Shares of hydrogen fuel cell maker Plug Power Inc. (NASDAQ: PLUG) dropped more than 8% Tuesday and traded down as much as an additional 22% in Wednesday’s premarket session following the company’s announcement that it is restating its annual financial statements for 2018 and 2019 and quarterly filings for 2019 and 2020.
In its announcement, Plug Power said that the restatement was “due to errors in accounting primarily related to several non-cash items.” KPMG, the company’s accounting firm, was consulted regarding the restatement.
Plug Power enumerated four things, among others, that the restatement will review:
- The reported book value of right of use assets and related finance obligations;
- Loss accruals for certain service contracts;
- The impairment of certain long-lived assets; and
- The classification of certain costs, resulting in a decrease in research and development expense and a corresponding increase in cost of revenue.
Calling the accounting restatement “complex and technical and [involving] significant judgments in how to apply U.S. GAAP,” Plug Power noted that the restatement is not expected to impact its “cash position, business operations or economics of commercial arrangements.” Plug Power “continues to expect to achieve its previously stated gross billings targets of $475 million in 2021, $750 million in 2022 and $1.7 billion in 2024.”
The company said that before releasing fourth-quarter and full-year 2020 results in February, the board’s audit committee “discussed those results with KPMG, and at that time, no material issues were raised. However, after the Company reported its 2020 fourth quarter and year end results, and in the course of finalizing the audit, the Company and KPMG identified the restatement items cited above. The Company has since reevaluated its accounting and determined that it needed to correct the previous accounting for those items.”
None of the changes are the result of “any override of controls or misconduct, and KPMG has not informed the Audit Committee of any issues related to an override of controls or misconduct.”
Due to the restatement, Plug Power was unable to file its Form 10-K annual report by the March 16 deadline. The company’s prior period financial statements “should no longer be relied upon and the fourth quarter and full year 2020 financial results and related discussion in the Company’s shareholder letter issued on February 25, 2021 should no longer be relied upon.”
At last look, Plug Power shares traded down about 11.6% in Wednesday’s premarket to $37.75, after closing at $42.68 on Tuesday. Monday’s closing price was $46.46, and the stock’s 52-week range is $2.70 to $75.49. The consensus price target on the shares is $63.83.