Fuelcell Energy Earnings 2020-07-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

fcel-10q_20200731.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-14204

FUELCELL ENERGY, INC.

(Exact name of registrant as specified in its charter)

Delaware		06-0853042
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3 Great Pasture Road Danbury, Connecticut		06810
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (203) 825-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

FCEL

The Nasdaq Stock Market LLC

(Nasdaq Global Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock, par value $0.0001 per share, outstanding as of September 3, 2020: 239,374,041

FUELCELL ENERGY, INC.

FORM 10-Q

Table of Contents

		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	3

	Consolidated Balance Sheets as of July 31, 2020 and October 31, 2019.	3

	Consolidated Statements of Operations and Comprehensive Loss for the three months ended July 31, 2020 and 2019.	4

	Consolidated Statements of Operations and Comprehensive Loss for the nine months ended July 31, 2020 and 2019.	5

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2020.	6

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2019.	7

	Consolidated Statements of Cash Flows for the nine months ended July 31, 2020 and 2019.	8

	Notes to Consolidated Financial Statements.	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	32

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	56

Item 4.	Controls and Procedures.	57

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	58

Item 1A.	Risk Factors.	59

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	75

Item 3.	Defaults Upon Senior Securities.	75

Item 4.	Mine Safety Disclosures.	75

Item 5.	Other Information.	75

Item 6.	Exhibits.	76

Signatures		78

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FUELCELL ENERGY, INC.

Consolidated Balance Sheets

(Unaudited)

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

	July 31,			October 31,
	2020			2019
ASSETS
Current assets:
Cash and cash equivalents, unrestricted	$	66,284		$	9,434
Restricted cash and cash equivalents - short-term		6,087			3,473
Accounts receivable, net		7,364			3,292
Unbilled receivables		7,917			7,684
Inventories		51,502			54,515
Other current assets		7,640			5,921
Total current assets		146,794			84,319
Restricted cash and cash equivalents - long-term		34,909			26,871
Inventories - long-term		9,018			2,179
Project assets		160,921			144,115
Property, plant and equipment		37,301			41,134
Operating lease right-of-use assets, net		10,316			-
Goodwill		4,075			4,075
Intangible assets		20,291			21,264
Other assets		13,144			9,489
Total assets	$	436,769		$	333,446
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	17,692		$	21,916
Current portion of operating lease liabilities		888			-
Accounts payable		10,407			16,943
Accrued liabilities		14,622			11,452
Deferred revenue		10,100			11,471
Preferred stock obligation of subsidiary		932			950
Total current liabilities		54,641			62,732
Long-term deferred revenue		31,026			28,705
Long-term preferred stock obligation of subsidiary		17,565			16,275
Long-term operating lease liabilities		9,988			-
Long-term debt and other liabilities		167,367			90,140
Total liabilities		280,587			197,852
Redeemable Series B preferred stock (liquidation preference of $64,020 as of July 31, 2020 and October 31, 2019)		59,857			59,857
Total equity:
Stockholders’ equity:
Common stock ($0.0001 par value); 337,500,000 and 225,000,000 shares authorized as of July 31, 2020 and October 31, 2019, respectively; 236,172,797 and 193,608,684 shares issued and outstanding as of July 31, 2020 and October 31, 2019, respectively		24			19
Additional paid-in capital		1,242,518			1,151,454
Accumulated deficit		(1,145,340	)		(1,075,089	)
Accumulated other comprehensive loss		(877	)		(647	)
Treasury stock, Common, at cost (44,322 and 42,496 shares as of July 31, 2020 and October 31, 2019, respectively)		(403	)		(466	)
Deferred compensation		403			466
Total stockholders’ equity		96,325			75,737
Total liabilities and stockholders' equity	$	436,769		$	333,446

