Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from [Julie Kutu] – Simmons and Company.
[Julie Kutu] – Simmons and Company
With the new cost-reduced product that you’ve been producing this quarter, do you have a target or expectation on the magnitude that that’ll impact your overall product margins and when you would expect to see the full impact of those?
R. Daniel Brdar
Yes, I think Julie it’s been as we’ve reported, we’ve reported that volume somewhere above 35 megawatts of through-put, 35 to 50 megawatts we grow gross margin positive. And at somewhere between 75 and 125 depending on product mix, the company goes profitable. So the key is really increasing the volume of orders into the business to capture this profitability.
[Julie Kutu] – Simmons and Company
Looking at the Connecticut orders, I know you’ve discussed already and a lot in the past that your in discussions with getting those projects financed. Can you give some color on how those are going and timing if you can? But also on the DOE loan guarantees and the cash grants, is your thinking there as it relates to the Connecticut orders that qualifying for those awards would be a bonus or are you really counting on those to get the project financed and booked?
R. Daniel Brdar
Yes. The answer is probably yes to everything. The project finance is a tricky animal right now. Our projects in Connecticut are very good projects. They’re showing better than 10%, really in a 10 to 15% un-levered return. If you lever those they can get you know above 20% returns. But the financing market is pretty fickle. To give you an example, I mean we’re perfect for tax equity and the tax equity markets are just in flux right now. They’re actually moving to things like portable housing. They perhaps can get corporate bonds at a 7 or 8% rate and they’re somewhat risk averse this year. So that’s put some pressure on us in that flux. You mentioned the grant, and the grant should slip right in and be very, very helpful and it will actually. Everybody’s applying for the grant who can’t use [tax] credits and that should be a big positive for us.
So our belief is that we’re really working parallel paths right now. Our belief is that the projects are [financeable] on their own, you are up against early fuel cell as opposed to you’ll remember early wind or early solar, but it does have the project returns that early brings to the table so they are financial. So we are working with multiple financing tiers to do this without loan guarantees and some of the other DOE programs. They will use the ITC grant or the tax credit when that is appropriate.
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