Ladies and gentlemen, thank you for standing by, and welcome to FuelCell Energy’s Fiscal Third Quarter 2020 Financial Results and Business Update Call. At this time all participant are in a listen-only mode. After the speakers’ presentation there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Tom Gelston, Senior Vice President, Investor Relations. Thank you. Please go ahead sir.

Thank you, Julian. Good morning everyone and thank you for joining us on our call today. As a reminder, this call is being recorded. This morning, FuelCell Energy released our financial results for the third quarter of fiscal year 2020, and the earnings press release is available on the Investor Relations section of our website at fuelcellenergy.com. Consistent with our practice, in addition to this call and our press release, we have posted a slide presentation on our website. This webcast is being recorded and will be available for replay on the company’s website approximately two hours after we conclude this call. Before we begin our prepared comments, please direct your attention to the disclosure statement on Slide 2 of the presentation and the disclaimers included in the press release related to forward-looking statements. The discussion today will contain forward-looking statements, 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 FuelCell technology and its business plans. These forward-looking statements are intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements made on this call today other than statements of historical facts are forward-looking statements, and include statements regarding our anticipated financial and operational performance. Forward-looking statements made on this call represent management’s current expectations and are based on information available at the time such statements are made. Forward-looking statements involve numerous known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from any results predicted, assumed, or implied by the forward-looking statements. We strongly encourage you to review the information in the reports we file with the SEC regarding these risks and uncertainties, in particular, those that are described in the Risk Factors section of our Annual Report on Form 10-K and the cautionary statements concerning forward-looking statements disclosures in our Quarterly Reports on Form 10-Q. You should also review the section entitled cautionary statements concerning forward-looking statements in this morning’s earnings press release. During this call we will use non-GAAP financial measures when talking about the company’s performance and financial condition. In accordance with SEC regulations, you can find a reconciliation of these non-GAAP measures to the comparable GAAP measures in this morning’s earnings release, and the reconciliation document posted on our Investor Relations portion of our website. For our call today, I’m joined by Jason Few, FuelCell Energy’s President and Chief Executive Officer and Mike Bishop, Executive Vice President, Chief Financial Officer and Treasurer. Following our prepared remarks, we will be available to take your questions. I would like to now hand the call over to Jason for opening remarks. Jason?

Thank you Tom and good morning everyone. We appreciate you joining us on our call today. I am pleased with our third quarter performance as we continued to execute on our powerhouse business strategy that we first announced in January of this year. Despite the ongoing challenges of COVID-19 and resultant economic uncertainty, the FuelCell Energy team continues to operate with safety as our number one priority while continuing to execute on the projects in our backlog, delivering on our customer service and support obligations, and moving business development opportunities forward. Each quarter we include the overview of FuelCell Energy shown on Slide 3 for investors who may be less familiar with our business. During fiscal year 2019, which ended on October 31st we recorded approximately 61 million of total revenue, primarily across our three largest categories; service and license, advanced technologies, and generation, which together represent a diversified source of recurring revenue under multi-year contracts. During the first nine months of fiscal year 2020, we've generated approximately 53.9 million in revenue or 88% of total revenue generated in 2019. Near the top of the slide, we highlight many of our well recognized customers, currently using our technology platforms including our extended stack life fuel cells and combined heating power systems that enabled microgrid and leveraged multiple fuel types, including carbon neutral biofuels. The same molten-carbonate fuel cell platform is capable of providing distributed hydrogen, which is what we will implement for Toyota at the Port of Long Beach, California. We are working toward commercializing our solid oxide platform capabilities to deliver hydrogen production through highly efficient electrolysis, long duration hydrogen based energy storage, and zero carbon hydrogen power generation, which will support the increasing penetration of intermittent renewable technologies around the world by providing a way to store the…

Thank you, Jason and good morning everyone. Let's start by reviewing the highlights of our results as shown on Slide 7. Total reported revenue in the third quarter was $18.7 million, a decrease of 18% year-over-year. Recall that the third quarter of 2019 included $10 million of revenue related to the ExxonMobil Research and Engineering company license agreement. Breaking down total revenues, service and license revenues decreased 38% to 7.1 million from 11.5 million in the year ago period. Service and license revenues for the prior year period included revenues of 10 million recorded for the aforementioned license agreement that was entered into with ExxonMobil Research and Engineering Company. The service and license revenues for the three months ended July 31, 2020 include revenues recorded from module replacements and routine maintenance activities. There were no module replacement revenues recorded in the prior year quarter. Generation revenues decreased 13% to 4.7 million from 5.4 million due to plant maintenance activities primarily related to downtime while upgrades were performed at our 14.9 megawatt Bridgeport, Connecticut facility. Advanced technology contract revenue increased 20% to 6.9 million from 5.8 million as a result of revenues recognized in connection with our joint development agreement with ExxonMobil Research and Engineering Company, which was executed during the first quarter of fiscal 2020 and timing of activity under other existing contracts. Cost of service and license revenues increased 7.7 million to 8.8 million for the three months ended July 31, 2020 from 1.1 million for the three months ended July 31, 2019 due to the fact there were module replacements in the three months ended July 31, 2020 compared to no module replacements in the prior year period and also due to a $2.8 million increase in our loss accrual during the three months ended July 31, 2020…

