FuelCell Energy is cutting 6 percent of its work force, or about 30 workers, just over a year after accepting a $4 million state loan to add jobs in Torrington.
The Danbury-based company makes fuel cells for industrial power applications, with Fairfield-based Sound Energy Partners Inc. numbering among its three largest shareholders with a 5 percent stake.
At last report, FuelCell Energy had just over 300 workers in Danbury and at various field offices; and 225 in Torrington, where it added 100 jobs in a $10 million expansion partly financed by the Connecticut Department of Economic and Community Development.
In January, the U.S. Department of Energy awarded FuelCell Energy $21 million in funding to develop a coal-based, solid-oxide fuel cell capable of generating sufficient power for thousands of homes.
In addition to the job cuts, FuelCell Energy suspended employer contributions to its 401(k) retirement benefit plan, and froze salaries save for production workers.
FuelCell Energy lost $20.7 million in its first fiscal quarter ending Jan. 31, slightly worse than a year ago despite increasing revenue 45 percent to $21.7 million. The company said its cash expenditures rose in the quarter due to increases in accounts receivable owed it, and delays in finalizing new customer contracts it expects to collect in the current quarter.
The job cuts come even as the company ramps up for new business from the state of Connecticut. On March 10, Connecticut Department of Public Utility Control issued a revised draft decision for a third round of contracts under the state”™s Project 150 initiative to build renewable energy plants, with the new projects worth an estimated $84 million to FuelCell Energy.
Approved projects include a 14.3-megawatt power plant for Bridgeport FuelCell Park; and 3.2 megawatt generators in Danbury and Trumbull, as well as similar-sized stations in Bloomfield and Glastonbury.
The company is currently negotiating contracts for generators in Milford, at Stamford Hospital and at Waterbury Hospital. The latter two projects were announced last May but have yet to be finalized.
In a conference call with investors, FuelCell Energy CEO Daniel Brdar said the new projects in the pipeline could help the company by putting pressure on companies considering a purchase to move forward.
“While it always helps to have stuff pressuring in terms of when you might get your unit, a couple of the projects are actually very far along in the process,” Brdar said. “It”™s getting that last little push ”“ that”™s the big thing.”
According to one analyst, the company has been exposed on multiple occasions to politically driven contract cuts, due to its reliance to date on publicly funded projects.
“We”™ve gone through this with Connecticut a number of times, where (FuelCell Energy has) been awarded something and then modifications had to come in because somebody else had hurt feelings,” said Walter Nasdeo, an analyst with New York City-based Ardour Capital Investments L.L.C.
