普拉格能源 (PLUG) 2008 Q4 法說會逐字稿

Greetings and welcome to Plug Power's 2008 fourth quarter and year end conference call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Cathy Yudzevich, Manager of Investor Relations for Plug Power. Thank you, you may begin.

Good morning. Thank you for joining Plug Power to discuss our 2008 fourth quarter and year end results. Andy Marsh, CEO, and Gerry Anderson, CFO, will be on this call. The call will be archived on our website at plugpower.com in the Investors section under Presentations.

This conference call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to, expectations regarding revenues and product orders for 2009. These statements are based on current expectations that are subject to certain assumptions, risks and uncertainties, any of which are difficult to predict, are beyond our control, and that may cause our actual results to differ materially from the expectations in our forward-looking statements.

These risks include, without limitation, the timing and quantity of orders, shipments, and installations for our products, our ability to develop commercially viable energy products, the cost and timing of developing our products, market acceptance of our products, and our ability to lower the cost of our products and demonstrate their reliability. Other risks and uncertainties discussed under item 1A 'Risk Factors' in Plug Power's Annual Report on Form 10-K for the fiscal year ended on December 31st, 2007, as filed with the SEC on March 17th, 2008, and in the reports we file from time to time with the SEC.

Also, please refer to our Annual Report on Form 10-K for the fiscal year ended on December 31st, 2008, which will be filed today with the SEC. Plug Power does not intend to, and undertakes no duty to update any forward-looking statements, as a result of new information or future events.

It is now my pleasure to introduce Andy Marsh.

Thank you, Kathy. Good morning everyone, and thank you for joining our call. Last year the increasingly challenging economic environment tested the resolve of companies worldwide. Despite this ongoing recession, I can say that I represent a company that continues to meet all challenges head-on.

In that spirit, I would like to start with the announcement that Plug Power successfully fulfilled each of it's 2008 milestones. After discussing these achievements, I am going to review the individual successes of our lines of business. Finally, I would like to lay out our strategy for building on these successes in 2009. When I have finished setting out these 2009 milestones, Gerry Anderson will lead the discussion of our 2008 fourth quarter and full year financial results. We will then open up today's call to questions.

Last August, Plug Power set three milestones. First, secure between 150 and 200 GenDrive orders in the second half of 2008. Second, secured 50 GenCore orders in the second half of 2008. Third, limit operating net cash consumed to 55 million to 60 million US dollars. Plug Power surpassed it's first milestone, by booking 326 new GenDrive orders in the third and fourth quarter of 2008, bringing the yearly orders for GenDrive to 358 units.

Our ability to exceed this milestone reinforces the strength of our decision, to focus available resources on the accelerating market adoption of our product in the material handling market. Accomplishing our second milestone, 52 new GenCore orders, replaced in the second half of 2008, bringing our total to 109. While Plug Power met it's 2008 GenCore sales targets, we have not yet witnessed the market pull necessary to generate meaningful revenue where a high availability electrical grid exists.

Management continues to assess and monitor the backup power market for traction, adoption, and opportunities. We also continue to engage with certain established customers on future initiatives related to this market, if there is a significant revenue opportunity. In the meantime, our Company resources remain aligned, primarily with our market strategies for the GenDrive and GenSys product lines.

Plug Power also achieved it's third milestone, capping 2008 annual net cash for operating expenses at 56.6 million. We implemented several extensive cost control measures last year, including the elimination of 170 positions. As of year-end, Plug Power employed 208 individuals Company-wide. In doing so, Plug Power aligned it's resources to set the stage for long-term profitability. As evidenced by these milestone successes, and despite ongoing economic pressures, Plug Power continues to be a leader in the fuel cell industry, by understanding market trends and satisfying customer requirements.

I would now like to discuss the successes of our lines of business, beginning with our material handling product line. Last June, Plug Power focused it's market strategy, internal resources, in response to market traction and customer pull in the material handling market. Our efforts to implement this strategy was well-rewarded. Plug Power received orders for 326 GenDrive fuel cell units in the last six months of 2008, bringing our annual total to 358. 140 of these units are being delivered in the first and early second quarter of 2009.

Our success and momentum was highlighted by the Central Grocers order for 220 GenDrive units last December. Central Grocers' purchase marked the first customer committed to a full fleet conversion at a newly constructed greenfield site. By minimizing infrastructure for the storage and handling of lead asset batteries, valuable floor space for Central Grocers distribution activities will increase, and their operational costs will decrease. Our ability to offer a greener footprint, also helped secure an order last December with a major food distributor, for over 70 units at another greenfield site conversion.

