Danbury company exits 2018 with $62M loss
FuelCell Energy inched sales back upward in the final three months of its fiscal year, even as the Danbury company quietly put up as collateral its interests in a pair of power plants backed by the state, as part of a $100 million loan it secured in December.
FuelCell plants generate electricity through a chemical process the company likens to that of a battery, with Connecticut having subsidized the installation of FuelCell plants in Bridgeport, Hartford and elsewhere to make the total cost competitive with other electric generators like natural gas plants.
Under CEO Chip Bottone, FuelCell has its main manufacturing plant in Torrington where the company has been hiring as it readies to increase production by half to fulfill contracts, and where it is consolidating some production that has been performed at its Danbury headquarters.
On Thursday, FuelCell reported sales of $17.9 million in the fourth quarter, up from $12.1 million in the third quarter though well below the $47.9 million it took in a year ago.
Despite those deals and others — the company estimates its product and services order backlog at a record $2 billion — FuelCell generated a $62.2 million loss for its 2018 fiscal year ending in October, including $14.1 million in its fourth fiscal quarter not including additional amounts accrued by investors holding preferred stock.
On a conference call Thursday morning, Bottone said FuelCell’s actions in 2018 have “set the company up quite well,” in his words, to generate growth going forward, and maintained his opinion that investors are not adequately valuing the company’s shares which traded Thursday morning at 55 cents, less than a third of their value of a year ago.
“We recognize the need to deliver results,” Bottone said. “Relative to our ability to compete, I think we’ve done a very nice job with that.”
Last fall, FuelCell announced plans to acquire a 14-megawatt power plant in Bridgeport it had constructed for Dominion — a “showpiece facility” as Bottone described it Thursday — with the company telling investors it expects to generate $150 million in revenue from the plant. FuelCell is also completing a small plant on Triangle Street in Danbury that Bottone indicated should be running shortly.
Last month, FuelCell secured a $100 million loan from Generate Lending to finance the manufacture of fuel cells, with the possibility of another $200 million in credit if approved by the Generate Capital affiliate. The deal’s provisions include a three-month period at the end of any installation under which FuelCell can either sell the power plant or refinance the loan; and if it does not do either, giving Generate Lending the option to take ownership of the plant in exchange for erasing any repayment obligation by FuelCell.
FuelCell has already drawn $10 million from the loan to finance construction of a 5 megawatt fuel cell for Bolthouse Farms, a California-based subsidiary of Campbell Soup alongside Pepperidge Farm in Norwalk. FuelCell agreed to put up as collateral projects in Hartford and Derby awarded by the Connecticut Department of Energy and Environmental Protection, as well as three more with the Long Island Power Authority.
Alex.Soule@scni.com; 203-842-2545; @casoulman