普拉格能源 (PLUG) 2014 Q1 法說會逐字稿

Greetings, and welcome to the Plug Power Incorporated 2014 first-quarter financial call. At this time, all participants are in a listen-only mode. A 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 for today, Ms. Teal Vivacqua, Director of Marketing. Thank you. You may begin.

Good morning, and welcome to the Plug Power 2014 first-quarter earnings conference call. This call will include forward-looking statements, including, but not limited to, statements regarding our expectations for future business and financial performance, bookings, product shipments, revenue margins, EBITDAS, geographic and market expansion, and inorganic growth.

We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, and Section 21E of the Securities and Exchange Act of 1934. We believe that it is important to communicate our future expectations to our investors.

However, investors are cautioned not to unduly rely on forward-looking statements because they involve risks and uncertainties, and actual results may differ materially from those discussed as a result of various factors; including, but not limited to, the risks and uncertainties discussed under item 1A, Risk Factors, and in our Annual Report on Form 10-K for the fiscal year ending December 31, 2013, as well as other reports we file from time to time with the SEC.

These forward-looking statements speak only as of the day on which the statements are made, and we do not undertake or intend to update any forward-looking statements after the call.

At this point, I'd like to turn the call over to Plug Power's CEO, Andy Marsh.

Thank you, Teal. Good morning, everyone. Thank you for joining the call today. During our first quarter of 2014 we've had several significant events that are good news, both in the short-term and in the long-term, as we've improved upon the foundations we are laying for our continued growth.

I would like to start out by discussing our recent stock offering. Two weeks ago, Plug Power closed a public stock offering that resulted in $116 million of new capital for the Company. We raised these funds working alongside Morgan Stanley and Barclays. The capital raised gives Plug Power a total of $174 million in cash on its balance sheet to support a continued business growth. With this funding we can now execute activities associated with accelerating revenue and enhancing margins.

I want to reinforce that Plug Power is building a business for long-term substantial growth, and we believe being properly funded for this growth is in the best interest of the Company and its investors.

Our strategic objectives include growing the salesforce to address increasing demand for Plug Power products; directing capital expenditures at expanding into new markets, including Europe and Asia; completing opportunistic acquisitions; and focusing on hydrogen generation and distribution opportunities.

First, I would like to discuss the importance of hydrogen fueling. Plug Power is the first hydrogen fuel cell company to address the conundrum that plagues the development of the entire fuel cell industry -- what comes first, the fuel cell infrastructure or the vehicle? Plug Power addressed this issue by focusing on powering a type of fleet vehicles, a forklift truck which consumes hydrogen at a rate comparable to the consumption at a present-day gas station. The costs of the infrastructure, on a per-mile fuel basis, become less significant as more hydrogen is consumed. This full utilization of the hydrogen infrastructure is one reason our value proposition works in material and in applications.

After proving success from this business, our next step was to explore hydrogen in infrastructure as an opportunity to grow revenue and to accelerate the sales process. We've done this by providing a single offering to the customers to convert a facility through a turnkey package, an option we've named GenKey.

As a key component of GenKey, Plug Power offers GenFuel, a hydrogen and hydrogen infrastructure which are now vital components in our activities to grow revenue. The recent success of the GenFuel business has generated additional interest from customers and partners.

I would like to discuss two such opportunities. One is hydrogen generation. Today the Company is reselling hydrogen to our customers in the material handling. The margins for hydrogen are modest: in the single-digits. Potential partners have recognized that most of the increased demand for liquid hydrogen in North America is being used to fuel Plug Power products. This margin is being captured mostly by others for the increased use of hydrogen. Plug Power may consider investing in centralized hydrogen generation with a partner, using some of the capital that was recently raised to significantly increase hydrogen margins. Each generation facility could support 20 to 40 GenKey sites.

