuelCell Energy Reports Fourth Quarter and Fiscal Year 2004 Results and Accomplishments
Monday December 13, 7:22 pm ET
* Received New Orders of 7.5 Megawatts During the Fiscal Year and Expanded Target Market Segments
* Shipped 6 Megawatts and Increased Commercial Product Financial Backlog to $26.3 Million
* Reduced DFC300A Product Cost by 25 Percent; Block Two Changes to be Implemented in Summer 2005
* Strengthened Global Distribution Network
* Improved Financial Position with Net Proceeds of $93.5 Million from Preferred Stock Offering
DANBURY, Conn., Dec. 13 / FuelCell Energy, Inc. (Nasdaq: FCEL - News; the Company), a leading manufacturer of large stationary fuel cell power plants for commercial and industrial customers, today reported results and accomplishments for the quarter and fiscal year ended October 31, 2004.
Financial Results
FuelCell Energy reported a net loss for the fourth quarter of fiscal 2004 of $20.8 million or $0.43 per basic and diluted share, compared to a net loss of $15.4 million or $0.39 per basic and diluted share in the same period of the previous year. Net loss from continuing operations was $0.37 per basic and diluted share. Revenues for the fourth quarter of fiscal 2004 were $8.9 million compared to $7.3 million in the same period a year ago. Net cash used during the quarter was $17.0 million, which included $1.5 million used in our discontinued Canadian operations.
For the fiscal year ended October 31, 2004, FuelCell Energy reported a net loss from continuing operations of $64.9 million or $1.36 per basic and diluted share compared to a net loss from continuing operations of $67.4 million, or $1.71 per basic and diluted share, for the prior year. Revenues for fiscal 2004 were $31.4 million compared to $33.8 million in the same period a year ago. Net cash used during the year was $1.0 million, consisting of $70 million used in operations offset by $69 million of cash and investments received in the Global Thermoelectric Inc. (Global) transactions.
During fiscal 2004, we acquired, and subsequently discontinued (the sale of Global on May 28, 2004 and the combination of our Canadian solid oxide fuel cell (SOFC) operations with Versa Power Systems (Versa) on November 1, 2004) substantially all of our Canadian operations that resulted from the acquisition of Global. Including results from discontinued operations, the Company reported a total net loss of $86.4 million or $1.81 per basic and diluted share for the fiscal year ended October 31, 2004. The loss from discontinued operations totaled $21.6 million for the fiscal year ended October 31, 2004 including a loss of approximately $9.4 million from the Global and SOFC operations and an acquisition related in-process research and development charge of $12.2 million. The combination of the Canadian SOFC operations with Versa in exchange for stock increased the Company"s ownership interest in Versa to 42 percent. The Company expects to reduce its annual cash use by approximately $10.0 million as a result of these transactions related to Canadian operations.
The Company is also reporting Adjusted Net Loss of $74.2 million and $1.55 per share (see reconciliation chart included in the financial tables). Adjusted net loss excludes a charge of $12.2 million, or $0.26 per basic and diluted share, related to purchased in-process research and development expense of SOFC fuel cell development from the acquisition of Global in November of 2003.
Cash, cash equivalents and investments (U.S. Treasuries) on hand as of October 31, 2004 totaled $152.4 million. Subsequent to our fiscal year end, the Company received net proceeds of approximately $93.5 million from its preferred stock sale on November 28, 2004. Fourth quarter capital expenditures totaled $2.6 million primarily related to power purchase agreement power plants being built for the City of Santa Barbara and the Sierra Nevada Brewing Company. Depreciation and amortization expense from continuing operations for the quarter ended October 31, 2004 was approximately $2.0 million. Components of revenue and costs for the fourth quarter and fiscal 2004 were as follows:
* Research and development contract revenue for the fourth quarter of
fiscal 2004 was $3.8 million compared to $3.4 million in the same
period a year ago and $18.8 million for the fiscal year ended
October 31, 2004 compared to $17.7 million for the fiscal year ended
October 31, 2003. For the fourth quarter and fiscal year, the
Company"s revenues increased on the Vision 21 and Solid State Energy
Conversion Alliance (SECA) contracts with the U.S. Department of
Energy (DOE). These increases were offset by lower revenue from the
Clean Coal contract as the installation phase for the Company"s first
two megawatt DFC3000 power plant was completed. The cost of research
and development contract revenue declined by $2.0 million in the
fourth quarter of fiscal 2004 and $8.5 million for the fiscal year
ended October 31, 2004 compared to similar periods in 2003 due to the
mix of cost shared contracts and reduced cost for the Clean Coal
contract.
