Connecticut, USA:“We have launched a series of strategic initiatives to strengthen our financial and operational position, which we believe will enable the Company to deliver current projects on time and budget and set the stage for future growth. As we enter 2020, our recent performance indicates that we are on the right track. We are implementing a comprehensive strategy to strengthen and grow FuelCell Energy by executing on our core business, building on customer relationships, delivering and expanding our project backlog, and developing and commercializing new technologies, products, and markets. Our “Powerhouse” business strategy consists of three fundamental pillars: Transform, Strengthen, and Grow.”Jason FewPresident and Chief Executive OfficerFuelcell Energy
FuelCell Energy, Inc. a global leader in delivering localized, always-on, and sustainable clean energy solutions – on the 22nd of January 2020 announced the details of its new “Powerhouse” business strategy, which is focused on the fundamental pillars of Transform, Strengthen, and Grow.
“Building on our 50-year history of innovation and our leadership in the advancement of fuel cell technology, we are embarking on a new “Powerhouse” business strategy focused on strengthening our operations and industry positioning to enable the delivery of sustained profitable growth to benefit all of our stakeholders,” said Jason Few, President and Chief Executive Officer. “In 2019, we largely completed the restructuring necessary to support our new business strategy, including accomplishing several foundational milestones toward achieving profitable growth and reestablishing our position of industry leadership. We are now able to focus fully on execution of our strategy and both growing our existing business and expanding into new products, markets and geographies.”
2019 Key Accomplishments and Recent Developments
In 2019, the company ended its engagement with Huron Consulting Services LLC (“Huron Consulting”) after successfully restructuring its business and operations and paying off its senior secured credit facility. The company also closed on a new $200 million senior secured credit facility with Orion Energy Partners to fund construction costs, inventory and other capital expenditures associated with current and future fuel cell projects.
In the same year, the company saw improved capital structure by retiring its Series C and Series D preferred stock obligations and entered into a new two-year joint development agreement with ExxonMobil Research and Engineering Company, with anticipated revenues of up to $60 million, to further the development of its carbon capture technology, and entered into a related $10 million technology license agreement.
Fuelcell announced a strategic relationship with E.ON Business Solutions to market and distribute its products, adding to the two operating plants already owned by E.ON. and relaunched its sub-megawatt products in Europe commercially, including its 250kW and 400kW SureSource™ solutions, in addition to offering its SureSource 1500, 3000 and 4000 platforms.
The company indicated that it reached more than 9 million MW hours of clean electricity produced by its SureSourc fuel cell power plants globally since the first commercial installation in 2003. In the same year, Fuelcell announced a carbon capture project with Drax Power Station, the largest single-site renewable power generator in the United Kingdom.
2019 was the year the company also advanced its solid oxide power generation, electrolysis, and energy storage applications by executing on our existing Department of Energy contracts and earning new DOE project awards.
Continued Execution on Customer Projects
Even while restructuring its business and operations in fiscal 2019, the company remained focused on delivering on its customer commitments where it:
- Completed construction and began commercial operation of the 2.8 MW renewable biogas fuel cell project at a wastewater treatment facility in Tulare, California, leveraging its SureSource™ fuel cell technology.
- Progress in constructing the 7.4 MW fuel cell power plant for the Connecticut Municipal Electric Energy Cooperative on the U.S. Naval submarine base in Groton, Connecticut.
- Winning a new renewable biogas 1.4 MW project with the City of San Bernardino, California Municipal Water Department.
New Business Strategy Launched
“We have launched a series of strategic initiatives to strengthen our financial and operational position, which we believe will enable the Company to deliver current projects on time and budget and set the stage for future growth. As we enter 2020, our recent performance indicates that we are on the right track. We are implementing a comprehensive strategy to strengthen and grow FuelCell Energy by executing on our core business, building on customer relationships, delivering and expanding our project backlog, and developing and commercializing new technologies, products and markets. Our “Powerhouse” business strategy consists of three fundamental pillars: Transform, Strengthen, and Grow,” said Jason Few.
Much of the company’s transformational strategy has already been achieved which includes:
- Restructured management: Appointed Jason Few as President and CEO, promoted Michael Lisowski to EVP and COO, and Tony Leo to EVP and CTO, and retained the balance of the existing leadership team including Mike Bishop as EVP and CFO and Jennifer Arasimowicz as GC, Corporate Secretary and CAO.
- Secured funding: Closed on a $200 million senior secured credit facility with Orion Energy Partners to support execution of current and future projects and provide balance sheet strength and liquidity.
- Restructured organization: Ended its engagement with Huron Consulting after successfully restructuring its business and operations and payoff of our prior senior secured credit facility.
- Delivered cost savings: Realized annualized operating savings of approximately $15 million through the restructuring of its business.
- Refinanced debt: Repaid a substantial portion of its short-term debt with funds from a combination of sales of the company’s common stock under its at-the-market sales plan and its long-term credit facility with Orion Energy Partners.
With this transformation already well underway, Fuelcell Energy is now fully committed to delivering on the remaining two pillars of the Powerhouse strategy:
- Capital deployment: Continue to focus on disciplined capital deployment and obtaining lower-cost, long-term financing and tax equity for completed generation projects.
- Commercial excellence: Build on customer relationships and extend its customer-centric reputation.
- Operational excellence: Implement a rigorous approach to project backlog execution and on-time, on-budget delivery.
- Cost reductions: Continued focus on lean resource management and cost reduction opportunities.
- Sales growth: Increase global product sales to key strategic customers, grow service revenue through pricing strategy and enhanced energy solutions, and reduce the cost of ownership for its customers.
- Innovation: Increase product life and reliability, and expand commercialization of new technologies such as carbon capture, hydrogen, biofuels, long-term energy storage, and solid oxide systems.
- Segment leadership: Capitalize on its expertise and competitive advantages in key addressable markets—biofuels, microgrid development, and the expanding hydrogen economy for industry, transportation and electric power generation.
- Education: Ensure federal, state and local legislators, regulators and environmental organizations understand the environmental benefits, grid reliability advantages and multi-featured capabilities of the FuelCell SureSource™ platforms.
- Geographic and market expansion: Continue to develop new clean and renewable energy partnerships to advance carbon capture, hydrogen and multi-fuel/biofuel technology, and pursue growth around the world.
“I am proud of all that the FuelCell Energy team, along with our valued partners, has accomplished during my first five months as CEO. I am excited about our new Powerhouse business strategy and the clear go-forward plan to execute on our project commitments, build on our technical leadership, deliver improved financial results for our stakeholders, and play a critical role in environmentally sustainable baseload energy, hydrogen and energy storage,” concluded Jason Few.