FuelCell Energy, Inc.

Good morning and welcome to Fuel Cell Energy's fourth quarter and fiscal year 2022 financial results conference call. All participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. To ask a question, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Tom Galston, Senior Vice President of Finance and Investor Relations. Thank you. Please go ahead, Mr. Galston.

Thank you, and good morning, everyone, and thank you for joining us on the call today. As a reminder, this call is being recorded. This morning, Fuel Cell Energy released our financial results for the fourth quarter and fiscal year 2022, and our earnings press release and our annual report on Form 10-K are available in the investor section of our website at www.fuelcellenergy.com. Consistent with our practice, in addition to this call and our earnings press release, we have posted a slide presentation on our website. This webcast is being recorded and will be available for replay on our website approximately two hours after we conclude the call. Before we begin, please note that some of the information that you will hear or be provided with today will consist of forward-looking statements within the meaning of the Securities and Exchange Commission Act of 1934. Such statements express our expectations, beliefs, and intentions regarding the future and include, without limitation, statements with respect to our anticipated financial results, our plans and expectations regarding the continuing development, commercialization, and financing of our fuel cell technology, and our business plans and strategies. Our actual future results could differ materially from those described in or implied by such forward-looking statements because of a number of risks and uncertainties. More information regarding such risks and uncertainties is available in the Safe Harbor Statement in the slide presentation and our filings with the Securities and Exchange Commission. particularly the risk factors section of the most recently filed annual report on Form 10-K. During the course of this call, we will be discussing certain non-GAAP financial measures, and we refer you to their website and to our earnings press release and the appendix of the slide presentation for the reconciliation of those measures to GAAP financial measures. Our earnings press release and a copy of today's webcast presentation are available on our website at www.fuelcellenergy.com under Investors. For our call today, I am joined by Jason Few, Fuel Cell Energy's President and Chief Executive Officer, and Mike Bishop, our Executive Vice President and Chief Financial Officer. Following our prepared remarks, we will be available to take your questions and be joined by other members of the leadership team. I will now hand the call over to Jason for opening remarks. Jason? Thank you, Tom, and good morning, everyone.

Thanks for joining us on our call today. Since we met last quarter, we achieved some exciting accomplishments on our journey to enable the world to be empowered by clean energy. Today, we announced our best annual revenue since 2015 as a result of strong execution of product sales and continued progress on our powerhouse business strategy. More on that in a few minutes, but before getting into the business results, I always like to give an overview of Fuel Cell Energy on slide three for anyone who might be new to the Fuel Cell Energy story. In operation for over 50 years, Fuel Cell is a leader in developing stationary fuel cell energy platforms. Our goal is to leverage our proprietary technologies to decarbonize power and produce hydrogen. We operate in North America, Asia, and Europe, and we are focused on entering more markets around the world as we commercialize and scale our technologies. Our manufacturing facilities are currently located in the United States, Canada, and Germany, which creates an efficient distribution network, leverages our centers of expertise, and helps us to meet local content requirements. We have 95 platform installations in commercial operation, which we believe demonstrates the commercial feasibility of our energy platforms. Our first commercial platform was deployed in 2003 in Japan, where we demonstrated our fuel flexibility using biofuels produced on site. For the full fiscal year 2022, we reported revenues of over $130 million across four revenue categories, product, service agreements, advanced technologies, and generation, which together represent diversified sources of recurring revenue under multi-year contracts. In fiscal year 2021 and 2020, we had no revenue from product sales, but they returned to our revenue mix in fiscal year 2022 with orders for 20 molten carbonate fuel cell modules from Korea Fuel Cell. We have delivered these modules ex-works to Korea Fuel Cell to service its installations in the south korea market generating new product sales in south korea as well as other asian markets select countries in europe the middle east africa and north america is a priority for us starting january 1 2023 the limitations in our settlement agreement with posco energy