See accompanying notes to consolidated financial statements

FUELCELL ENERGY, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

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

	Three Months Ended July 31,
	2020			2019
Revenues:
Product	$	—		$	—
Service and license		7,113			11,496
Generation		4,722			5,448
Advanced Technologies		6,893			5,768
Total revenues		18,728			22,712
Costs of revenues:
Product		2,658			4,547
Service and license		8,833			1,102
Generation		6,327			5,726
Advanced Technologies		4,038			3,372
Total costs of revenues		21,856			14,747
Gross (loss) profit		(3,128	)		7,965
Operating expenses:
Administrative and selling expenses		6,607			7,058
Research and development expenses		1,027			1,977
Total costs and expenses		7,634			9,035
Loss from operations		(10,762	)		(1,070	)
Interest expense		(4,165	)		(3,536	)
Change in fair value of common stock warrant liability		(1,694	)		—
Gain on extinguishment of financing obligation		1,801			—
Other expense, net		(501	)		(685	)
Loss before provision for income taxes		(15,321	)		(5,291	)
Provision for income taxes		(10	)		(20	)
Net loss		(15,331	)		(5,311	)
Series B preferred stock dividends		(800	)		(810	)
Series C preferred stock deemed contributions		—			884
Series D preferred stock deemed dividends		—			(3,091	)
Net loss attributable to common stockholders	$	(16,131	)	$	(8,328	)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.07	)	$	(0.18	)
Basic and diluted weighted average shares outstanding		217,966,402			45,069,911

	Three Months Ended July 31,
	2020			2019
Net loss	$	(15,331	)	$	(5,311	)
Other comprehensive (loss) income:
Foreign currency translation adjustments		(139	)		105
Total comprehensive loss	$	(15,470	)	$	(5,206	)

See accompanying notes to consolidated financial statements.

FUELCELL ENERGY, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

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

	Nine Months Ended July 31,
	2020			2019
Revenues:
Product	$	—		$	—
Service and license		19,697			25,866
Generation		14,795			8,560
Advanced Technologies		19,380			15,285
Total revenues		53,872			49,711
Costs of revenues:
Product		7,512			14,362
Service and license		16,418			15,166
Generation		17,576			9,047
Advanced Technologies		12,046			9,016
Total costs of revenues		53,552			47,591
Gross profit		320			2,120
Operating expenses:
Administrative and selling expenses		19,041			23,622
Research and development expenses		3,323			12,435
Total costs and expenses		22,364			36,057
Loss from operations		(22,044	)		(33,937	)
Interest expense		(11,026	)		(7,807	)
Change in fair value of common stock warrant liability		(39,311	)		—
Gain on extinguishment of financing obligation		1,801			—
Other income (expense), net		370			(556	)
Loss before provision for income taxes		(70,210	)		(42,300	)
Provision benefit for income taxes		(41	)		(89	)
Net loss		(70,251	)		(42,389	)
Series A warrant exchange		—			(3,169	)
Series B preferred stock dividends		(2,531	)		(2,410	)
Series C preferred stock deemed dividends and redemption value adjustment, net		—			(6,522	)
Series D preferred stock deemed dividends and redemption accretion		—			(9,752	)
Net loss attributable to common stockholders	$	(72,782	)	$	(64,242	)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.35	)	$	(2.97	)
Basic and diluted weighted average shares outstanding		210,389,907			21,608,427

	Nine Months Ended July 31,
	2020			2019
Net loss	$	(70,251	)	$	(42,389	)
Other comprehensive loss:
Foreign currency translation adjustments		(230	)		(28	)
Total comprehensive loss	$	(70,481	)	$	(42,417	)

FUELCELL ENERGY, INC.

Consolidated Statements of Changes in Equity

(Unaudited)

(Amounts in thousands, except share amounts)

	Common Stock
	Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Deferred Compensation		Total Equity
Balance, October 31, 2019		193,608,684	$	19	$	1,151,454	$	(1,075,089	)	$	(647	)	$	(466	)	$	466	$	75,737
Share based compensation		—		—		488		—			—			—			—		488
Orion warrant exercises

Price	0.40	EPS	-0
Shares	118	P/E	-1
MCap	47	P/FCF	-3
Net Debt	75	EBIT	-49
TEV	123	TEV/EBIT	-3
TTM 2019-07-31, in MM, except price, ratios

