Fuel Cell Energy Reports 1stQ Revenue Increase
Inc. (NASDAQ: FCEL) today reported revenues of $5.3 million for the first quarter ended January 31, 2001, compared with revenues of $3.6 million in the same quarter of 2000, an increase of 59%. Net loss for the period was ($2.8 million) or ($0.18) per diluted share compared with a net income of $5,000 or $0.00 per diluted share for the first quarter ended January 31, 2000.
Revenues increased in the quarter due to a greater number of projects, including the Los Angeles Department of Water and Power, Mercedes-Benz, and Marubeni field trials, and the Clean Coal, Vision 21, Navy Phase II, and King County, Washington contracts. The net loss for the period reflects the Company's continuing investment in its fuel cell commercialization efforts.
The net change in cash and cash equivalents of $5.9 million reflects capital expenditures and operating costs. "We started this fiscal year in the same fashion we concluded 2000, with a singular focus on meeting our commercialization and production milestones," said Jerry D. Leitman, president and chief executive officer of FuelCell Energy. "Our activity during the first quarter provides a solid foundation for us to accomplish our goals for 2001. We believe FuelCell Energy can contribute to meeting the need for additional electrical generating capacity in the U.S. and we are eager to begin this year's commercial field trials to demonstrate the capabilities of our clean, efficient and reliable Direct FuelCell(R) (DFC(R)) power plants."
Significant Events during the First Quarter Included:
-- Receipt of orders from three customers for Direct FuelCell power plants. -- Fabrication of fuel cell modules for commercial field trials in the U.S. and Europe. -- Modification of 400 kW test facility in Danbury, CT, to facilitate the Vision 21 fuel cell/turbine project and power electronics evaluation. -- Start of construction for a sub-megawatt and megawatt-class fuel cell test facility. -- Relocation to new manufacturing facility in Torrington, CT. -- Verification of cost reduction strategy and targets.
FuelCell Energy received orders for sub-megawatt and megawatt-class power plants from three customers during the quarter: one from King County, two additional power plants from the Los Angeles Department of Water and Power, and the first unit from PPL Energy Plus. All of these represent the company's ongoing effort to site commercial field trials for testing, analysis and operation by customers in real-world, grid-connected settings.
Fabrication of Fuel Cell Modules
Fuel cells for three field trial power plants were completed and are being integrated with balance-of-plant components prior to delivery to customer sites. The first three sites are the Mercedes-Benz facility in Alabama, the first unit for the Los Angeles Department of Water and Power, and a unit for RHOEN-KLINIKUM AG, a hospital in Germany, by the company's European partner, MTU, a unit of DaimlerChrysler.
400 kW Test Facility Modifications
The company has been preparing its test facility in Danbury to operate a DFC combined with a microturbine under the U.S. Department of Energy's Vision 21 contract. Fuel cells for that facility are currently being manufactured. The company has also taken delivery of a microturbine and is preparing to install both the fuel cell module and the microturbine with applicable heat exchangers. This facility will also enable evaluation of multiple suppliers of power electronics for grid-independent and grid-connected operation.
Construction of Megawatt-Class Test Facility
A facility is now under construction in Danbury to enable the company to test and condition submegawatt and megawatt class power plants prior to shipment to customers.
Move to New Manufacturing Facility
In July 2000, the company announced that it would move to a new 65,000-square foot manufacturing facility to increase production capacity for commercial manufacturing and sales. The move continued during the first quarter in a phased approach that enabled production of commercial field trials to continue. Discrete operations were shut down, moved and restarted while others continued production, thereby minimizing schedule impact. The company has made investments in capital equipment to increase capacity 10-fold to 50 MW per year in anticipation of increasing demand. The first of this equipment has been installed in the new facility. Several major equipment items are scheduled to arrive during the next three months.
Cost Reduction Verification
The company maintains its focus on cost reduction of fuel cell production and balance-of-plant equipment. The move to a new manufacturing facility allows for increased production volume, resulting in further cost reductions. Installation of new equipment to manufacture critical materials in house, such as electrolyte production, has also contributed significantly to meeting cost targets, as has volume purchasing of materials associated with increased production quantities.
For the balance-of-plant supply, the company's strategy is evolving. Systems integration for the submegawatt field trials is currently being provided by General Electric Industrial Systems. In addition to partnering with systems integrators, FuelCell Energy can perform the systems integration function and partner with packagers to assemble the power plants. Both approaches can meet the goals of reliable supply and cost reduction.
A conference call is scheduled for today at 4:15 p.m. EST to review results and discuss the company outlook. Listeners can gain access to the call live over the Internet by clicking http://www.vcall.com/NASApp/VCall/EventPage?ID=68622 or http://www.fce.com. A playback version will be available for seven days after the call by calling 888 203-1112, confirmation number 526364.
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