GenDrive's improved productivity value proposition also led to an order from Nestle Waters last quarter for 32 Class 1 GenDrive units, for a full fleet conversion at their Dallas, Texas facility. Plug Power continues to successfully encourage customers to join the sustainability trend, green the supply chain, and improve the profitability at their facilities, and we are highly confident we will be announcing additional customers' orders in the near future.

Our exhibition this past January at ProMat, the premier material handling trade show, further confirms increased fuel cell traction in the material handling market. Plug Power's Class 1, Class 2 and Class 3 GenDrive products were displayed in various Crown, Raymond, Toyota, Yale and Hyster true lift trucks. In fact, Plug Power's GenDrive order offerings, were showcased by nine material handling industry leaders. Our GenDrive products are gaining exposure and assessment with commercial customers, logging more than 140,000 operating hours in 2008, with more than 16,700 refuelings.

We have concentrated our development efforts in developing a full suite of GenDrive products, especially our Class 2 product, while reducing product costs. In addition to our engineering efforts to reduce costs internally, our senior management and government relation teams were on the ground in Washington, DC, ensuring favorable provisions were included in the American Recovery and Reinvestment Act of 2009.

The final bill signed into law by President Obama on February 17th, includes a hydrogen infrastructure tax credit, that further reinforces GenDrive's value proposition. As enacted, the tax credit offers the owners of the hydrogen infrastructure tax credit worth a maximum of either $200,000, or 30% of infrastructure cost. Joined by the government and industry representatives, Plug Power also continues to advocate for additional cost savings measures, in the form of additional tax credits and rebates.

As a result, several notable changes were included in the ARRA. For instance, the fuel cell Investment Tax Credit was modified to include a grant option. Fuel cell product customers who were otherwise entitled to claim the tax credit against qualified fuel cell property purchases and placed in service in 2009 and 2010, can now receive a grant in lieu of taking the credit.

I would now like to discuss our progress in our Continuous Power division and our GenSys Prime product lines. During our last call, Plug Power shared the results of our GenSys power fuel trial partnership with Tata Teleservices and Hindustan Petroleum. This fuel trial was a success, equipping Plug Power with critical application knowledge, to provide a remote primary power solution to India's booming telecommunication market. We continue our marketing and sales efforts with Tata Teleservices, and other wireless service providers in India.

I would like now to move into our GenSys residential and light commercial combined Eaton power product efforts. In December we brought a group of stakeholders together in Germany to review our proposal's progress. Joined by international natural gas utilities, strategic suppliers, and government representatives, Plug Power reviewed term product performance, confirmed commercial targets, and conducted a customer requirement workshop, to capture system design preferences.

Detailed stakeholder product evaluations are also progressing as planned. At GenSys, a micro combined heat and power system was successfully shipped and installed at our Korean stakeholder partner's facility last December. In coming months, our German and US stakeholder partners will receive prototype units for detailed assessments as well. We will look forward to updating you on these exciting efforts, as we progress through the years.

Now I would like to talk about 2009 milestones. Building on these successes, I would like to announce our public milestones. First, we will secure 500 unit orders. Second, net cash consumed for operating expenses will be in the 33 million to $37 million range. Third, we will release our GenDrive F2 product in the fourth quarter of 2009, broadening our GenDrive product portfolio. Fourth, in the fourth quarter of 2009, Plug Power will announce our path and timeline to profitability.

I will now turn the call over to Gerry Anderson, for a discussion of our 2008 fourth quarter and year end financial results.

Thank you, Andy and good morning everyone. I would like to follow on to some of Andy's comments on our products, and add some additional insight into our order and shipment flow for the quarter and the year.

As Andy noted, we met our milestone for GenDrive orders, which included 293 unit orders in the fourth quarter, and 358 unit orders for the full year. We also shipped 132 units during 2008, and ended the year with a GenDrive backlog of 341 units. On the GenCore side, our fourth quarter included 41 unit orders, and we tallied 109 unit orders, and 146 shipments for the year, with an ending backlog of 140 units. Additionally, during 2008 we had both five unit orders and shipments for GenSys units.

