FuelCell Energy : Reports Fourth Quarter and Full Fiscal Year 2024 Results Form 8 K

FCEL

FuelCell Energy Reports Fourth Quarter and Full Fiscal Year 2024 Results

Fourth Quarter Fiscal 2024 Summary

(All comparisons are year-over-year unless otherwise noted)

Fiscal Year 2024 Summary

(All comparisons are year-over-year unless otherwise noted)

DANBURY, Conn., December 19, 2024 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc. (NASDAQ: FCEL) today reported financial results for its fourth quarter and fiscal year ended October 31, 2024.

"In the fourth quarter, our revenue more than doubled, year over year, mainly driven by module sales to Gyeonggi Green Energy Co., Ltd. in South Korea," said Jason Few, President and Chief Executive Officer. "Looking ahead, we believe that global demand for energy remains strong in markets around the world, driven by data centers, AI, cryptocurrency growth, the need for more resilient and reliable grids, and carbon recovery and capture."

"In 2025, we expect that our business will be on stronger financial footing as a result of our previously announced global restructuring that will focus our core technologies on distributed power generation, grid resiliency, and data center growth," added Mr. Few. "Our go-forward strategy will enable us to better navigate the current market and emphasizes topline revenue growth and future profitability. We remain encouraged by our platforms' ability to address critical needs, including power shortages in grids, high voltage transmission needs, and delays in centralized power projects due to lengthy permitting processes. In the short to medium term, we don't see a better answer than clean baseload distributed power generation from a fuel cell."

1

Consolidated Financial Metrics

Three Months Ended October 31,

Twelve Months Ended October 31,

(Dollars in thousands, except per share amounts)

2024

2023

Change

2024

2023

Change

Total revenues

$ 49,326

$ 22,462

120%

$ 112,132

$ 123,394

(9%)

Gross loss

(10,917)

(1,464)

N/A

(35,918)

(10,535)

N/A

Loss from operations

(41,032)

(36,376)

(13%)

(158,488)

(136,084)

(16%)

Net loss

(39,600)

(29,458)

(34%)

(156,778)

(108,056)

(45%)

Net loss attributable to common stockholders

(42,216)

(31,164)

(35%)

(129,209)

(110,768)

(17%)

Net loss per basic and diluted share (1)

(2.21)

(2.07)

(7%)

(7.83)

(7.92)

1%

EBITDA*

(32,250)

(29,660)

(9%)

(122,317)

(110,709)

(10%)

Adjusted EBITDA*

$ (25,343)

$ (30,830)

18%

$ (101,111)

$ (102,882)

2%

(1) All per share figures have been retroactively adjusted to reflect the Company's reverse stock split that became effective on November 8, 2024.

* A reconciliation of non-GAAP measures EBITDA and Adjusted EBITDA is contained in the appendix to this press release.

Fourth Quarter of Fiscal 2024 Results

(All comparisons are between fourth quarter of fiscal 2024 and fourth quarter of fiscal 2023 unless otherwise noted)

Fourth quarter revenue of $49.3 million represents an increase of 120% from the comparable prior year quarter.

2

Gross loss for the fourth quarter of fiscal 2024 totaled $(10.9) million, compared to a gross loss of $(1.5) million in the comparable prior year quarter. The increase in gross loss for the fourth quarter of fiscal 2024 was primarily related to (i) the fact that there were costs associated with the increased product revenues recognized in the fourth quarter of fiscal year 2024, while there was no cost of goods sold associated with the product revenues of $10.5 million recognized in the fourth quarter of fiscal 2023, and (ii) higher generation cost of sales during the fourth quarter of fiscal 2024 as the Company recorded a derivative loss of $1.8 million, as compared to a derivative gain of $4.1 million in the fourth quarter of fiscal 2023 as a result of net settling certain natural gas purchases under the previous normal purchase normal sale contract designation. These items were partially offset by benefits from improved service profitability as a result of module exchanges in the fourth quarter of fiscal 2024, while there were no module exchanges during the fourth quarter of fiscal 2023.

Operating expenses for the fourth quarter of fiscal 2024 decreased to $30.1 million from $34.9 million in the fourth quarter of fiscal 2023. Administrative and selling expenses decreased to $15.9 million during the fourth quarter of fiscal 2024 from $16.9 million during the fourth quarter of fiscal 2023. The decrease in administrative and selling expenses is primarily a result of the fact that the comparable prior year quarter included closing costs relating to a tax equity financing, which impact was partially offset by higher compensation expense in the fourth quarter of fiscal 2024. Research and development expenses decreased to $11.6 million during the fourth quarter of fiscal 2024 compared to $18.0 million in the fourth quarter of fiscal 2023. The decrease in research and development expenses reflects the previously announced decrease in spending on the Company's ongoing commercial development efforts related to our solid oxide platforms and carbon separation and carbon recovery solutions compared to the comparable prior year quarter, as well as the allocation of resources to funded Advanced Technology projects.

