FuelCell Energy, Inc. (NASDAQ:FCEL) Q2 2021 Earnings Conference Call June 10, 2021 10:00 AM ET Company Participants Tom Gelston - Senior Vice President of Investor Relations Jason Few - President, Chief Executive Officer and Chief Commercial Officer Michael Bishop - Executive Vice President, Chief Financial Officer and Treasurer Michael Lisowski - Executive Vice President and Chief Operating Officer Anthony Leo - Executive Vice President and Chief Technology Officer Conference Call Participants Colin Rusch ...

PART I [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ended April 30, 2021, reflect a significant reduction in liabilities, an increase in equity, and a widening net loss across both quarterly and six-month periods, with increased cash usage from operations [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of April 30, 2021, total assets slightly increased to **$535.6 million**, while total liabilities significantly decreased to **$166.7 million**, leading to a substantial increase in stockholders' equity to **$309.0 million** Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | April 30, 2021 | October 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$535,591** | **$523,538** | | Cash and cash equivalents, unrestricted | $139,086 | $149,867 | | Project assets | $187,242 | $161,809 | | **Total Liabilities** | **$166,685** | **$269,133** | | Current portion of long-term debt | $8,575 | $21,366 | | Long-term debt and other liabilities | $75,580 | $150,651 | | **Total Stockholders' Equity** | **$309,049** | **$194,548** | [Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenues declined **26%** to **$14.0 million** for the quarter and **18%** to **$28.8 million** for the six months, resulting in gross losses and widening net losses, including an **$11.2 million** loss on debt extinguishment Three Months Ended April 30 (in thousands, except per share data) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Total revenues | $13,953 | $18,880 | | Gross (loss) profit | $(4,756) | $167 | | Loss from operations | $(17,390) | $(8,142) | | Net loss attributable to common stockholders | $(19,717) | $(15,569) | | Net loss per share | $(0.06) | $(0.07) | Six Months Ended April 30 (in thousands, except per share data) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Total revenues | $28,830 | $35,144 | | Gross (loss) profit | $(8,374) | $3,448 | | Loss on extinguishment of debt | $(11,156) | — | | Loss from operations | $(31,763) | $(11,282) | | Net loss attributable to common stockholders | $(66,477) | $(56,651) | | Net loss per share | $(0.21) | $(0.27) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to **$41.2 million** for the six months, while financing activities provided **$42.5 million**, primarily from stock issuance offset by debt and preferred stock repayments Consolidated Cash Flows for Six Months Ended April 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(41,162) | $(14,719) | | Net cash used in investing activities | $(22,172) | $(14,299) | | Net cash provided by financing activities | $42,466 | $62,750 | | **Net (decrease) increase in cash** | **$(20,870)** | **$33,641** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **26%** Q2 revenue decline to a lack of module exchanges, leading to a wider operating loss, while liquidity was significantly bolstered by a **$156.4 million** stock offering used for debt extinguishment [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Revenue declined **26%** for the quarter and **18%** for the six months, primarily due to reduced Service and License revenue, resulting in a gross loss and widened operating losses, including an **$11.2 million** debt extinguishment loss Revenue by Segment - Three Months Ended April 30 (in thousands) | Revenue Segment | 2021 | 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Service and license | $660 | $6,972 | $(6,312) | (91)% | | Generation | $6,185 | $4,631 | $1,554 | 34% | | Advanced Technologies | $7,108 | $7,277 | $(169) | (2)% | | **Total revenues** | **$13,953** | **$18,880** | **$(4,927)** | **(26)%** | - The decline in Q2 Service and License revenue was primarily due to no new module exchanges occurring in the quarter, compared to exchanges that generated approximately **$5.5 million** in the prior year quarter[152](index=152&type=chunk) - Administrative and selling expenses for Q2 2021 increased to **$9.7 million** from **$7.2 million**, partly due to **$0.8 million** in additional share-based compensation from new Long Term Incentive Plans[163](index=163&type=chunk) - For the six months ended April 30, 2021, the company recorded an **$11.2 million** loss on extinguishment of debt, which included a **$4.0 million** prepayment penalty and a **$7.1 million** write-off of unamortized costs related to the Orion Credit Agreement repayment[205](index=205&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) Unrestricted cash stood at **$139.1 million** as of April 30, 2021, significantly bolstered by a **$156.4 million** stock offering used for debt and preferred share extinguishment, with management projecting sufficient liquidity for the next year despite increased expenditures - The company closed a **25.0 million** share offering in December 2020, raising net proceeds of approximately **$156.4 million**[215](index=215&type=chunk) - Proceeds from the offering were used to extinguish the Orion senior secured debt (**$87.3 million**) and the Series 1 Preferred Shares (**$21.5 million**), with the remaining **$47.5 million** allocated to working capital and strategic initiatives[215](index=215&type=chunk)[216](index=216&type=chunk) - Management believes unrestricted cash, expected receipts from its **$1.32 billion** backlog, and release of restricted cash will be sufficient to meet obligations for at least one year[217](index=217&type=chunk)[233](index=233&type=chunk) Fiscal Year 2021 Expenditure Forecasts (in millions) | Expenditure Category | FY2021 Forecast | FY2020 Actual | | :--- | :--- | :--- | | Project asset expenditures | $65.0 - $90.0 | $31.5 | | Capital expenditures | $5.0 - $10.0 | $0.4 | | Company funded R&D | $15.0 - $18.0 | $4.8 | [Quantitative and Qualitative Disclosures about Market Risk](index=87&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces minimal interest rate risk on cash, minor foreign currency exchange risk, and derivative fair value risk from an interest rate swap, which generated a small gain in Q2 2021 - The company is not significantly exposed to market risk from changing interest rates on its cash holdings[299](index=299&type=chunk) - Foreign currency exchange risk is present but has not been significant to date, with about **1.0%** of cash held in currencies other than the U.S. dollar[300](index=300&type=chunk) - An interest rate swap agreement fixes the interest rate on the BFC Credit Agreement at **5.09%** Fair value adjustments for this derivative resulted in a gain of **$0.1 million** for the three months and **$0.2 million** for the six months ended April 30, 2021[301](index=301&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk) [Controls and Procedures](index=89&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the reporting period, with no material changes in internal controls over financial reporting during the last fiscal quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[306](index=306&type=chunk) - No changes in internal controls over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control[307](index=307&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=90&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in significant legal disputes with POSCO Energy, seeking over **$200 million** in damages for alleged breaches, while POSCO Energy has counterclaimed for approximately **$880 million** and initiated other legal actions - The company terminated its license agreements with POSCO Energy and filed a demand for arbitration, seeking over **$200 million** in damages for alleged breaches including failure to commercialize technology and unauthorized disclosure of proprietary information[313](index=313&type=chunk)[316](index=316&type=chunk) - POSCO Energy has filed a counterclaim in the arbitration seeking approximately **$880 million** in damages, alleging misrepresentation of technology capabilities[316](index=316&type=chunk) - POSCO Energy has also initiated other legal actions, including obtaining provisional attachments on revenues owed to the company by KOSPO, which has delayed payments As of April 30, 2021, outstanding receivables from KOSPO were **$8.0 million**[312](index=312&type=chunk) [Risk Factors](index=93&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors include ongoing COVID-19 impacts on operations and supply chains, alongside potential SBA audit and SEC inquiry risks related to the company's repaid PPP loan - The COVID-19 pandemic continues to pose risks, including potential facility closures, supply chain disruptions, increased costs, and adverse effects on the economy that could impact product demand[325](index=325&type=chunk) - The company's now-repaid **$6.5 million** PPP loan may be subject to an SBA audit regarding the necessity certification, which could lead to enforcement actions, fines, or penalties[328](index=328&type=chunk)[330](index=330&type=chunk) - The SEC's Division of Enforcement has made a voluntary inquiry requesting information about the company's PPP loan application and its relation to the company's financial condition and disclosures The company is cooperating with the request[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered equity sales but repurchased **65,212** shares at an average price of **$13.49** to satisfy employee tax withholding obligations on stock-based awards Stock Repurchases (Q2 FY2021) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Feb 1 - Feb 28, 2021 | 2,432 | $21.60 | | Mar 1 - Mar 31, 2021 | 982 | $17.51 | | Apr 1 - Apr 30, 2021 | 61,798 | $13.10 | | **Total** | **65,212** | **$13.49** | - The shares purchased were surrendered by employees to satisfy statutory tax withholding obligations related to the vesting of stock-based compensation awards[333](index=333&type=chunk)

