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Plug Power Announces Third Quarter 2010 Financial Results

Cash and Liquidity

Net cash used in operating activities for the third quarter of 2010 was $15.0 million. On September 30, 2010, Plug Power had cash, cash equivalents and available-for-sale securities of $20.7 million and net working capital of $26.0 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.

Conference Call

Plug Power has scheduled a conference call today at 10:00 am ET to review the company's results for the third quarter of 2010. Interested parties are invited to listen to the conference call by calling 877.407.8291 or 201.689.8345 for international participants.

The webcast can be accessed by going directly to the Plug Power Web site ( www.plugpower.com ) and selecting the conference call link on the home page. A playback of the call will be available online for a period following the call.

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.

The Plug Power Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4446

Plug Power Inc. Safe Harbor Statement

This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to expectations regarding revenues and product orders for 2010. These statements are based on current expectations that are subject to certain assumptions, risks and uncertainties, any of which are difficult to predict, are beyond our control and that may cause our actual results to differ materially from the expectations in our forward-looking statements including statements regarding the risk that unit orders will not ship, be installed and/or convert to revenue, in whole or in part; the cost and timing of developing our products and our ability to raise the necessary capital to fund such development costs; the ability to achieve the forecasted gross margin on the sale of our products; the actual net cash used for operating expenses may exceed the projected net cash for operating expenses; the cost and availability of fuel and fueling infrastructures for our products; market acceptance of our GenDrive system; our ability to establish and maintain relationships with third parties with respect to product development, manufacturing, distribution and servicing and the supply of key product components; the cost and availability of components and parts for our products; our ability to develop commercially viable products; our ability to reduce product and manufacturing costs; our ability to successfully expand our product lines; our ability to improve system reliability for GenDrive; competitive factors, such as price competition and competition from other traditional and alternative energy companies; our ability to manufacture products on a large-scale commercial basis; our ability to protect our intellectual property; the cost of complying with current and future governmental regulations; and other risks and uncertainties discussed under "Item IA-Risk Factors" in our annual report on Form 10-K for the fiscal year ended December 31, 2009, filed with the Securities and Exchange Commission ("SEC") on March 16, 2010, and the reports we file from time to time with the SEC. Plug Power does not intend to, and undertakes no duty to update any forward-looking statements as a result of new information or future events.

Plug Power Inc.    
Financial Highlights       
     
Balance Sheets (Dollars in thousands):        
(unaudited)        
  September 30, 2010 December 31, 2009    
         
Assets         
Current assets:         
Cash and cash equivalents   $ 10,325  $ 14,581    
Trading securities - auction rate debt securities   --   53,397    
Available-for-sale securities   10,410  47,960    
Accounts receivable   4,334  2,005    
Inventory   10,507  6,361    
Assets held for sale   1,155  --     
Auction rate debt securities repurchase agreement   --   5,978    
Prepaid expenses and other current assets   1,365  3,217    
         
Total current assets   38,096  133,499    
         
Restricted cash   2,266  2,265    
Property, plant and equipment, net   12,547  14,343    
Investment in leased property   2,339  2,256    
Intangible assets, net   10,264  11,822    
         
Total assets   $ 65,512  $ 164,185    
         
Liabilities and Stockholders' Equity         
Current liabilities:         
Accounts payable   $ 2,780  $ 2,877    
Accrued expenses   3,860  5,848    
Product warranty reserve   918  --     
Borrowings under line of credit   --   59,375    
Current portion long term debt   356  414    
Deferred revenue   3,628  4,597    
Other current liabilities   570  379    
         
Total current liabilities   12,112  73,490    
         
Long term debt   900  1,150    
Other liabilities   1,306  1,276    
         
Total liabilities   14,318  75,916    
         
Stockholders' equity   51,194  88,269    
         
Total liabilities and stockholders' equity   $ 65,512  $ 164,185    
         
         
     
Statements of Operations (Dollars in thousands):  Three months ended September 30,   Nine months ended September 30, 
(unaudited)
   2010   2009   2010   2009 
Revenue        
Product and service revenue   $ 4,796  $ 1,045  $ 10,285  $ 3,612
Research and development contract revenue   957  1,497  2,943  4,773
Total revenue   5,753  2,542  13,228  8,385
         
Cost of revenue and expenses        
Cost of product and service revenue  7,345  1,335  15,175  3,566
Cost of research and development contract revenue  1,730  2,815  5,291  7,762
Research and development expense   2,086  4,387  11,954  12,811
Selling, general and administrative expense   3,430  3,973  17,829  11,667
Amortization of intangible assets   563  544  1,692  1,575
         
Operating loss   (9,401)  (10,512)  (38,713)  (28,996)
         
Interest and other income   142  627  753  1,318
Change in fair value of auction rate securities repurchase agreement   (2,843)  (570)  (5,978)  (4,134)
Net trading gain   2,843  570  5,978  4,134
Interest and other expense and foreign currency gain (loss)   (33)  (286)  (406)  (900)
         
Net loss   $ (9,292)  $ (10,171)  $ (38,366)  $ (28,578)
         
