Fuelcell Energy, Inc. has a market cap of $198.5 million; its shares were traded at around $1.18 with and P/S ratio of 1.3.
Highlight of Business Operations:Product sales and service backlog totaled $306.6 million as of October 31, 2012 compared to $209.9 million as of October 31, 2011. Product backlog was $228.1 million or 150.7 MW as of October 31, 2012 and $131.8 million or 72.9 MW as of October 31, 2011. Service agreement backlog was $78.5 million and $78.1 million as of October 31, 2012 and 2011, respectively. The 14.9 MW Bridgeport fuel cell park project that was closed subsequent to fiscal year end 2012 will increase product and service backlog in the first quarter of 2013 by approximately $125 million, including approximately $56 million for product backlog and $69 million for service backlog. Although backlog reflects business that is considered firm, cancellations or scope adjustments may occur and will be reflected in our backlog when known.
Product sales and service agreement revenues decreased $2.0 million, or 2 percent, in the fiscal year ended October 31, 2012 to $113.1 million compared to $115.1 million for the prior year period. Cost of product sales and service agreement revenues decreased $14.4 million, or 11 percent in fiscal year ended October 31, 2012 to $112.9 million compared to $127.4 million in the same period the prior year. This decrease is primarily due to continued focus on reducing product costs and enhancing manufacturing processes and efficiencies. The decrease is also partially a result of a B1200 repair and upgrade program charge recorded in fiscal 2011 totaling $8.3 million. Also, fiscal 2011 cost of sales reflects a benefit of approximately $1.0 million from a vendor settlement related to certain prior period issues associated with components purchased from this vendor.
Product sales and service agreement revenues increased $55.9 million, or 94 percent, in the fiscal year ended October 31, 2011 to $115.1 million compared to $59.2 million for the prior year period. Cost of product sales and service agreement revenues increased $49.3 million, or 63 percent in fiscal year ended October 31, 2011 to $127.4 million compared to $78.1 million in the same period the prior year. This increase is primarily due to the significant growth in revenues during fiscal 2011 as discussed below in product sales and cost of sales, as compared to fiscal 2010, as well as the B1200 repair and upgrade program charge totaling $8.3 million. Fiscal 2011 cost of sales also reflects a benefit of approximately $1.0 million from a vendor settlement related to certain prior period issues associated with components purchased from this vendor.
Service agreement revenues for fiscal year ended October 31, 2011 totaled $12.1 million from service and power purchase agreements, compared to $9.1 million for fiscal 2010 on an increase in the number of service agreements as the Company's number of operating units in the field increases as well as service agreements on new MW class product installations. Service agreement cost of revenues increased to $30.8 million from $23.6 million in fiscal 2010 due to the charge for the B1200 repair and upgrade program totaling $8.3 million in fiscal 2011. The gross loss on service agreements increased to $18.7 million for fiscal year ended October 31, 2011 from $14.6 million in fiscal 2010. Excluding the B1200 repair and upgrade program charge, the gross loss would have been $10.4 million, an improvement of $4.2 million from fiscal 2010. This improvement is primarily due to lower stack replacement and routine maintenance costs and increased revenues on new MW class product installations. The loss on service agreements has historically been due to high maintenance, stack replacement and other costs on older and sub-MW product designs.
Research and development contracts revenue decreased $3.1 million to $7.5 million for fiscal 2011, compared to $10.6 million for 2010. Cost of research and development contracts decreased $2.5 million to $7.8 million during fiscal 2011, compared to $10.4 million for 2010. Gross profit (loss) from research and development contracts for 2011 was ($0.4) million or (5 percent), compared to $0.2 million or 2 percent in 2010. The decrease in revenue was due to lower levels of research activities compared to the prior period as phase II of the solid oxide fuel cell development program with the U.S. Department of Energy (DOE) ended. The Company began phase III of this program towards the end of the second quarter 2011. The decline in margins is due to the mix of cost share and lower overall government billing rates due to the increase in the commercial business.
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