* Fuel cell product sales were $5.0 million for the fourth quarter of
fiscal 2004 compared to $3.9 million in the same period of a year ago.
Revenue during the quarter ended October 31, 2004 was higher than the
previous year primarily due to the manufacture of power plants for
Marubeni and the Salt River Project. Year to date fuel cell product
sales were $12.6 million for fiscal 2004 compared to $16.1 million in
fiscal 2003. Product sales backlog totaled $26.3 million as of
October 31, 2004 compared with $14.4 million for the same period a
year ago.
Administrative and selling expenses were $3.4 million and $13.7 million, respectively, for the three months and fiscal year ended October 31, 2004 compared to $3.0 million and $12.6 million in the same periods of the prior year. This increase was primarily due to higher sales and marketing costs and higher investor relations costs related to our increased shareholder base.
Research and development expenses for the three months and fiscal year ended October 31, 2004 were $5.4 million and $17.6 million, respectively, compared to $2.5 million and $8.5 million for the same periods of the prior year. The increase in research and development spending is primarily related to product development including the Company"s cost reduction program, product documentation and engineering support for products in the field.
Accomplishments
"We are extremely pleased with our progress in developing repeatable markets, meeting customer expectations for performance and reliability, and reducing the cost of our DFC products," said Jerry D. Leitman, Chairman and CEO of FuelCell Energy. "Market opportunities are growing for our "ultra- clean" DFC power plants."
Establishing Positions in Repeatable Markets
The Company is currently targeting customers in regions where electricity prices are $.10/kilowatt hour (kWh) or higher and have access to incentive funding programs to effectively compete with grid delivered power and conventional combustion-based distributed generation technologies for base load power. Key global markets include Japan, Korea, Canada, California, the Northeastern United States, and Europe. Concurrent with this, the Company is continuing its aggressive value engineering cost-our program and achieving annual product cost reductions of 20 to 25 percent at nominal production volume, with additional cost savings expected from increasing volumes.
* In fiscal year 2004, Fuel Cell Energy secured 7.5 megawatts of new
orders for DFC products and fuel cell stacks from distribution
partners and customers in North America, Asia and Europe. Specific
orders included:
-- 4 megawatts from Asia-Pacific distribution partner, Marubeni
Corporation, which represents its second follow-on order since its
initial order of 1.25 megawatts in 2001 and first follow-on order
of 3 megawatts in 2003;
-- 1.5 megawatts from Alliance Power for two multi-unit projects -
500 kilowatts for a municipal wastewater treatment facility in
Santa Barbara, Calif. and 1 megawatt for the Sierra Nevada Brewing
Co. in Chico, Calif.;
-- 1 megawatt from Chevron Energy Solutions for the Santa Rita
Correctional Facility in Alameda County, Calif.;
-- 750 kilowatts in fuel cell stack components for its European
distribution partner MTU CFC Solutions GmbH, a subsidiary of
DaimlerChrysler; and,
-- 250 kilowatts from the Salt River Project for installation of a
DFC300A at the Arizona State University East Campus in Mesa, Ariz.
Subsequent to fiscal year end 2004, the Company received an order for
a 250-kilowatt DFC300A from Chevron Energy Solutions for the U.S.
Postal Service"s San Francisco Mail Processing Center.
* FuelCell Energy strengthened its global distribution network:
-- FuelCell Energy and Marubeni entered into strategic alliances with
leading industrial companies to be sub-distributors and packagers
of DFC products and to participate in the Company"s cost-out
program.
* Kawasaki Heavy Industries in Japan. Kawasaki is a leading
global manufacturer of transportation equipment and industrial
goods, including gas turbine power generators. Kawasaki is
expected to further penetrate the market in Japan. Japan
strongly supports clean and efficient power generation,
particularly in biomass applications such as wastewater
treatment plants.
* POSCO in Korea. POSCO is a leading producer of steel in the
global market. POSCO has extensive experience in power plant
project development with over 2,400 megawatts of power plants
for its various facilities. POSCO is expected to extend our
market penetration to Korea. Korea"s Ministry of Commerce,
Industry and Energy has committed to install 300 fuel cell
units sized 250 kilowatts to one megawatt for distributed power
generation by 2012.
