PLUG - Earnings call transcript Q1 2019

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Operator

Ladies and gentlemen, greetings and welcome to Plug Power’s First Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation [Operator Instructions].

As a reminder, this program is being recorded. It is now my pleasure to introduce your host, Teal Vivacqua Hoyos. you. Thank

begin. may You

Teal Vivacqua Hoyos

by contained believe of the morning. in Earnings future to include Call. these important communicate be that and it of Securities Act Exchange expectations We Good provisions XXA the XXXX our of forward-looking Plug First intend is covered to XXE statements Securities Quarter This Section to forward-looking of Safe And statements you. Harbor the for welcome Power statements. the Act XXXX Thank forward-looking call Section XXXX. investors. We to will

to, the XXXX, undertake turn as forward-looking would after forward-looking Andy Form December cautioned because and made, item under However, to At to XX-K ending materially a XX, but on other investors are file call. Factors only risks reports we statements statements not Risk we may well any forward-looking to time-to-time update XA I year limited as various results intend involve unduly from this our for uncertainties this and rely and uncertainties of annual on of discussed fiscal report as the including not day result Power’s statements, do like the discussed risks call those the in SEC. to over Plug and point, speak are which Marsh. These or as in the differ they statements factors, with actual not from CEO,

Andy Marsh

as for Today, remainder issued Letter, provides first which Thank year. as quarter our you first Shareholder our quarter the for our details first call outlook the the conference well we joining of quarter about today. performance,

project gross XX% first declined billing first of we our are of quarter important the disappointed the start XXXX, deal this and $X because the A billings closed the me that shift closing by The portion quarter units billing during costs. over were down. the on gross a is Let to that of GenDrives close improved versus It timing based the the quarter growth note quarter is numbers quarter first and with saying revenue more deal. we gap. million, quarter. versus in EBITDA six at lower the of positive Even of financials significant by EBITDA a our level, financing lower gross represented primarily our post service prior days of billings improvement

of Looking between quarter, $XX billings $XX in to forward, million expecting we’re the over million gross XXX% sequential reflecting second growth.

for in a launched $XXX approximately announcements EBITDA are goal a some is hydrogen gross, global are on half line. a it and year first four pre-engineered line vehicle our we Plug makes we meaningful our guidance the of full of basis. reiterates revenue customers. first the directly during ProGen reiterating The for our previous the Power one-third for offering guidance in Today, product applications. $XXX the ongoing electrification tied our bookings use our ProGen year The quarter, engine XXXX modular XX simple our announcements major in scalable million by that The the and ProGen of kilowatt In or e-mobility to first for new half. role line positive to in year, playing offers with million architecture

[indiscernible] over modular globally. customer well as battery which especially considerable long generate interest utilization, starting ProGen engine distinct as provides hydrogen advantage is require applications asset Our The high electric in to vehicles, range.

in already announcements. near announcements Contracts four post with have our line, will more One been in customers' major this future. our will of to the program and ProGen sharing for look executed announced be we associated and forward May be information

line open to like for I’d the questions. Now,

Operator

be time [Operator Instructions]. this at conducting gentlemen, and Ladies our session you. we’ll Thank now Q&A

comes Eric Craig-Hallum. with Stein line the question first of from Our

You are live. now

Eric Stein

but and I on company then that’s I industrial stationary. the that May, more about had third in ask to one on. to maybe just believe have I'll love announcements I’d suspect past, EV distributor, you three wait potentially the just gas about coming being that in other talked the targeted. that’s But announcement you

know months. But change those shape all maybe, of how’s about been your those XXXX. opportunities a Just your it’s couple of in I thoughts and taken view or

Andy Marsh

with Sure, past. that maybe enormous times announcement and are reach and a programs huge we give met I’d had that in distributor I activities, underestimating go we in I the someone that the be a will footprint global and the the would them And I us - that with where June. there’s where would never is and ahead think that in partnership. expect

-- again, So opportunity to them close so the announcement, and use to the that make deal with major first going proceeding. as there the we’re looking that’s to we're

doesn’t more going so in And the and in hydrogen today. with says know industry. going excited solar growth active of than power conferences talking Plug the in I has the happen felt that. think a verge reaching there the felt it XXXX it who and before my on activity. in cell recent pocket quite that hydrogen I've impressed been be hydrogen, good the that join announcement. industry. actually over affair and I told a space. feel beginning products Shrestha I is third to pointed announcing have It’s And quarter. hydrogen larger think out, way at think me Power, funnel that the will to Sanjay of like a is going looking I there really On that have making quarter third I quarter, CEO, position world lots And with it opportunities meetings lot stationary about in with fourth them been hope time recently. in discussions. be and how till And through third engaging had I and And Sanjay the -- many was a that were I've with that poured family the and on and and announcements, company me, people I of the us we the of about he activities he more. to their to program. had the Again, The I much front, AMR personal X,XXX fuel like be will down their

