LATHAM, N.Y., March 11, 2008 (PRIME NEWSWIRE) -- Plug Power Inc. (Nasdaq:PLUG), a leader in providing clean, reliable on-site energy solutions, today provided a progress update and reported its financial results for the fourth quarter and full-year 2007.
Revenue for the fourth quarter of 2007 and year ended December 31, 2007, was $5.1 million and $16.3 million, respectively. This compares with revenue in the same periods in 2006 of $1.0 million and $7.8 million.
Net loss for the fourth quarter of 2007 was $17.5 million, or $0.20 per share on a basic and diluted basis, compared with $13.3 million, or $0.15 per share, for the fourth quarter of 2006. For the full year, net loss was $60.6 million, or $0.69 per share, compared with $50.3 million, or $0.58 per share, in 2006.
Much of the increase in net loss is attributable to the operating costs associated with Cellex Power Products, Inc. and General Hydrogen Corporation, which were acquired during 2007.
"Overall, we made substantial progress in 2007. Our acquisitions of Cellex and General Hydrogen fulfilled an important public milestone, opening up another potential revenue stream that has had an immediate impact," said Roger Saillant, Plug Power's president and CEO. "Our GenDrive business is generating substantial interest in the material handling industry."
The milestones established for 2007 were:
* Install 400 GenCore(r) systems * Achieve 50 percent reduction in Plug Power's GenCore support costs by the end of the fourth quarter * Reduce GenCore manufacturing costs by 25 percent * Expand into new fuel cell applications through strategic partnerships or acquisitions * Contain cash used in operations to $50 to $55 million in 2007, increased from $45 to $50 million in the second quarter to include the estimated cash to be used in 2007 for the combined operations of Plug Power, Cellex Power and General Hydrogen.
The Company installed 208 GenCore systems in 2007, more than double its total from 2006, but short of its stated goal of 400. The company reduced its GenCore manufacturing costs by 20%, missing its projection of 25%. Plug Power achieved all three other milestones.
"Although results for the year are mixed based on our public milestones, we remain optimistic about our GenCore business. As our telecommunications customers work with the FCC to iron out the details of the FCC's order regarding backup power, we expect GenCore orders to accelerate," noted Saillant.
Product Installations, Shipments and Backlog
GenCore installations in the fourth quarter of 2007 were 51 and for the full year were 208 compared to a stated milestone of 400 installations.
Total (GenCore, GenDrive and GenSys(r) products) shipments in the fourth quarter were 81 units and for the full year were 235 units compared to 152 unit shipments in 2006.
During the fourth quarter of 2007, Plug received 122 total new unit orders and had 210 total orders for the full year. Total product backlog at December 31, 2007, was 305 units. During the fourth quarter, Plug Power removed 100 units from the backlog associated with a distributor order that is no longer expected to ship. Product orders include firm orders, stocking orders and orders that require certain conditions or contingencies and certain redesign elements to be satisfied prior to shipment, some of which are outside Plug Power's control. The time periods from order receipt to shipment date and from shipment date to installation vary widely and are determined by a number of factors, including the customer contract terms and deployment plan as well as siting, permitting and construction.
Acquisition Integration
Plug Power's integration of Cellex Power Products, Inc. and General Hydrogen Corporation is substantially complete. The operations are now consolidated in one facility in Richmond, British Columbia. Manufacturing of GenDrive is being performed at Plug Power's Latham headquarters, and units have shipped to customers. Limited manufacturing and prototyping still takes place at the Richmond facility. Administrative, sales and marketing, and information technology functions and systems are substantially integrated between the facilities in Richmond and Latham, and Plug Power has developed additional sales and technical capabilities to support the GenDrive product line.