-- Enbridge Inc. opens up our North American market beyond the United
States and has been identifying key applications for our DFC
products. Enbridge owns and operates Canada"s largest natural gas
distribution company and provides distribution services in
Ontario, Quebec, New Brunswick and New York State to 1.6 million
customers. Canada also launched a Cdn.$250 million Sustainable
Technology Development Program that may provide incentives for our
DFC products.
-- FuelCell Energy and LOGANEnergy, Inc. entered into a market
development agreement to sell DFC power plants, with a focus on
megawatt-class systems in the California market. LOGAN has been
specializing in planning, designing, developing and implementing
fuel cell projects since 1994.
Meeting Customer Expectations of Product Performance
* FuelCell Energy shipped its first commercial DFC300A to the Kirin
Brewery in January 2003 and has since shipped 34 units.
* Based on survey results from a majority of its U.S. and Japanese
customers, the Company is meeting customer expectations for product
performance. Additionally, customer input has contributed to the
Company"s cost-out program and improvements in performance and
reliability.
* Through mid-December 2004, over 53 million kilowatt hours of
electricity has been generated from power plants incorporating DFC
technology at customer sites throughout the world, up from 20 million
kilowatt hours from the same period a year ago.
Reducing Product Costs through Value-Engineering
* FuelCell Energy is meeting its product value-engineering cost
reduction targets at nominal volume.
* During fiscal year 2004, the first cost-out block changes were
implemented for both the sub-megawatt and megawatt-class products.
Block one and block two changes combined resulted in a cost reduction
of approximately 25 percent. Block two changes for the sub-megawatt
product will be implemented in products manufactured in Summer 2005.
* The Company has identified technology improvements for increased
output performance and additional value-engineering changes that are
expected to result in 20 to 25 percent cost reduction for 2005 at
nominal volume. Additional cost savings can be realized as production
volume increases.
Advancing Future Product Development
* Direct FuelCell/Turbine(R) - FuelCell Energy has completed the design
of its first packaged sub-megawatt alpha unit for factory testing in
Danbury in the third calendar quarter of 2005. A second packaged
field trial unit is planned for a customer site in Montana in the
first calendar quarter of 2006.
* Marine Diesel Ship Service Fuel Cell (SSFC) - FuelCell Energy has
assembled the balance of plant process equipment for the 500-kilowatt
land-based DFC power plant and has initiated testing in Danbury. Upon
successful completion of the equipment testing, the balance of plant
will be integrated with two 250-kilowatt fuel cell stacks. The
complete power plant is expected to be tested in Danbury during the
summer of 2005.
* SOFC Technology - FuelCell Energy continues as a prime contractor for
SOFC development under the U.S. Department of Energy"s (DOE) Solid
State Energy Conversion Alliance (SECA) Program. The Company is
collaborating with Versa Power Systems (Versa) and other partners on
SOFC development. Versa established its headquarters in Colorado and
continues technology development in Calgary, Alberta, Canada. A two-
kilowatt SOFC system is currently being tested as part of expected
delivery of a three-kilowatt system for the DOE in 2006. FuelCell
Energy has a 42 percent equity ownership in Versa.
Strong Cash Position
The Company received net proceeds of $93.5 million from its November 2004 preferred stock sale, which strengthens its financial position to accelerate its cost-out program and market penetration of its DFC products. Including these net proceeds, we have over $240 million in cash, cash equivalents and investments (U.S. Treasuries) beginning fiscal 2005.
Focus for 2005
Building upon momentum from 2004, the Company"s focus areas for 2005 are
to:
* Increase penetration in key repeatable market segments in North
America, Asia and Europe.
* Continue to meet customer expectations for performance, reliability
and service.
* Achieve 2005 targets for cost-out, availability, increased power
output and stack life to reduce capital and operating costs.
* Manage cash to execute the strategy and penetrate the market.
Conference Call Information
A conference call is scheduled for 10:00 A.M. EST on December 14, 2004 to review results and discuss the Company"s outlook. Listeners can gain access to the call live over the Internet by clicking on the web cast link on the Company"s homepage at http://www.fuelcellenergy.com. A playback version will be available for seven days after the call by calling 800-642-1687 for the U.S./Canada and 706-645-9291 for international. The confirmation number is 2649014.