We also view hydrogen as an opportunity to increase our servable addressable market. We feel our GenKey sites are natural distribution points to provide hydrogen to retail stores and wireless sites. For example, one GenKey site could service 50 to 75 district retails stores and a distribution center. This could more than double the revenue that we can generate with each sale, if the stores associated with the distribution centers were included.

Additionally, this could increase our servable annual addressable market in North American material handling from $6 billion to close to $10 billion. We've had a number of retail customers show interest in this solution.

The value proposition for retail stores is different from distribution centers. The model is based on simplifying logistics. Forklift trucks at stores are generally battery-powered and must be charged overnight. We have spoken our customers regarding what issues they see using batteries at the retail stores.

Three issues have been identified. Batteries are often not charged when the delivery truck comes to the store. The employee turnover rate at stores is high, and the staff often does not reliably follow proper procedures for charging batteries. The result is that delivery trucks can be waiting for up to a half hour more until the batteries have some minimal charge to unload a truck. A fuel cell can be refueled at full power in under two minutes -- a distinct advantage.

Two, a fuel cell in a retail store will typically last seven to 10 years. Batteries are often damaged by the staff by overcharging, and can result in replacing batteries as often as every six months.

And, finally, batteries that are not charged can lead to a missed opportunity to sell products. Envision home repair retail stores with high shelves with goods on the top shelf. If a customer wants the product, it is on the top shelf, and the batteries are not charged -- this is a missed opportunity; and, worse, an opportunity for that customer to go across the street to a competitor.

So, in summary, Plug Power may use some capital to assist in increasing our servable addressable market by expanding into retail stores by developing local distribution for hydrogen fuel. We also view this as an opportunity to grow margins, since pricing may be higher at a retail store.

Now let us discuss our near-term activities. Plug Power expects to ship approximately 650 GenDrive units, in the second quarter of 2014, to customers including Walmart, P&G, Volkswagen, Central Grocers, and Ace. Already to date, Plug Power has over $80 million in bookings. This is 2 times bookings from 2013. Plug Power attributes its increased growth as a successful launch of its GenKey business. GenKey is Plug Power's all-inclusive solution intended to provide ease of use to customers in the material handling space. GenKey combines together GenDrive fuel cell units, GenFuel infrastructure, and hydrogen molecule and GenCare service contracts in order to make the transition to fuel cell simple for the customers.

In line with today's discussion plans for growth, Plug Power has demonstrated the ability to grow significant backlog. Year to date, the backlog has increased from 1439 units to 3719 units as of mid-April. To date, Plug Power has closed nine GenKey deals; eight of them in the first quarter of 2014, including Kroger, Volkswagen, and a milestone deal with Walmart for over 1700 GenDrive units at six sites.

To update you on the progress with some of these customers, Plug Power is bringing online the GenFuel infrastructure at Walmart in Pottsville, as we speak. Over 270 GenDrive fuel cell units are being shipped out the door to be delivered to the site. As of this morning, I'm told almost 100 units have been commissioned at that site. The outdoor infrastructure is nearly complete. In just weeks, the concrete pad has been poured; the outdoor liquid tank and skids have been placed; the liquid tank has been purged and slow filled; and the skid interconnector is being made in preparation for fills and leak checks. Additionally, four indoor fuel cells -- fueling dispensers are installed.

The entire GenFuel infrastructure was completed in under 13 weeks after the receipt of order. The first facility is expected to be fully deployed this month. Two additional Walmart sites are scheduled to be brought online in the third quarter of the year, as we expect to ship another 500 GenDrive units.

Let me just divert a second to highlight the fact that our original plan was just a second site in the third quarter. And Walmart increased that to two sites in the third quarter in the coming year; I believe a significant event.

We're also excited about the deployment of GenKey at two Kroger sites in the third and fourth quarter of the year. One site is in Stapleton, Colorado, and it's expected to be online in the third quarter, followed by another site in Louisville, Kentucky. Kroger operates 30 distribution centers in the United States, and we will have three sites completely cut over by year's end.