Revenue
Product and service revenue was $0.7 million for the fourth quarter of 2007, while research and development (R&D) contract work contributed $4.4 million to the quarter's revenue total. These amounts compare to $0.4 million of product and service revenue and $0.6 million of R&D contract revenue for the fourth quarter of 2006. For the year, total revenue of $16.3 million represents an $8.4 million or 108% increase over the prior year. Product and service revenue was $3.1 million and R&D contract revenue was $13.2 million in 2007 compared with product and service revenue of $2.7 million and R&D contract revenue of $5.2 million in 2006. Deferred product and service revenue at December 31, 2007, stood at $3.3 million, an increase of $649 thousand over December 31, 2006. Plug Power defers recognition of product and service revenue and recognizes revenue on a straight-line basis over the service period of each sold system. Plug Power expects to recognize substantially all of the deferred product and services revenue over the next 24 months.
Operational Results
Total cost of revenue for the fourth quarter was $7.8 million, comprised of $1.3 million for product and service cost of revenue and $6.5 million for R&D contract cost of revenue. These amounts compare to $2.9 million in the fourth quarter of 2006, which was comprised of $1.5 million of cost of product and service revenue and $1.4 million of cost of R&D contract revenue. For the full year, product and service cost of revenue was $9.4 million, a $4.6 million increase over 2006, and R&D contract cost of revenue was $19.0 million, an $11.4 million increase over 2006. The increases resulted from a 55% increase in shipped units, service costs on the larger installed base and the increase in R&D contract work performed in 2007.
R&D expenses for the fourth quarter and full-year 2007 were $11.8 million and $39.2 million, respectively, compared to fourth quarter and full-year 2006 amounts of $11.0 million and $41.6 million, respectively. The $2.4 million decrease from the prior full-year total is attributable to the larger amount of costs absorbed in R&D contract work reported in cost of R&D contract revenue instead of R&D expense. For the full year, this more than offset the $6.4 million of new R&D expense associated with the companies acquired in 2007.
Selling, general and administrative (SG&A) expenses were $5.1 million for the fourth quarter of 2007 and $19.3 million for the full year 2007 compared with $3.4 million for the fourth quarter of 2006 and $12.3 million for the full year 2006. The $7.0 million year-over-year increase in SG&A expenses resulted primarily from the additional SG&A expenses of the acquired companies and the growth of the GenCore sales team.
Cash and Liquidity
Net cash used in operating activities for the quarter ended December 31, 2007, was $13.4 million and $49.3 million for the full year, less than our stated milestone of $50-55 million. On December 31, 2007, Plug Power had cash, cash equivalents and available-for-sale securities of $165.7 million and net working capital of $163.9 million, compared with $269.1 million and $267.0 million, respectively, at December 31, 2006. Plug Power also used $800 thousand for capital expenditures in the fourth quarter of 2007 and $2.9 million for the full year.
Conference Call
Plug Power has scheduled a conference call today at 10:00 a.m. (EDT) to review the Company's results for the fourth quarter and full-year 2007. Interested parties are invited to listen to the conference call by calling (877) 407-8291, or (201) 689-8345 for international participants, and entering the pass code PLUG (7584).
The webcast can by accessed by visiting the Plug Power Web site at www.plugpower.com and selecting the conference call link on the home page. The call will be archived on the Company's Web site for a period of time following the call.
About Plug Power
Plug Power Inc. (Nasdaq:PLUG), an established leader in the development and deployment of clean, reliable on-site energy solutions, integrates fuel cell technology into backup, motive and continuous power products for telecommunications, material handling, utility and uninterruptible power supply applications. The Company is actively engaged with private and public customers in targeted markets throughout the world, including North America, Europe, the Middle East, Russia, South Africa and South America. For more information about how to join Plug Power's energy revolution as an investor, customer, supplier or strategic partner, please visit www.plugpower.com.