About Direct FuelCells
FuelCell Energy"s Direct FuelCells efficiently generate clean electricity at distributed customer locations, including hospitals, schools, universities, hotels and other commercial and industrial facilities, as well as grid-support applications for utility customers. Direct FuelCells convert readily available fuels, such as natural gas or waste gas, to electrical power with greater efficiency than any competing technology of comparable size, including other fuel cells. This high-efficiency technology generates more electric power from less fuel and has the lowest emissions of any fossil based electric generating technology because the fuel is not burned. DFC power plants can be sited at or near users, and the heat byproduct can be used for cogeneration applications such as district heating, hot water or absorption chilling for air conditioning. Depending upon location, application and load size, the Company"s DFC power plants in a cogeneration configuration can achieve an overall energy efficiency of between 70 and 80 percent. The sub-megawatt fuel cell power plant is a collaborative effort using Direct FuelCell® technology of FuelCell Energy and the Hot Module® balance of plant design of MTU CFC Solutions, GmbH, a subsidiary of DaimlerChrysler.
About FuelCell Energy, Inc.
FuelCell Energy, Inc., based in Danbury, Connecticut, is a world leader in the development and manufacture of high temperature fuel cells for clean electric power generation. The Company has developed commercial distribution alliances for its carbonate Direct FuelCell products with world class companies such as Caterpillar, PPL Energy Plus, Alliance Power, Chevron Energy Solutions and LOGANEnergy in the U.S.; Marubeni Corporation in Asia; MTU CFC Solutions in Europe; and Enbridge Inc. in Canada. FuelCell Energy developed its patented Direct FuelCell technology for stationary power plants with the U.S. Department of Energy through its Office of Fossil Energy"s National Energy Technology Laboratory.
FuelCell Energy is also developing next generation high temperature fuel cell products, such as a diesel fueled marine Ship Service Fuel Cell, a combined-cycle DFC/Turbine® power plant and solid oxide fuel cells through its partnership with Versa Power Systems for applications up to 100 kilowatts. More information is available at http://www.fuelcellenergy.com.
Source: FuelCell Energy, Inc.
Monday December 13, 7:22 pm ET
* Received New Orders of 7.5 Megawatts During the Fiscal Year and Expanded Target Market Segments
* Shipped 6 Megawatts and Increased Commercial Product Financial Backlog to $26.3 Million
* Reduced DFC300A Product Cost by 25 Percent; Block Two Changes to be Implemented in Summer 2005
* Strengthened Global Distribution Network
* Improved Financial Position with Net Proceeds of $93.5 Million from Preferred Stock Offering
DANBURY, Conn., Dec. 13 / FuelCell Energy, Inc. (Nasdaq: FCEL - News; the Company), a leading manufacturer of large stationary fuel cell power plants for commercial and industrial customers, today reported results and accomplishments for the quarter and fiscal year ended October 31, 2004.
Financial Results
FuelCell Energy reported a net loss for the fourth quarter of fiscal 2004 of $20.8 million or $0.43 per basic and diluted share, compared to a net loss of $15.4 million or $0.39 per basic and diluted share in the same period of the previous year. Net loss from continuing operations was $0.37 per basic and diluted share. Revenues for the fourth quarter of fiscal 2004 were $8.9 million compared to $7.3 million in the same period a year ago. Net cash used during the quarter was $17.0 million, which included $1.5 million used in our discontinued Canadian operations.
For the fiscal year ended October 31, 2004, FuelCell Energy reported a net loss from continuing operations of $64.9 million or $1.36 per basic and diluted share compared to a net loss from continuing operations of $67.4 million, or $1.71 per basic and diluted share, for the prior year. Revenues for fiscal 2004 were $31.4 million compared to $33.8 million in the same period a year ago. Net cash used during the year was $1.0 million, consisting of $70 million used in operations offset by $69 million of cash and investments received in the Global Thermoelectric Inc. (Global) transactions.