For the full year we had 472 total unit orders, a 225% increase over the prior year, and 283 unit shipments exceeding prior year by 20%. The invoiced value of our 2008 unit shipments was $6 million, and our year end backlog of 481 units has an estimated invoiceable value of $8.2 million. This includes $1.1 million for 45 GenDrive units that have been pre-funded under various government projects. We would also point out that our backlog, which is up 58%, or 176 units from 2007 year-end, is now for the first time comprised largely of GenDrive units, which is indicative of our growing momentum in this applications space.

Turning to our statement of operations, total revenue for the fourth quarter was $5.3 million, of which $1.4 million was derived from products and services, and $3.9 million attributable to Research & Development contracts. For the full year, we had $17.9 million in revenue, which represents a 10% increase over the prior year. This increase was driven by improving product and service revenue, which grew by 51% year-over-year to $4.7 million. Our 20% increase in year-over-year shipments along with the support and service of our growing installed base, which is now approximately 665 units, are the contributing factors for this increase.

Our Research & Development contract revenue at $13.2 million for the year, is essentially even to our prior year. We performed billable work on 29 different programs in 2008, 18 of which will carry over into 2009, and as discussed in our last call, Plug Power is participating in 13 new DOE proposals, where we await the announcement of awards. We also finished the year with $5.4 million of deferred product revenue on our balance sheet, which is a $2.1 million, or 62% increase over the prior year end.

We expect to recognize this revenue over future periods, as the service contracts on the associated shipments are fulfilled. As Cathy referenced earlier, our 2008 10-K will be released today, and will provide further explanation of our revenue recognition policies as a development stage Company. We encourage you to review that document once it is filed with the SEC.

Our total cost of revenue for the fourth quarter of 2008 was $12.1 million, comprised of $5.1 million for product and service revenue, inclusive of approximately $2.3 million in restructuring charges for excess GenCore inventory, and $7 million for R&D contract revenue. For the full year, cost of product and service revenue, direct materials for units shipped plus materials and labor to service the installed base was $11.4 million, which is a $2 million increase over the prior year.

Absent the $2.3 million inventory write-down taken in 2008, and the $2 million charge taken in 2007, our year-over-year increase was approximately 23%, which is consistent with a 20% increase in shipments, coupled with a slightly different mix of products as more GenDrive units were included in 2008 shipments. Our cost of revenue for R&D contracts, comprised of materials, labor and overhead, at $7 million, represented 180% of sales for the quarter, and for the full year at $21.5 million represents 162% of sales.

During the year and particularly in the fourth quarter, we completed more work on 50/50 cost share programs, resulting in cost of sales being a higher percentage of revenue. Basically with these programs, for every $2 we spend on the project, we get $1 of revenue from our funding participant. Research & Development expenses, costs incurred for internally funded R&D programs, were $8.4 million for the fourth quarter, inclusive of $1.5 million in accelerated stock compensation expense, triggered by smart hydrogen sales of their Class B shares to OGK3, which was disclosed in a separate filing with the SEC.

Without the accelerated stock compensation, our run rate at $6.9 million is the lowest it has been in the last 36 quarters. A direct result of our more targeted focus, and the impact of the restructurings completed in 2008. Full year 2008 R&D expenses were $35 million, representing a $4.2 million, or 11% decline from the prior year. While 2007 included only a partial year run rate for our material handling company acquisitions, the impact for a full year of those operations in 2008, was more than offset by the restructurings which reduced 170 people, the majority of which were R&D staff.

Selling, general and administrative expenses were $8.7 million for the fourth quarter of 2008, and $28.3 million for the full year. The fourth quarter included $400,000 for accelerated stock compensation expense, and $4 million for restructuring charges. Full year restructuring charges and SG&A expense totaled $7.7 million. Absent the restructuring and accelerated stock compensation charges, SG&A expenses were approximately $900,000, or 5% above 2007. However, 2007 included our Canadian operations for only a partial year, and we significantly expanded our material handling sales and service workforce in 2008.

During these unprecedented economic times, we, like many other companies, have experienced a significant decline in the fair value of our business, and accordingly we recorded a non-cash impairment charge of our goodwill balances, in the amount of $45.8 million during the fourth quarter. Our net loss for the quarter ended December 31st was $64.3 million, or $0.69 per share, inclusive of the $45.8 million in goodwill impairment, $6.3 million in restructuring charges, and $1.9 million in accelerated stock compensation. The full year loss was $121.7 million, or $1.36 per share. The non-recurring items in Q4 mentioned above, plus the $3.7 million in restructuring charges booked in Q2, account for $0.65 of the full year EPS loss.

