FuelCell Energy(FCEL) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended April 30, 2025, were $37.4 million, reflecting a 67$22.4 million in the same period of 2024[128]. - Total costs of revenues for the same period were $46.8 million, an increase of 59$29.5 million in the prior year[128]. - The gross loss for the three months ended April 30, 2025, was $9.4 million, compared to a gross loss of$7.1 million in the same period of 2024, representing a 33% increase in losses[128]. - Product revenues reached $13.0 million for the three months ended April 30, 2025, with no product revenues reported in the comparable prior year period[129]. - Product revenues increased by$13.3 million to $16.3 million for the three months ended April 30, 2025, compared to$2.9 million in the same period in the prior year[130]. - Service agreements revenues surged by 495% to $8.1 million for the three months ended April 30, 2025, up from$1.4 million in the same period in 2024, driven by three module exchanges[133]. - Generation revenues decreased by 14% to $12.1 million for the three months ended April 30, 2025, down from$14.1 million in the same period in 2024, due to lower output from plants[136]. - Advanced Technologies contract revenues fell by 41% to $4.1 million for the three months ended April 30, 2025, compared to$6.9 million in the same period in 2024[142]. - Total revenues for the six months ended April 30, 2025, were $56.4 million, an increase of$17.3 million (44%) from $39.1 million in the same period of 2024[161]. - Cost of revenues for the same period increased to$71.0 million, up $13.1 million (23$57.9 million in 2024[161]. - Product revenues reached $13.1 million for the six months ended April 30, 2025, compared to no product revenue in the same period of 2024[162]. - Service agreements revenues increased to$10.0 million, a rise of $7.0 million (235$3.0 million in 2024[166]. - Generation revenues decreased to $23.5 million, down$1.1 million (5%) from $24.6 million in 2024[169]. - Advanced Technologies contract revenues fell to$9.8 million, a decrease of $1.7 million (15$11.5 million in 2024[173]. Expenses and Losses - Research and development expenses decreased to $9.9 million for the three months ended April 30, 2025, down from$16.6 million in the same period in 2024[146]. - Loss from operations improved to $35.8 million for the three months ended April 30, 2025, compared to a loss of$41.4 million in the same period in 2024[149]. - Net loss attributable to common stockholders was $38.8 million for the three months ended April 30, 2025, compared to$32.9 million in the same period in 2024[159]. - Interest expense increased to $2.5 million for the three months ended April 30, 2025, compared to$2.3 million in the same period in 2024[150]. - Administrative and selling expenses decreased to $16.5 million for the three months ended April 30, 2025, down from$17.7 million in the same period in 2024[145]. - Overall gross loss from service agreements revenues was $(0.9) million for the three months ended April 30, 2025, compared to a gross profit of$0.1 million in the same period in 2024[135]. - Loss from operations for the six months ended April 30, 2025, was $68.7 million, a decrease of$15.1 million (18%) from $83.8 million in 2024[181]. - Interest expense increased to$5.2 million for the six months ended April 30, 2025, compared to $4.6 million in 2024[182]. - Net loss attributable to common stockholders for the six months ended April 30, 2025, was$68.0 million, compared to $53.5 million for the same period in 2024, with net loss per common share decreasing to$3.22 from $3.55[190]. Restructuring and Workforce - The company implemented a global restructuring plan, including a workforce reduction of 122 employees, or approximately 22$3.5 million to $4.5 million related to severance payments and other employee termination benefits[124]. - The company is evaluating certain assets for impairment, including goodwill and in-process research and development intangible assets, with a net book value of$13.8 million[125]. - The company aims to align its production schedule with contracted demand, which may result in a decrease in annualized production rate if growth in the closed order book does not continue[123]. - The company continues to face macroeconomic and industry-specific headwinds, particularly in the zero-carbon hydrogen space, impacting its strategic plans[123]. Cash and Liquidity - As of April 30, 2025, unrestricted cash and cash equivalents totaled $116.1 million, down from$148.1 million as of October 31, 2024[194]. - Cash and cash equivalents totaled $179.1 million as of April 30, 2025, down from$208.9 million as of October 31, 2024[235]. - The company received a $4.0 million contribution from East West Bank during the six months ended April 30, 2025, recorded as noncontrolling interest[195]. - Net cash used in operating activities was$75.6 million for the six months ended April 30, 2025, an improvement from $95.4 million in the same period of 2024[236]. - The company has pledged approximately$63.1 million of cash and cash equivalents as collateral for performance security and letters of credit as of April 30, 2025[232]. Backlog and Contracts - The company's backlog increased by approximately 18.7% to $1.26 billion as of April 30, 2025, compared to$1.06 billion as of April 30, 2024[216]. - Generation backlog totaled $967.4 million as of April 30, 2025, compared to$852.9 million as of April 30, 2024[218]. - The company entered into a 20-year PPA with Eversource and United Illuminating for a 7.4 MW carbonate fuel cell power generation