Plug Power will also begin construction on the GenFuel infrastructure Volkswagen Chattanooga, Tennessee, facility in the coming months. This infrastructure is expected to be completed in the third quarter of this year. Volkswagen will start with 45 GenDrive power lift trucks. This site -- like similar facilities at BMW in Spartanburg, and Mercedes in Huntsville -- is expected to expand the plate considerably over the coming year.

BMW and Mercedes have, combined, over 500 units today. As part of the GenKey model, Volkswagen will also receive Plug Power's GenCare aftermarket service and support. Plug Power's full-year 2014 booking targets is $159 million. This year we have already almost tripled our backlog from 2013, and are more than halfway to our bookings goal for the year.

We are also focused on rapidly expanding sales, and are in the process of doubling our sales team. We expect to spend an additional $2.5 million for sales expense this year. We expect that by increasing the sales staff, we can increase our target revenue in 2015 from $100 million to $135 million for material handling. We believe this is a sound decision.

I now would like to discuss our efforts to expand gross margins. Plug Power has discussed our need to build expanded margin at the product level. To address this head-on in 2014, Plug Power has made investments that we believe will help us be successful.

At the beginning of April, we announced our purchase of ReliOn, a developer of modular air-cooled hydrogen fuel cell stacks and unique low-cost stack assembly systems. This acquisition provides Plug Power with a second-source supplier for fuel cell stack technology for our low-power products. The ReliOn acquisition will increase EBITDAS loss by $1 million in 2014, but we believe it will provide us with increased margins in 2015 and beyond. We also continue to proceed developing our own high-power stack in coordination with Air Liquide and leading membrane suppliers.

For the entire year, we expect revenue of $75 million, including ReliOn. With the additional sales expense of $2.5 million, we grew our revenue in 2015. And the additional EBITDAS loss associated with the ReliOn acquisition, we expect EBITDAS for the entire year to be a loss between $0.5 million to $3 million. The Company expects to reach EBITDAS and net income breakeven in the fourth quarter, excluding extraordinary events.

I would like to finish up here with a quick overview of our global expansion plans. Plug Power's joint venture with Air Liquide has gained momentum in Europe, and deployments are in place with customers including BMW in Germany and IKEA in France. We estimate that the European material handling markets for fuel cells will total $18 billion in 2015, which is about one-third larger than the US market. Plug Power has an option to purchase up to 80% of HyPulsion in 2018.

As we announced in April 2014, we have signed a memorandum of understanding with Hyundai Hysco in South Korea to create a joint venture that will develop, manufacture, and sell hydrogen fuel cells throughout Asia, using Hyundai's advanced stack and plate technologies. This partnership will broaden our reach to the Asian market and produce vertical integration opportunities using Hyundai's low-cost stack plate technologies. We are on track to finalize the business agreements between the two companies by the end of July of this year.

We are all focused on growing a business that serves our investors, our customers, and our employees. The key element of that is building a large, profitable company. Investments in the sales team, hydrogen generation, hydrogen distribution, geographical expansion, and stack technology are just some of the steps being taken by Plug Power today to build our future.

I would now like to turn the call over to Dave Waldek for a review of Plug Power's first-quarter financial results.

Thank you, Andy, and good morning, everyone. Before I jump into the first-quarter numbers, I want to reiterate a few financial updates. Our cash balance today is approximately $174 million. As of March 31, our working capital was $72.6 million. Subsequently, we received net proceeds of approximately $116.3 million when the public offering completed last month.

During the first quarter of 2014, we shipped 165 GenDrive units. And as of March 31, our backlog was comprised of 3063 unit orders. Product and service revenue for the first quarter was $5.3 million compared to $6 million for the first quarter of 2013. Research and development contract revenue for the quarter was $346,000 compared to $400,000 during the first quarter of 2013. The gross margin for products and services for the first quarter was a loss of $2.2 million compared to the gross margin loss of $2 million for the first quarter of 2013.

