Arthur A. Chip BottoneThank you, Kurt. Good morning, everyone, and welcome. Fiscal year 2011 was a year of growth for our company. We had record revenues and generated gross profits during the third and fourth quarters, the first since commercializing our products. We successfully managed a significant production increase and are executing on our backlog. Credit for these achievements goes to our talented team of associates and their dedication to our vision, which is to provide ultra-clean, efficient distributed generation baseload power for less than the cost of grid-delivered electricity. I'll review our business and update you on our execution of our strategic initiatives in greater detail after Mike Bishop, our Chief Financial Officer, reviews our financial results for the quarter. Mike? Michael Bishop Thank you, Chip. Good morning, and thank you for joining our call today. FuelCell Energy recorded total revenues for the fourth quarter of 2011 of $34.7 million compared to $19.7 million in the same period last year. Product sales and revenues for the fourth quarter were $33.3 million compared to $17.2 million reported in the prior year. This is a 94% increase in quarterly product revenue and a record for the company. The company's product sales and service backlog totaled $210 million as of October 31, 2011, compared to $154 million at the end of the prior year. The components of this backlog include product orders of $132 million, service agreement backlog of $78 million. We plan to deliver product backlog through October 2013. We generated gross profit from product sales in the fourth quarter of 2011. This is our second consecutive quarterly gross profit resulting from increased production volume and lower product costs. Margins for product sales and revenues improved by $4.3 million compared to the fourth quarter of 2010, and the product cost-to-revenue ratio improved to 0.98:1. Research and development contract revenue was $1.4 million for the fourth quarter of 2011 compared to $2.5 million in the prior year. The company's research and development backlog totaled $15.8 million as of October 31, 2011 and increased compared to the $9.7 million reported in the prior year.
Net loss to common shareholders for the fourth quarter decreased to $7.9 million or $0.06 per basic and diluted share compared to $12.9 million or $0.11 per basic and diluted share in the fourth quarter of 2010. This improvement is due to increased revenues and improved product margins.Turning to the full year, my discussion of results will exclude the charges related to the repair and upgrade program, and the reevaluation of the Series I preferred shares recorded during fiscal 2011. Please note there is a non-GAAP reconciliation included at the end of the earnings release, which illustrates financial results, excluding these items. For the fiscal year, the company reported total revenue of $122.6 million, up 76% compared to total revenue of $69.8 million in 2010. Product sales and revenues were $115.1 million compared to $59.2 million in the prior year, and R&D contract revenue was $7.5 million compared to $10.6 million in fiscal '10. Margins for product sales and revenues improved by $14.9 million compared to the prior-year period, and the product cost of revenue ratio improved to 1.03:1 on cost reductions including better labor efficiency and improved overhead absorption from higher production rates. Net loss to common shareholders for the fiscal year was $40.6 million or $0.33 per basic and diluted share, compared to $58.9 million or $0.63 per basic and diluted share for fiscal 2010. Total liquidity was $64.4 million at October 31, 2011, including cash and investments in U.S. Treasuries of $63.4 million and revolver availability of $1 million. Net cash, cash equivalents and investments generated in the fourth quarter of 2011 was $13.9 million. Cash flows from operations totaled $9.5 million, reflecting strong milestone payments from contracts and backlogs. We used $2.2 million of cash on capital expenditures in the quarter and generated $6.6 million through financing activities. Read the rest of this transcript for free on seekingalpha.com