FuelCell Energy Inc. Reports Operating Results (10-Q)
Fuelcell Energy Inc. has a market cap of $120.2 million; its shares were traded at around $1.1 with and P/S ratio of 1.4. Fuelcell Energy Inc. had an annual average earning growth of 12.6% over the past 10 years.FCEL is in the portfolios of Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: Total revenues for the three months ended July 31, 2010 decreased $4.1 million, or 18 percent to $18.9 million from $23.0 million during the same period last year. Total cost of revenues for the three months ended July 31, 2010 decreased $6.6 million, or 23 percent to $22.6 million from $29.2 million during the same period last year.
Product sales and revenues for the three months ended July 31, 2010 totaled $16.2 million compared to $18.7 million which is a $2.5 million, or 13 percent decline compared to the third quarter of 2009. Compared to the prior year quarter, revenues are lower as the U.S. market has been in an economic downturn. However, revenues increased by $3.2 million or 25 percent from $13.0 million reported in the second quarter. Order activity in the U.S. increased in the third quarter with 3.4 MW of new orders resulting in increased revenue over the second quarter. Partially offsetting the year over year decline was higher revenue due to an increased number of long-term service agreements (LTSAs) resulting from sales of service agreements on power plant installations in South Korea. Total product sales and service backlog as of July 31, 2010, was $79.8 million including $24.6 million related to LTSAs. This compares to $104.8 million as of July 31, 2009 including $25.5 million related to LTSAs.
Loss from operations for the three months ended July 31, 2010 improved by $1.9 million and totaled $12.6 million compared to a loss from operations of $14.5 million for the three months ended July 31, 2009. The improvement in net loss from operations was primarily due to improved product margins which reduced loss by $3.7 million. This improvement was partially off-set by lower research and development contract margins of $1.2 million on timing of contract activity and higher selling general and administrative and research and development costs of $0.5 million.
Total revenues for the nine months ended July 31, 2010 decreased $17.5 million, or 26 percent to $50.1 million from $67.6 million during the same period last year. Total cost of revenues for the nine months ended July 31, 2010 decreased $26.7 million, or 29 percent to $65.1 million from $91.9 million during the same period last year.
Research and development contract revenue decreased $2.5 million to $8.0 million in the nine months ended July 31, 2010 compared to $10.5 million for the nine months ended July 31, 2009. Cost of research and development contracts decreased $0.1 million to $7.9 million in the nine months ended July 31, 2010 compared to $8.0 million in the nine months ended July 31, 2009. The decline in revenue was primarily due to completion of the Vision 21 and Ship Service fuel cell contracts with the U.S. Department of Energy (DOE) and U.S. Navy, respectively. The decrease in cost of research and development contracts resulted from the impact of different cost-shares on our contracts and different levels of activity between our contracts for these periods.
In July 2010 we completed an underwritten public offering of 27,600,000 shares of common stock at a price to the public of $1.25 per share. Net proceeds to the Company from the offering, after deducting the underwriters discounts and commissions and offering expenses, were approximately $32.1 million. Excluding this offering and a prior year stock offering which totaled $22.5 million, our net cash use for the nine months ended July 31, 2010 totaled $29.1 million compared to $56.4 million in the same 2009 period. Cash use improved over the prior year period on increased customer milestone payments and lower overall
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