end and we can work directly with existing posco energy kfc customers to provide new long-term service agreements for the existing installed base in addition to COSPO, where we already provide 20 megawatts directly. It is also important that we keep our sights on our company's purpose, which is shown on slide four. Across our company, we are committed to a shared purpose of enabling a world empowered by clean energy. As world events have recently shown us, every industry will be meaningfully impacted in the future by the energy transition. We believe Fuel Cell Energy is well positioned to be part of that solution by assisting customers on a safe, secure, and practical path to carbon zero. And this purpose drives our strategic focus and our passion for our work. Next, let's turn to the key business developments during the quarter shown on slide five. Over the fiscal year, we continue to execute against our strategic agenda, delivering projects in our backlog, completing and delivering product orders, and making tangible progress toward commercialization of our new technologies. As I mentioned, we delivered eight more modules XWorks to Korea Fuel Cell during the fourth quarter, completing the initial two orders for a total of 20 modules placed earlier this year. We are continuing to scale our commercial organization in Korea in anticipation of developing a pipeline of opportunities in Korea and other Asia markets. Importantly, as I previously stated, starting January 1, 2023, we will regain full access to the Korea market, including legacy customers that were previously solely serviced by Korea Fuel Cell. On December 16, we announced that the platform at the U.S. Navy Submarine Base in Groton, Connecticut, achieved commercial operations. We entered into an amended and restated power purchase agreement with Connecticut Municipal Electric Energy Cooperative, or CMAQ, to allow the plant to operate at a reduced output of approximately 6 megawatts while a technical improvement plan is implemented over the next year with the goal of bringing the platform to its rated capacity of 7.4 megawatts by December 31, 2023. In conjunction with this project reaching commercial operation, we have closed on a previously announced tax equity transaction with East West Bank Corp. We continue to expect this project to highlight the ability of Fuel Cell Energy's platforms to perform at high efficiencies while advancing the U.S. Navy's sustainability objectives and contributing to the reduction in Scope 2 emissions. Incorporation of the Fuel Cell Platform project into a microgrid is expected to demonstrate the capacity of fuel cell energy's platforms to increase grid stability and resiliency while supporting the U.S. military's efforts to fortify base energy supply. Next, we recently announced the important milestone that we are accepting orders for our solid oxide platform for both power generation and hydrogen electrolysis applications. We have also entered into our first contract for our solid oxide fuel cell with a repeat customer Trinity College in Hartford, Connecticut. We continue to invest in our internal R&D activities as we focus on full commercialization of our patented solid oxide platform. More details on this in just a minute. Additionally, we have announced our intent to deploy our solid oxide electrolysis platform integrated with NuScale's small modular reactor to produce hydrogen and ammonia in Ukraine to support energy security and agriculture. We believe this will be an important application for solid oxide technology and are excited about this opportunity. The timing of the project will be predicated on further resolution of the unfortunate conflict in Ukraine and other factors. We continue to hope for the restoration of peace in Ukraine while offering our prayers and support to the people in that region. who are suffering greatly. Next, we're continuing to progress toward commercialization of our advanced technologies for carbon capture. Under our joint development agreement with ExxonMobil Technology and Engineering Company, or EmTech, we recently completed a joint marketing study to define application opportunities and commercialization strategies that Exxon and Fuel Cell Energy will pursue in collaboration. In addition, We have now extended our joint development agreement until August 31st, 2023 to further the technology and prepare for demonstrations. Together, we will continue to identify partners for commercial trials or demonstration projects as we pursue carbon capture across a broad landscape of industrial applications. My fourth key message is that we are encouraged by developments in global policy support for decarbonization, including the Inflation Reduction Act in the US, a carbon tax in Canada, and an overall policy support across Europe, Asia, Africa, and the Middle East. We believe we are well positioned to capitalize on the evolving global energy landscape with a portfolio of solutions that aim to decarbonize power and produce hydrogen. On slide six, we wanted to illuminate that we believe our company is well positioned for future