Continued growth expected in Walmart’s use of
Plug Power hydrogen fuel cells in its distribution center
material handling fleet
Plug Power Inc. (NASDAQ:PLUG), a leader in providing energy
solutions that change the way the world moves, announces a new
collaborative agreement with Walmart to facilitate further
expansion of its ongoing relationship with Wal-Mart Stores, Inc.
(NYSE:WMT). The new agreement includes revised deal terms
with Walmart that allow Plug Power to access project financing at a
lower cost of capital and no restricted cash, making Plug Power’s
future distribution transactions with Walmart cash flow positive up
front. Plug Power expects to provide its GenKey hydrogen
fueling station and fuel cell energy solutions to up to 30
additional Walmart sites in North America over the next three
years, with ten sites already under contract and scheduled to be
finished by the end of 2017. The value of these 2017 commitments is
expected to be around $80 million. On average, Plug Power has
deployed a new Walmart site every 6 weeks since 2014, resulting in
a deployed fleet of 5500 Plug Power fuel cells at 22 of Walmart’s
U.S. distribution centers as of the end of 2016.
“Our expanding relationship with Walmart
validates Plug Power’s advanced capabilities in fuel cell products
and systems, allowing the world’s largest retailer to maintain its
leading position as an industry innovator,” said Andy Marsh, CEO of
Plug Power. “Walmart’s long-term supply agreement is a great
example of our strategy in action, as it enables us to improve both
our revenue visibility and cost structure, all while allowing our
customers to experience improved productivity and operational cost
savings. We see a growing market opportunity for our power and
fueling station technologies within the material handling segment,
as well as new mobility applications worldwide, positioning us for
long-term success and shareholder value creation.”
As part of the agreement, and as an incentive to
align Walmart’s future business with Plug Power’s growth and
success, Plug Power has granted Walmart warrants to acquire up to
55,286,696 of Plug Power's common shares. Warrants for the
first 5,819,652 shares vested upon execution of the new program
agreements at an exercise price of $2.1231 per share, which is
based on the volume weighted average closing price of Plug Power
common shares for the thirty trading days ending July 19,
2017. Additional warrants will vest in installments tied to
successive $50 million payment thresholds, up to a total of $600
million in the aggregate, made by Walmart in connection with
qualified purchases of goods and services from Plug Power.
The exercise price for warrants vesting after the first 34,917,912
warrant shares 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.
The new agreement is a key milestone in a
longstanding relationship with Walmart, which has been at the
forefront of fuel cell technology adoption and commercialization in
material handling, becoming Plug Power’s first GenKey customer in
2014. Plug Power supplies the retail giant with fuel cells,
hydrogen fueling stations, and ongoing maintenance services. Today,
Walmart operates the largest fleet of hydrogen fuel cell powered
electric vehicles in the world, totaling more than 6,600 units in
distribution centers across North America. Plug Power’s hydrogen
fuel cell technology replaces traditional lead-acid batteries,
helping customers increase warehouse productivity with a more
energy efficient solution, while reducing the costs and
sustainability issues related to traditional battery
maintenance.
“Plug Power’s material handling solutions represent a critical
component in our supply chain,” said Jeff Smith, Senior Director of
Logistics Maintenance and Purchasing Services. “Plug Power’s
hydrogen fuel cell technology, coupled with their innovative
fueling stations has proven to be a reliable, cost-effective
alternative to traditional energy solutions.”
Technology Collaboration
Plug Power has introduced a suite of ProGen fuel
cell engine platforms to provide clean, scalable power for on- and
off-road applications around the world. In addition to the GenKey
contract, Walmart and Plug Power will continue to collaborate on
developing, testing, and commercializing new motive power
applications that utilize Plug Power’s ProGen line of fuel cell
engines and systems. Advancing the electrification of
mission-critical devices, is an important piece of Walmart’s future
plans.
About Plug Power
Inc.
The architect of modern hydrogen and fuel cell technology, Plug
Power is the innovator that has taken hydrogen and fuel cell
technology from concept to commercialization. Plug Power has
revolutionized the material handling industry with its full-service
GenKey solution, which is designed to increase productivity, lower
operating costs and reduce carbon footprints in a reliable,
cost-effective way. The Company’s GenKey solution couples together
all the necessary elements to power, fuel and serve a customer.
With proven hydrogen and fuel cell products, Plug Power replaces
lead acid batteries to power electric industrial vehicles, such as
the lift trucks customers use in their distribution
centers.
Extending its reach into the on-road electric vehicle market,
Plug Power’s ProGen platform of modular fuel cell engines empowers
OEMs and system integrators to rapidly adopt hydrogen fuel cell
technology. ProGen engines are proven today, with thousands 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. Learn more at
www.plugpower.com.