Thank you, Mike. Next, on Slide 10, I want to provide an update on the Powerhouse business strategy that we announced earlier this year. The first phase of our plan was to transform the company to build a durable financial foundation for growth. Just before I assumed the role of CEO, approximately one year ago, we implemented a number of restructuring initiatives to strengthen our financial footing, to support future phases of our strategy that we're now working to execute. Currently we're focused on the strengthening stage of our strategy by improving our capital deployment. While we raised additional capital through the sale of common stock under our open market sales agreement during the quarter, our ultimate goal is to obtain low cost, long term financing through our delivered generation projects which subject to approval of our existing lender would allow us to recycle capital to finance the completion of our other projects that are underway. As we think about capital deployment opportunities we're focused on reinvesting in our power generation portfolio to enhance our operating performance, maximize uptime, and reduce costs in addition to investing in new project opportunities. Building on our sales pipeline, strengthening our customer relationships, and delivering our platforms against targeted applications that help our customers get essential jobs done is our core focus. And operational excellence is the key to our success as we strive to execute on project delivery, manufacturing efficiency, and customer service. We remain focused on continuous improvement and optimizing production efficiencies. Our team continues to develop and implement process yield improvements and advancement of our lean principles by reducing process cycle times and reducing waste. We work to improve our cost structure over the past year and this is evident in our results. Reducing costs while adhering to safety and product…

Thank you. [Operator Instructions]. Your first question comes from Colin Rusch from Oppenheimer. Please go ahead.

Thanks so much guys and congrats on all the progress. Can you give us an update on some of the project finance conversations, given the extended lifetime on the stack life as well as the improved equity position, [indiscernible] close to being able to [indiscernible] of the opportunities for refinancing and how much are terms and preference on what we’re seeing [indiscernible] on these projects?

Good morning Colin, this is Mike, I'll take that one. And thank you for the question. Just to provide a little bit of background, so the company - for projects that are in construction, the company finances those projects with a combination of construction debt from our Orion credit facility, a $200 million facility. We've drawn down $80 million on that facility and FuelCell equity. At commercial operation the company recycles that capital out by bringing in long-term permanent debt financing and tax equity or a combination thereof. Earlier in the fiscal year, the company completed a tax equity financing with Crestmark, a $14 million tax equity financing, which recycled capital back into the company. The company is executing on projects in our pipeline now, the next two projects that are nearing commercial operation would be the Groton Navy Sub Base Project, as well as the San Bernardino project. We would expect to bring in permanent financing when those projects get to commercial operations. We are actively involved in dialogue with various financing entities and expect to provide further updates as those projects get closer to permanent financing.

Okay, I'll take it offline. Just trying to get a little bit more on that one. And then the advanced technologies work is running at a little bit faster cadence than we expected. Could you speak to why that's progressing so quickly and how we should think about that going forward?

Colin, hi, good morning, thanks for joining us. This is Jason, I'll give you a perspective on that. Part of the work that we've been doing under our Powerhouse strategy is really to look at what are the areas and opportunities as a company we have to really accelerate growth. Obviously, as we look across the four major areas of opportunities we're focused on from distributed generation, distributed hydrogen, carbon capture, and electrolysis long duration energy storage, we see a market opportunity and momentum really building around hydrogen and the role that hydrogen will play and the transformation of the energy grid. As part of that and the work that we've been doing with DOE, we really began to accelerate the pace at which we're working and have a much stronger emphasis and focus on advancing that technology on the hydrogen side as well as, we put ourselves in a good position with the JDA 2 agreement with ExxonMobil Research and Engineering to really advance our carbon capture work. And, as more momentum builds around that as we continue to -- our organization focused on core priorities being very clear about the applications we're going after, that's why you're seeing some faster pacing as we just have a lot more clarity about the order of battle, what we're focused on, and where we're going to drive future value for this company.