During fiscal 2004, we acquired, and subsequently discontinued (the sale of Global on May 28, 2004 and the combination of our Canadian solid oxide fuel cell (SOFC) operations with Versa Power Systems (Versa) on November 1, 2004) substantially all of our Canadian operations that resulted from the acquisition of Global. Including results from discontinued operations, the Company reported a total net loss of $86.4 million or $1.81 per basic and diluted share for the fiscal year ended October 31, 2004. The loss from discontinued operations totaled $21.6 million for the fiscal year ended October 31, 2004 including a loss of approximately $9.4 million from the Global and SOFC operations and an acquisition related in-process research and development charge of $12.2 million. The combination of the Canadian SOFC operations with Versa in exchange for stock increased the Company"s ownership interest in Versa to 42 percent. The Company expects to reduce its annual cash use by approximately $10.0 million as a result of these transactions related to Canadian operations.
The Company is also reporting Adjusted Net Loss of $74.2 million and $1.55 per share (see reconciliation chart included in the financial tables). Adjusted net loss excludes a charge of $12.2 million, or $0.26 per basic and diluted share, related to purchased in-process research and development expense of SOFC fuel cell development from the acquisition of Global in November of 2003.
Cash, cash equivalents and investments (U.S. Treasuries) on hand as of October 31, 2004 totaled $152.4 million. Subsequent to our fiscal year end, the Company received net proceeds of approximately $93.5 million from its preferred stock sale on November 28, 2004. Fourth quarter capital expenditures totaled $2.6 million primarily related to power purchase agreement power plants being built for the City of Santa Barbara and the Sierra Nevada Brewing Company. Depreciation and amortization expense from continuing operations for the quarter ended October 31, 2004 was approximately $2.0 million. Components of revenue and costs for the fourth quarter and fiscal 2004 were as follows:
* Research and development contract revenue for the fourth quarter of
fiscal 2004 was $3.8 million compared to $3.4 million in the same
period a year ago and $18.8 million for the fiscal year ended
October 31, 2004 compared to $17.7 million for the fiscal year ended
October 31, 2003. For the fourth quarter and fiscal year, the
Company"s revenues increased on the Vision 21 and Solid State Energy
Conversion Alliance (SECA) contracts with the U.S. Department of
Energy (DOE). These increases were offset by lower revenue from the
Clean Coal contract as the installation phase for the Company"s first
two megawatt DFC3000 power plant was completed. The cost of research
and development contract revenue declined by $2.0 million in the
fourth quarter of fiscal 2004 and $8.5 million for the fiscal year
ended October 31, 2004 compared to similar periods in 2003 due to the
mix of cost shared contracts and reduced cost for the Clean Coal
contract.
* Fuel cell product sales were $5.0 million for the fourth quarter of
fiscal 2004 compared to $3.9 million in the same period of a year ago.
Revenue during the quarter ended October 31, 2004 was higher than the
previous year primarily due to the manufacture of power plants for
Marubeni and the Salt River Project. Year to date fuel cell product
sales were $12.6 million for fiscal 2004 compared to $16.1 million in
fiscal 2003. Product sales backlog totaled $26.3 million as of
October 31, 2004 compared with $14.4 million for the same period a
year ago.
Administrative and selling expenses were $3.4 million and $13.7 million, respectively, for the three months and fiscal year ended October 31, 2004 compared to $3.0 million and $12.6 million in the same periods of the prior year. This increase was primarily due to higher sales and marketing costs and higher investor relations costs related to our increased shareholder base.
Research and development expenses for the three months and fiscal year ended October 31, 2004 were $5.4 million and $17.6 million, respectively, compared to $2.5 million and $8.5 million for the same periods of the prior year. The increase in research and development spending is primarily related to product development including the Company"s cost reduction program, product documentation and engineering support for products in the field.
Accomplishments
"We are extremely pleased with our progress in developing repeatable markets, meeting customer expectations for performance and reliability, and reducing the cost of our DFC products," said Jerry D. Leitman, Chairman and CEO of FuelCell Energy. "Market opportunities are growing for our "ultra- clean" DFC power plants."
Establishing Positions in Repeatable Markets
The Company is currently targeting customers in regions where electricity prices are $.10/kilowatt hour (kWh) or higher and have access to incentive funding programs to effectively compete with grid delivered power and conventional combustion-based distributed generation technologies for base load power. Key global markets include Japan, Korea, Canada, California, the Northeastern United States, and Europe. Concurrent with this, the Company is continuing its aggressive value engineering cost-our program and achieving annual product cost reductions of 20 to 25 percent at nominal production volume, with additional cost savings expected from increasing volumes.