About Walmart
Wal-Mart Stores, Inc. helps people around the world save money and
live better - anytime and anywhere - in retail stores, online, and
through their mobile devices. Each week, nearly 260 million
customers and members visit our 11,539 stores under 63 banners in
28 countries and e-commerce websites in 11 countries. With fiscal
year 2016 revenue of $482.1 billion, Walmart employs approximately
2.3 million associates worldwide. Walmart continues to be a leader
in sustainability, corporate philanthropy and employment
opportunity. Additional information about Walmart can be found by
visiting http://corporate.walmart.com on Facebook at
http://facebook.com/walmart and on Twitter at
http://twitter.com/walmart.
Additional Information about the Transaction and Where
to Find ItThis communication is being made in respect of
the transactions between Plug Power Inc. (the “Company”) and
Wal-Mart Stores, Inc. (“Walmart”), 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 19.9% 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 2018 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 Walmart, 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: media@plugpower.com.
The Company and its directors, executive officers and other
members of management and employees may be deemed to be
participants in the solicitation of proxies from the Company’s
stockholders in favor of the Stockholder Approval. Information
about the Company’s directors and executive officers is included in
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2016 filed with the SEC on March 10, 2017 and in its
definitive proxy statement on Schedule 14A filed with the SEC on
May 23, 2017. Additional information regarding these persons and
their interests in the transactions will be included in the Proxy
Statement when it is filed with the SEC. These documents can be
obtained free of charge from the sources indicated above.
Cautionary Note on Forward Looking
StatementsThis communication contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve significant risks and uncertainties
about the Company, including but not limited to statements about
the Company’s expectations regarding the number and timing of
GenKey deployments with Walmart, expansion of applications for
ProGen and the achievement of operational efficiencies and
long-term profitability. Investors are cautioned that such
statements should not be read as a guarantee of future performance
or results, and will not necessarily be accurate indications of the
times that, or by which, such performance or results will have been
achieved. Such statements are subject to risks and uncertainties
that could cause actual performance or results to differ materially
from those expressed in these statements. In particular, the risks
and uncertainties include, among other things, the risk that the
Company will not obtain the Stockholder Approval that may be
required with respect to the equity arrangements expressed in the
agreements with Walmart; the risk that the anticipated benefits of
the agreements with Walmart will not be realized when expected, or
at all; the possibility that Walmart may terminate its agreements
with the Company; the effect of the announcement or pendency of the
transactions contemplated by the agreements with Walmart; the risk
that the Company continues to incur losses and might never achieve
or maintain profitability; the risk that the Company will need to
raise additional capital to fund its operations and such capital
may not be available; the risk that the Company’s lack of extensive
experience in manufacturing and marketing products may impact its
ability to manufacture and market products on a profitable and
large‑scale commercial basis; the risk that unit orders will not
ship, be installed and/or be converted to revenue, in whole or in
part; the risk that a loss of one or more of the Company’s major
customers could result in a material adverse effect on the
Company’s financial condition; the risk that a sale of a
significant number of shares of stock could depress the market
price of the Company’s common stock; the risk of potential losses
related to any product liability claims or contract disputes; the
risk of loss related to an inability to maintain an effective
system of internal controls; the Company’s ability to attract and
maintain key personnel; the risks related to the use of flammable
fuels in the Company’s products; the risk that pending orders may
not convert to purchase orders, in whole or in part; the cost and
timing of developing, marketing and selling the Company’s products
and the Company’s ability to raise the necessary capital to fund
such costs; the Company’s ability to obtain financing arrangements
to support the sale or leasing of its products and services to
customers; the Company’s ability to achieve the forecasted gross
margin on the sale of its products; the cost and availability of
fuel and fueling infrastructures for the Company’s products; the
risk of elimination of government subsidies and economic incentives
for alternative energy products; market acceptance of the Company’s
products and services, including GenDrive units; the Company’s
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 the Company’s
products; the Company’s ability to develop commercially viable
products; the Company’s ability to reduce product and manufacturing
costs; the Company’s ability to successfully market, distribute and
service its products and services internationally; the Company’s
ability to improve system reliability for its products; competitive
factors, such as price competition and competition from other
traditional and alternative energy companies; the Company’s ability
to protect its intellectual property; the cost of complying with
current and future federal, state and international governmental
regulations; the risks associated with potential future
acquisitions; the volatility of the Company’s stock price; and
other risks and uncertainties referenced in the Company’s public
filings with the SEC.
For additional disclosure regarding these and other risks faced
by the Company, see disclosures contained in the Company’s public
filings with the SEC, including the “Risk Factors” section of the
Company’s Annual Report on Form 10-K for the year ended December
31, 2016. Investors should consider these factors in evaluating the
forward-looking statements included in this communication and not
place undue reliance on such statements. The forward-looking
statements are made as of the date hereof, and the Company
undertakes no obligation to update such statements as a result of
new information.
Plug Power Investor Contact
John Cococcia
investors@plugpower.com
Plug Power Media Contact
Teal Vivacqua
media@plugpower.com
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