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    Stock Alert for Plug Power Inc. (PLUG)

    Plug Power Inc. (PLUG) is a provider of alternative energy technology focused on the design, development, commercialization and manufacture of fuel cell systems for the industrial off-road (forklift or material handling) market. It has also developed products for the back-up and stationary power markets worldwide. Effective April 1, 2010, the Company was no longer considered a development stage enterprise since principal operations began to provide more than insignificant revenues as the Company received orders from repeat customers, increased its customer base and had a significant backlog. PLUG concentrates its efforts on developing, manufacturing and selling its hydrogen-fueled PEM GenDrive products on commercial terms for industrial off-road (forklift or material handling) applications, with a focus on multi-shift high volume manufacturing and high throughput distribution sites. It has sold, on commercial terms, product offerings to target customers including Walmart, FedEx Freight, Coca-Cola Bottling Co., Sysco Foods and Central Grocers.

    Share Statistics (16-Sept-11)

      FY

    2009

    FY

    2010

    %

    Chg

    Q2

    2010

    Q2

    2011

    %

    Chg

    Symbol PLUG Revenue, $Mn 12.29 19.47 58.4% 3.10 4.35 40.3%
    Current price $1.97 Gross marg. -60.1% -51.4% -14.5% -100.6% -70.3% -30.1%
    52wk Range: $1.35-$10.70 Oper. margin -244.1% -198.7%
    Avg Vol (3m): 335,743 Net margin -331.2% -241.2% -27.2% -597.4% -155.2% -74.0%
    Market Cap. 44.65M              
    Shares Outstanding 22.66M EPS, $ -3.15 -3.21 1.9% -0.92 -0.41 -55.4%

    Source: Reuters.com, SEC Filings

    Investment Highlights

    Shares in PLUG have risen 15.8% in the last five trading days and 8.2% in the last month.  Year to date, the stock is down 50.5%.

    Speaking at two separate investment conferences in New York this month, Andy Marsh, CEO of PLUG, presented an overview of the clean energy company’s market opportunities with its GenDrive fuel cell product suite. Marsh has outlined how the Company has developed a commercially viable business, as indicated by unit orders, shipment backlog, targeted gross margin improvements and significant revenue stream.

    As the Company states, GenDrive replaces lead-acid batteries in electric lift trucks in the $19.9 billion global material handling market. The Company believes that it will be well positioned to achieve profitability by the end of 2012.

    As reported in its Form 10-Q with the SEC, PLUG had received orders for 431 and 986 GenDrive units in the three and six months ended June 30, 2011, respectively. Its backlog of 1,296 orders as of June 30, 2011 represents about $24.2 million in potential future revenue and the Company expects approximately 60% of these orders to ship throughout the remainder of 2011.

    With this increase in orders, and expected engineering improvements that utilize common components across product lines, the Company stated that it expects to drive down material costs by 30 to 40%.  Implementation is currently underway and it expects these improvements to begin to impact its financial results by the end of this year.

    PLUG has experienced and continues to experience negative cash flows from operations and it expects to continue to incur net losses in the foreseeable future. Accordingly, in 2010, the Company restructured and consolidated its operations to focus on the GenDrive business. This restructuring is expected to decrease its operating expenses by $12 to $15 million annually starting in 2011.

    Source:

    http://www.plugpower.com/Home.aspx

    http://biz.yahoo.com/e/110811/plug10-q.html

    Financial Summary

    PLUG posted a net loss of $6.8 million, or $0.41 per share on a basic and diluted basis, for the second quarter of 2011. This compares with a net loss of $18.5 million, or $1.41 per share, for the second quarter of 2010.

    Total revenue for this year’s second quarter was $4.3 million, comprised of $2.6 million for product and service revenue, $1.5 million for research and development (R&D) contract revenue, and $0.2 million for licensed technology revenue.   This compares to total revenue of $3.1 million in the second quarter of 2010, which was comprised of $2.3 million of product and service revenue and $0.8 million of R&D contract revenue.