* In fiscal year 2004, Fuel Cell Energy secured 7.5 megawatts of new
orders for DFC products and fuel cell stacks from distribution
partners and customers in North America, Asia and Europe. Specific
orders included:
-- 4 megawatts from Asia-Pacific distribution partner, Marubeni
Corporation, which represents its second follow-on order since its
initial order of 1.25 megawatts in 2001 and first follow-on order
of 3 megawatts in 2003;
-- 1.5 megawatts from Alliance Power for two multi-unit projects -
500 kilowatts for a municipal wastewater treatment facility in
Santa Barbara, Calif. and 1 megawatt for the Sierra Nevada Brewing
Co. in Chico, Calif.;
-- 1 megawatt from Chevron Energy Solutions for the Santa Rita
Correctional Facility in Alameda County, Calif.;
-- 750 kilowatts in fuel cell stack components for its European
distribution partner MTU CFC Solutions GmbH, a subsidiary of
DaimlerChrysler; and,
-- 250 kilowatts from the Salt River Project for installation of a
DFC300A at the Arizona State University East Campus in Mesa, Ariz.
Subsequent to fiscal year end 2004, the Company received an order for
a 250-kilowatt DFC300A from Chevron Energy Solutions for the U.S.
Postal Service"s San Francisco Mail Processing Center.
* FuelCell Energy strengthened its global distribution network:
-- FuelCell Energy and Marubeni entered into strategic alliances with
leading industrial companies to be sub-distributors and packagers
of DFC products and to participate in the Company"s cost-out
program.
* Kawasaki Heavy Industries in Japan. Kawasaki is a leading
global manufacturer of transportation equipment and industrial
goods, including gas turbine power generators. Kawasaki is
expected to further penetrate the market in Japan. Japan
strongly supports clean and efficient power generation,
particularly in biomass applications such as wastewater
treatment plants.
* POSCO in Korea. POSCO is a leading producer of steel in the
global market. POSCO has extensive experience in power plant
project development with over 2,400 megawatts of power plants
for its various facilities. POSCO is expected to extend our
market penetration to Korea. Korea"s Ministry of Commerce,
Industry and Energy has committed to install 300 fuel cell
units sized 250 kilowatts to one megawatt for distributed power
generation by 2012.
-- Enbridge Inc. opens up our North American market beyond the United
States and has been identifying key applications for our DFC
products. Enbridge owns and operates Canada"s largest natural gas
distribution company and provides distribution services in
Ontario, Quebec, New Brunswick and New York State to 1.6 million
customers. Canada also launched a Cdn.$250 million Sustainable
Technology Development Program that may provide incentives for our
DFC products.
-- FuelCell Energy and LOGANEnergy, Inc. entered into a market
development agreement to sell DFC power plants, with a focus on
megawatt-class systems in the California market. LOGAN has been
specializing in planning, designing, developing and implementing
fuel cell projects since 1994.
Meeting Customer Expectations of Product Performance
* FuelCell Energy shipped its first commercial DFC300A to the Kirin
Brewery in January 2003 and has since shipped 34 units.
* Based on survey results from a majority of its U.S. and Japanese
customers, the Company is meeting customer expectations for product
performance. Additionally, customer input has contributed to the
Company"s cost-out program and improvements in performance and
reliability.
* Through mid-December 2004, over 53 million kilowatt hours of
electricity has been generated from power plants incorporating DFC
technology at customer sites throughout the world, up from 20 million
kilowatt hours from the same period a year ago.
Reducing Product Costs through Value-Engineering
* FuelCell Energy is meeting its product value-engineering cost
reduction targets at nominal volume.
* During fiscal year 2004, the first cost-out block changes were
implemented for both the sub-megawatt and megawatt-class products.
Block one and block two changes combined resulted in a cost reduction
of approximately 25 percent. Block two changes for the sub-megawatt
product will be implemented in products manufactured in Summer 2005.
* The Company has identified technology improvements for increased
output performance and additional value-engineering changes that are
expected to result in 20 to 25 percent cost reduction for 2005 at
nominal volume. Additional cost savings can be realized as production
volume increases.
Advancing Future Product Development
* Direct FuelCell/Turbine(R) - FuelCell Energy has completed the design
of its first packaged sub-megawatt alpha unit for factory testing in
Danbury in the third calendar quarter of 2005. A second packaged
field trial unit is planned for a customer site in Montana in the
first calendar quarter of 2006.