10-Q	2020-07-31	Filed 2020-09-10
10-Q	2020-04-30	Filed 2020-06-12
10-Q	2020-01-31	Filed 2020-03-16
10-K	2019-10-31	Filed 2020-01-22
10-Q	2019-07-31	Filed 2019-09-09
10-Q	2019-04-30	Filed 2019-06-17
10-Q	2019-01-31	Filed 2019-03-07
10-K	2018-10-31	Filed 2019-01-10
10-Q	2018-07-31	Filed 2018-09-06
10-Q	2018-04-30	Filed 2018-06-07
10-Q	2018-01-31	Filed 2018-03-08
10-K	2017-10-31	Filed 2018-01-11
10-Q	2017-07-31	Filed 2017-09-08
10-Q	2017-04-30	Filed 2017-06-08
10-Q	2017-01-31	Filed 2017-03-09
10-K	2016-10-31	Filed 2017-01-12
10-Q	2016-07-31	Filed 2016-09-08
10-Q	2016-04-30	Filed 2016-06-09
10-Q	2016-01-31	Filed 2016-03-10
10-K	2015-10-31	Filed 2016-01-08
10-Q	2015-07-31	Filed 2015-09-09
10-Q	2015-04-30	Filed 2015-06-09
10-Q	2015-01-31	Filed 2015-03-11
10-K	2014-10-31	Filed 2015-01-09
10-Q	2014-07-31	Filed 2014-09-09
10-Q	2014-04-30	Filed 2014-06-05
10-Q	2014-01-31	Filed 2014-03-12
10-K	2013-10-31	Filed 2014-01-06
10-Q	2013-07-31	Filed 2013-09-06
10-Q	2013-04-30	Filed 2013-06-07
10-Q	2013-01-31	Filed 2013-03-12
10-K	2012-10-31	Filed 2013-01-14
10-Q	2012-07-31	Filed 2012-09-07
10-Q	2012-04-30	Filed 2012-06-08
10-Q	2012-01-31	Filed 2012-03-12
10-K	2011-10-31	Filed 2012-01-17
10-Q	2011-07-31	Filed 2011-09-09
10-Q	2011-04-30	Filed 2011-06-09
10-Q	2011-01-31	Filed 2011-03-14
10-K	2010-10-31	Filed 2011-01-14
10-Q	2010-07-31	Filed 2010-09-09
10-Q	2010-04-30	Filed 2010-06-09
10-Q	2010-01-31	Filed 2010-03-12
10-K	2009-10-31	Filed 2010-01-14

8-K	2020-09-10	Earnings, Regulation FD, Exhibits
8-K	2020-08-24	Exhibits
8-K	2020-06-28	Leave Agreement, Other Events
8-K	2020-06-26	Regulation FD, Exhibits
8-K	2020-06-23
8-K	2020-06-22
8-K	2020-06-16
8-K	2020-06-12
8-K	2020-06-05
8-K	2020-05-11
8-K	2020-05-08
8-K	2020-04-30
8-K	2020-04-20
8-K	2020-04-09
8-K	2020-04-07
8-K	2020-03-30
8-K	2020-03-18
8-K	2020-03-16
8-K	2020-02-19
8-K	2020-02-11
8-K	2020-01-22
8-K	2020-01-13
8-K	2019-12-19
8-K	2019-12-11
8-K	2019-11-20
8-K	2019-10-31
8-K	2019-10-21
8-K	2019-10-04
8-K	2019-09-27
8-K	2019-09-12
8-K	2019-09-09
8-K	2019-08-19
8-K	2019-08-08
8-K	2019-07-30
8-K	2019-07-24
8-K	2019-07-19
8-K	2019-07-18
8-K	2019-07-15
8-K	2019-07-11
8-K	2019-07-11
8-K	2019-07-03
8-K	2019-06-28
8-K	2019-06-11
8-K	2019-06-07
8-K	2019-06-05
8-K	2019-06-02
8-K	2019-05-28
8-K	2019-05-16
8-K	2019-05-08
8-K	2019-05-08
8-K	2019-04-12
8-K	2019-04-04
8-K	2019-03-29
8-K	2019-03-19
8-K	2019-03-07
8-K	2019-02-28
8-K	2019-02-21
8-K	2019-01-28
8-K	2019-01-28
8-K	2019-01-10
8-K	2018-12-19
8-K	2018-12-13
8-K	2018-11-28
8-K	2018-11-08
8-K	2018-10-31
8-K	2018-09-06
8-K	2018-08-27
8-K	2018-06-15
8-K	2018-06-13
8-K	2018-06-07
8-K	2018-04-05
8-K	2018-03-28
8-K	2018-03-08
8-K	2018-01-11

EX-31.1	fcel-ex311_6.htm
EX-31.2	fcel-ex312_10.htm
EX-32.1	fcel-ex321_8.htm
EX-32.2	fcel-ex322_9.htm

FCEL 10Q Quarterly Report

Fuelcell Energy Earnings 2020-07-31