Loss per share: Basic and diluted  $ (0.07)  $ (0.08)  $ (0.29)  $ (0.22)
         
Weighted average number of common shares outstanding  131,501,132  129,356,230  131,038,368  128,960,903
         
         
         
Plug Power Inc.         
Reconciliation of Non-GAAP financial measures         
         
Reconciliation of Reported Net loss to EBITDAS        
         
   Three months ended September 30,   Nine months ended September 30, 
   2010   2009   2010   2009 
         
Operating loss, as reported   $ (9,401)  $ (10,512)  $ (38,713)  $ (28,996)
         
Stock based compensation   442  620  1,334  1,781
Depreciation and amortization   1,293  1,435  4,035  4,359
         
EBITDAS   $ (7,666)  $ (8,457)  $ (33,344)  $ (22,856)
 
EBITDAS is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense and charges for equity compensation. We have excluded these items because we believe they are not reflective of our ongoing operating performance. EBITDAS is a non-GAAP measure of our financial performance and should not be considered as alternatives to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of our liquidity.
 
 
Reconciliation of Gross margin percentage to Adjusted gross margin percentage
     
  Three months ended September 30,  Nine months ended September 30, 
   2010   2009   2010   2009 
         
Total revenues, as reported   $ 5,753  $ 2,542  $ 13,228  $ 8,385
         
Deferred revenue recognized from previous reporting periods   (638)  (570)  (2,204)  (2,561)
Current invoiceable value of shipments, recorded to deferred revenue   1,235  65  1,235  465
         
Total revenues, as adjusted   $ 6,350  $ 2,037  $ 12,259  $ 6,289
Total cost of product and service revenue and cost of research and development revenue   $ 9,075  $ 4,150  $ 20,466  $ 11,328
         
Gross margin percentage  (57.7%) (63.3%) (54.7%) (35.1%)
         
Adjusted gross margin percentage  (42.9%) (103.7%) (66.9%) (80.1%)
 
Gross margin percentage is a financial ratio used to indicate the relationship between cost of sales and total revenue. We use the term adjusted gross margin percentage to refer to total revenue, as adjusted, less total cost of product and service revenue and total cost of research and development contract revenue as a percentage of total revenues, as adjusted. This non-GAAP financial measure allows management to view gross margin percentage as if revenue had been fully recognized upon invoicing. We believe that these non-GAAP measures, when taken together with our GAAP financial measures, allow us and our investors to better evaluate short-term and long-term profitability trends.
 
While management believes that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These measures are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation. 
 
 
Plug Power Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
  Nine months ended
  September 30,
  2010 2009
 Cash Flows From Operating Activities:     
 Net loss   $ (38,366)  $ (28,578)
 Adjustments to reconcile net loss to net cash used in operating activities:     
 Depreciation and amortization   2,343  2,783
 Amortization of intangible asset   1,692  1,576
 Loss on disposal of property, plant and equipment   99  280
 Stock-based compensation   1,334  1,781
 Provision for bad debts   10  82
 Net unrealized gains on trading securities   (5,978)  (4,134)
 Change in fair value of auction rate debt securities repurchase agreement   5,978  4,134
 Gain (loss) on repayable government assistance     324
 Changes in assets and liabilities, net of effects of acquisitions:     
 Accounts receivable   (2,332)  584
 Inventory   (4,120)  (656)
 Assets held for sale   (376)  
 Prepaid expenses and other current assets   1,843  887
 Accounts payable and accrued expenses   (621)  (6,631)
 Deferred revenue   (969)  (2,213)
 Net cash used in operating activities   (39,463)  (29,781)
     
 Cash Flows From Investing Activities:     
 Purchase of property, plant and equipment   (1,197)  (46)
 Investment in leased property   (284)  (2,462)
 Restricted cash   --  (2,265)
 Proceeds from disposal of property, plant and equipment   45  
 Proceeds from trading securities   59,375  3,300
 Proceeds from maturities and sales of available-for-sale securities   70,366  94,564
 Purchases of available-for-sale securities   (32,911)  (117,839)
 Net cash provided by (used in) investing activities   95,394  (24,748)
     
 Cash Flows From Financing Activities:     
 Purchase of treasury stock   (441)  (534)
 Proceeds from stock option exercises and employee stock purchase plan   --  76
 Repayment from borrowings under line of credit   (59,375)  (3,300)
 Repayment of government assistance     --
 Proceeds from long term debt   --  1,652
 Principal payments on long-term debt and borrowings under line of credit   (314)  (140)
 Net cash used in financing activities   (60,130)  (2,246)
     
 Effect of exchange rate changes on cash   (57)  66
 Decrease in cash and cash equivalents   (4,256)  (56,709)
 Cash and cash equivalents, beginning of period   14,581  80,845
     
 Cash and cash equivalents, end of period   $ 10,325  $ 24,136
CONTACT:  Plug Power Inc.
          Media Contact:
          Reid Hislop
            (518) 782-7700 ext. 1360
            media@plugpower.com
          Investor Relations Contact:
          Cathy Yudzevich
            (518) 782-7700 ext. 1448
            investors@plugpower.com

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