Plug Power records $18.5M loss in 2Q

Plug Power Inc., a leader in providing clean, reliable energy solutions, today reported its financial results for the second quarter of 2010.

During the second quarter, Plug Power consolidated its operations and focused its business on its GenDrive(TM) product for the material handling market. Customer success and a strong and proven value proposition encourages Plug Power to view the $4 billion North American material handling industry as the first commercially viable market for a fuel cell company to establish profitability. With over 85% market share in the material handling fuel cell market, Plug Power's marquee customer-base has grown to include Walmart Canada, Sysco, Wegmans, BMW, United Natural Foods Inc. (UNFI), Coca-Cola Consolidated and FedEx Freight.

"This noteworthy customer base mirrors the strength of GenDrive's value proposition," said Andy Marsh, CEO at Plug Power. "By eliminating battery droop and change-out, customers report productivity increases of 15 to 30%. Additionally, customers demonstrate their green house gas emissions could be reduced by up to 80% onsite."

While new relationships continued to fill the company's active sales funnel, Plug Power also celebrated deployments of its GenDrive products with its socially responsible customers who enjoy both the productivity increases and environmental value of the GenDrive product suite. Sysco Houston and UNFI both held ribbon cutting events at their newly-constructed distribution centers. The events showcased the commitments made by each company to adopt a hydrogen economy at the facility.

During the second quarter, Plug Power also coordinated efforts with both Congressman Tonko and Senator Schumer to augment current fuel cell tax credits. Plug Power welcomed both Tonko and Schumer at its headquarters where critical support was given for the tax credit and the anticipated green jobs it can help create within the fuel cell manufacturing and supply chain.

"Plug Power's work on this tax policy seeks to place fuel cell tax incentives on par with other incentives in the energy industry set aside for oil, wind and solar," continued Marsh. "Though we are closing deals without this legislation, with the support of the US Government, we believe that the market for fuel cell based products will accelerate and will benefit the nation's overall alternative energy strategy."

Financial Results

Net loss for the second quarter of 2010 was $18.5 million, or $0.14 per share on a basic and diluted basis. This compares with a net loss of $10.3 million, or $0.08 per share, for the second quarter of 2009. The quarter over quarter increase in net loss is primarily due to $6.4 million in charges recorded in selling, general and administrative expenses (SG&A) as a direct result of our restructuring plan announced on May 27, 2010.

Total revenue for the second quarter of 2010 was $3.1 million, comprised of $2.3 million for product and service revenue and $0.8 million for research and development (R&D) contract revenue. This compares to total revenue of $3.2 million in the second quarter of 2009, which was comprised of $1.3 million for product and service revenue and $1.9 million for R&D contract revenue.

Effective April 1, 2010, the Company adopted ASU No. 2009-13 on Topic 605, Revenue Recognition-- Multiple Deliverable Revenue Arrangements retroactive to January 1, 2010. As a result of implementing ASU No. 2009-13, the Company recognized approximately $805,000 as revenue in the second quarter of 2010 that would have been recorded as deferred revenue under the previous guidance for multiple-element revenue arrangements. In addition, the Company also retrospectively recorded $1.6 million in revenue into the first quarter of 2010 that had been recorded to deferred revenue under previous guidance.

The Company shipped 97 units of its fuel cell products during the second quarter of 2010 compared to 13 unit shipments in the second quarter of 2009.

Total cost of revenue for the second quarter of 2010 was $6.2 million, comprised of $4.5 million for product and service cost of revenue and $1.7 million for R&D contract cost of revenue. This compares to total cost of revenue of $4.5 million in the second quarter of 2009, which was comprised of $1.8 million for costs of product and service revenue and $2.7 million for R&D contract cost of revenue.

R&D expenses for the second quarter of 2010 were $4.4 million compared with $4.0 million for the second quarter of 2009.

Selling, general and administrative (SG&A) expenses were $10.5 million for the second quarter of 2010 (inclusive of the $6.4 million restructuring charges noted above) compared with $4.5 million for the second quarter of 2009. Additionally, $0.6 million was expensed for amortization of intangible assets during the second quarter of 2010 compared to $0.5 million for the second quarter of 2009.

Cash and Liquidity

Net cash used in operating activities for the second quarter of 2010 was $13.5 million. On June 30, 2010, Plug Power had cash, cash equivalents and available-for-sale securities of $35.8 million and net working capital of $33.0 million. This compares to $62.5 million and $60.0 million, respectively, at December 31, 2009.

The accompanying financial statements and reconciliation tables provide additional information on the Company's year-to-date performance as it relates to the full year 2010 milestones previously announced.

About Plug Power Inc.

The architects of modern fuel cell technology, Plug Power revolutionized the industry with cost-effective power solutions that increase productivity, lower operating costs and reduce carbon footprints. Long-standing relationships with industry leaders forged the path for our key accounts, including Wegmans, Whole Foods, and FedEx Freight. With more than 1,000 units in the field and over 1.5 million hours of runtime, Plug Power manufactures tomorrow's incumbent power solutions today. Visit us at www.plugpower.com.