Plug Power shares plunged on Tuesday after the company disappointed investors with its latest earnings report, although management tried to soften the blow by highlighting high-profile customers like Walmart and Home Depot. The hydrogen fuel cell system maker also introduced a new capital financing segment in hopes of spurring greater adoption by a wider array of customers.
Plug Power unveils financing arm
CEO Andy Marsh told the Albany Business Review that the first quarter was their best quarter yet. The company reported $15.3 million in sales and losses of $11.8 million. Bookings surged from $46 million in the year-ago quarter to $72 million. Plug Power shipped out orders to Walmart, Kroger, BMW and Lowe’s during the first quarter and installed new sites at a Home Depot store in Savannah, Georgia.
Marsh highlighted their new financing initiative, saying that it enables them to finance their own projects going forward.
“In the long run, what it will mean is we’re not going to have to have future shareholder dilutions to fund the business,” he told the media outlet.
Plug Power tries to finance growth
Plug Power’s new financing arm is called GenFund, and its purpose is to facilitate deals. Marsh explained that the initiative will begin with their current customers and that it should bring in new customers going forward. He added that the financing comes from third parties rather than from the company itself. It secured a $30 million loan facility earlier this year from Generate Capital for the purpose of financing GenFund.
Marsh also pointed out that solar companies have financed projects using this same business model over the last five to eight years and that it has resulted in fast growth.
For this year, Plug Power is targeting more than $150 million in sales and more than $275 million in bookings. It also intends to reach breakeven level by the fourth quarter of this year, which Marsh has been aiming to do since he took the helm in 2009, reports the Albany Business Review.
Shares of Plug Power declined by as much as 0.27% to $1.86 during regular trading hours on Wednesday.