The gross margin loss in the first quarter of 2014 resulted primarily from fixed overhead costs associated with the number of units shipped compared to our capacity, as well as cost incurred to service the installed base.

In our operating expense categories, selling, general, and administrative expenses were $3.3 million for the quarter compared to $2.9 million in the first quarter of 2013. Research and development expense for the quarter was $1.3 million compared to $750,000 during the first quarter of last year.

The operating loss for the quarter was $7.4 million compared to an operating loss of $6.4 million in the first quarter of 2013. Our net loss for the quarter included a $68.4 million non-cash charge related to the change in fair value of common stock warrants. Including that charge, the net loss was $75.9 million, or $0.57 per share on a basic and diluted basis. Excluding that charge, the adjusted net loss was $7.5 million, or $0.06 per share on a basic and diluted basis.

During the first quarter of 2014, 23.8 million stock warrants were exercised, leaving only 4.3 million common stock warrants outstanding.

Please reference the financial tables in the press release for a reconciliation of net loss to the adjusted net loss.

The net loss for the first quarter of 2013 was $8.6 million, or $0.18 per share, and included a $2.1 million non-cash expense related to the change in fair value of the common stock warrants. Excluding that stock warrant expense, the adjusted net loss was $6.4 million, or $0.13 per share on a basic and diluted basis.

In total, our loss before taxes for the quarter included $70.1 million in non-cash expenses from a combination of depreciation, amortization, non-cash stock compensation, and the change in the fair value of the stock warrants.

Weighted average shares outstanding for the quarter were 133.75 million. EBITDAS loss for the quarter was $5.7 million compared to an EBITDAS loss of $6.9 million in the fourth quarter of 2013.

Again, please reference the financial tables in the press release for a reconciliation of EBITDAS to operating loss.

Net cash used in operating activities for the quarter was $8.9 million. As of March 31, 2014, the Company had $63.2 million in cash and cash equivalents, and $72.6 million in working capital. This compares to $5 million of cash on hand and $11.1 million in working capital, respectively, at December 31, 2013.

As Andy previously mentioned, we expect total revenue for 2014 be $75 million, and full-year EBITDAS to be a loss of $0.5 million to $3 million. Those projections include the impact of the ReliOn acquisition and the additional $2.5 million investment in sales.

Looking ahead to the second quarter of 2014, we expect total revenue to be between $16 million to $18 million. EBITDAS for the second quarter is projected to be a loss of $3 million to $4 million, which includes the impact of the ReliOn acquisition, the investment in sales, as well as the delay in the receipt of approximately $1.7 million in government funding.

We would now like to open the call to any questions.

(Operator Instructions). Matt Koranda, ROTH Capital.

Good morning, Andy. Thanks for taking my questions.

Good morning, Matt.

I just wanted to start out with Q1. It looks like you guys broke out product and service revenue separately this quarter, which is helpful. Can you talk about service revenues for a moment? Was a portion of that associated with GenKey contracts? And if so, how much?

Dave, do you want to take that? I will tell you quick. Very little of that was with GenKey contracts. As I mentioned on the call, Matt, we're at the moment turning up the first GenKey site at Walmart's facility in Pottsville. So we will start seeing the GenKey revenue for the infrastructure and the hydrogen really filling in second, third, and fourth quarter.

Okay. That's great. And then the service gross margins looked kind of low. Could you just talk about what happened there?

I think that, one, the key item of that is that we have been building up the service team to support the GenKey offering as we move into more and more facilities in 2014. For example, the teams for the Walmart sites both in Pottsville and Johnstown are already on staff, because we want to make sure that the execution is flawless when we turn it over. So that is the primary reason that the service revenues -- as we built up some fixed costs prior to the revenue being recognized.

Okay. So it's fair to expect that the service revenue should improve as we head through 2014, kind of quarter by quarter?

When we think about the service business -- and I've said this before -- it will be the fourth -- the product business is ahead of the service business in reaching gross margin positive. And we expect the service business to be gross margin positive by the fourth quarter.

