FuelCell Energy Reports First Quarter Results and Business Highlights

FuelCell Energy Reports First Quarter Results and Business Highlights

  *$86 million of cash and cash equivalents at January 31, 2013
  *Increasing annual production run-rate by 25 percent in 2013
  *Construction of multi-megawatt fuel cell parks progressing in Bridgeport,
    CT and S. Korea
  *Expanding European customer base
  *First tri-generation DFC-H2 fuel cell project to use on-site landfill gas

DANBURY, Conn., March 11, 2013 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc.
(Nasdaq:FCEL), a global leader in the design, manufacture, operation and
service of ultra-clean, efficient and reliable fuel cell power plants, today
reported results for its first quarter ended January 31, 2013 along with an
update on key business highlights.

Financial Results

FuelCell Energy (the Company) reported total revenues for the first quarter of
2013 of $36.4 million, compared to total revenues of $31.3 million for the
first quarter of 2012. Additional revenue detail is being provided by
separating revenues from product sales and revenues from service agreement and
license revenue. This change was instituted to provide investors with greater
insight into the expanding revenue components and recognize the evolution of
the Services business and the growing royalty and license fee income from
Asian sales by its partner, POSCO Energy, from the licensing agreements
executed in October 2012. Additionally, advanced technologies contract
revenues has been renamed from research and development contracts to better
describe the sources of revenue from contract research.

Product sales and revenues for the first quarter of 2013 totaled $29.1 million
including $25.1 million of fuel cell kits and power plants, and $4.0 million
of power plant component sales and installation services. For the comparable
prior year period, Product sales and revenues totaled $26.2 million. The
year-over-year increase is due to higher fuel cell kit sales and the beginning
of revenue recognition for the Bridgeport fuel cell park of approximately $2.7
million. The planned production increase in the annual run-rate to 70
megawatts (MW) is underway with the hiring of additional production workers
along with close integration with the supply chain to support the increasing
production levels, as discussed in greater detail below. The Company
maintained an annual production run-rate of 56 MW during the first quarter of
2013 while preparing to ramp production to 70 MW in the second quarter.

Service and license revenues for the first quarter of 2013 totaled $5.0
million, including $4.3 million derived from service and power purchase
agreements and $0.7 million from license and royalty revenue. For the
comparable prior year period, service revenue totaled $3.4 million. The
growing installed base of power plants with associated long term service
agreements is driving growth in service revenue.

Advanced technologies contract revenue was $2.3 million for the first quarter
of 2013 compared to $1.7 million for the first quarter of 2012. Versa Power
Systems (Versa) contract revenue is included in advanced technologies
contracts as of the date of the acquisition in December 2012.

Backlog totaled $428.1 million at January 31, 2013 compared to $318.9 million
at October 31, 2012.

  *Product sales backlog was $260.4 million at January 31, 2013 compared to
    $228.1 million at October 31, 2012 as the Bridgeport fuel cell park was
    added to backlog, partially offset by fuel cell kit shipments to POSCO
    Energy. Product backlog in megawatts totaled 150.7 MW at January 31, 2013,
    unchanged from October 31, 2012 as new orders offset shipments.
  *Service backlog was $149.9 million at January 31, 2013 compared to $78.5
    million at October 31, 2012 as the long term service agreement for the
    Bridgeport fuel cell park was added to Service backlog during the first
    quarter of 2013.
  *Advanced technologies contracts backlog was $18.0 million at January 31,
    2013 compared to $12.2 million at October 31, 2012. The sequential
    increase in backlog reflects the addition of Versa backlog. 

The gross loss incurred in the first quarter of 2013 totaled $2.3 million
compared to a gross profit of $2.1 million generated in the first quarter of
2012.The Company incurred higher than planned warranty and after-market costs
of approximately $2.1 million during the quarter as a result of a select
number of fuel cell stacks being damaged in the assembly process.This
isolated issue has been thoroughly investigated, process changes implemented,
and field repairs undertaken to support the limited number of customers
impacted.Margins in the first quarter of 2013, when compared to the first
quarter of 2012, were further impacted by an unfavorable product mix and costs
related to the Company's undertaking to increase production in the second
quarter of 2013.

Loss from operations for the first quarter of 2013 was $11.1 million compared
to $5.4 million for the first quarter of 2012.Administrative and selling
expenses increased in the first quarter of 2013 compared to the first quarter
of 2012, based on increased business development activity in the USA and
European market development.Partially offsetting the increase in
administrative and selling expenses was a decrease in research and development
costs.

Net loss to common shareholders for the first quarter of 2013 totaled $12.5
million, or $0.07 per basic and diluted share, compared to $6.7 million or
$0.05 per basic and diluted share in the first quarter of 2012.

Cash and cash equivalents

Total cash and cash equivalents was $86.3 million at January 31, 2013.Net
cash generated for the first quarter of 2013 was $28.8 million.POSCO Energy
remitted $16.7 million of license agreement payments during the first quarter
of 2013 including $10.0 million received November 1, 2012, which had been
recorded as License fee receivable on the Consolidated balance sheets at
fiscal year-end 2012.Capital spending for the first quarter of 2013 was $1.4
million and depreciation expense was $1.0 million.

On March 5, the Company closed on a new long-term loan agreement with the
Connecticut Clean Energy andFinance Investment Authority (CEFIA) totaling
$5.9 million in support of the Bridgeport fuel cell park. A portion of the
proceeds of this new loan will be used to repay an existing loan of $0.9
million due to the Connecticut Clean Energy Fund. The balance of this loan
will be drawn down during 2013 as working capital support during the
construction period of the project. The principal will be repayable commencing
on the eighth anniversary of the project's provisional acceptance date in
forty eight equal monthly installments.

Business Highlights and Strategy Execution

Market Update

"We continue to execute on our global growth plans," said Chip Bottone,
President and CEO, FuelCell Energy, Inc. "We have in development a strong
pipeline of projects and expect new order acceleration in 2013, as we are
seeing increased interest from project investors arising from the execution of
our strategic initiatives."

Construction of the 14.9 MW fuel cell park in Bridgeport, Connecticut is on
schedule to deliver power by the end of calendar 2013.United Illuminating
(UI) is performing the inter-connection work to connect the fuel cell park to
the electric grid, which UI owns, and the work is on schedule.The first fuel
cell module will be delivered to the site in the spring with subsequent
modules delivered throughout the summer.Module manufacturing and conditioning
is on schedule.

POSCO Energy began construction in late 2012 on the 59 MW fuel cell park in
Hwasung City, South Korea.Power generation is expected to begin in 2013 and
the park is expected to be fully operational by early 2014.

FuelCell Energy Solutions, GmbH (FCES) announced a long term service contract
with a Swiss utility for a Direct FuelCell® (DFC®) power plant.Growing
utility interest and adoption demonstrated by the 59 MW fuel cell park in S.
Korea, the 14.9 MW fuel cell park in Connecticut, and the relationship with a
Swiss utility illustrate the global market potential for clean baseload
distributed generation for supporting the electric grid.

DFC power plants are versatile and fuel flexible, capable of operating on a
variety of fuels including clean natural gas and renewable biogas.Under a
research program partially sponsored by a number of various entities
associated with the Canadian government, a DFC fuel cell power plant
configured for tri-generation is being installed at a landfill in Vancouver,
Canada.The landfill gas will be used to generate ultra-clean power, heat and
renewable hydrogen for vehicle fueling or industrial uses.Landfills represent
a sizeable potential market opportunity to convert harmful waste gases into
ultra-clean power and other value streams.

Operations update

Numerous actions were undertaken during the first quarter of 2013 in
preparation for increasing the annual production run-rate at the Torrington,
Connecticut production facility to 70 MW as a result of the increasing
backlog.To support the production ramp, more than 50 new manufacturing jobs
have been created in Connecticut since the start of the first quarter.Higher
production volumes support increased quarterly revenue in 2013 and will lead
to expanding margins from improved absorption of fixed overhead costs, lower
product costs, and a more geographically dispersed revenue mix to include
complete power plant sales in North America and Europe.

The Company and POSCO Energy are working together under the licensing and
manufacturing agreements for the sharing of intellectual property to enable
production in South Korea of fuel cell components and finalizing the design of
the fuel cell component manufacturing facility that POSCO Energy will build at
their Pohang, South Korea campus.

The Company acquired the remaining 61 percent ownership position of Versa in
December 2012, as previously announced.An allocation of the purchase price
paid for the underlying assets is required for financial reporting
purposes.The allocation of the purchase price was based on the estimated fair
value of the assets acquired and liabilities assumed as of the acquisition
date, including $9.6 million of identifiable intangible assets and $4.2
million of goodwill.This allocation is preliminary, and was based on the
purchase price paid and previous equity ownership interests in Versa.The
Company is still in the process of analyzing and evaluating the acquired
deferred tax attributes of Versa, if any.Completion of this review may result
in adjustments to the deferred tax attributes and amounts recorded as a result
of this acquisition.Integration is on track with the identification of new
revenue sources in conjunction with implementation of cost reduction
actions.FuelCell Energy is continuing discussions with several potential
global partners to commercialize the solid oxide fuel cell technology.As a
wholly owned subsidiary, Versa financial results are consolidated in the
Company's financial statements as of the acquisition date.

Cautionary Language

This news release contains forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995, including, without limitation, statements with respect to the Company's
anticipated financial results and statements regarding the Company's plans and
expectations regarding the continuing development, commercialization and
financing of its fuel cell technology and business plans. All forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Factors that could cause
such a difference include, without limitation, changes to projected deliveries
and order flow, changes to production rate and product costs, general risks
associated with product development, manufacturing, changes in the regulatory
environment, customer strategies, changes in critical accounting
policies,potential volatility of energy prices, rapid technological change,
competition, and the Company's ability to achieve its sales plans and cost
reduction targets, as well as other risks set forth in the Company's filings
with the Securities and Exchange Commission. The forward-looking statements
contained herein speak only as of the date of this press release. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any such statement to reflect any change in the
Company's expectations or any change in events, conditions or circumstances on
which any such statement is based.

About FuelCell Energy

Direct FuelCell® power plants are generating ultra-clean, efficient and
reliable power at more than 50 locations worldwide. With more than 300
megawatts of power generation capacity installed or in backlog, FuelCell
Energy is a global leader in providing ultra-clean baseload distributed
generation to utilities, industrial operations, universities, municipal water
treatment facilities, government installations and other customers around the
world. The Company's power plants have generated more than 1.5 billion
kilowatt hours of ultra-clean power using a variety of fuels including
renewable biogas from wastewater treatment and food processing, as well as
clean natural gas. For more information, please visit our website at
www.fuelcellenergy.com

See us on YouTube at www.youtube.com/user/FuelCellEnergyInc?feature=watch

Direct FuelCell, DFC, DFC/T, DFC-H2 and FuelCell Energy, Inc. are all
registered trademarks of FuelCell Energy, Inc. DFC-ERG is a registered
trademark jointly owned by Enbridge, Inc. and FuelCell Energy, Inc.

The FuelCell Energy, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3284

Conference Call Information

FuelCell Energy management will host a conference call with investors
beginning at 10:00 a.m. Eastern Time on March 12, 2013 to discuss the first
quarter 2013 results. An accompanying slide presentation for the earnings
call will be available
athttp://fcel.client.shareholder.com/events.cfmimmediately prior to the
call.

Participants can access the live call via webcast on the Company website or by
telephone as follows:

  *The live webcast of this call will be available on the Company website at
    www.fuelcellenergy.com.To listen to the call, select 'Investors' on the
    home page, then click on 'events & presentations' and then click on
    'Listen to the webcast'
  *Alternatively, participants in the U.S. or Canada can dial 877-303-7005
  *Outside the U.S. and Canada, please call 678-809-1045
  *The passcode is 'FuelCell Energy'

The webcast of the conference call will be available on the Company's
Investors' page at www.fuelcellenergy.com.Alternatively, the replay of the
conference call will be available approximately two hours after the conclusion
of the call until midnight Eastern Time on March 15, 2013:

  *From the U.S. and Canada please dial 855-859-2056
  *Outside the U.S. or Canada please call 404-537-3406
  *Enter confirmation code14192572

                                                                 
FUELCELL ENERGY, INC.
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except share and per share amounts)
                                                                 
