FuelCell Energy develops and markets ultra-clean power plants that generate electricity with up to twice the efficiency of conventional fossil fuel plants with virtually no air pollution and reduced greenhouse gas emissions using a variety of fuels including renewable biogas and domestically-available fuels like natural gas. Fuelcell Energy Inc. has a market cap of $281.9 million; its shares were traded at around $3.65 with and P/S ratio of 2.8.
Highlight of Business Operations:Total revenues for the three months ended July 31, 2009 decreased by $4.9 million, or 18 percent, to $23.0 million from $27.9 million during the same period last year. Total cost of revenues for the three months ended July 31, 2009 decreased by $14.1 million or 33 percent to $29.2 million.
Product sales and revenue decreased $4.5 million to $18.7 million for the three months ended July 31, 2009 compared to $23.2 million for the same period in the prior year. Revenue in the third quarter included approximately $16.7 million of power plant sales, $1.3 million related to service agreements and component sales and approximately $0.7 million of revenue related to power purchase agreements. Revenues are lower in the 2009 period due to a shift in product mix to more megawatt module sales compared to completed power plants and site construction in the prior year period. POSCO Power, a strategic distribution partner, accounted for approximately 90 percent and 49 percent of total product sales and revenues for the periods ended July 31, 2009 and 2008, respectively.
Research and development revenue decreased to $4.3 million for the three months ended July 31, 2009 compared to $4.7 million for the same period in 2008. Cost of research and development contracts decreased to $3.0 million during the third quarter of 2009 compared to $4.4 million for 2008. Margin from research and development contracts for the third quarter was approximately $1.3 million or 30 percent compared to $0.3 million or 6 percent in the third quarter of 2008. The decline in revenue compared to the prior year is due to the completion of several government programs in the second half of fiscal 2008 and transition to the Phase II coal-based SOFC contract which was awarded late in the first quarter of fiscal 2009. In January, the U.S. Department of Energy (DOE) awarded the Company Phase II of the MW-class coal-based SOFC contract, a $30.2 million contract of which the DOE has agreed to fund $21.0 million with the remaining amount to be funded by the Company.
Administrative and selling expenses for the quarter ended July 31, 2009 totaled $4.1 million, a decrease of $0.8 million compared to $4.9 million in the same period of the prior year. This decrease is due to lower spending as a result of the cash management plan implemented in fiscal 2009 and stock-based compensation was lower by approximately $0.2 million.
Research and development expenses totaled $4.2 million during the three months ended July 31, 2009, a decrease of $1.5 million compared to $5.7 million recorded in the same period of the prior year. The decrease is related to the cash management plan implemented in fiscal 2009 and the level of engineering effort supporting manufacturing operations.
Total revenues for the nine months ended July 31, 2009 decreased by $7.0 million, or 9 percent, to $67.6 million from $74.6 million during the same period last year. Total cost of revenue for the nine months ended July 31, 2009 decreased by $20.0 million or 18 percent to $91.9 million.
Read the The complete Report