Net loss was $(39.6) million in the fourth quarter of fiscal 2024, compared to net loss of $(29.5) million in the fourth quarter of fiscal 2023.

Adjusted EBITDA totaled $(25.3) million in the fourth quarter of fiscal 2024, compared to Adjusted EBITDA of $(30.8) million in the fourth quarter of fiscal 2023. Please see the discussion of non-GAAP financial measures, including Adjusted EBITDA, in the appendix at the end of this release.

The net loss per share attributable to common stockholders in the fourth quarter of fiscal 2024 was $(2.21), compared to $(2.07) in the fourth quarter of fiscal 2023. The net loss per common share in the fourth quarter of fiscal 2024 was a result of the higher net loss offset by the benefit of the higher number of weighted average shares outstanding due to share issuances since October 31, 2023.

3

Restructuring and Operational Update

In November, we announced a global restructuring of our operations in the U.S., Canada, and Germany that aims to significantly reduce operating costs, realign resources toward advancing the Company's core technologies, and protect the Company's competitive position amid slower-than-expected investments in clean energy. We believe that the restructuring plan will allow us to prioritize commercially available technologies to reflect changing market opportunities with an updated strategic plan. In connection with this restructuring plan, we expect to reduce operating costs by approximately 15% in fiscal year 2025, compared with fiscal year 2024. The restructuring plan included a reduction in our workforce of approximately 13% or 75 employees in November 2024 and includes reduced spending for product development, overhead and other costs. This followed a 4% or 17 employee reduction in our workforce in September 2024.

In fiscal year 2022, we provided aspirational long-term revenue targets to be met by the end of fiscal year 2025 and fiscal year 2030. In developing these revenue targets, we made certain timing assumptions regarding, among other things, the development, commercialization and market adoption timelines of our solid oxide electrolysis cell ("SOEC"), solid oxide fuel cell ("SOFC") and carbon capture products. However, these long-term revenue targets do not reflect the current market realities regarding the pace of hydrogen adoption and infrastructure build out as well as continuing uncertainty regarding the Inflation Reduction Act and other large scale clean energy policies globally. In addition, as part of our restructuring plan, we reduced headcount and have begun to reduce spending on product development. As a result of current market realities, and in conjunction with our restructuring plan, the timing of the development and commercialization of our SOEC, SOFC and carbon capture products has been delayed from our prior estimates and, accordingly, due to these factors, we will not meet the aspirational revenue targets that we provided in fiscal year 2022. However, because we believe we have good visibility into contracted revenue drivers for fiscal year 2025, including with respect to revenues expected to be recognized upon delivery of replacement modules to GGE, we expect to see a material improvement in the Company's revenues for fiscal year 2025 compared to fiscal year 2024.

Cash, Restricted Cash and Short-Term Investments

Cash and cash equivalents, restricted cash and cash equivalents, and short-term investments totaled $318.0 million as of October 31, 2024, compared to $403.3 million as of October 31, 2023. Of the $318.0 million total as of October 31, 2024, unrestricted cash and cash equivalents totaled $148.1 million, short-term investments totaled $109.1 million and restricted cash and cash equivalents totaled $60.8 million. Of the $403.3 million total as of October 31, 2023, unrestricted cash and cash equivalents totaled $250.0 million, short-term investments totaled $103.8 million, and restricted cash and cash equivalents totaled $49.6 million. Short-term investments represent the amortized cost of U.S. Treasury Securities outstanding and held by the Company as of October 31, 2024 and October 31, 2023 as part of the Company's cash management optimization effort.

"We were pleased to add the Export-Import Bank of the United States to the list of financing organizations with whom we have created relationships," said Michael Bishop, Executive Vice President, Chief Financial Officer and Treasurer. "We continue to see growth opportunities around the world that benefit from access to supportive capital. Lastly, I am encouraged by the strength of our balance sheet, which includes over $300 million in cash and short-term investments."

During the three months ended October 31, 2024, approximately 1.9 million shares of the Company's common stock were sold under the Company's Amended Open Market Sale Agreement at an average sale price of $11.23 per share, resulting in gross proceeds of approximately $21.5 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $20.8 million after deducting sales commissions and fees totaling approximately $0.6 million.