Eric Stein

And major question I clearly announcement targeting what markets, the the piece. with just or it four helps the announcements next some but guess partnership, And little third but of different, mean of the wonder month one last not stationary it’s the world. is I wonders same I a here, CHEM for how it you know in

and partnership? that just how the you you with opportunity how see So that wondering helps

Andy Marsh

half see but brewing revenue support with And Africa. of CHEM in met that activity on and over Africa. could the be Sub-Saharan with be -- the -- And half Africa they in there DC, well back only South week So Africa developing and on their focused and CHEM, up relationship they the going large South in we have is we we in South not substantial in only there activity. and last were on folks CHEM outlined not -- their CHEM. associated in with really to Ministry a in opportunity a date the in have the Energy on We think will year

Eric Stein

me this in lowest looks for while. one like book we’ve seen that quarter financial. level just R&D a last maybe keeping quite And or It

or you’ve levels? some programs run Just and there see to should gotten, of more and returning your more -- mature, something are curious development it a at previous has we is those is that a the new rate blip that’s

Andy Marsh

product Paul, by I’ll let you development. the associated association R&D primarily answer. less material it's in think use I But with probably

the expect don’t run comment? I So our you rate do to R&D decrease. Paul, have any for

Paul Middleton

Andy. right, that’s think I

haven’t think the it this quarter. thing the seen a there's year so flows. ebbs or of just a bit last I think in and tremendously I we is in grow timing But is

think we’ll run normal be our I quarter So next rate. to back

Operator

Thank you.

next Rusch line comes the Our Company. and of Oppenheimer question from from Colin

live. are You now

Colin Rusch

adjacent warehouse markets billings little move talk bookings? the you Can sales material into pipeline cadence about with that the you out bit of of a moving As and and handling. the funnel into the and business

Andy Marsh

board I meeting by am that of on and And to We today level we’re stunned push activity. beginning the just we’re tomorrow, quite have and this honestly, the a see. big beginning really activity

programs day. later meeting our I we’re think actually board probably talking the today XX or XX there’s in about at

The be first $XX opportunity, larger it million the that. The than but somewhere funnel as could will be think at range. -- the it look growing. actually is in I be announcement grows, significantly I it could

think and honestly I U.S. challenges, quite I in of part the see activity Europe, the the in than more Asia

in the week one been I last FedEx about probably star that the was program has made. think progress DC, -- in -- it U.S., of Plug the has program

up our of can to think that that one someone winters. actually made who us to the probably the to think count build has aftermarket products and the is service. system that real FedEx someone they right finding went is to of only provide not with who introductions product some on the integrator, and finding challenge worked find challenges I to close our we I the and through harsh FedEx can and XX%, has time But

for has Plug the that all quite partner itself, our honestly vehicle challenges area. had is provided service aftermarket of to the One the even in been because weak

Colin Rusch

for help with And forward, Can a when start financing. you sizable to that that trend going Would you for is Going the uses? how become balance the the understand we love new gets looking me it’s guys then to at available cash freed just see restricted pretty up? sheet amount. just and just how operational understand

Paul Middleton

agreements bank, rate that bulk four about structure about million of amortization with year we parallel puts that. million run-rate about in the not next get majority to it if are of it four it on years. a So customer It’s $XX it And the Think to with the PPA will the like associated and project $XX underlying the release. of the have period. key it particular released

programs will a puts four program. and amortization we combination that effectively service facility. the to got interest the and debt them our and year some -- legacy on go -- That money new got So principle on some but we ones blended

project existing million basically the and that. look But to as as Our generate way financing looks to is investment $XX year they million this programs place levered in project having interesting about at it at and about lender opportunity, that it. $XX it’s basically very think back

Colin Rusch

and offline. Thanks so much And -- around other collateralization things few or guys. take I’ll a questions some

Operator

Thank [Operator you Instructions].

with question Our the of H.C. Dayal comes next Wainwright. Amit from line

now You’re live.

