PLUG Plug Power Inc

Closing on transformational $217 million investment to accelerate growth LATHAM, N.Y., July 27/PRNewswire-FirstCall/ -- Plug Power Inc. (NASDAQ:PLUG), a leader in providing clean, reliable on-site energy products, today reported recent operational accomplishments and financial results for the quarter ended June 30, 2006. Plug Power management noted that the Company has $290 million in cash and marketable securities, providing the resources and impetus to help accelerate its path to profitability. In addition to the $217 million in cash from the recently closed Smart Hydrogen investment, Plug Power anticipates leveraging the new relationship for increased access to the vast Russian market and technical collaboration with Russian scientists. "With the completion of the Smart Hydrogen transaction, Plug Power is entering an exciting, dynamic stage in terms of globalization and commercialization," said Roger Saillant, Plug Power's CEO. "Our aggressive pursuit of global sales and product development bodes well for achieving all of our 2006 milestones." Among recent global sales is Telefonica Moviles, one of the two largest wireless providers in Latin America, which began deploying Plug Power's GenCore(R) backup power systems in Venezuela. With more than 10,000 sites across Central and South America, Telefonica Moviles offers Plug Power significant potential for future sales. In addition to this South American success, the Company believes Russia and South Africa represent promising market opportunities. While global opportunities are expanding, Plug Power is simultaneously developing domestic sales in both the private and public sectors. Increasing orders and interest for backup systems within the telecommunications industry, government market and public safety field have been encouraging. Plug Power also recently installed its first system funded by the U.S. Department of Homeland Security, as well as units for the New York State Energy Research and Development Authority, both of which could serve as national models. "By accelerating our sales and market development efforts -- both at home and abroad -- we can better seize opportunities and position our technology and products among leaders of the telecommunications and other targeted industries," said Greg Silvestri, Plug Power's newly named President. Financial results: Total revenue for the second quarter ended June 30, 2006, was $2.8 million, compared to $3.7 million for the second quarter in 2005. Year-to-date total revenue was $5.0 million, compared to $6.9 million in the prior year period. The Company continues to defer product and service revenue, a component of total revenue, at the time of sale and amortize that revenue over the period of the underlying service and other contractual obligations. Deferred revenue was $3.9 million at June 30, 2006, compared to $4.7 million at June 30, 2005. Net loss for the quarter ended June 30, 2006, was $13.0 million, or $0.15 per share, compared to $10.9 million, or $0.15 per share, for the same period in 2005. Year-to-date net loss was $25.2 million, or $0.29 per share, compared to $23.4 million or $0.32 per share for the same period last year. Net cash used in operating activities for the second quarter ended June 30, 2006, was $10.5 million, compared to $9.2 million in 2005. Year-to-date net cash used in operating activities was $21.5 million compared to $19.4 million in the prior year. For more detailed information, see the attached financial highlights. Conference call: Plug Power has scheduled a conference call today at 10:00 AM (EDT) to review its second quarter 2006 results. Interested parties are invited to participate. To listen to the conference call, call (617) 597-5307 and enter the pass code PLUG (7584). The live webcast can be accessed by logging onto http://www.plugpower.com/. A playback of the call will be available on the Company's Web site for a period following the call. About Plug Power: Plug Power Inc. is an established leader in the deployment of clean, reliable on-site energy products. More than 650 Plug Power fuel cell systems have been delivered to customers worldwide in commercial, public sector, telecommunications, utility and uninterruptible power supply markets. For more information about how to join Plug Power's energy revolution as an investor, customer, supplier or strategic partner, please visit http://www.plugpower.com/. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements, including, without limitation, the risk that possible strategic benefits of the Smart Hydrogen transaction do not materialize, Plug Power's ability to develop commercially viable on-site energy products; the cost and timing of developing Plug Power's on-site energy products; market acceptance of Plug Power's on-site energy products; Plug Power's ability to manufacture on-site energy products on a large-scale commercial basis; competitive factors, such as price competition and competition from other traditional and alternative energy companies; the cost and availability of components and parts for Plug Power's on-site energy products; Plug Power's ability to establish relationships with third parties with respect to product development, manufacturing, distribution and servicing and the supply of key product components; Plug Power's ability to protect its intellectual property; Plug Power's ability to lower the cost of its on-site energy products and demonstrate their reliability; the cost of complying with current and future governmental regulations; the impact of deregulation and restructuring of the electric utility industry on demand for Plug Power's on- site energy products and other risks and uncertainties discussed under "Item IA-Risk Factors" in Plug Power's annual report on Form 10-K for the fiscal year ended December 31, 2005, filed with the Securities and Exchange Commission ("SEC") on March 14, 2006, and the reports Plug Power files from time to time with the SEC. Plug Power does not intend to and undertakes no duty to update the information contained in this press release. Plug Power Inc. Financial Highlights Balance Sheets: (unaudited) Assets June 30, 2006 December 31, 2005 Current assets: Cash and cash equivalents $135,121,183 $21,877,726 Restricted cash 385,000 385,000 Marketable securities 155,144,000 75,685,634 Accounts receivable 1,582,420 1,516,969 Inventory 4,757,409 4,692,515 Prepaid expenses and other current assets 1,222,800 1,524,004 Total current assets 298,212,812 105,681,848 Restricted cash 3,580,274 3,580,274 Property, plant and equipment, net 18,830,220 19,826,111 Goodwill 10,388,980 10,388,980 Other assets 251,959 307,164 Total assets $331,264,245 $139,784,377 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $2,063,550 $2,660,130 Accrued expenses 2,669,814 3,835,973 Deferred revenue 3,935,396 3,148,048 Current portion of capital lease obligation and long-term debt 432,269 526,806 Total current liabilities 9,101,029 10,170,957 Long-term debt 3,603,641 3,603,641 Other liabilities 1,083,657 1,054,888 Total liabilities 13,788,327 14,829,486 Stockholders' equity 317,475,918 124,954,891 Total liabilities and stockholders' equity $331,264,245 $139,784,377 Statements of Operations: (unaudited) Three months ended June 30, Six months ended June 30, 2006 2005 2006 2005 Revenue Product and service revenue $742,850 $1,473,669 $1,599,580 $2,530,039 Research and development contract revenue 2,021,307 2,183,015 3,440,285 4,347,332 Total revenue 2,764,157 3,656,684 5,039,865 6,877,371 Cost of revenue and expenses Cost of product and service revenue 1,336,366 975,316 2,557,360 1,682,981 Cost of research and development contract revenue 2,350,841 3,255,333 4,887,540 6,169,792 Research and development expense: Noncash stock-based compensation 716,915 377,080 1,380,275 749,354 Other research and development 9,319,301 7,364,196 17,640,701 16,813,184 General and administrative expense: Noncash stock-based compensation 571,486 468,405 766,120 603,949 Other general and administrative 2,438,249 1,907,101 4,676,483 3,874,834 Operating loss (13,969,001) (10,690,747) (26,868,614) (23,016,723) Interest income 997,441 285,476 1,820,046 555,724 Interest expense (53,443) (33,892) (102,354) (62,862) Loss before equity in losses of affiliates (13,025,003) (10,439,163) (25,150,922) (22,523,861) Equity in losses of affiliates - (448,274) - (898,729) Net loss $(13,025,003) $(10,887,437) $(25,150,922) $(23,422,590) Loss per share: Basic and diluted (0.15) (0.15) (0.29) (0.32) Weighted average number of common shares outstanding 86,020,770 73,493,993 85,974,843 73,471,719 Statements of Cash Flows Data: (unaudited) Three months ended June 30, Six months ended June 30, 2006 2005 2006 2005 Net loss $(13,025,003) $(10,887,437) $(25,150,922) $(23,422,590) Adjustments to reconcile net loss to net cash 2,083,901 2,196,931 4,406,679 5,141,110 Changes in assets and liabilities 460,363 (518,938) (804,128) (1,096,183) Net cash used in operating activities $(10,480,739) $(9,209,444) $(21,548,371) $(19,377,663) Purchase of property, plant and equipment $(188,267) $(364,606) $(520,728) $(940,891) Proceeds from maturities of marketable securities 176,661,333 2,114,661 230,577,646 23,750,542 Purchases of marketable securities (264,119,556) (1,461,346) (309,862,771) (5,492,175) Cash provided by (used in) investing activities $(87,646,490) $288,709 $(79,805,853) $17,317,476 Proceeds from issuance of stock, net $214,478,949 $- $214,478,949 $- Proceeds from shares issued for stock option exercises and employee stock purchase plan 209,678 357,370 213,269 555,996 Principal payments on long-term debt and capital lease obligations (47,269) (16,828) (94,537) (33,242) Net cash provided by financing activities $214,641,358 $340,542 $214,597,681 $522,754 DATASOURCE: Plug Power Inc. CONTACT: Cynthia Mahoney White, Manager, Public Relations & Marketing, +1-518-782-7700, ext. 1973, Mobile: +1-518-527-1172, Web site: http://www.plugpower.com/

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