The Plug Power, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4446
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements, including, without limitation, the risk that the anticipated synergies of the Cellex Power and General Hydrogen acquisitions are not realized, that unit orders will not ship, be installed and/or convert to revenue, in whole or in part. Plug Power's ability to develop commercially viable on-site energy products; the cost and timing of developing Plug Power's on-site energy products; market acceptance of Plug Power's on-site energy products; Plug Power's ability to manufacture on-site energy products on a large-scale commercial basis; competitive factors, such as price competition and competition from other traditional and alternative energy companies; the cost and availability of components and parts for Plug Power's on-site energy products; Plug Power's ability to establish relationships with third parties with respect to product development, manufacturing, distribution and servicing and the supply of key product components; Plug Power's ability to protect its intellectual property; Plug Power's ability to lower the cost of its on-site energy products and demonstrate their reliability; the cost of complying with current and future governmental regulations; the impact of deregulation and restructuring of the electric utility industry on demand for Plug Power's on-site energy products and other risks and uncertainties discussed under "Item IA-Risk Factors" in Plug Power's annual report on Form 10-K for the fiscal year ended December 31, 2006, filed with the Securities and Exchange Commission ("SEC") on March 16, 2007, and the reports Plug Power files from time to time with the SEC. Plug Power does not intend to and undertakes no duty to update the information contained in this press release.
Plug Power Inc.
Financial Highlights
Balance Sheets (Dollars in
thousands):
--------------------------
(unaudited)
December 31, December 31,
2007 2006
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 12,077 $ 26,900
Available-for-sale securities 153,624 242,223
Accounts receivable 4,338 893
Inventory 5,787 5,559
Prepaid expenses and other
current assets 2,991 3,706
------------ ------------
Total current assets 178,817 279,281
Property, plant and equipment, net 21,065 18,048
Goodwill and Intangible Assets 68,379 10,389
Other assets 131 202
------------ ------------
Total assets $ 268,392 $ 307,920
============ ============
Liabilities and Stockholders'
Equity
Current liabilities:
Due to broker for security
purchase $ -- $ 5,000
Accounts payable 4,637 1,990
Accrued expenses 5,510 2,597
Deferred revenue 3,341 2,692
Other current liabilities 1,423 --
------------ ------------
Total current liabilities 14,911 12,279
Other liabilities 4,580 1,113
------------ ------------
Total liabilities 19,491 13,392
Stockholders' equity 248,901 294,528
------------ ------------
Total liabilities and
stockholders' equity $ 268,392 $ 307,920
============ ============
Statements of
Operations
(Dollars in Three months Twelve months
thousands): ended December 31, ended December 31,
------------- ------------------------ ------------------------
(unaudited)
2007 2006 2007 2006
----------- ----------- ----------- -----------
Revenue
Product and
service
revenue $ 745 $ 381 $ 3,082 $ 2,657
Research and
development
contract
revenue 4,354 660 13,189 5,179
----------- ----------- ----------- -----------
Total revenue 5,099 1,041 16,271 7,836
Cost of revenue and
expenses
Cost of product
and service revenue 1,369 1,514 9,399 4,833
Cost of research
and development
contract revenue 6,470 1,413 19,045 7,637
Research and
development
expense 11,772 10,988 39,219 41,577
Selling, general
and administrative
expense 5,121 3,382 19,323 12,268
Amortization of
intangible
assets 586 -- 1,614 --
----------- ----------- ----------- -----------
Operating loss (20,219) (16,256) (72,329) (58,479)
Interest income and
net realized gains/
losses from
the sale of
available-for-sale
securities 3,061 2,987 12,338 8,340
Interest expense (209) (13) (429) (171)
Other income (117) -- (151) --
----------- ----------- ----------- -----------
Net loss $ (17,484) $ (13,282) $ (60,571) $ (50,310)
=========== =========== =========== ===========
Loss per share:
Basic and diluted $ (0.20) $ (0.15) $ (0.69) $ (0.58)
=========== =========== =========== ===========
Weighted average
number of common
shares
outstanding 87,857,110 86,264,500 87,341,717 86,100,326
=========== =========== =========== ===========
Amounts in US $'s