* Marine Diesel Ship Service Fuel Cell (SSFC) - FuelCell Energy has
assembled the balance of plant process equipment for the 500-kilowatt
land-based DFC power plant and has initiated testing in Danbury. Upon
successful completion of the equipment testing, the balance of plant
will be integrated with two 250-kilowatt fuel cell stacks. The
complete power plant is expected to be tested in Danbury during the
summer of 2005.
* SOFC Technology - FuelCell Energy continues as a prime contractor for
SOFC development under the U.S. Department of Energy"s (DOE) Solid
State Energy Conversion Alliance (SECA) Program. The Company is
collaborating with Versa Power Systems (Versa) and other partners on
SOFC development. Versa established its headquarters in Colorado and
continues technology development in Calgary, Alberta, Canada. A two-
kilowatt SOFC system is currently being tested as part of expected
delivery of a three-kilowatt system for the DOE in 2006. FuelCell
Energy has a 42 percent equity ownership in Versa.
Strong Cash Position
The Company received net proceeds of $93.5 million from its November 2004 preferred stock sale, which strengthens its financial position to accelerate its cost-out program and market penetration of its DFC products. Including these net proceeds, we have over $240 million in cash, cash equivalents and investments (U.S. Treasuries) beginning fiscal 2005.
Focus for 2005
Building upon momentum from 2004, the Company"s focus areas for 2005 are
to:
* Increase penetration in key repeatable market segments in North
America, Asia and Europe.
* Continue to meet customer expectations for performance, reliability
and service.
* Achieve 2005 targets for cost-out, availability, increased power
output and stack life to reduce capital and operating costs.
* Manage cash to execute the strategy and penetrate the market.
Conference Call Information
A conference call is scheduled for 10:00 A.M. EST on December 14, 2004 to review results and discuss the Company"s outlook. Listeners can gain access to the call live over the Internet by clicking on the web cast link on the Company"s homepage at http://www.fuelcellenergy.com. A playback version will be available for seven days after the call by calling 800-642-1687 for the U.S./Canada and 706-645-9291 for international. The confirmation number is 2649014.
About Direct FuelCells
FuelCell Energy"s Direct FuelCells efficiently generate clean electricity at distributed customer locations, including hospitals, schools, universities, hotels and other commercial and industrial facilities, as well as grid-support applications for utility customers. Direct FuelCells convert readily available fuels, such as natural gas or waste gas, to electrical power with greater efficiency than any competing technology of comparable size, including other fuel cells. This high-efficiency technology generates more electric power from less fuel and has the lowest emissions of any fossil based electric generating technology because the fuel is not burned. DFC power plants can be sited at or near users, and the heat byproduct can be used for cogeneration applications such as district heating, hot water or absorption chilling for air conditioning. Depending upon location, application and load size, the Company"s DFC power plants in a cogeneration configuration can achieve an overall energy efficiency of between 70 and 80 percent. The sub-megawatt fuel cell power plant is a collaborative effort using Direct FuelCell® technology of FuelCell Energy and the Hot Module® balance of plant design of MTU CFC Solutions, GmbH, a subsidiary of DaimlerChrysler.
About FuelCell Energy, Inc.
FuelCell Energy, Inc., based in Danbury, Connecticut, is a world leader in the development and manufacture of high temperature fuel cells for clean electric power generation. The Company has developed commercial distribution alliances for its carbonate Direct FuelCell products with world class companies such as Caterpillar, PPL Energy Plus, Alliance Power, Chevron Energy Solutions and LOGANEnergy in the U.S.; Marubeni Corporation in Asia; MTU CFC Solutions in Europe; and Enbridge Inc. in Canada. FuelCell Energy developed its patented Direct FuelCell technology for stationary power plants with the U.S. Department of Energy through its Office of Fossil Energy"s National Energy Technology Laboratory.
FuelCell Energy is also developing next generation high temperature fuel cell products, such as a diesel fueled marine Ship Service Fuel Cell, a combined-cycle DFC/Turbine® power plant and solid oxide fuel cells through its partnership with Versa Power Systems for applications up to 100 kilowatts. More information is available at http://www.fuelcellenergy.com.
Source: FuelCell Energy, Inc.