FOR IMMEDIATE RELEASE

FuelCell Energy Reports Third Quarter 2017 Financial Results and Business Update

DANBURY, CT – September 7, 2017 -- FuelCell Energy (Nasdaq: FCEL), a global leader in delivering clean, innovative and affordable fuel cell solutions for the supply, recovery and storage of energy, today reported financial results for its third quarter ended July 31, 2017 and key business highlights.  

Financial Results

FuelCell Energy (the Company) reported total revenues for the third quarter of 2017 of $10.4 million, compared to $21.7 million for the comparable prior year period.  The change in revenue reflects the transition to retaining projects in the Generation portfolio.  Revenue components include:    

A gross loss of ($2.6) million was incurred in the third quarter of 2017, compared to a gross profit of $0.4 million for the comparable prior year period.  Production levels were adjusted in the third quarter to meet backlog requirements.  This led to the under-absorption of fixed overhead costs compared to the prior year period that had a higher level of production.  The gross loss in Products was only partially offset by the positive contribution from the Generation portfolio, Advanced Technology and Service contracts.

Operating expenses for the current period totaled $11.7 million compared to $10.8 million for the prior year period.  The increase in Administrative and selling expenses reflected higher professional fees, particularly in relation to awarded contracts and new proposals, such as the recently announced 40 megawatt award from Long Island Power Authority (LIPA) and the 20 megawatt South Korean project.  Research and development expenses are supporting new product introductions.    

Net loss attributable to common shareholders for the third quarter of 2017 totaled $17.8 million, or $0.31 per basic and diluted share, compared to $11.8 million or $0.38 per basic and diluted share for the third quarter of 2016.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA, a Non-GAAP measure) in the third quarter of 2017 totaled ($10.9) million.  Refer to the discussion of Non-GAAP financial measures below regarding the Company’s calculation of Adjusted EBITDA.  Capital spending was $2.2 million in the third quarter of 2017 and depreciation expense was $2.2 million, including depreciation of property, plant and equipment as well as Project assets.  

Revenue Backlog

Total backlog was $437.0 million as of July 31, 2017 compared to $392.1 million as of July 31, 2016.  

During the third quarter of 2017, the previously announced 1.4 megawatt Trinity University project was added to backlog.  

Project awards referenced by the Company are notifications that the Company has been selected, through a competitive bidding process, to enter into definitive agreements. These awards have been publicly disclosed.  Negotiations are in process and when complete, project awards will become backlog. Project awards that were not included in backlog as of July 31, 2017 include the 39.8 megawatt LIPA selections, the 20 megawatt Korea Product Sale and Service Agreements, the 2.8 megawatt Tulare BioMAT project and the 7.4 megawatt CMEEC letter of intent.

Cash, restricted cash and financing availability

Cash, cash equivalents, restricted cash and financing availability totaled $113.8 million as of July 31, 2017, including:

Subsequent to the end of the third quarter of 2017, the Company priced an underwritten offering of convertible preferred stock which will raise net proceeds of approximately $28 million upon closing, which is expected on September 8, 2017.

Project Assets  

Long term project assets consists of projects developed by the Company that are structured with power purchase agreements (PPA), which generate recurring monthly Generation revenue, as well as projects the Company is developing and expects to retain and operate.  Long term project assets totaled $67.2 million as of July 31, 2017, consisting of five projects totaling 11.2 megawatts plus costs incurred to date for an additional five previously announced projects that are under construction.

Business Highlights

“Recent project awards combined with existing backlog now total about $1.5 billion, which is transformational for the Company by providing the sales volume needed to reach profitability,” said Chip Bottone, President and Chief Executive Officer, FuelCell Energy.  “We have a global platform and demonstrated a sizeable win in South Korea in a relatively short period of time since re-assuming Asian marketing rights as we pursue a number of multi-megawatt opportunities in the region.”

Conference Call Information

FuelCell Energy management will host a conference call with investors beginning at 10:00 a.m. Eastern Time on Thursday, September 7, 2017 to discuss the third quarter results for 2017.

Participants can access the live call via webcast on the Company website or by telephone as follows:

The replay of the conference call will be available via webcast on the Company’s Investors’ page at www.fuelcellenergy.com approximately two hours after the conclusion of the call.

Cautionary Language  

This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements with respect to the Company’s anticipated financial results and statements regarding the Company’s plans and expectations regarding the continuing development, commercialization and financing of its fuel cell technology and business plans. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation, changes to projected deliveries and order flow, changes to production rate and product costs, general risks associated with product development, manufacturing, changes in the regulatory environment, customer strategies, unanticipated manufacturing issues that

impact power plant performance, changes in critical accounting policies, potential volatility of energy prices, rapid technological change, competition, and the Company’s ability to achieve its sales plans and cost reduction targets, as well as other risks set forth in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based.

About FuelCell Energy

FuelCell Energy (NASDAQ: FCEL) delivers efficient, affordable and clean solutions for the supply, recovery and storage of energy.  We design, manufacture, undertake project development, install, operate and maintain megawatt-scale fuel cell systems, serving utilities, industrial and large municipal power users with solutions that include both utility-scale and on-site power generation, carbon capture, local hydrogen production for transportation and industry, and long duration energy storage.  With installations on three continents and millions of megawatt hours of ultra-clean power produced, FuelCell Energy is a global leader with environmentally responsible power solutions.  Visit us online at www.fuelcellenergy.com and follow us on Twitter @FuelCell_Energy

SureSource, SureSource 1500, SureSource 3000, SureSource 4000, SureSource Recovery, SureSource Capture, SureSource Hydrogen, SureSource Storage, SureSource Service, SureSource Capital, FuelCell Energy, and FuelCell Energy logo are all trademarks of FuelCell Energy, Inc.

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FUELCELL ENERGY, INC.

Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands, except share and per share amounts)

Deferred Finance Costs. Accounting Standards Update 2015-03, Simplifying the Presentation of Debt Issuance Costs, requires that deferred finance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt. Retrospective application is required which resulted in a reclassification in our Consolidated Balance Sheet as of October 31, 2016 of $0.3 million of debt issuance costs from Current assets to be a direct deduction of Current portion of debt and a reclassification of $1.1million of debt issuance costs from Other assets, net to be a direct deduction of Long-term debt and Other liabilities.

FUELCELL ENERGY, INC.

Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except share and per share amounts)

FUELCELL ENERGY, INC.

Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except share and per share amounts)

Non-GAAP Financial Measures

Financial Results are presented in accordance with accounting principles generally accepted in the United States (“GAAP”).  Management also uses non-GAAP measures to analyze and make operating decisions on the business. Earnings before interest, taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA are alternate, non-GAAP, measures of cash utilization use by the Company.

These supplemental non-GAAP measures are provided to assist readers in determining operating performance. Management believes EBITDA and Adjusted EBITDA are useful in assessing performance and highlighting trends on an overall basis. Management also believes these measures are used by companies in the fuel cell sector and by securities analysts and investors when comparing results of FuelCell Energy with those of other companies. EBITDA differs from the most comparable GAAP measure, net loss attributable to FuelCell Energy, Inc., primarily because it does not include finance expense, income taxes and depreciation of property, plant and equipment. Adjusted EBITDA adjusts EBITDA for stock-based compensation and restructuring charges, which are considered non-recurring.

While management believes that the non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these measures. The measures are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

The following table calculates EBITDA and Adjusted EBITDA and reconciles these figures to the GAAP financial statement measure Net loss attributable to FuelCell Energy, Inc.