Updated report PLUG POWER / AMAZON Deal Breakdown April 6th, 2017 – https://tradersnewssource.com/plug-2/
Plug Power and Amazon Sign Agreement for Multi-Site GenKey Deployments
LATHAM, N.Y., April 05, 2017 (GLOBE NEWSWIRE) — Plug Power Inc. (PLUG), a leader in providing energy solutions that change the way the world moves, announced that it has reached an agreement with Amazon to utilize Plug Power fuel cells and hydrogen technology in its fulfillment network. At select fulfillment center locations, Amazon will begin powering its industrial equipment such as forklifts using the GenKey technology which will enable faster charging times, reduced costs, and support energy-efficiency in Amazon’s fulfillment operations. Revenues associated with the commercial agreements are expected to be around $70 million in 2017.
“This agreement is a tremendous opportunity for Plug Power to further innovate and grow while helping to support the work Amazon does to pick, pack and ship customer orders,” said Andy Marsh, CEO of Plug Power. “Our hydrogen fuel cell technology, comprehensive service network, and commitment to providing cost-savings for customers has enabled Plug Power to become a trusted partner to many in the industry and we are excited to begin working with Amazon.”
Additionally, Amazon and Plug Power will begin working together on technology collaboration, exploring the expansion of applications for Plug Power’s line of ProGen fuel cell engines.
Plug Power has granted Amazon warrants to acquire up to 55,286,696 of Plug Power’s common shares at $1.1893 per share (Exercise Price), which is based on the volume weighted average closing price of Plug Power common shares for the thirty trading days ending April 4, 2017. Vesting of the warrants is tied to payments totaling $600 million in the aggregate made by Amazon, directly or indirectly, in connection with the purchase of goods and services from Plug Power. An adjustment to the Exercise Price will occur after the first 34,917,912 warrants have vested, and will be based on the volume weighted average closing price, at the time that such warrants vest. The details of the warrants and vesting is described in more detail in a report on Form 8-K filed by Plug Power with the SEC earlier today.
About Plug Power Inc.
The architects of modern hydrogen and fuel cell technology, Plug Power is the innovator taking hydrogen fuel cell technology from concept to commercialization. Plug Power has revolutionized the industry with its simple GenKey solution, which is designed to increase productivity, lower operating costs and reduce carbon footprints in a reliable, cost-effective way. Plug Power’s GenKey solution couples together all the necessary elements to power, fuel and serve a customer.
Plug Power’s hydrogen and fuel cell solutions for material handling applications replace lead acid batteries to power electric industrial vehicles, such as the lift trucks Amazon uses in its fulfillment centers. Material handling professionals experience a more productive workforce as trucks operate at maximum power for an entire shift, and they can eliminate costly battery changes that impact productivity and safety. The use of hydrogen fuel cells also reduces greenhouse gas emissions, improving a customer’s environmental footprint.
Plug Power’s ProGen platform of modular fuel cell engines empowers OEMs and system integrators to rapidly adopt hydrogen fuel cell technology. Through ProGen, Plug Power extends its reach into the on-road electric vehicle market, increasing its served market for fuel cell products and hydrogen fueling stations. The ProGen fuel cell engine solution addresses a wide range of applications, including parcel delivery and service trucks, municipal and government fleets, taxis and port vehicles. ProGen engines are proven today, with more than 6,000 ProGen engines in service, supporting some of the most rugged operations in the world.
Plug Power is the partner that customers trust to take their businesses into the future. For more information about Plug Power, visit www.plugpower.com[plugpower.com].
We are working on an updated Analyst review and what this deal relates to in potential earnings for PLUG to be issued soon!
Additional Information about the Transaction and Where to Find It
This communication is being made in respect of the transactions between Plug Power Inc. (the “Company”) and Amazon.com, Inc. (“Amazon”), and the related issuance of warrants, described herein. The issuance of the warrants, and the exercise thereof, with respect to shares of the Company’s common stock representing more than 20% of the Company’s shares of common stock outstanding as of the date of issuance of such warrants will be submitted to the Company’s stockholders for their approval (the “Stockholder Approval”). The Company intends to file with the U.S. Securities and Exchange Commission (the “SEC”) a proxy statement for its 2017 annual meeting of stockholders (the “Proxy Statement”) that will include a proposal relating to the Stockholder Approval. This communication does not constitute a solicitation of any vote or proxy from any of the Company’s stockholders. Investors are urged to read the Proxy Statement carefully and in its entirety when it becomes available and any other relevant documents or materials filed or to be filed with the SEC or incorporated by reference in the Proxy Statement, because they will contain important information about the transactions between the Company and Amazon, the issuance of the warrants and the proposal relating to the Stockholder Approval. The Proxy Statement will be mailed to the Company’s stockholders. In addition, the Proxy Statement and other documents will be available free of charge at the SEC’s internet website, www.sec.gov[sec.gov]. When available, the Proxy Statement and other pertinent documents may also be obtained free of charge at the Investor Relations section of the Company’s website, www.plugpower.com[plugpower.com], or by directing a written request to Plug Power Media & Investor Relations, 968 Albany Shaker Road, Latham, New York 12110 or at tel: (518) 738-0269 or email: email@example.com.