growth as a result of the Inflation Reduction Act, or IRA. As a U.S. manufacturer and a company that has demonstrated a long-term commitment and practice of sourcing U.S. materials, we find the IRA to be a very meaningful and supportive domestic policy. We believe that the various policy mechanisms within the IRA as highlighted on this chart will provide fuel cell energy with the long-term market and tax certainty needed to support our continued investment decisions in hydrogen, carbon capture, and manufacturing expansion, as well as team members passionate about our purpose. With this legislation, We believe that fuel cell energy and customers of our fuel cell technology will be able to take advantage of investment tax credits, production tax credits for clean power and hydrogen, and carbon capture utilization and sequestration credits, which we have summarized on slide six. To illustrate how we believe the IRA may work, I want to highlight two examples. First, even though the fuel cell investment tax credit expires in two years given our molten carbonate platform's fuel flexibility to operate on biofuels or a hydrogen blend and our solid oxide platform's ability to operate on 100% pure hydrogen, the Green Power Generation Investment Tax Credit or Section 48E is expected to extend incentives which benefit the cell of our platforms through 2032. The second example, relates to our carbon capture platform under development, where we expect to benefit from sections 45Q and 48C as a U.S. manufacturer. Across the board, we believe that these are important incentives to achieve three critical objectives. First, building and deploying more clean energy assets across the country, ensuring that the United States leverages its rich natural resources. Second, decarbonizing our most challenging sectors without deindustrialization, and third, supporting U.S. manufacturers in rapidly scaling capacity, thereby driving down unit costs and creating favorable economics for global deployment of U.S. manufactured clean energy technologies such as fuel cell energy. The investments fuel cell energy is making in our business are well aligned with these policy goals and constructive energy transition policies around the world. Next, on slide seven, I'd like to go into further detail about our solid oxide platform, which has progressed far enough in the design cycle and commercialization process that we are now accepting customer orders. Over the past several quarters, we have provided you with specific updates, including photographs of our prototype units, In recent months, the technology has undergone independent lab testing at Idaho National Labs, or INL, and their teams validated that the fuel cell stack has performed well in test in a broad range of conditions and unexpected events. This independent validation has allowed us to move forward with our first order from Trinity College in Hartford, Connecticut, for a 250 kilowatt solid oxide fuel cell. We are very excited about potential opportunities for a sub-megawatt power generation platform and our targeted geographic markets in addition to the sub-megawatt power generation platforms we currently offer across the European Union and the UK. In support of future production, we are expanding our facility in Calgary, Canada with additional dedicated manufacturing space as part of the first phase of increased solid oxide capacity. We will provide more insight on our expansion plans as they progress in conjunction with reevaluating our market opportunity in light of the IRA and other favorable developments around the world. Next, on slide eight, we highlight the specific advantages of fuel cell energy, solid oxide fuel cell, and solid oxide electrolysis cell technologies. There are many characteristics that make our technology attractive, including fuel flexibility, efficiency, reliability, and a small footprint for easy co-location. The most important factor is the cost of electrolysis-produced hydrogen, however, is the cost of electricity. Efficiency is one of the most effective ways to lower costs, and we believe FuelSo Energy's solid oxide platform is among the most efficient electrolysis technologies available. Therefore, among competing technologies, we believe our solid oxide platform offers one of the best chances of achieving the $1 per kilogram levelized cost of hydrogen targeted by the U.S. Department of Energy by 2050. We believe solid oxide presents the best opportunity for hydrogen production facilities to minimize the overall cost while maximizing efficiencies and And this platform will give more organizations the option to implement a flexible energy strategy. In addition, with the renewed focus on nuclear energy, extended operational dates, and the recognition that nuclear energy is an excellent source of power for hydrogen generation utilizing electrolysis, we believe our high-temperature solid oxide electrolysis platform is well-positioned to capitalize on this developing opportunity. And now, I will turn the call over to Mike to discuss the financial results for the third quarter in more detail. Mike?