I don't understand why Plug has a $20 million backlog.
Is there a problem obtaining parts or otherwise getting product out the door?
If more sales translate into a bigger backlog, I personally would appreciate an explanation.
Basher comments aside, could someone who has been here for a while please explain why Plug is running a backlog? Are there manufacturing inefficiencies or supply chain issues that the company needs to work out? Thanks.
I think there are a couple of reasons - first, there is a fairly large labor component (Marsh estimated 30% of costs) in labor, so they need a trained workforce to manufacture these units. It takes time to get the right people and make then efficient. Second, the timing on delivery is up to the customer, so they could be ordering today to get into PLUG's forward manufacturing "queue" and don't want delivery until later in the year, which would create a backlog. Third, they get their fuel cell stacks from BLDP and material handling is not that large a market for them so PLUG may not be at the top of BLDP's delivery priority list.
I think a great question to Marsh's IR team is "how fast can you build and ship a unit? - what are the biggest bottlenecks in increasing capacity/reducing delivery time? - what progress have you made in reducing the cost of the units so that you can achieve a positive gross margin?" Everyone on the conference call who asked a question seemed to be focused on sales - I think that the bigger problem lies with their costs. If they can't get their costs down significantly, then they will have to raise the price to make a profit - not sure what a higher price would do to future sales levels.
Just read the SEC filings, particularly the 10Qs and yearly report. The backlog is a fictitious number and the $20 million in backlog has not changed in 5 years but they never ship anywhere close. In fact, in 2012 if one reads the SEC filings PLUG quotes backlog at the end of 2011 as more than it shipped for the whole year of 2012 AND announced new sales. Like I have said PLUG will say anything.