4

Backlog

As of October 31,

(Amounts in thousands)

2024

2023

Change

Product

$ 111,283

$ 0

$ 111,283

Service

174,174

140,782

33,392

Generation

841,377

872,072

(30,695)

Advanced Technologies

35,999

15,263

20,736

Total Backlog

$ 1,162,833

$ 1,028,117

$ 134,716

As of October 31, 2024, backlog increased by approximately 13.1% to $1.16 billion, compared to $1.03 billion as of October 31, 2023, primarily as a result of the GGE Agreement entered into during the third quarter of fiscal year 2024. Backlog for the GGE Agreement has been allocated between product backlog and service backlog. Product backlog will be recognized as revenue as the Company completes commissioning of the replacement modules. Under the GGE Agreement, commissioning of the first six 1.4-MW replacement fuel cell modules was completed in the fourth quarter of fiscal year 2024. An additional 30 1.4-MW replacement fuel cell modules are expected to be commissioned throughout the course of calendar year 2025, and the remaining six 1.4-MW replacement fuel cell modules are expected to be commissioned in the first half of calendar year 2026. Service backlog will be recognized as revenue as the Company performs service at the GGE site over the term of the GGE Agreement.

Backlog represents definitive agreements executed by the Company and our customers. Projects for which we have an executed power purchase agreement ("PPA") or hydrogen power purchase agreement ("HPPA") are included in generation backlog, which represents future revenue under long-term PPAs and HPPAs. The Company's ability to recognize revenue in the future under a PPA or HPPA is subject to the Company's completion of construction of the project covered by such PPA or HPPA. Should the Company not complete the construction of the project covered by a PPA or HPPA, it will forgo future revenues with respect to the project and may incur penalties and/or impairment charges related to the project. Projects sold to customers (and not retained by the Company) are included in product sales and service agreements backlog, and the related generation backlog is removed upon sale. Together, the service and generation portion of backlog had a weighted average term of approximately 16 years as of October 31, 2024, with weighting based on the dollar amount of backlog and utility service contracts of up to 20 years in duration at inception.

Conference Call Information

FuelCell Energy will host a conference call today beginning at 10:00 a.m. ET to discuss fourth quarter and full fiscal year 2024 results as well as key business highlights. Participants can access the live call via webcast on the Company's website or by telephone as follows:

The replay of the conference call will be available via webcast on the Company's Investors' page at www.fuelcellenergy.com approximately two hours after the conclusion of the call.

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Cautionary Language

This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 regarding future events or our future financial performance that involve certain contingencies and uncertainties. The forward-looking statements include, without limitation, statements with respect to the Company's anticipated financial results and statements regarding the Company's plans and expectations regarding the continuing development, commercialization and financing of its current and future fuel cell technologies, the expected timing of completion of the Company's ongoing projects, the Company's business plans and strategies, the implementation, effect, and potential impact of the Company's restructuring plan, the Company's plan to reduce operating costs, the capabilities of the Company's products, and the markets in which the Company expects to operate. Projected and estimated numbers contained herein are not forecasts and may not reflect actual results. These forward-looking statements are not guarantees of future performance, and all forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation: general risks associated with product development and manufacturing; general economic conditions; changes in interest rates, which may impact project financing; supply chain disruptions; changes in the utility regulatory environment; changes in the utility industry and the markets for distributed generation, distributed hydrogen, and fuel cell power plants configured for carbon capture or carbon separation; potential volatility of commodity prices that may adversely affect our projects; availability of government subsidies and economic incentives for alternative energy technologies; our ability to remain in compliance with U.S. federal and state and foreign government laws and regulations; our ability to maintain compliance with the listing rules of The Nasdaq Stock Market; rapid technological change; competition; the risk that our bid awards will not convert to contracts or that our contracts will not convert to revenue; market acceptance of our products; changes in accounting policies or practices adopted voluntarily or as required by accounting principles generally accepted in the United States; factors affecting our liquidity position and financial condition; government appropriations; the ability of the government and third parties to terminate their development contracts at any time; the ability of the government to exercise "march-in" rights with respect to certain of our patents; our ability to successfully market and sell our products internationally; delays in our timeline for bringing commercially viable products to market; our ability to develop additional commercially viable products; our ability to implement our strategy; our ability to reduce our levelized cost of energy and deliver on our cost reduction strategy generally; our ability to protect our intellectual property; litigation and other proceedings; the risk that commercialization of our new products will not occur when anticipated or, if it does, that we will not have adequate capacity to satisfy demand; our need for and the availability of additional financing; our ability to generate positive cash flow from operations; our ability to service our long-term debt; our ability to increase the output and longevity of our platforms and to meet the performance requirements of our contracts; our ability to expand our customer base and maintain relationships with our largest customers and strategic business allies; the risk that our restructuring plan and workforce reduction will not result in the intended benefits or savings; the risk that our restructuring plan and workforce reduction will result in unanticipated costs; and our ability to reduce operating costs, as well as other risks set forth in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement contained herein to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based.

