FuelCell Energy (FCEL)
Q4 2012 Earnings Call
December 21, 2012 10:00 am ET
Kurt Goddard - Vice President of Investor Relations
Arthur A. Bottone - Chief Executive Officer, President, Director, Chairman of Executive Committee and Member of Government Affairs Committee
Michael S. Bishop - Chief Financial Officer, Principal Accounting Officer, Senior Vice President, Treasurer and Corporate Secretary
Sanjay Shrestha - Lazard Capital Markets LLC, Research Division
Jacob W. Hughes - FBR Capital Markets & Co., Research Division
Jeffrey D. Osborne - Stifel, Nicolaus & Co., Inc., Research Division
Previous Statements by FCEL
» FuelCell Energy Management Discusses Q3 2012 Results - Earnings Call Transcript
» FuelCell Energy Management Discusses Q2 2012 Results - Earnings Call Transcript
» FuelCell Energy's CEO Discusses Q1 2012 Results - Earnings Call Transcript
Good morning, and welcome to the fourth quarter 2012 earnings call for FuelCell Energy. Delivering remarks today will be Chip Bottone, President and Chief Executive Officer; and Mike Bishop, Senior Vice President and Chief Financial Officer.
The earnings release, as well as an accompanying slide presentation, is posted on our website at www.fuelcellenergy.com, and a replay of this call will be posted 2 hours after its conclusion. The telephone numbers for the replay are listed in the press release. Once again, for those of you listening to this call via the dial-in phone number rather than via the Internet, management will be referencing a fourth quarter 2012 slide presentation that is available on the Investor Relations section of our website at www.fuelcellenergy.com.
Before proceeding with the call, I would like to remind everyone that this call is being recorded, and that the discussion today will contain forward-looking statements, including the company's plans and expectations for the continuing development and commercialization of our fuel cell technology. I would like to direct listeners to read the company's cautionary statement on forward-looking information and other risk factors in our filings with the U.S. Securities and Exchange Commission. Now I'd like to turn the call over to Chip Bottone. Chip?
Arthur A. Bottone
Thank you, Kurt. Good morning, everyone. Happy holidays, and welcome. Please turn to Slide 4, fourth quarter 2012 highlights. We are executing on our global strategy, building a solid foundation for growth and diversifying our revenue sources. During 2012, we set the stage for our future growth, executing our strategic initiatives on 3 continents as we planned. As we embark on fiscal 2013, we are solidly positioned for growth. Our focus is on driving orders, with these initiatives serving as catalysts that are expected to accelerate order flow in our markets.
During the fourth quarter, we received a 121.8-megawatt order from POSCO Energy, our Asian partner, and successfully concluded a license agreement with them. This is the largest order ever received in the fuel cell industry. It greatly increases our backlog, and guarantees a solid base level of production for several years. The license agreement leverages our partnership with POSCO to meet the growing demand under South Korea's RPS and expand the Asian market, again, without requiring a commitment of capital by us.
Persistent effort to close projects in North America was rewarded with the sale of a 14.9-megawatt fuel cell park in Connecticut to Dominion, one of the largest utilities in the U.S. This milestone project involves 3 different utilities and enjoys strong support from state, local and federal governments. Other utilities or regulatory bodies are taking notice of this multi-megawatt installation, which, in many aspects, is a replicable model for other projects around the globe.
We are pleased to announce recently the sale of a power plant to Microsoft Corporation using renewable biogas to power data center. We are excited to be entering the rapidly growing data center market, which we believe holds considerable potential. And we are pleased to be working with such a well-known and large customer.
Our European presence is expanding in high visibility installations in major European cities. We recently announced another sale of a power plant for installation at a prestigious development project in Central London. Our pro forma products and services backlog of $450 million provides us with a stable base production level for multiple years that can expand upon with additional order flow. The 121.8-megawatt POSCO order and the 14.9-megawatt Bridgeport fuel cell park represents solid progress on our path to profitability.
Our growing services revenue provides predictability and stability with annuity-like returns. A long-term enhanced royalty stream will begin flowing from our Asian initiatives, adding additional predictability to our forecasted financial returns, without requiring investment of capital by us.
Positioning us to benefit from adjacent market opportunities in sub-megawatt advanced military and storage applications using solid oxide fuel cell technology, FuelCell Energy acquired the remaining shares of Versa Power Systems, a leading solid oxide fuel cell developer. Solid oxide fuel cells are a promising technology and an excellent complement to our megawatt-class carbonate fuel cell products. The Versa name is well recognized in the industry, and we are in the advanced discussions with numerous potential global partners to assist us with the commercialization process.
I will discuss our results and outlook in more detail after Mike Bishop, our Chief Financial Officer, reviews our financial results for the quarter. Mike?
Michael S. Bishop
Thank you, Chip. Good morning, and thank you for joining our call today. Please turn to Slide 5, titled financial highlights, quarterly. FuelCell Energy reported total revenues for the fourth quarter of 2012 of $35.4 million, compared to $34.7 million in the same period last year. Product sales and revenues for the fourth quarter totaled $33.9 million, compared to $33.3 million reported in the prior year. Research and development contract revenue was $1.6 million for the fourth quarter 2012, compared to $1.4 million for the prior year quarter.