Okay. That's helpful. And then 2014 outlook -- you guys said $75 million for the year. Any updates on the quarterly pacing of those revenues? I know on the last call, you provided a bit of color. Any updates there?

So I would expect, as Dave said, the second quarter we'll come in in the $16 million to $18 million range. And on the third quarter, I would expect that number to be, I would think, in the terms of the mid-20s. I would say I would use the mid-20s, I would think, in the range of $22 million to $25 million.

Okay. That's helpful. Then for 2015 I think I heard you say potentially product revenues of $100 million to $135 million. Did I hear that right?

Total revenues.

Total revenues. Okay. So total revenue in 2015 -- $100 million to $135 million.

Well, yes. One of the reasons, Matt -- look, the Company recently had the opportunity to raise capital. We've taken a look and said to ourselves, for us not be thinking as a Company how to grow this business quicker for our investors, we with would think, would have been foolish. So we are putting an additional $2.5 million in sales. I have a big sales meeting next week, with everybody coming in as we build out the sales team. We've been on record that we expect next year to be about $100 million in revenue. With the increased interest and increased demand, and being able to reach customers, we feel that number should be around $130 million today. And we wouldn't be able to do it unless we had salespeople in place with the customers.

Okay. That's helpful. A couple of more here. One on the pipeline, if you will. You've highlighted some potentially large deals, similar to the recent Walmart deal in the past. Can you discuss where things stand on the larger potential orders in your pipeline? What stage of the pipeline are they in? When could we see another potential announcement on one of these larger GenKey orders?

I would, Matt, just to give you a feel for the first big GenKey order, took them six, seven months from start to end. But I would start thinking third quarter. I would think that by the end of the second quarter, we are probably close to two-thirds of the way towards our goal for bookings for the year, and that we'd be targeting a significant announcement in the third, fourth quarter type timeframe. But I would circle late third quarter at the moment.

Okay. Great. And one more here (multiple speakers). Sorry, go ahead.

Matt, obviously that is speculative, but there is a good deal of work that has been going into it. And I think you really highlight why I am investing more in sales, too, because I find these big deals require one salesperson full-time to make sure they happen. That's what we did with Walmart; and one of the reasons I am actually signing individuals who will just have responsibility for a single account, to accelerate and close those deals.

Okay. Great. That has been helpful color. One more here -- the last business update call, I think you said you had about 80 million bookings, year-to-date. I know it was only a few weeks ago, but it looks like it's still stands at about 80 million today. Can you just clarify for us, have you booked any orders since last update call? What's going on there?

We have. Cost -- I don't have the numbers exactly in front of me at the moment, but we booked some orders. The orders come in chunks, Matt. I expect that probably, as I mentioned before, by the end of the quarter; so it's about two-thirds of the way to our $150 million booking goal for the year.

Okay. Thanks, Andy. I'll jump back in queue.

Okay. Thanks, Matt.

Rob Stone, Cowen and Company.

Hi, Andy. You have a lot going on.

Hi, Rob. How are you?

Good, good. I have quite a few questions, also, but I wanted to follow up on your comments about next year. So you had, as I recall, $50 million in backlog at the end of last year, and you are targeting $150 million in bookings this year. So if we deduct $75 million in billings, you would enter next year with $125 million or so in backlog. It seems like putting the low end of the range at $100 million for next year is pretty conservative. Are there some issues around timing? Help us understand what could drive the range of revenue for next year. Thanks.

Remember, Rob, about -- that, say, 30% of our revenue is going to be recurring revenue for GenKey and GenFuel. That revenue will be recognized over a five-year-type timeframe. So if you're walking into it with a backlog of $125 million, think about for hardware-type products. That's equivalent to about a $90 million product backlog.

Okay. (multiple speakers)

Rob, just to be clear, so that product backlog is GenDrive and the GenFuel infrastructure.

Okay. With respect to your target for 650 units or so this quarter, can you say how linear those shipments are likely to be? (multiple speakers) halfway through.

