Michael S. Bishop
Thank you, Chip. Good morning, and thank you for joining our call today. Please turn to Slide 5 entitled Financial Highlights.
FuelCell Energy reported total revenues for the second quarter of 2012 of $24.2 million compared to $28.6 million in the same period last year. Product sales and revenues for the second quarter totaled $22.1 million compared to $26.7 million reported in the prior year.
Research and development contract revenue was $2 million for the second quarter of 2012 compared to $1.9 million for the prior year. Although sales were lower year-over-year, we generated a gross profit from product sales and research and development contracts in the quarter of $0.2 million.Gross profit for product sales and revenues improved by $2.3 million compared to the second quarter of 2012 excluding a nonrecurring charge incurred in 2011. All subsequent references to 2011 financial results will exclude nonrecurring charges. Improvements in margin are primarily attributable to lower product costs achieved from manufacturing and supply chain efficiencies and improved service margins. These cost reduction efforts have enabled gross profit in the second quarter despite a decrease in year-over-year revenue compared to a $2.1 million loss at the gross profit level in the prior year. Total operating expenses were $8 million for the second quarter of 2012 compared to $9 million in the prior year. Our continued focus on cost control drove this expense reduction of approximately 11%. Net loss to common shareholders for the second quarter decreased to $9.1 million, or $0.06 per basic and diluted share, compared to $12 million, or $0.10 per basic and diluted share, in the second quarter of 2011. This improvement is due to lower product costs and reduced operating expenses. Turning to year-to-date results, for the 6 months ended April 30, 2012, the company reported revenue of $55.5 million compared to $56.7 million in the prior year. In this period, the company generated a gross profit of $2.3 million compared to a gross loss of $4.4 million on an adjusted basis. This is a year-over-year improvement of $6.7 million. Read the rest of this transcript for free on seekingalpha.com