Ballard Power Systems (TSX: BLD, Stock Forum) significantly strengthened its material handling segment when the company announced today that it had entered into a long term supply agreement with Plug Power (NASDAQ: PLUG, Stock Forum).
Ballard shares fell 1.8% to $3.24 on the news, leaving the fuel cell maker with a market cap of $428 million, based on 132.1 million shares outstanding.
According to the news release, the new agreement replaces an existing supply contract with Plug Power, where the company will provide FCGen™-1020ACS air-cooled stacks used in GenDrive® systems to power Class 3 pallet jacks; and FCVelocity™-9SSL liquid-cooled stacks used in systems to power Class 2 reach trucks and Class 1 counterbalanced lift trucks.
The contract takes effect immediately and runs through to the end of 2017, with the option of two 1-year extensions and adds to the company's 177% year-on-year growth in fuel stack revenue from material handling.
Company CEO, Steve Karaffa, commented on the deal, “We are very pleased to conclude this important supply agreement with Plug Power, which will ensure the continuation of the longstanding partnership between the two companies in support of accelerating growth in a key fuel cell market.”
Keith Schmid, Plug Power CEO, added, “We are certainly pleased to have this agreement in-place, providing certainty of fuel cell stack supply as we focus on fulfilling customer orders and closing significant additional opportunities in our sales pipeline.”
Plug Power continues to grow its material handling division with such customers as Walmart, Kroger and Mercedes-Benz, and expects an increase in its order book for products and services to $150 million at the end of 2014, a threefold increase from the prior year.
Ballard was in the news recently when the Vancouver-based company announced receiving a ElectraGen™ Fuel Cell System order for deployments in the Digicel Network a little over a week ago.