Actually, I don't have my exact numbers out. But I can tell you by the end of the week I will have over 270 units out for Walmart, and I shipped additional units already. So I've shipped over half the quarter so far.

Okay. And you talked about increased --

And the factory has never been this active. It has actually been running -- I measure how well it is running by how often I have to get involved in issues, and the factory has been running incredibly smooth. Components are coming in time. The units are running through test well. Units that have been put online at sites -- even this morning, I was getting reports on how cleanly the products are coming up. I'm pretty pleased with that -- the factory, and our service teams' execution so far this quarter.

With respect to the increased investment in operating expenses for sales, do you have a comment on what you are expecting for total OpEx this year? And linearity of that -- it was a little higher than we modeled in Q1. Should we expect it to just be rising quarter by quarter? Is there a significant second-half-weighting? Any color would be great.

So let me look at my numbers here, Rob, just to make sure I give you some accurate numbers. So if I look at operating expenses, I would think we would leave the fourth quarter somewhere between $6.75 million and $7.25 million.

Okay.

And that includes, Rob, stock compensation, depreciation, and amortization.

Okay.

From a cash basis, I would subtract out about $1 million.

Okay. All right. With respect to the hydrogen fuel opportunity, can you give us a sense of the GenKey deals that you've signed so far -- I guess nine of them -- what that represents in annual -- once they are all up and running, I recognize that's going to be a while from now. Once they are installed, what is the level of hydrogen consumption on an annualized basis?

So I would think of in terms of, Rob, that the infrastructure itself, depending on the complexity, is probably somewhere between $800,000 and $1.2 million initial revenue. And I would think that would be based on the size of the site -- hydrogen revenue would be between $250,000 to $500,000 a year, per site.

That is per site.

Per site.

Okay. Great. Final question is on ReliOn, which I guess accounts for the delta between your prior target of 70, and now 75. How should we think about external sales for ReliOn versus using that technology internally going forward?

I guess the primary reason we acquired ReliOn was for the stack technology to reduce the cost and provide us a second sourcing for low-power stacks. We look at the wireless backup business -- where there are some customers with people like AT&T, Sprint, Verizon -- I think about that business as if we can find a solution for hydrogen distributions for retail stores, it could be an opportunity to expand that business more rapidly. Our intent is to run the product portion of that business by the fourth quarter of this year at an EBITDAS breakeven type level.

We don't view the telecom business as core to our activities every day. But if there is a way that we can leverage that acquisition via our hydrogen distribution model, there is a potential we can grow that into not only a technology offering to the company, but also an opportunity to expand revenue.

As I mentioned in the talk today, I think fuel cells are reliable and dependable. And it is how one delivers fuel to the fuel cells which are important. And ReliOn has a very reliable product. Their challenge is how to bring fuel to the wireless sites. It's fundamentally why I exited that business four or five years ago. But we think that with GenKey and some simple bumping technology, there's a possibility that we could develop regions where fuel cells make a logical choice for telecom operators to replace diesel or batteries with fuel cells.

As you know, Rob, I spent about 30 years of my life in that business exactly. 30 years of my life in that business, and I do see the value fuel cells can bring. It's how you bring fuel to those products that are really critical.

Great. My final question, Andy, is in the prepared remarks there was something about a delay in government funding. Is that related to some of these funded R&D efforts in the new segments, like ground support equipment? Any comment on what's going on in those (multiple speakers)?

Rob -- that's actually, there is some 1603 funding from deferred revenue that we expect at the second quarter. We now see that going into the third quarter.

So any update on the expansion segments around support equipment and range extenders and TRUs?

So I don't think -- I have said this publicly, so I will say publicly it at the moment -- we, at the FedEx facility, we are actually doing the hydrogen infrastructure at the Memphis airport. We are planning to have that online in the third quarter and starting deployments. So that's exciting.

