Before proceeding with the call, I would like to remind everyone that this call is being recorded and that the discussions today will contain forward-looking statements, including the company's plans and expectations for the continuing development and commercialization of our Fuel Cell Technology. I would like to direct listeners to read the company's cautionary statement on forward-looking information and other risk factors in our filings with the U.S. Securities and Exchange Commission.Now, I'd like to turn the call over to Chip Bottone. Chip? Arthur A. Bottone Thank you, Kurt. Good morning, everyone, and welcome. I ask you to please turn to Slide 4 of the presentation entitled Second Quarter 2012 Highlights. We continue executing on our path to profitability and global strategy for growth, making measurable progress on major strategic initiatives on 3 continents. Cost reduction efforts and streamlining certain aspects of our business over the past year allowed us to break even at the gross profit level this quarter despite lower revenue year-over-year the gross margin improvement of $2.3 million on adjusted basis. This enhances our confidence in gaining profitability. Our business model transformation is progressing to diversify our revenue streams, internal [ph] costs and reduce the capital intensity of our business while expanding our global footprint. Continued execution of our strategic initiatives will provide expanding order growth from the growing demand in Asia, market development actions in Europe as well as resurgence of the U.S. domestic market. Our cash position is strong, nearly $100 million in the lower burn rate, which is both critical and comforting to prospective customers and project investors, particularly for multi-megawatt projects that will be operating for 1 or 2 decades. I will discuss our strategy and results in more detail after Mike Bishop, our Chief Financial Officer, reviews our financial results for the quarter. Mike?
Michael S. BishopThank 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