Weighted average shares outstanding for the full year were 89.4 million. Net cash used in operating activities for the fourth quarter was 13.9 million, and for the full year was $56.6 million, meeting our milestone of 55 million to $60 million. As Andy has already mentioned, we expect to be in the 33 million to $37 million range for net operating cash spend for 2009, exclusive of working capital requirements to fund inventory and Accounts Receivable, from expected increases in orders and shipments.

On December 31st, 2008, the Company had $104.7 million in cash, cash equivalents and available for sale securities, and $86.2 million in working capital. In concluding, while our 2008 financial results are not indicative of what we expect and demand of ourselves, we have made strong progress in transforming Plug Power into a sales and marketing-driven organization, and we will continue to grow our business, and forge a path to profitability in 2009.

We also take note of and acknowledge the current challenges of the global economy, our country and many of our customers and prospects are facing. Plug Power is prepared to face these realities head-on, and minimize any long-term financial consequences of the current recessionary cycle, while vigilantly remaining focused on our 2009 objectives.

At this time, we would now like to open the call to any questions.

Operator, we would like to go to the Q&A please.

Thank you. Ladies and gentlemen, at this time we will be conducting the question and answer session. (Operator Instructions). We will take a moment to poll for questions. Our first question comes from the line of Trey Cobb with Stephens.

Good morning.

Good morning, Trey.

Good morning, Trey.

My first question relates to what was obviously a very strong quarter for GenDrive orders. Could you talk a little bit about the driving factors behind the pick up, and whether that momentum has carried forward into 1Q?

Sure, Trey. If you take it from a big picture point of view, as we have been stating since last June, the value proposition for GenDrive products is strong. We can sell customers on productivity improvements, as well as a greener footprint for their facility.

Since joining the Company, we have really built out the sales team for the material handling industry, to be able to position those products with our customers. When I joined the Company, we did not have a structured sales organization. Today we have over 25 individuals involved in sales, service, and hydrogen infrastructure, all reporting to the VP of Sales and Marketing. That organization did not exist when I joined Plug.

So it is a combination of a strong value proposition and this reach-out to customers. In the first quarter of the year, we will not have as strong a quarter as the fourth quarter shipping GenDrive products, but the funnel is large, and we have a number of deals that we expect that will close over the coming 60 to 90 days, to allow us a continual expansion of the market. We remain bullish.

I think one last item, and I spoke about it briefly, but I believe it is important. In the recent ARRA Act, the tax credit also now offers an option for individuals to take a grant, and so instead of having a 30% tax credit, many of our customers can't take advantage of tax credits. The 30% grant allows them in 2009 and 2010, to receive a cash payment within 60 days, which we actually also believe will help us grow this business.

That was helpful. And then Andy, could you revisit kind of the commercialization outlook for the product? Are you looking for a handful of 100 unit orders from the few key customers? And then if you could talk a little bit about how 2010 looks?

Right. I think you hit on a good point, Trey. If you look at this business in the manufacturing sector, single orders need to be in the range of 45 to 50 units for a new facility to provide a strong value proposition, and that is because of the cost of the hydrogen infrastructure. When one takes a look at food distribution, orders need to be in the range of 50 to 150 units.

So I would expect our orders will be in these large buckets. So we are projecting X number of orders this coming year, and that may come from four or five different customers. So I don't expect that you will see 5 and 10 units, except maybe for some trials, and I think what is more important is that we are looking to have progress with customers who have multiple distribution centers.

For example, our unit for 70 units in December, which I can't announce the customer, that customer actually has hundreds of distribution centers, and so that really allows you kind of how do you go scale this business to make it larger. For 2010, Trey, we have not yet signed up for numbers. One of the items you heard from my conference call, though, was that our fourth objective was to really lay out to the market by the end of the year that path to profitability.

A portion of that path obviously is that rapid revenue growth in the material handling market, to allow us to have a projection of when profitability will be realized. I think 2010, based on macroeconomic conditions certainly, but with the level of field trials we have going on, with the level of progress we have going on with many customers, I would expect that we will continue to see growth. I hope that answered your question, Trey.

It did. It was very helpful. And then for Gerry, you have obviously made significant progress, reducing the burn, given the 33 million to $37 million guidance for next year. How should we be thinking about 1Q '09, and do you expect any additional goodwill restructuring charges going forward?