February 24th, 2017 report below
Plug Power and Hydrogen Fuel Cells
Plug Power Inc. (NASDAQ: PLUG) founded in 1997 and headquartered in Latham, New York, is an energy focussed on designing, developing, manufacturing and commercializing hydrogen fuel cell systems. The company also has facilities in Spokane, Washington and Boulogne-Billancourt, France. It has been named to Deloitte’s 2016 Technology Fast 500TM, a listing of the 500 fastest growing technology, media, telecommunications, life sciences and energy tech companies in North America.
The company was founded in 1997 as a joint venture between DTE Energy and Mechanical Technology and subsequently went public in 2002.
Plug Power’s primary focus has been in the materials handling market, specifically electric forklifts and pallet jacks. It is now broadening its scope and is now also focussing on electric vehicles and other industrial applications. The company offers an array of products for all phases of the energy consumption process such as hydrogen fuel cell engines, hydrogen fuel cell systems, fueling delivery systems, stationary back up fuel cells and maintenance services.
Some notable customers include Nike, BMW, Wal-Mart, Home Depot, Mercedes-Benz, Kroger and Whole Foods.
Hydrogen fuel cells have several advantages over typical lead-acid batteries. They are more reliable and can withstand more extreme temperatures and more rugged environments.
- Significantly shorter recharge times
- Ability to hold more energy
- Reduce greenhouse emissions
- Less replacements
- Less costly to dispose of since materials are less hazardous
- ProGen: Hydrogen fuel engine that is used as a component for the GenDrive and GenSure. It enhances the electric range (duration) and has a wide range of transportation applications. ProGen is generally sold as a component within Plug Power’s other products, but can also be sold standalone (provided ProGen engines to Fedex).
- GenDrive: Hydrogen Fueled Proton Exchange Membrane (PEM) fuel cell system used to power material handling vehicles.
- GenFuel: A delivery system to provide refueling to Plug Power products.
- GenSure (formerly ReliOn): Stationary fuel cell that provides back up power, grid supplementation and off grid power.
- GenCare: A maintenance program for Plug Power products. This includes advanced system monitoring, preventative maintenance, periodic system enhancements, parts inventory logs, training and rapid response onsite services.
All products integrate together to create a complete solution: GenKey. It is a solution for customers transitioning their material handling vehicles or stationary power applications from typical lead batteries to hydrogen fuel cell power. GenKey solution includes GenFuel, GenCare and GenDrive or GenSure.
The global fuel cell market is expected to reach $25.5 billion by 2024. Much of that will be driven by China as validated by their recent commitment of $100 billion towards fuel cell technology development through 2030. The CEO has already made several trips to the country to broker agreements and deals with various Chinese automotive and government organizations.
Plug Power has indicated that they are looking to broaden their revenue streams and will also be focusing efforts on the consumer transportation segment by working on providing fuel cells for electric delivery vehicles. The global electric vehicle market is estimated to reach $596.5 billion by 2030.
In regards to consolidation, the industry is experiencing mergers and acquisitions as industry players look to adopt new fuel cell technologies, expand sales channels and expand their geographic scope.
In February 2017, Plug Power announced its first shipment of ProGen fuel cell engines designed for electric delivery vehicles for Fedex in the Greater Los Angeles area. Also, US Postal Service purchased the GenDrive system for its truck fleet in Capitol Heights, Maryland.
The company has announced a product revenue diversification strategy since currently 80% of sales is attributed to fuel cell related products for the material handling business.
Plug Power is currently in talks to acquire an unnamed European industrial gas company.
On December 22, 2016, the company issued a two-part stock offering of $30 million. The proceeds were used to prepay one of the outstanding loans with its senior lender, Hercules Capital Inc. Also in the same month, the company replaced another loan with Hercules Capital Inc. with a loan facility agreement with NY Green Bank for $25 million. The former loan restricted growth due to strict financial covenants.
Key Risk Factors & Stock Influences
- Breakeven financially in 2017 to validate that it is on a profitable growth plan
- Uncertainty in regards to the extension of the renewable energy investment tax credit in the US (30% tax credit on renewable energy costs)
- China’s continued commitment towards fuel cell development as that is the company’s next frontier
- Company’s ability to obtain future financing for fuel cell development despite increasing debt levels significantly over the past year
Revenue was $31.43 million for the third quarter of 2016 as compared to $17.56 million for the third quarter of 2015.
Gross margin was 2.2% for the third quarter of 2016 as compared to 0.3% for the third quarter of 2015. There is slight margin expansion, but it has to improve significantly to breakeven financially.
Furthermore, the company continues to report losses with net loss from continuing operations at -$13.39 million or -$0.07 per diluted share for the third quarter of 2016 as against -$10.21 million or -$0.06 per diluted share for the third quarter of 2015.
The company refinanced $25 million of debt and recently offered a $30 million two part stock offering resulting in an increase in the debt/equity ratio from 6.4% for the third quarter of 2015 to 73.1% for the third quarter of 2016.
The company is targeting $500 million in sales in the next four to five years.
The company is expected to provide a business update on preliminary full year results and 2017 growth plans on February 24, 2017.
As companies look to reduce costs, generate efficiencies and reduce greenhouse emissions, Plug Power’s fuel cell technology offers a viable option to help achieve all of these imperatives. With unified product integration, Plug Power can provide the energy required by customers without disrupting their business.
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