Plugging away at profits: Plug Power CEO remains optimistic, but cautious, about earnings timetable
May 22, 2009 (Albany Times Union – McClatchy-Tribune Information Services via COMTEX) — Chief Executive Officer Andy Marsh told shareholders Wednesday that two of Plug Power Inc.’s product lines could become profitable within three years.
Although Plug has yet to detail a timetable for a favorable bottom line, the comments provided a glimpse of just how close the company believes it is to earning, versus bleeding, money every quarter.
“We’ve transformed the organization into a sales-driven organization,” said Marsh, who spoke at the company’s annual meeting, held in New York City.
Marsh, who became CEO a year ago, said Plug needs to sell between 4,000 and 5,000 of its hydrogen-powered GenDrive fuel cells, used in forklift trucks, annuallly to make that business unit profitable. The fuel cells are popular with companies that have large warehouses with a fleet of forklift trucks.
Plug delivered 186 GenDrive units to customers during the first quarter of the year. The company also posted an $8.2 million loss that quarter, on $2.6 million in revenue.
Marsh said Plug needs to sell 2,000 of its GenSys systems, used for remote industrial power, a year to have that unit turn a profit. The largest need the company sees is in India, where cellphone towers are being installed at a furious pace in areas too remote to be connected to the electrical grid.
Marsh wants his sales force to reach those goals in less than three years.
The company is much farther away from commercializing its GenSys system — designed to provide heat and power to homes — but Marsh said the wait will be worth it.
“Our current investment in this technology will drive shareholder value in the future.” he said.
Marsh plans to announce a specific timeline on profitability later this year.
Meanwhile, several shareholders asked Marsh pointed questions, including why the GenSys system for homes is not commercially viable at this point.
Marsh said the home system is currently reliable for only up to a year, and it needs much higher reliability before being sold into the home market — something that will take additional investment by the company.
“That is really the major challenge we’re confronted with,” he said.
However, Marsh is bullish on the home system, saying it will be an ideal source of renewable energy for homeowners in the Northeast. “We think it’s a better solution than solar,” he said.
The annual meeting later was adjourned to give shareholders more time to vote on three proposals in the proxy: the election of three board members, the 2009 stock-incentive plan and ratification of KPMG LLC as the company’s auditor.
The vote now will take place Tuesday at 4 p.m. at Plug’s offices on Albany-Shaker Road in Latham.
Larry Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.
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