Plug Power's Revenue Increases; On Track to Meet Milestones As Company Reports Second Quarter Results
LATHAM, N.Y., July 31 -- Plug Power Inc. , today reported financial results and accomplishments for the second quarter ended June 30, 2003. Overall both financial and operational accomplishments were in line with company expectations and Plug Power remains on track to achieve its full-year milestones.
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Total revenue for the second quarter ended June 30, 2003 was $3.1 million compared to $2.5 million for the second quarter of 2002. Year-to-date total revenue was $6.1 million compared to $5.4 million in 2002. Second quarter and year-to-date total revenue excludes deferred product and service revenue, as Plug Power continues to defer revenue at the time of the initial product sale and amortize that revenue over the period of the underlying service obligations. Deferred revenue was $4.3 million at June 30, 2003.
Net cash used in operating activities for the quarter ended June 30, 2003 was $10.8 million, including $1.8 million spent in the second quarter of 2003 for acquisition fees and expenses and $0.6 million of severance and integration costs related to the March 25, 2003 acquisition of H Power Corp. (H Power). This compares to $9.1 million during the second quarter of 2002. Year-to-date, net cash used in operating activities was $19.3 million, including $3.1 million related to H Power, compared to $16.8 million during the same period of 2002 (see attached financial highlights). Plug Power does not expect to incur any significant integration costs in the second half of 2003. Additionally, excluding the impact of H Power, we continue to expect that cash used in operating activities for the full year 2003 will be $35.0 to $40.0 million.
Net loss for the quarter was $12.8 million or $0.21 per share, compared to $12.2 million or $0.24 per share for the same period in 2002. Year-to-date, the net loss was $26.6 million or $0.47 per share, compared to $23.8 million or $0.47 per share for the same period last year. The current year-to-date loss includes a charge of $3.0 million for the write-off of in-process research and development expense related to the acquisition of intellectual property and certain other assets acquired as a part of the H Power transaction.
Research and development expenditures combined with cost of revenues increased to $13.8 million for the second quarter ended June 30, 2003, compared to $13.2 million for the same period during 2002. Year-to-date these expenses were $28.6 million compared to $25.8 million for the same period last year. As described above, the amount in 2003 includes a charge of $3.0 million for the write-off of in-process research and development expenses related to the acquisition of intellectual property and certain other assets acquired as a result of the merger with H Power.
General and administrative expenses were $1.9 million for the second quarter ended June 30, 2003, compared to $1.7 million for the same period during 2002. General and administrative expenses were $3.4 million in both the year-to-date periods ended June 30, 2003 and June 30, 2002.
Weighted average shares outstanding for the quarter ended June 30, 2003, increased to 60.4 million shares compared to 50.5 million shares for the same period in 2002. Year-to-date weighted average shares outstanding increased to 56.0 million shares compared to 50.4 million shares in 2002. As of June 30, 2003 there were 60,931,558 shares issued and outstanding, including approximately 9.0 million shares issued in connection with the H Power transaction.
2nd Quarter Accomplishments
-- Announced GenCore(TM)5T at SuperComm, a premier communications and
technology exhibition in Atlanta, Georgia, where GenCore(TM)5T systems
were on display in the Tyco Electronics Power Systems and Plug Power
exhibit areas. The GenCore(TM)5T is designed to provide extended
back-up power for the telecommunications industry in the demanding
outside plant (OSP) market. GenCore(TM)5T is Plug Power's first
direct hydrogen product based on a proprietary, modular, scaleable,
architected fuel cell platform.
-- Shipped initial GenSys(TM)5P systems, Plug Power's first product
fueled by liquefied petroleum gas (LPG). GenSys(TM)5P is a
5-kilowatt, grid-parallel fuel cell system that is being marketed to
customers who require the remote fuel capability that LPG provides.
-- Strengthened alliance with DTE Energy Technologies, by enabling
connectivity to its energy|now System Operations Center(TM) (SOC).
The energy|now SOC is a web-based, remote monitoring and control
service that provides the opportunity for on-site energy users to add
centralized, end-to-end management of all vital functions required to
serve electric loads and maintain the reliability of on-site energy
systems.
-- Shipped 35 systems during the quarter, which included two LPG systems.
Order backlog at the end of the quarter was 74 systems.
-- Operated 128 systems, including 20 new installations, at customer
locations for a total of more than 139,000 hours during the quarter,
generating approximately 354,000 kilowatt-hours of electricity.
-- Added eight new patents to Plug Power's portfolio in the second
quarter, for a total of 101 patents issued.
Plug Power has scheduled a conference call today, at 10:00 AM (ET) to review its second quarter 2003 results. Interested parties are invited to participate. To listen to the conference call, please call (706) 645-9291. The live web cast can be accessed by logging onto http://www.plugpower.com/ . A playback of the call will be available on the company's Web site until August 7, 2003.
See the attached financial highlights for the second quarter 2003. For more information about Plug Power please visit our Web site at http://www.plugpower.com/ .
About Plug Power
Plug Power Inc. designs, manufactures and markets proton exchange membrane (PEM) fuel cells for stationary applications. Plug Power's strategic partners include GE Fuel Cell Systems, DTE Energy Technologies, Vaillant GmbH, Honda R&D Co., Ltd., Engelhard Corporation and Celanese Ventures. The Company's headquarters are located in Latham, N.Y., with offices in Washington, D.C., and The Netherlands.
This press release may contain statements, which are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements contain projections of Plug Power's future results of operations, Plug Power's product development expectations or of Plug Power's financial position or state other forward-looking information. In some cases you can identify these statements by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will" and "would" or similar words. You should not rely on forward-looking statements because Plug Power's actual results may differ materially from those indicated by these forward- looking statements as a result of a number of important factors. These factors include, but are not limited to, Plug Power's ability to develop a commercially viable fuel cell system; the cost and timing of developing Plug Power's fuel cell systems; market acceptance of Plug Power's fuel cell systems; Plug Power's reliance on Plug Power's relationship with certain affiliates of General Electric; Plug Power's ability to perform on its multi-generation product plan in a manner satisfactory to GEFCS and DTE; ability to manufacture fuel cell systems on a commercial basis; competitive factors, such as price competition, competition from other power technologies and competition from other fuel cell companies; the speed and extent of consolidation of the fuel cell industry; the cost and availability of components and parts for Plug Power's fuel cell systems; the ability to raise and provide the necessary capital to develop, manufacture and market Plug Power's fuel cell systems; Plug Power's ability to lower the cost of its fuel cell systems and demonstrate their reliability; the cost of complying with current and future governmental regulations; and other risks and uncertainties discussed under the heading "Factors Affecting Future Results" in Plug Power's annual report on Form 10-K for the fiscal year ended December 31, 2002, dated March 31, 2003 and filed with the Securities Exchange Commission on March 31, 2003, and the reports Plug Power files from time to time with the Securities and Exchange Commission. 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 Sheet Data: December 31, June 30,
Assets 2002 2003
Current assets:
Cash and cash equivalents $27,257,641 $49,299,429
Restricted cash 325,000 325,000
Marketable securities 28,590,378 16,828,085
Accounts receivable 4,145,328 2,740,766
Inventory 2,031,995 2,970,893
Prepaid development costs 2,145,265 1,373,217
Other current assets 2,639,630 1,212,534
Total current assets 67,135,237 74,749,924
Restricted cash 4,675,274 4,675,274
Property, plant and equipment, net 26,320,676 25,373,655
Intangible asset 514,847 4,812,500
Investment in affiliates 9,488,762 8,523,674
Goodwill -- 10,459,793
Other assets 547,995 493,194
Total assets $108,682,791 $129,088,014
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $947,839 $1,691,203
Accrued expenses and
other currrent liabilities 3,432,841 3,733,894
Deferred revenue 5,878,784 4,308,203
Total current liabilities 10,259,464 9,733,300
Long-term debt and other liabilities 5,726,559 5,767,479
Total liabilities 15,986,023 15,500,779
Stockholders' equity 92,696,768 113,587,235
Total liabilities and
stockholders' equity $108,682,791 $129,088,014
Statements of Operations Data:
Three Months Ended Six Months Ended
June 30, June 30,
2002 2003 2002 2003
Revenue
Product and
service revenue $2,189,751 $2,145,531 $4,762,288 $4,178,594
Research and
development
contract revenue 353,938 958,643 685,667 1,877,935
Total revenue 2,543,689 3,104,174 5,447,955 6,056,529
Cost of revenue
and expenses
Cost of revenues 2,891,668 3,340,875 4,582,832 5,106,858
In-process
research and
development -- -- -- 3,000,000
Research and
development
expense:
Noncash
stock-based
compensation 131,429 288,667 200,442 514,792
Other research
and
development 10,174,832 10,124,310 21,032,579 20,029,640
General and
administrative
expense:
Noncash
stock-based
compensation 99,825 83,675 442,901 104,676
Other general
and
administrative 1,565,176 1,788,355 2,982,345 3,289,082
Operating loss (12,319,241)(12,521,708) (23,793,144) (25,988,519)
Interest income,
net 568,511 174,704 1,030,907 359,821
Loss before
equity in losses
of affiliates (11,750,730)(12,347,004) (22,762,237) (25,628,698)
Equity in losses
of affiliates (478,273) (479,887) (1,062,648) (965,088)
Net loss $(12,229,003)$(12,826,891)$(23,824,885)$(26,593,786)
Loss per share
- basic and
diluted $(0.24) $(0.21) $(0.47) $(0.47)
Weighted average
number of shares
outstanding 50,504,418 60,368,062 50,425,556 56,040,409
Statements of Cash Flows Data:
Three Months Ended Six Months Ended
June 30, June 30,
2002 2003 2002 2003
Net cash used in
operating
activities $(9,086,279) $(10,834,317)$(16,843,708) $(19,317,802)
Purchases of
property, plant
and equipment,
net of proceeds
on disposals (453,834) (88,229) (933,747) (137,364)
Principal payments
on long-term debt
and capital leases (3,164) (1,274) (12,673) (2,519)
Proceeds from stock
option exercises 684,572 196,134 916,958 210,099
Proceeds from
acquisition, net -- -- -- 29,465,741
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