Amit Dayal

year, guidance for maintaining however. you’re the So

cetera. very about seem you lines optimistic the between et the building, pipeline reading So

So, this expect guidance? announcements raise potentially hit, not you And the of to guidance these the dependent coming next on few in once quarters. do is announcements potentially any

Andy Marsh

you So, question little of Amit, to good guidance maybe But about with on bit these There is our back I the historically, think we’ve if answer the based not that. a your go announcements. associated it really think revenue is been -- reason we us it’d that. There growth. XX% the premature think make no represents we’ll guidance. revenue do for sense, this comes I -- our opportunity be time. to meeting But is this at If and is

become I’m had I three been And what revenue the because to year pocket. guidance we the cautious quarter so to do very in back not and overaggressive. saw low in bumped to last and the And fourth have our we going about quarters in we’re quarter, going

As the that world, and make -- want up bump day. pocket to to rainy have our in the But and hurt a sense comes there's I it for will. think doesn’t I in to time ebbs it have it something back we flows

Amit Dayal

cetera certain do portion inventory quarters, of of second GenDrive quarters? next expect at maintain few Will quarter. going or high the the shift inventory Just into recognized you to third for say et still under and looking levels this quarter the normalize

Andy Marsh

is there goods and for the the balance combination plus associated drove inventory the think really in programs, down. in the I off the goal with it deliver build I of investment what quarter. as can. inventory over, that was our and of first the to then that, on second it number rolled the as we programs And will we nimbly going long-term the to is quarter run year those tailor finished that expect But as come

expect And will So in be year end, we'll the continue I that normal it back down. inventory on by to range. driving focus

Amit Dayal

for Just one one last me.

XX, many by top end around should at of the currently. we think sites, see this fueling On on are the year? maybe added-on How I we of the

Andy Marsh

I to XX think XX in range. the

Amit Dayal

year? the So touching end we should almost XXX of be a by the

Andy Marsh

I you’re to think and on just take to down think I that that’s But XXX been breakeven. level, I right, the money. absolutely on I’ve you in good. Amit. XXX right focusing have EBITDA you’re

Operator

Osborn Jeff you. Company. from Instructions] Thank next with of Our comes [Operator line question and Cowen the

You live. are now

Jeff Osborn

built this Couple Andy, out? distribution just Amit’s it quarter, of shipments following with up hydrogen sites, new centers flat. no questions Were existing on sites maybe question on my to I the all end, your was thought

Andy Marsh

a second couple we're and about have the We three that roll quarter. in think I there’s that process, the into

whip. but I there build, weren’t mean, any what if you know new they there’s were -- So Jeff,

Jeff Osborn

And A; of quantify Are have place facility? follow that, with is. What the revenue the the customer XXst. to then that or B is if had exposed for been lag better dynamics your that expired these would day been in question number there financing, the and to there? a terms way six unit March and what happened What or then the part prior the facility with prior was the by

Paul Middleton

first then $XX the the and million. of plus collectively $X of all, of majority on This couple of your Well, biggest it there and was was it million about question it was it programs range. was

these have timing, delivery, driver, the as what the going their banks on Some of then other got hills players and ones of that of the you this, drive But well. facilities. they And terms got in customer the factors needs and the on many construction, that in market. really other overall in closed

So are at four lead one it's cycles, just time. three, that and everything just sometimes to sometimes months happen corral long hard these it's

don’t those push to and more and push continue more and necessarily try know processes make driver, that nimble efficient. I one So but we particular there’s to

we drive with So times. the them can lead shorter

Andy Marsh

have because I had, Paul, the to forward, straight time, been the internal would had I administratively the It And think with Jeff. actually it third happen. work the do bank didn’t be in would thought March, just just normal We to maybe nothing March. by other have this we down just So they we Plug. in gave think of slowed closed we And issues processes. the lead some week it to of started early

Jeff Osborn

for delivery for the it But new year revenue for needed delivery hit guidance to structures that that the the are partners the rest Is financing cadence? of or guidance. major there or any

Paul Middleton

with and No, same partners think… the I have we we’re working that

Andy Marsh

of a this out of we have think a little for plays I view quarter were of -- remainder a hump, the clear year. bit had but we it how the

Jeff Osborn

end few other don’t my on ones mind. A if you

certainly that quarter Can the just referring Is that margin in the gross what’s segment? side, the on you transpiring that you fuel have you the talk were also On deteriorated. to on even about something had purchased is just fuel built because the a a delivery structurally that’s it, bunch for hadn’t of few fuel weren’t the of timing and and side? out there paid more sites Or issue? going whip

