Plug Power Conference Call - The Breakout Picture

On November 14, Plug Power (PLUG) reported its Q3 results and held its Q3 2013 earnings call. Andy Marsh, PLUG's CEO, surprised Wall Street by announcing $14 million of new booking since October 8. I want to point out the major insights I uncovered while reading the release and listening to the call.

• The big driver for the increase in booking was an order from Kroger for 201 GenDrive units with a service component attached to it. If we assume two third of the booking since October 8 is from this order than Kroger did a $9 million deal with PLUG. That works to about $46,000 per Gen-Drive unit. We know that on average a Gen-Drive unit costs about $16,000. Service becomes a very large portion of this contract. This bodes well for PLUG, because the service addition gives us confidence that PLUG is in a position to see revenues swell above the break even mark of about $55 million in 2014. In addition, this is the second Kroger distribution center win for PLUG. Kroger is sold on the PLUG solution and there is no reason why PLUG can't win a significant chunk of all of its 34 distribution centers conversion if Kroger decide to go all in. The total Kroger Distribution Center opportunity is about $300 million recurring over a 5 to 6 years period. If you doubt the importance of fuel cells for Kroger check out page 43 of the Kroger Factbook.
• Bridgestone was the second customer of PLUG Power Gen Drive solution. They have used Gen Drive for over 6 years in their automated ground vehicles (AGV). These units run 24/7 and can lift up to 40,000 pounds for 21-plus hours a day. They have decided to renew this fleet with a Gen-Drive solution. This is another testimony of the superiority of the PLUG solution. This is something PLUG can bring on the road to win more contracts and win new customers.
• Marsh said: I'm expecting a blowout number of orders in the fourth quarter as we start to close some of these multi-site deals and gain new customers win. When Philip Shen of Roth Capital asked: You've already had a really nice Q4 for booking. How much better can it get? Marsh responded:It easily could be 2 to 3 times higher. Shen exlcaimed: WOW!

On December 4th, PLUG will hold an Analyst meeting in Latham, NY to update analysts on these deals and new customers wins. I will be attending the meeting and can't wait to give you an update.

Written by Michael Bigger. Follow me on Twitter and StockTwits. 

Disclaimer: Bigger Capital, LLC, Bigger Capital Fund, LP, Bachelier, LLC and the Bigger family hold millions of shares of Plug Power. We intend to increase our position if the company's results track our benchmark.

Plug Power is a highly distressed situation and it is not suitable for the majority of investors. The likely outcome of an investment is a loss of principal.