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About FuelCell Energy

FuelCell Energy, Inc. (NASDAQ: FCEL): FuelCell Energy is a global leader in delivering environmentally responsible distributed baseload energy platform solutions through our proprietary fuel cell technology. FuelCell Energy is focused on advancing sustainable clean energy technologies that address some of the world's most critical challenges around energy access, security, resilience, reliability, affordability, safety and environmental stewardship. As a leading global manufacturer of proprietary fuel cell technology platforms, FuelCell Energy is uniquely positioned to serve customers worldwide with sustainable products and solutions for industrial and commercial businesses, utilities, governments, municipalities, and communities.

SureSource, SureSource 1500, SureSource 3000, SureSource 4000, SureSource Recovery, SureSource Capture, SureSource Hydrogen, SureSource Storage, SureSource Service, SureSource Capital, FuelCell Energy, and FuelCell Energy logo are all trademarks of FuelCell Energy, Inc.

Contact:

FuelCell Energy, Inc. ir@fce.com 203.205.2491

7

FUELCELL ENERGY, INC.

Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands, except share and per share amounts)

October 31,

2024

October 31,

2023

ASSETS

Current assets:

Cash and cash equivalents, unrestricted

$

148,133

$

249,952

Restricted cash and cash equivalents - short-term

12,161

5,159

Investments - short-term

109,123

103,760

Accounts receivable, net

11,751

3,809

Unbilled receivables

36,851

16,296

Inventories

113,703

84,456

Other current assets

12,736

12,881

Total current assets

444,458

476,313

Restricted cash and cash equivalents - long-term

48,589

44,465

Inventories - long-term

2,743

7,329

Project assets, net

242,131

258,066

Property, plant and equipment, net

130,686

89,668

Operating lease right-of-use assets, net

8,122

8,352

Goodwill

4,075

4,075

Intangible assets, net

14,779

16,076

Other assets

48,541

51,176

Total assets (1)

$

944,124

$

$955,520

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$

15,924

$

10,067

Current portion of operating lease liabilities

807

599

Accounts payable

22,585

26,518

Accrued liabilities

30,362

26,313

Deferred revenue

4,226

2,406

Total current liabilities

73,904

65,903

Long-term deferred revenue

3,010

732

Long-term operating lease liabilities

8,894

8,992

Long-term debt and other liabilities

130,850

119,588

Total liabilities (1)

216,658

195,215

Redeemable Series B preferred stock (liquidation preference of $64,020 as of October 31, 2024 and October 31, 2023)

59,857

59,857

Total equity:

Stockholders' equity: Common stock ($0.0001 par value); 1,000,000,000 shares authorized as of October 31, 2024 and October 31, 2023; 20,375,932 and 15,020,872 shares issued and outstanding as of October 31, 2024 and October 31, 2023, respectively)

2

2

Additional paid-in capital

2,300,031

2,199,704

Accumulated deficit

(1,641,550)

(1,515,541)

Accumulated other comprehensive loss

(1,561)

(1,672)

Treasury stock, Common, at cost (12,543 and 8,216 shares as of October 31, 2024 and October 31, 2023, respectively)

(1,198)

(1,078)

Deferred compensation

1,198

1,078

Total stockholders' equity

656,922

682,493

Noncontrolling interests

10,687

17,955

Total equity

667,609

700,448

Total liabilities, redeemable Series B preferred stock and total equity

$

$944,124

$

955,520

8

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(Amounts in thousands, except share and per share amounts)

Three Months Ended

October 31,

2024

2023

Revenues:

Product

$

25,425

$

10,494

Service

5,572

(829)

Generation

11,962

8,529

Advanced Technologies

6,367

4,268

Total revenues

49,326

22,462

Costs of revenues:

Product

30,072

5,453

Service

6,797

4,320

Generation

18,782

11,747

Advanced Technologies

4,592

2,406

Total costs of revenues

60,243

23,926

Gross loss

(10,917)

(1,464)

Operating expenses:

Administrative and selling expenses

15,945

16,891

Research and development expenses

11,608

18,021

Restructuring

2,562

-

Total costs and expenses

30,115

34,912

Loss from operations

(41,032)

(36,376)

Interest expense

(2,522)

(2,321)

Interest income

2,994

4,731

Other income, net

983

4,508

Loss before provision for income taxes

(39,577)

(29,458)

Provision for income taxes

(23)

-

Net loss

(39,600)

(29,458)

Net income attributable to noncontrolling interest

1,816

906

Net loss attributable to FuelCell Energy, Inc.