Well, first to answer the latter part, Trey, no we do not expect to have any additional restructurings or goodwill impairment. Our intent is to grow this business going forward. In terms of the cash target, the 33 million to 37 million, we are confident that we will live up to our 2009 commitment. It is a challenge to try to forecast that by quarter. Due to some of the seasonality and volatility of our orders. What I would say though, is that we definitely expect by the end of the year, to exit the year with a run rate that is well below that 33 million to $37 million target.

Okay. And then as far as the breakdown of the 71 units that were shipped during the quarter, could you give the shipments for GenCore and GenDrive there?

Right. We had 25 GenCore shipments and 46 GenDrive shipments.

Okay. Great. Thanks, guys.

Our next question comes from the line of [Julie Kotu] with Simmons & Company.

Hi, guys, good afternoon.

Good afternoon.

Sticking on the question on your cash burn guidance, just wondering if you expect the quarterly cash use to be fairly even through the year, or continue to trend down through 2009?

Again, Julie, as we commented, we do have some volatility and not consistent order flow, so it is hard to gauge quarter-to-quarter, but what we will say is that we do expect to improve over the course of the year, such that by the end of 2009, we will exit with a better than 33 million to $37 million annual burn rate.

Okay. Great. And then in terms of your guidance of 500 orders for 2009, can you give any insight on what that means for shipments?

I would expect, Julie, that the lead time for material handling type products is approximately five months from receipt of order. That is just in general, mainly because of hydrogen infrastructure and the time to deploy. So when I am thinking about orders for our material handling business, I would think orders I received today will most likely be shipped within six months.

Okay. Great. And one last question. On your new GenDrive product that you plan to release in Q4 of '09, can you talk a bit about what you might expect, in terms of margins compared to the existing product, and when you might expect to see that product ship?

Sure. As far as product margins go, we have made significant progress in reducing material costs, which represents 90% of our costs of shipping products for our GenDrive product. The F3 cost is reduced by approximately 25 to 30%, and we planned by the second half of this year, for all products that we ship for GenDrive, that their cost will be lower than their price.

And that over time and by the fourth quarter, we will map out clearly to the market that margin improvement over the coming year. So by the end of the year, during this year, we are flipping to where we start making money when we ship units.

Okay. Perfect. Thanks, guys.

Okay.

You are welcome.

Our next question comes from the line of Walter Nasdeo with Ardour Capital.

Thank you. Good morning.

Good morning, Walter.

Could we circle back around to the goodwill for a second, please? Gerry, can you kind of walk me through the components of that, and what else is left, and what we can expect to see, and just any other ramifications of how it looks right now?

Okay, sure, Walter. Essentially, the write-off, the $45.8 million, eliminates all of the goodwill on our books. We still have some intangibles associated with acquired technological know-how of about $12 million, as well as the value of customer relationships we have acquired, which is about $800,000. So obviously at this point, absent any other business combinations or acquisitions, we would not have any additional goodwill write-off.

And I am sure you know, Walter, in compliance with GAAP accounting for FAS 142 and 144, we have had the independent impairment analysis done, and there is a fairly high weighted average cost of capital and discount rate to measure our forward cash flows, which are still well above, more than 2 times what our book value is. But when you discount that, and you also look at our market cap now at $109 million, it put that pressure on the balance sheet to write off the goodwill.

As I am looking through these things, I am seeing there is still a taste of H Power, is that correct, you still have H Power goodwill?

No, that would be eliminated as well. The goodwill analysis that was done was at a total enterprise level for Plug Power.

Okay. Okay. I see what you are saying. Could you also just give me a quick update on the ARS situation, and where that stands, please?

Certainly, Walter. On December 15th, Plug accepted an offer from UBS. We filed an 8-K on December 19th explaining that, and the subject is additionally addressed in more detail in our 2008 10-K that will be filed later today, and you will see in the balance sheet we have access to liquidity, and then there is a corresponding credit line to access that liquidity.

And is that in place now, or will that be in place?

It is in place now.

Very good. Okay. Thank you.

You are welcome, Walter.

(Operator Instructions). Our next question comes from the line of Jeff Osborne with Thomas Weisel Partners.

Yes, good morning, guys. I was just wondering if we could dig into the GenDrive being gross margin positive towards the end of the year? Is that due to the new release that you have, or is that just due to the economies of scale, can you just kind of walk through what the moving parts there are?

Right. And Jeff actually both.

One, we have certainly done learning throughout the year, and we are looking from when I joined the Company to by the fourth quarter, costs will have gone down approximately by then 45%. So the additional savings, about 3/4 are actually associated with simplification of our Class 1 and Class 3 designs, and approximately 25% is associated with greater scale.

I do think, Jeff, there is opportunity on the scale side, but we have learned a good deal about how, for example, to move to simplify our hydrogen design internally in the units. We have simplified some of the electronics, some of that from my previous learning we have been able to move on into the Company. So I think that we are seeing progress on simplification design, and I believe there is much greater opportunity and scale than we have been able to take advantage of yet.

Okay. And kind of along the same lines, I am just curious on the decision not to provide the path to profitability now. It is very reassuring that you are willing to talk about that this year, but it sounds like it's less of a manufacturing cost issue. Is it you just need to close some orders to get that visibility, to have the comfort to elaborate on that on the market, or is there some OpEx reshuffling? I am trying to get a sense of the decision making process there?

Fair question, Jeff. Since joining the Company, I have wanted to make sure that when we set out goals and objectives to individuals, that the Company will achieve those goals and objectives. And when one takes a look into 2010 and 2011, the critical conversion of some customers during this year for full scale, for a wider cut-over of their facilities to our fuel cell power forklift truck opportunities, is really required to provide that clear visibility. So there is the revenue activity, but there is also the fine-tuning of the material costs. I talked to you about the simplification design.

I also believe especially in these economic times when you have a Company that is growing, suppliers are much more interested in doing business with you. So instead of giving you a path and saying that in 2011 we will be profitable, when I tell you in the fourth quarter when we will be profitable, it will be based on a clear vision that Plug knows it can achieve.

Okay. Two more quick ones. The R&D revenue for the Company, you mentioned the 50/50 cost share programs. I am just trying to get a sense of the pipeline of 13 new proposals that you detailed last year, and the 18 that you currently have. Should we think about that being a similar gross margin negative level for you folks, or is there any type of shift, if you were to win all 13?

The 13 that we have in, nine of those are actually submitted by customers or customer prospects in material handling, which in that case we would be a supplier, which is much better for us. But again, we have to wait until we see those mix of awards announced. In terms of the 18 programs that are carrying over into 2009, eight of those 18 have a 50% or higher cost share, and again, historically we have typically been in the 140 to 150% of revenues. If everything was to go as planned on those 18 programs we would probably be in that range.

Okay.

I want to reemphasize a point Gerry made, and a good deal of those programs are associated with market transformation. And they were submitted with customers who have large distribution facilities, and multiple large distribution facilities. So today we are putting a good deal of focus for our government activity associated with making these products have large market acceptance instead of R&D.

And that is kind of a basic shift as the companies have grown and matured. We certainly are still doing technology development, but at least half of our submittals from a dollar point of view, are actually associated with products that build systems at customer facilities, which should generate gross margin positive numbers for Plug Power.

Right. Okay. And the last one, I just may have missed it, but what was the stock-based compensation total for the quarter, and if you have the breakout of COGS and R&D and SG&A?

The total stock-based compensation for the quarter was about $4.4 million, I am sorry, Jeff, what do you want for --?

How much was in cost of sales versus OpEx?

The entire $4.4 million on the stock base was in OpEx, about 1.9 million of the accelerated was in R&D, and $400,000 of the accelerated was in SG&A. Our total COGS for the quarter was $5.1 million for the products and services, and $7 million for R&D contracts.

I am just saying of the stock based comp that wasn't in the accelerated portion, do you happen to have that breakout?

That was $2.5 million, and I will have to get back to you on that one, Jeff. I don't know that one off the top of my head.

Okay. Thank you.

This concludes the question and answer session of today's conference. And I would now like to turn the call to Andy Marsh for any concluding remarks.

Well, thank you for your questions today. Before concluding this call, I would like to announce that Plug Power's 2009 Annual Meeting will be held at the Hilton Garden Inn in Albany, New York on May 20th at 10:00 a.m.

As a final note, I recognize 2008 was a year of transition for Plug Power. I joined last April as the new CEO. Our Company shifted focus to take advantage of accelerating material handling market opportunities, and Plug Power employed significant cost cutting measures, to accommodate our new business strategy.

That said, this Company continues to be a leader in the fuel cell industry, setting new standards for product development and customer satisfaction. Without a doubt, 2008 was a transitional year. But more important, Plug Power is ready and energized to build a strong business, as we progress in 2009.

Thank you for your time this morning.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.