system, expected to generate approximately $167.4 million in revenue over the contract term[218]. - The LTSA with GGE has a total contract value of approximately$159.6 million, with $33.6 million allocated to service and$126.0 million to product sales[221]. - The Advanced Technologies contract backlog totals $29.6 million, with$22.0 million being non-U.S. Government-funded and $7.6 million being U.S. Government-funded[307]. Projects and Development - The generation operating portfolio totaled 62.8 MW as of April 30, 2025, with an additional project of 7.4 MW in development expected to generate future cash flows[207]. - The Groton Project reached its design rated output of 7.4 MW during the first quarter of fiscal year 2024[212]. - The company has ceased all work on the Trinity and UConn projects due to restructuring plans and a slowdown in clean energy technology adoption[214]. - The Hartford Project, a 7.4 MW project under development, is expected to require an additional investment of approximately$34.0 million to $36.0 million through calendar year 2026[227]. - The company recognized revenue for four modules shipped during the six months ended April 30, 2025, and expects to continue recognizing revenue from additional shipments[226]. Financing and Debt - Total significant commitments and contractual obligations amount to$266.06 million, with $91.82 million due within 1 year[246]. - Purchase commitments total$61.22 million, with $59.49 million due within 1 year[246]. - Term loans (principal and interest) total$141.12 million, with $18.77 million due within 1 year[246]. - Operating lease commitments total$16.90 million, with $1.32 million due within 1 year[246]. - Natural gas and biomethane gas supply contracts total$39.32 million, with $10.83 million due within 1 year[246]. - The company entered into a 7-year natural gas contract for the LIPA Yaphank Project with an estimated annual cost of$2.0 million[248]. - A project debt financing transaction with EXIM resulted in gross proceeds of approximately $10.1 million, with a fixed interest rate of 5.81$80.5 million and a letter of credit facility of up to $6.5 million[261]. - The company is required to maintain a minimum cash balance of$100.0 million under the EXIM credit agreement[252]. - The OpCo Financing Facility closed on May 19, 2023, with a total Term Loan amount of $80.5 million drawn down[266]. - Approximately$11.4 million of senior and subordinated indebtedness related to the Bridgeport Fuel Cell Project was extinguished[264]. - The total net proceeds from the financing transactions amounted to approximately $46.1 million after accounting for the release of restricted cash[267]. - The Term Loan has a seven-year term, maturing on May 19, 2030, with quarterly principal amortization obligations based on a 1.30x debt service coverage ratio[269]. - The Applicable Margin for SOFR Rate Loans is set at 2.5$29.0 million, with $14.5 million funded from the Term Loan[270]. - An Irrevocable Letter of Credit was issued for$6.5 million to satisfy the debt service reserve funding obligation[271]. - The interest rate swap agreements will result in a net interest rate of 6.366% for the first four years and 6.866% thereafter[274]. - OpCo Borrower must maintain a debt service coverage ratio of not less than 1.20:1.00, tested every six months[276]. - Groton Holdco Borrower secured a total of $20.0 million through the Groton Senior Back Leverage Loan Facility and the Groton Subordinated Back Leverage Loan Facility on August 18, 2023[283]. - The Groton Senior Back Leverage Loans have a seven-year term, maturing on August 18, 2030, with a principal amortization based on a ten-year period[286]. - The interest rate for the Groton Senior Back Leverage Loan from Liberty Lender is 6.75$18.8 million as of April 30, 2025, with $11.3 million representing imputed interest[293]. - The company received a$10.0 million disbursement from the State of Connecticut for the expansion of its Torrington manufacturing facility, with a fixed interest rate of 2.0%[294]. Compliance and Obligations - The Employment Obligation under the Assistance Agreement requires the company to maintain 538 full-time positions for 24 consecutive months to qualify for loan forgiveness[295]. - The Third Amendment to the Assistance Agreement extended the Target Date to October 31, 2024, requiring the retention of 538 full-time positions[296]. - The Company has an average of 389 employees over the applicable 24 consecutive month period, resulting in a calculated repayment obligation of $2.1 million due to not meeting the amended Employment Obligation[300]. - The Company is subject to an accelerated payment penalty of$14,225.00 for each full-time employment position below the amended Employment Obligation[298]. - The Company has not been formally assessed a penalty as of April 30, 2025, but any accelerated payment penalty will be applied to the outstanding principal balance of the loan[300]. - The Company has deferred three months of principal and interest payments under the Assistance Agreement due to the COVID-19 pandemic, extending the maturity date by three months[301]. - As of April 30, 2025, the Company has $2.9 million in restricted cash primarily to support obligations under power purchase and service agreements related to Crestmark sale-leaseback transactions[302]. - The Company has no off-balance sheet debt or similar obligations and does not guarantee any third-party debt[308]. - The Company is in discussions with the State of Connecticut regarding a potential amendment to the terms of the Third Amendment to the Assistance Agreement[300].