    Total cost of revenue for the second quarter of 2011 was $7.4 million, comprised of $4.9 million for product and service cost of revenue and $2.5 million for R&D contract cost of revenue. This compares to total cost of revenue of $6.2 million in the second quarter of 2010, which was comprised of $4.5 million of product and service cost of revenue and $1.7 million for R&D contract cost of revenue.

    R&D expenses for the second quarter of 2011 were $1.1 million compared with $4.4 million for the second quarter of 2010.  The overall decline in R&D expenses is related to our corporate restructuring plan, and our transition from a development stage enterprise focused on research and development to a company focused on the commercial production of our products.

    Selling, general and administrative (SG&A) expenses were $3.9 million for the second quarter of 2011 compared with $10.5 million for the second quarter of 2010.  The decline in SG&A expenses relates to restructuring charges of $6.4 million recorded in the second quarter of 2010.  Additionally, $0.6 million was expensed for amortization of intangible assets during the second quarter of 2011 compared to $0.6 million for the second quarter of 2010.

    Cash and Liquidity

    Net cash used in operating activities for the second quarter of 2011 was $6.0 million. Including the receipt of $20.2 million in net proceeds from the capital raise, PLUG had cash, cash equivalents and available-for-sale securities of $27.2 million and net working capital of $30.6 million at June 30, 2011.  This compares to $21.4 million and $23.7 million, respectively, at December 31, 2010.

    Source:

    http://www.plugpower.com/news/pressreleases/11-08-09/PLUG_POWER_ANNOUNCES_SECOND_QUARTER_2011_FINANCIAL_RESULTS.aspx

    Financial Strength (16-Sept-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 3.38 3.11 1.29 0.76
    Current Ratio (MRQ) 4.18 3.71 1.62 1.12
    LT Debt to Equity (MRQ) 0.00 16.92 49.59 111.24
    Total Debt to Equity (MRQ) 0.00 34.23 73.19 149.69
    Interest Coverage (TTM) 0.18 0.35 23.25

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Analyst Recommendations and Revisions

    1-5 Linear Scale

    Current

    1 Month
    Ago

    2 Month
    Ago

    3 Month
    Ago

    (1) BUY 0 0 0 0
    (2) OUTPERFORM 1 1 1 0
    (3) HOLD 0 0 1 1
    (4) UNDERPERFORM 0 0 0 0
    (5) SELL 0 0 0 0
    No Opinion 0 0 0 0
     
    Mean Rating 2.00 2.00 2.50 3.00

    Source: http://www.reuters.com/finance/stocks/analyst?symbol=PLUG.OQ

    Consensus Estimates Analysis

    # of Estimates

    Mean

    High

    Low

    1 Year Ago

    SALES (in millions)
    Quarter Ending Sep-11 1 3.20 3.20 3.20 12.22
    Quarter Ending Dec-11 1 22.80 22.80 22.80 12.00
    Year Ending Dec-11 1 36.30 36.30 36.30 28.40
    Year Ending Dec-12 1 63.00 63.00 63.00
    EARNINGS (per share)
    Quarter Ending Sep-11 1 -0.32 -0.32 -0.32 -0.90
    Quarter Ending Dec-11 1 -0.03 -0.03 -0.03 -0.80
    Year Ending Dec-11 1 -1.31 -1.31 -1.31 -2.90
    Year Ending Dec-12 1 -0.46 -0.46 -0.46

    Technical Analysis

    Source: http://stockcharts.com

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Sept16-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    FuelCell Energy Inc. FCEL 1.25 159.24M n/a n/a 1.33 0.98
    Avista Corp. AVA 24.52 1.42B 14.09 13.18 0.86 0.84
    Ballard Power Systems Inc. BLDP 1.46 123.21M n/a n/a 1.43 1.13
    Arotech Corp. ARTX 1.64 24.76M n/a n/a 0.31 0.28
    Industrial Electrical Equipment Median       12.34 n/a 1.14 n/a
    Plug Power Inc. PLUG 1.98 44.88M n/a n/a 1.24 0.71

    Source: Thomson Financial

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