Paul Middleton

No, I think there’s ebbs and flows.

our to on. see directionally And I going efficiencies flows and time ebbs I just to think think grow. some as continue you’re goes

assets. of will think you’ll existing customers overall usage continue the on, trend it year on that in starting it's the expect which We to incremental depreciation I And are so investing But in equipment non-cash timing terms goes see down, right improve. I to even you drive of in some some you kick in, ebbs then flows it. those And timing might and affected have of efficiency, the and to with continue of direction. that the to some have see though of leverage as

Jeff Osborn

there to was shareholder reference flow out. in to you cash And to million two quick asking the $XX call Colin $XX here, other million that is due structure, what was would down to letter, or guidance over four on ones the coming trying terms in that that Is some from receivables due the unclear? the the customers just and are moving receivables what Is the with I’m of amortizing understand flows. years that your cash financing collection just impact that? to new that pieces then

Paul Middleton

in of think given attempt results. guidance our some this terms provide the and some cash just with we be talk color to try advice flow to around honest, that, given before. But -- about we’ve I how help SEC particularly was don’t haven’t Jeff, an to actually operating and

think think close it that timely of been, always play flavor What goal seen And as can. and as collection end so, of that. the I quarter as some things deployment has timing I given around we we're to do as is, that cash effort the on our our havoc drive is we’ve numbers, and those can from

really And it, that cash into just show that we’re cash our effect saying the up in play doesn’t doesn’t flow. of because the timing so restricted in why operating that that’s that necessarily

new So, whether a get And shows ago, up cash it that presentation started in it cash released, my with it about overall. year doesn’t gets released the up position. or shows in

it’s So, factor that’s a not necessarily of the issue. just timing really But collections. between

to And given so I are think give reference that’s there. we’re why that is context put the numbers, EBITDAS we some if just you range the our with in you

Jeff Osborn

all enthusiasm the it if about market. van just one, for Andy, highlighted to on the Is your then any development Or for you on X Class the last could, curious you and you to just are FedEx side. of to was X? base you I side. range level in talk And Can I just you’re return Class market? long-haul that X the mobility Certainly, delivery sub the XXX on Class efforts seeing seeing? end

Andy Marsh

Sure, Jeff.

XX% am focused a trucks, address offerings X. on applications in data it in is payloads electric be important. vans, So sense some think more to we out heavy delivery make to that rolling that the makes plans -- day where Class we have utilization can A XX% cells sense, vehicles. fuel are as do our I But Class would have versus the payload X I asset where there shows battery these know

there. moment, to our interest and at of offering More would say domestically deal good continue a will seeing expand. We’re globally I the

really to package its items spend people a have like issues it using putting time stack, use. most actually the that into development we plate membranes delivery we product Our and it’s is see for There's metal to been And don’t other -- our products. we’ve how the scale not for any its compressors actually up. own on these stack van what items to simple

car a say for handling we we delivery at interest equipment where started of looking make I market I many over X like am no degree are amazed other on This I'm these you’re material shock use going and vibe it’s much X learning all has outside actually than its see actually year. my driving and in as into had that different made value look all versus first. idea as minus vans degree applications, simpler And folks, there. these hours to F. a on with started, we’ve material how by actually cold years previous scalable most from Class actually see minus easily as in and to leverage ever the you’re see or work XX So where into had experience this I customers. all the we Where translating the one a a simpler modules to warm simple difficult to is XX other experience. handling. highlight are F, versus I going trying the putting that to variety and But And will markets it do can

Operator

in and no Ladies we have back at like floor you. to this over Marsh Thank the to gentlemen, turn closing. time. for further I’d Andy queue questions

Andy Marsh

Sure.

be Just electrification will as tomorrow expected have in which giving Time material a presentation we provides guidance, exciting I look handling Procter's And Goodwin growth XX forward our and ongoing office transportation. year the in shareholder New to New Eight a in York full York, meeting the building. at the also o’clock detail, held well Avenue as our our so at during shareholder reminder, meeting, in XXX at work

is I person, going opportunity attend the not stream in For it’s the and webcast at proceedings. those to www.plugpower.com you and available find -- to who it’s hope be it could

So thank you everyone.

Operator

conclude does This gentlemen. teleconference for and today. the ladies you, Thank

and your this for disconnect your may a at have computer. line day. your participation You and you now time Thank wonderful log-off

Plug Power (PLUG) 8 May 192019 Q1 Earnings call transcript