At the Walmart facility in Johnstown, we are actually putting in place the hydrogen infrastructure to support the transport refrigeration units. Not only are we providing some demonstration products, we are also putting the fueling station in place. I think that Federal Express it is really important, because in Memphis we're putting in hydrogen on-site that can support hundreds and hundreds and hundreds of units that they have. Their initial plans were to put a small system in place. We convinced them to put a larger system in place using GenKey, which I find quite exciting.

Excellent. Thank you, Andy.

Thanks, Rob.

(Operator Instructions).

Craig Irwin, Wedbush Securities.

Good morning. Andy, it seems like some of your more interesting orders have come out of customers that have significant experience already with your product. Can you update us on your discussions with existing customers? How many of the roughly 25 are considering follow-on orders at this point? And what do you expect in your guidance, as far as any contribution from additional follow-on orders this year, or would these potentially be incremental to the guidance that you've discussed on this call?

Good question, Rob. Again, it's actually another reason that we are investing more heavily in sales team, Craig. If I step back, we have about 12 or 13 customers who have been repeat purchasers of the product: people like Mercedes, BMW, Walmart, Kroger, Cisco, to just name a few. With many of these customers, we have discussions going on about rolling out a larger number of products. And I think, as I mentioned to Matt earlier, we expect to announce a significant deal by the end of the third quarter.

I think what's also important is that there are about -- we have about 20 customers. I would say 10 to 12 are repeat buyers, which we want to increase the take rate. I can tell you, the stronger balance sheet is going to help us a lot. I hired a new salesperson this week who was working with one of the leading battery companies, and he said that their sales pitch against us is that we are going to run out of business. I don't think that is the case at the moment.

So if you look at the 12 to 15 repeat customers, I think that we have actually taken the financial risk issue completely off the table. With the increased salesforce, the focus, I think there's an opportunity to close more deals, quicker. The general question to me is, why not all the Walmart sites? I think that through execution that the possibility -- Walmart is the kind of company that does the same thing over and over again. I think that can grow with Walmart.

I think people like Kroger -- doing two sites this year. Obviously we are in discussions about more. People like P&G have done four sites. I think all those customers in the top 12 that have been repeat buyers represent opportunities for multiple purchases. That's why we need more feet on the street to address them.

And then, I've got to tell you, there are 50 other customers in this country that we need to move quicker through the funnel, and put the appropriate tension on, so we can grow this business quicker than our projections.

I know it was a long-winded answer, but I hope it helps you a bit, Craig.

It definitely does. It definitely does. My second question is greenfield versus brownfield. It seems that you have actually had better adoption at brownfield sites instead of greenfield, where the customer already has an existing battery room, an existing set of charging equipment. Maybe it's worn out and needs to be replaced, but they already have a fleet that actually has to be converted over. It doesn't present quite as large an opportunity as maybe a greenfield facility would.

So can you update us on whether or not you are seeing these customers that have been proving out the benefits at these brownfield sites reevaluate the potential for greenfield sites; whether or not they might more comprehensively include you in their rollout plans going forward? Or is there something particular about the brownfield sites that makes them more attractive for Plug Power at this point?

I think it's a question of servable addressable market, Craig. If you think about it, the distribution centers are probably going -- and manufacturing facilities -- new ones probably get built at rates close to the GDP or population growth rates. So the opportunities for greenfields are much less than they are for brownfields.

I think, the last I did a look, we win, quite honestly, a higher percentage of greenfield sites when we go after them versus brownfields. There are just less of them. I can tell you that a few customers have said to me -- I kind of enjoyed the one who told me, it's just a no-brainer for a greenfield. The question is, if I base this business on just chasing greenfield sites, we would not have the revenue growth rate that we are experiencing at the moment.

Great. Thank you for taking my questions.

You are welcome. A pleasure talking to you, Craig.

At this time, I would like to turn to call back over to Mr. Marsh for closing comments.

Thank you for joining us today on Plug Power's first-quarter 2014 business results and financials. Everyone, have had a good day. Thank you.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation.