Slowly but surely, Danbury’s FuelCell Energy is continuing to attempt to build its bottom line — as well as its public profile and apparently not a moment too soon.
According to Tom Gelston, vice president of investor relations, while the company’s year-to-date stock performance has in his words “underperformed” — it stood at 64 cents on Dec. 4, compared to its $2.02 close last Dec. 4 — it has been unusually busy over the past few months, signing long-term power purchase deals with utilities around the state and: receiving a $1.5 million grant from the U.S. Department of Energy for hydrogen production research and development that is compatible with nuclear energy sources; and last month signing an agreement to acquire the existing 14.9 megawatt fuel cell park in Bridgeport from Dominion Energy for $36.6 million.
Nasdaq apparently agrees with Gelston’s assessment that the company’s stock has underperformed.
Nasdaq has issued a letter to FuelCell warning that it could be delisted from the exchange if it doesn’t meet Nasdaq’s minimum price requirement of $1 by May 28, 2019, and remain there for a minimum of 10 consecutive business days.
Triggering that warning was the fact that FuelCell stock has been under the $1 threshold for 30 consecutive days.
The company, which Nasdaq said is currently in compliance with all of its other quantitative continued listing standards, has notified the exchange that it intends to regain the minimum price compliance.
Add those efforts to what has been an unusually busy past few months.
The Dominion transaction, undertaken as that Richmond, Virginia-based business seeks to reduce its debt, is expected to add annual revenue to FuelCell of over $15 million — not bad for a firm that posted total fiscal 2017 revenues of $95.7 million.
“We have not historically been an acquisitive company,” Gelston said. “Typically we will develop a project and then sell it off. But this was a project we developed about five years ago and sold to Dominion, which we have essentially operated on their behalf ever since. We’re effectively reacquiring that asset.”
In June, FuelCell entered a 20-year agreement for a recently completed 20 megawatt fuel cell project with Korea Southern Power Co., which is expected to significantly grow its market presence in that country. A few weeks before that, it refinanced its loan facility with Hercules Capital, increasing the facility amount from $20 million to $25 million, extending the maturity date to 2020 and providing for an interest-only period as well as other term modifications.
Changes have also taken place internally: in November, James Herbert England was named its new chairman of the board, replacing John Rolls, who had been chairman since 2011; Rolls is remaining on the board. The company also plans to expand its board by three members, two of whom — Jason Few and Christina Lampe-Onnerud — have already been named.
“What we were looking to do was to broaden the diversity and levels of expertise on our board,” Gelston, who joined FuelCell in February, said. “We will be adding one more outsider to the board over the next couple of months, bringing the total to nine, with the belief that varied opinions can only help.”
Gelston underscored that Chip Bottone, who joined the company in 2010 before being promoted to his current post as president and CEO a year later, is expected to remain.
FuelCell has a contract backlog of about $2 billion, Gelston said, which he said augurs well for the future. “2018 was a year of transition for us,” he said. “2019 will be a year of executing.”
He added that the firm expects to benefit from what he called “the inflection point” facing the energy industry at large: namely, producing cleaner, more efficient energy. One such product is its carbon capture effort, which captures carbon emissions from existing coal or gas-fired power plants while simultaneously producing power.
Indeed, FuelCell’s public profile and reputation have gone some way toward making up for its recent stock performance. Jennifer D. Arasimowicz, senior vice president, general counsel and corporate secretary at the company, has been named as a member of Gov.-elect Ned Lamont’s Energy Policy Committee, alongside a diverse group of transition advisors from the private sector, nonprofits and the government — something Gelston said is reflective of FuelCell’s prestige.
“We are gaining momentum,” Gelston declared. “What we provide is complementary to solar and wind technologies, except that our products work 24 hours a day, seven days a week, while those others can be intermittent. You can’t go 100 percent with solar or wind. We believe we’re well-positioned for the future.”