(41,416)

(30,364)

Series B preferred stock dividends

(800)

(800)

Net loss attributable to common stockholders

$

(42,216)

$

(31,164)

Loss per share basic and diluted:

Net loss per share attributable to common stockholders

$

(2.21)

$

(2.07)

Basic and diluted weighted average shares outstanding

19,063,628

15,018,901

9

FUELCELL ENERGY, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(Amounts in thousands, except share and per share amounts)

Year Ended

October 31,

2024

2023

Revenues:

Product

$

25,675

$

19,589

Service

9,969

49,084

Generation

49,975

37,508

Advanced Technologies

26,513

17,213

Total revenues

112,132

123,394

Costs of revenues:

Product

39,582

12,878

Service

11,098

44,953

Generation

79,861

62,913

Advanced Technologies

17,509

13,185

Total costs of revenues

148,050

133,929

Gross loss

(35,918)

(10,535)

Operating expenses:

Administrative and selling expenses

64,604

64,528

Research and development expenses

55,404

61,021

Restructuring

2,562

-

Total costs and expenses

122,570

125,549

Loss from operations

(158,488)

(136,084)

Interest expense

(9,690)

(7,247)

Interest income

13,720

15,795

Other (expense) income, net

(2,295)

4,724

Loss before provision for income taxes

(156,753)

(107,475)

Provision for income taxes

(25)

(581)

Net loss

(156,778)

(108,056)

Net loss attributable to noncontrolling interest

(30,769)

(488)

Net loss attributable to FuelCell Energy, Inc.

(126,009)

(107,568)

Series B preferred stock dividends

(3,200)

(3,200)

Net loss attributable to common stockholders

$

(129,209)

$

(110,768)

Loss per share basic and diluted:

Net loss per share attributable to common stockholders

$

(7.83)

$

(7.92)

Basic and diluted weighted average shares outstanding

16,505,257

13,991,593

​ ​​

10

Appendix

Non-GAAP Financial Measures

Financial results are presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Management also uses non-GAAP measures to analyze and make operating decisions on the business. Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA are non-GAAP measures of operations and operating performance by the Company.

These supplemental non-GAAP measures are provided to assist readers in assessing operating performance. Management believes EBITDA and Adjusted EBITDA are useful in assessing performance and highlighting trends on an overall basis. Management also believes these measures are used by companies in the fuel cell sector and by securities analysts and investors when comparing the results of the Company with those of other companies. EBITDA differs from the most comparable GAAP measure, net loss attributable to the Company, primarily because it does not include finance expense, income taxes and depreciation of property, plant and equipment and project assets. Adjusted EBITDA adjusts EBITDA for stock-based compensation, restructuring charges, non-cash (gain) loss on derivative instruments and other unusual items, which are considered either non-cash or non-recurring.

While management believes that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these measures. The measures are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

The following table calculates EBITDA and Adjusted EBITDA and reconciles these figures to the GAAP financial statement measure Net loss.

Three Months Ended

October 31,

Year Ended

October 31,

(Amounts in thousands)

2024

2023

2024

2023

Net loss

$ (39,600)

$ (29,458)

$ (156,778)

$ (108,056)

Depreciation and amortization (1)

8,782

6,716

36,171

25,375

Provision for income taxes

23

-

25

581

Other (income) expense, net (2)

(983)

(4,508)

2,295

(4,724)

Gain on extinguishment of finance obligations and debt, net (4)

-

-

-

(15,337)

Interest income

(2,994)

(4,731)

(13,720)

(15,795)

Interest expense

2,522

2,321

9,690

7,247

EBITDA

$ (32,250)

$ (29,660)

$ (122,317)

$ (110,709)

Stock-based compensation expense

2,537

2,957

11,764

11,954

Unrealized loss (gain) on natural gas contract derivative assets (3)

1,808

(4,127)

6,880

(4,127)

Restructuring

2,562

-

2,562

-

Adjusted EBITDA

$ (25,343)

$ (30,830)

$ (101,111)

$ (102,882)

11

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Disclaimer

FuelCell Energy Inc. published this content on December 19, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on December 19, 2024 at 12:34:04.749.