FuelCell Energy reports financials for first quarter 2003

DANBURY, Conn., March 11, 2003 — FuelCell Energy Inc. reported first quarter 2003 results for the period ended January 31, 2003, and progress on its key focus areas for 2003.

Financial Results

FuelCell Energy reported an increase in revenues of 47 percent in the first quarter of 2003 to $10.3 million compared to $7.0 million in the same quarter of the previous year. Net loss for the first quarter of 2003 was $16.0 million, or $0.41 per basic and diluted share, compared with a net loss of $6.0 million, or $0.15 per basic and diluted share, during the same quarter of the previous year.

Cash, cash equivalents and investments (U.S. Treasuries) on hand as of January 31, 2003 totaled $200 million. Cash used was $20.1 million in the first quarter, including $2.0 million for capital expenditures and $3.5 million for working capital. Depreciation expense for the three-month periods ended January 31, 2003 and 2002 was $1,253,000 and $615,000, respectively.

Revenues in the current quarter were attributable to the production of DFC power plants, shipment of fuel cell components and progress on the Company’s research and development contracts.

The net loss for the current quarter reflects the Company’s investment in the standardization of DFC power plants, development of its distribution network and increases in operating costs including employee expenses, depreciation related to plant expansion, information systems and infrastructure.

DFC Technology Generating Power Today

“Our DFC power plants are generating clean, efficient and reliable power for our customers today,” said Jerry D. Leitman, Chairman and CEO of FuelCell Energy, Inc. “In fact, our DFC power plants have produced over 7 million kilowatt hours of electricity at customer sites and more than 10 million kilowatt hours including units at our facilities. And because our products generate hydrogen internally within the fuel cell from readily available fuels such as natural gas and digester gas, we are ready today and do not need to wait for the creation of a hydrogen infrastructure.”

About Direct FuelCells

Direct FuelCells efficiently generate clean electricity at distributed locations near the customer, including hospitals, schools, universities, hotels and other commercial and industrial facilities, as well as grid support for utility applications.

In essence, Direct FuelCells are like large, continuously operating batteries that generate electricity as long as fuel, such as natural gas, is supplied. Since the fuel is not burned, there is no pollution commonly associated with the combustion of fossil fuels. This high-efficiency technology generates more electric power from less fuel and with less carbon dioxide emissions than traditional methods. Operating on biomass fuels, such as wastewater treatment digester gas, Direct FuelCells are a renewable technology.

About FuelCell Energy, Inc.

FuelCell Energy, Inc., based in Danbury, Connecticut, is a specialist in the development and manufacture of highly efficient hydrogen fuel cells for clean electric power generation, currently offering DFC power plant products ranging in size from 250 kilowatts to 2 megawatts for applications up to 50 megawatts.

The company has developed commercial distribution alliances with MTU CFC Solutions Gmbh, a company of DaimlerChrysler AG, in Europe; Marubeni Corporation in Asia; and Caterpillar, PPL Energy Plus, Chevron Energy Solutions, CMS Viron Energy Services and MWH Global in the U.S. FuelCell Energy is developing Direct FuelCell technology for stationary power plants with the U.S. Department of Energy through their Office of Fossil Energy’s National Energy Technology Laboratory.

Because hydrogen is generated directly within the fuel cell module from readily available fuels such as natural gas and wastewater treatment gas, DFC power plants are ready today and do not require the creation of a hydrogen infrastructure. More information is available at http://www.fuelcellenergy.com .

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