Plug Power Reports Product Shipments up 36% in 2012, Considering Sale of the Company

Plug Power Inc. reported its financial results for the fourth quarter and year-end 2012. For the full year 2012, expansion of its customer base in North America continued with new, first-time orders from Stihl, Mercedes Benz, Lowe’s, Carter’s and Ace Hardware. The Company also received additional orders for existing customers including Walmart, P&G, Coca-Cola, Sysco Foods, Wegmans, Kroger and BMW. Product shipments also increased reaching 1,391 units, a 36% growth from the previous year shipments. Another 2012 success for Plug Power was completing the introduction of the new product platforms in the third quarter. The new platforms reduced material cost, a key driver for product margins, by an average of 30%.

“The main goal of the company is to continue to build a successful market in material handling and expand into related applications such as refrigerated trucks, ground support equipment and range extending utility vehicles,” said Andy Marsh, CEO at Plug Power. “While the company has experienced significant challenges in 2012, I believe the future of Plug Power is bright and that we are in the right market, with the right customers. We remain focused on the future.”

Increased costs and delayed sales forced the company to adopt a restructuring plan in the fourth quarter to improve organizational efficiency and conserve working capital needed to support the growth of its GenDrive business. Additionally, to continue to support our stakeholders, by the direction of the board of directors, the company continues to consider all strategic options to provide funding for the business plan. The options include raising additional capital, asset sales, strategic partnerships and a sale of the company. In 2012, the company engaged Stephens, its long-time investment banking firm, to assist with exploring and implementing these options.

Net loss for the fourth quarter of 2012 and year ended December 31, 2012 was $8.5 million and $31.9 million, respectively. On a per share basis (basic and diluted), the loss for the quarter and the year was $0.22 and $0.93, respectively. This compares with a net loss of $7.2 million, or $0.32 per share (basic and diluted), for the fourth quarter of 2011 and net loss of $27.5 million, or $1.46 per share (basic and diluted) for the full year 2011.

Total revenue for the fourth quarter and year ended December 31, 2012 was $5.9 million and $26.1 million, respectively. This compares to total revenue of $11.9 million and $27.6 million for the same periods of 2011. Product and service revenue for the fourth quarter and year ended December 31, 2012 was $5.7 million and $24.4 million, respectively. This compares to $11.3 million and $23.2 million for the same periods of 2011. Research and development contract revenue for the quarter and year ended December 31, 2012 was $0.2 million and $1.7 million, respectively. This compares to $0.5 million and $3.9 million for the same periods of 2011.

As announced in the third quarter, the company experienced a number of quality issues in 2012, which negatively impacted its financial performance. The quality issues have been technically addressed, and a majority of the changes have been implemented as of the end of the fourth quarter. As previously discussed, Plug Power believes that the quality issues have caused our sales to be delayed by six to nine months, though the company has been successful in maintaining customer loyalty.