And then the progress with the facility, the fueling facility in California, I guess, can you speak to the potential for a growing pipeline on those fueling facilities, obviously a modular facility with clean electrolysis, it could be pretty compelling given some of the opportunities that we're seeing out there. Is there a growing number of folks interested in that opportunity from a commercial perspective at this point, or is it still pretty early days?

Yeah, when you think about our opportunity in the area to provide hydrogen for transportation, if I just think about transportation as one application in which we can address with our technology, we have a commercial technology today to address that with our tri-gen platform and we certainly see an opportunity and are having increased conversations around how to use that platform to distribute infrastructure around completing routes if you think about it that way from a transportation standpoint to make sure that the hydrogen infrastructure is there. As we look a little further out to what we can do with electrolysis, we certainly see a lot more increased conversations and are engaged in a lot more conversations around electrolysis and hydrogen storage, not only for transportation, but obviously for grid reliability and resiliency, the storage applications around that, and then repowering as well. So we -- the level of activity and conversations we're having around hydrogen has increased quite a bit. And we feel very well-positioned in our existing molten-carbonate platform to deliver hydrogen through our tri-gen application. But then as we go forward, we certainly see a much larger opportunity with electrolysis and long duration hydrogen energy storage.

Thanks so much. Really appreciate it.

Thank you, Colin. Really appreciate your questions.

Your next question comes from Eric Stine from Craig-Hallum. Please go ahead.

Good morning, everyone.

Good morning, Eric. How are you?

Fine, how are you?

Doing great, thank you.

Good. Well, so I was hoping just to kind of get an update on some of your long-term targets for the generation portfolio. I know you reiterated your fiscal 2022 goals this morning. And just curious, is that still kind of the 50 to 60 megawatt level, that's what you would target to get there? And then also curious, does that include any contribution from product sales or generally limited to generation and then the service side?

Good morning Eric, this is Mike. So in the -- in our material, the targets that we put out there, the long-term targets that we put out there for fiscal 2022 is based on our existing backlog generation portfolio and continued contributions in advanced technology, as Jason had been discussing, does not assume additional product sales on top of that. To provide a bit more color on where we are with fully constructing the generation portfolio today and this is in the appendix material of Slide 17, today the company has 32.6 megawatts of operating assets on balance sheet. We have another 40.6 megawatts of assets that are in various stages of development and construction. I mentioned the Groton Project and the San Bernardino Project, which are the farthest along. But we expect these projects to be constructed over that time period that we're talking about here.

Got it and then on the two -- projects that are still going on. I mean, I would assume those are still progressing. Any thoughts on timing or is it still more just going to get through the process, interconnect, etcetera?

Yeah, Eric it's working through the process, our gaping [ph] project we are well into that process for that project and expect that -- and we're making good progress there. But we're going through interconnects and all the things that you have to do and those things take time.

Okay, maybe just last one for me on South Korea specifically. I know that as you said now you're kind of freed up and you pretty engaged to an extent there. But -- and I know it may take some time, but is there -- I mean, certainly there's a level of knowledgeable know the name fuel cell. You've done a project with KOSPO, so just curious, I mean, the level of engagement whether it's with KOSPO or KEPCO and is that something that potentially speeds that to where you are fully reengaged in that market?

Yeah, it's a great question. So I won't make any comment around specific customers, but I will say this that, obviously the Korean markets, the largest fuel cell market in the world, there's public announcements from the Korean government that support over the next couple of years over gigawatt of opportunity that are targeted toward fuel cells. We are having very positive conversations with customers in the Korean market. And I'll tell you, we're excited about the energy level of those conversations if you will, no pun intended there. But, we think that to your point, our name is known, our technology is known, we have 160 million megawatts there or so -- plus megawatts there. We -- and if you think about KOSPO as our direct customer there, that platform has performed incredibly well, performed above expectations. And that certainly for us is an anchor and a reference to what we can bring to the market in addition to the things that are advantages for us in our platform versus other fuel cell providers, everything from one, our scalability to the advantages we have from combining power platform and then certainly our distributed hydrogen platform as well.

Got it. Very helpful. Thanks.

Thank you.

We have no further questions. I'd like to turn the call over to Jason Few for any closing remarks.

Julian, thank you. Thank you again for joining us today. We continue to execute on our Powerhouse business strategy, working to strengthen FuelCell Energy to deliver profitable growth and optimize returns. I'm encouraged by the positive attitude and teamwork I see on display at our organization day in and day out. And I'm excited about our work to deliver and our purpose to enable the world to live a life empowered by clean energy. We are committed to delivering long-term shareholder value and appreciate your continued interest in FuelCell Energy. Thank you for joining and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.