FuelCell Energy, Inc. (OTCPK:FCELB) Q1 2021 Earnings Conference Call March 16, 2021 10:00 AM ET Company Participants Tom Gelston - SVP, Finance and Investor Relations Jason Few - President, Chief Executive Officer and Chief Commercial Officer Mike Bishop - EVP, Chief Financial Officer and Treasurer Mike Lisowski - EVP and Chief Operating Officer Tony Leo - EVP and Chief Technology Officer Conference Call Participants Jeffrey Osborne - Cowen and Company Laurence Alexander - Jefferies Colin Rusch - Oppenheim ...

Financial Performance - Revenues decreased by 9% to $14.9 million[15] - Generation revenues decreased 10% to $4.9 million due to temporary shutdowns[15] - Net loss was $(46.0) million compared to $(40.2) million[15] - Adjusted EBITDA was $(7.4) million compared to $(0.2) million, reflecting lower revenues and higher expenses[15] Liquidity and Capital Structure - Completed an underwritten common stock offering netting proceeds of approximately $156.4 million[12] - Repaid $87.3 million under the Orion Credit Agreement in full[12] - Repaid $21.5 million owed to Enbridge under the Series 1 Preferred Shares in full[12] - Total cash, restricted cash, and equivalents at quarter end totaled $209.6 million[12] Project Backlog and Development - Near completion on 8.8 MW of new power platforms[12] - Began early-stage construction for 24.5 MW of projects[12] - Total MW Under Active Development is 40.7[53]

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 January 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | |----------------------------------------------------------------------------------------------|-----------------------------------------------------| ...

Financial Data and Key Metrics Changes - Total revenue for fiscal year 2020 increased 17% to approximately $70.9 million, driven by growth in generation and advanced technologies revenues [32] - Fourth quarter total revenue increased 54% year-over-year to $17 million, primarily due to increases in service and license, and advanced technology contract revenues [28] - Net loss for the fourth quarter totaled $18.9 million, an improvement from a net loss of $35.2 million in the prior year [31] Business Line Data and Key Metrics Changes - Service and license revenues increased to $5.4 million from $800,000 in the fourth quarter of fiscal 2019 due to module exchanges at three plant locations [29] - Generation revenues decreased to $5.1 million due to maintenance activities, while advanced technology contract revenues increased 48% to $6.4 million due to the joint development agreement with ExxonMobil [28][30] - For the full fiscal year, generation revenues increased 42% to $19.9 million, reflecting revenue from electricity generated under power purchase agreements [32] Market Data and Key Metrics Changes - The company is refocusing efforts on product sales in South Korea and other global markets, with expectations for future growth in Europe and the Middle East [12] - The backlog at the end of fiscal year 2020 was approximately $1.29 billion, reflecting a 2.5% decrease due to execution and adjustments in generation backlog [36] Company Strategy and Development Direction - The company aims to drive operational excellence and deliver value to customers while adhering to prudent capital deployment [10] - The Powerhouse business strategy focuses on transforming, strengthening, and growing the company, with an emphasis on enhancing financial results and operational efficiency [43] - The company is targeting growth opportunities in clean energy, including distributed generation, hydrogen generation, and carbon capture technologies [47][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about energy transition opportunities despite challenges posed by the COVID-19 pandemic [12] - The company plans to focus on commercializing advanced technologies and expanding its market presence, particularly in Asia and Europe [46] - Management highlighted the importance of regulatory support for clean energy initiatives under the new administration in the U.S. [24] Other Important Information - The company raised over $325 million in capital during fiscal year 2020, significantly reducing corporate debt and enhancing liquidity [22][23] - The company expects to increase production to an annualized rate of 45 megawatts during 2021 [21] Q&A Session Summary Question: Regarding the reengagement with the South Korean market, will it be in the form of product sales? - Management confirmed that the South Korean market will continue to be a product sale opportunity [56] Question: What is the timeframe for product sales in South Korea? - Management indicated that it is still too early to provide a specific timeframe, as the RFP process can take six months or longer [58] Question: Why is the backlog flat despite expectations for growth? - Management explained that revenue was recognized as they executed the business plan, but product sales were zero, impacting backlog growth [60] Question: Can the company participate in the methane cap initiative with existing technology? - Management stated that their current technology can address decarbonization requirements without needing special milestones [65] Question: What is the strategy for entering European and Asian markets? - Management outlined plans to expand existing partnerships and add resources to drive sales in these regions [68] Question: How does solid oxide fuel cell technology relate to long-duration storage for intermittent resources? - Management explained that solid oxide technology allows for efficient electrolysis and reversible operation, enabling hydrogen storage and power generation [73]

FuelCell Energy, Inc. (NASDAQ:FCEL) Q3 2020 Earnings Conference Call September 10, 2020 10:00 AM ET Company Participants Tom Gelston - SVP, Finance and IR Jason Few - President, CEO, and CCO Michael Bishop - EVP, Chief Financial Officer, and Treasurer Conference Call Participants Colin Rusch - Oppenheimer & Co Eric Stine - Craig-Hallum Capital Group LLC Operator Ladies and gentlemen, thank you for standing by, and welcome to FuelCell Energy’s Fiscal Third Quarter 2020 Financial Results and Business Update C ...