                                                      January 31, October 31,
                                                       2013        2012
ASSETS                                                            
Current assets:                                                   
Cash and cash equivalents                              $ 86,271    $ 57,514
License fee receivable                                 --          10,000
Accounts receivable, net                               20,101      25,984
Inventories, net                                       47,048      47,701
Other current assets                                   6,945       4,727
Total current assets                                   160,365     145,926
                                                                 
Property, plant and equipment, net                     21,553      23,258
Goodwill                                               4,245       --
Intangible assets                                      9,592       --
Investment in and loans to affiliate                   --          6,115
Other assets, net                                      13,881      16,186
Total assets                                           $ 209,636   $ 191,485
                                                                 
LIABILITIES AND EQUITY                                            
Current liabilities:                                              
Current portion of long-term debt                      $ 5,221     $ 5,161
Accounts payable                                       7,413       12,254
Accounts payable due to affiliate                      --          203
Accrued liabilities                                    20,843      20,265
Deferred revenue                                       66,589      45,939
Preferred stock obligation of subsidiary               1,073       1,075
Total current liabilities                              101,139     84,897
                                                                 
Long-term deferred revenue                             22,317      15,533
Long-term preferred stock obligation of subsidiary     13,268      13,095
Long-term debt and other liabilities                   7,380       3,975
Total liabilities                                      144,104     117,500
                                                                 
Redeemable preferred stock (liquidation preference of  59,857      59,857
$64,020 at January 31, 2013 and October 31, 2012)
                                                                 
Total Equity:                                                     
Shareholders' equity                                              
Common stock ($.0001 par value; 275,000,000 shares
authorized; 189,496,028 and 185,856,123 shares issued  19          18
and outstanding at January 31, 2013and October 31,
2012, respectively)
Additional paid-in capital                             754,605     751,256
Accumulated deficit                                    (748,512)   (736,831)
Accumulated other comprehensiveincome                 142         66
Treasury stock, Common, at cost (5,679 shares at       (53)        (53)
January 31, 2013 and October 31, 2012)
Deferred compensation                                  53         53
Total shareholders' equity                             6,254       14,509
Noncontrolling interest in subsidiaries                (579)       (381)
Total equity                                           5,675       14,128
Total liabilities and equity                           $ 209,636   $ 191,485

                                                           

FUELCELL ENERGY, INC.
Consolidated Statements of Operations
(unaudited)
(Amounts in thousands, except share and per share amounts)
                                                           
                                                Three Months Ended
                                                 January 31,
Revenues:                                        2013        2012
Product sales                                    $ 29,065    $ 26,202
Service agreement and license revenues           4,969       3,398
Advanced technologies contract revenues          2,324       1,737
Total revenues                                   36,358      31,337
                                                           
Costs of revenues:                                          
Cost of product sales                            29,944      23,360
Cost of service agreement revenues               6,485       4,300
Cost of advanced technologies contract revenues  2,240       1,573
Total cost of revenues                           38,669      29,233
                                                           
Gross (loss) profit                              (2,311)     2,104
                                                           
Operating expenses:                                         
Administrative and selling expenses              5,432       3,764
Research and development expenses                3,327       3,783
Total operating expenses                         8,759       7,547
                                                           
Loss from operations                             (11,070)    (5,443)
                                                           
Interest expense                                 (566)       (630)
Income (loss) from equity investment             46          (362)
License fee and royalty income                   --          424
Other income (expense), net                      (282)       196
                                                           
Loss before provision for income taxes           (11,872)    (5,815)
                                                           
Provision for income taxes                       (7)         (199)
                                                           
Net loss                                         (11,879)    (6,014)
                                                           
Net loss attributable to noncontrolling interest 198         71
                                                           
Net loss attributable to FuelCell Energy, Inc.   (11,681)    (5,943)
                                                           
Preferred stock dividends                        (800)       (800)
                                                           
Net loss to common shareholders                  $ (12,481)  $ (6,743)
                                                           
Loss per share basic and diluted                            
Basic                                            $ (0.07)    $ (0.05)
Diluted                                          $ (0.07)    $ (0.05)
                                                           
Weighted average shares outstanding                         
Basic                                            187,553,306 139,555,596
Diluted                                          187,553,306 139,555,596

CONTACT: FuelCell Energy, Inc.
         Kurt Goddard, Vice President Investor Relations
         203-830-7494
         ir@fce.com

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