May 25, 2017

AMSC Reports Fourth Quarter and Fiscal 2016 Financial Results and Provides Business Outlook

Company to host conference call today at 10:00 am ET

DEVENS, Mass., May 25, 2017 (GLOBE NEWSWIRE) -- AMSC (NASDAQ:AMSC), a global solutions provider serving wind and power grid industry leaders, today reported financial results for its fourth quarter and full year fiscal 2016 ended March 31, 2017. 

Revenues for the fourth quarter of fiscal 2016 were $16.2 million, compared with $27.5 million for the same period of fiscal 2015. The year-over-year decrease was largely due to lower Wind segment revenues, primarily due to lower than expected shipments of electric control systems to Inox during the fourth quarter of fiscal 2016.

AMSC's net loss for the fourth quarter of fiscal 2016 increased to $6.9 million, or $0.50 per share, from $3.4 million, or $0.25 per share, for the same period of fiscal 2015. The Company's non-GAAP net loss for the fourth quarter of fiscal 2016 was $7.1 million, or $0.51 per share, which increased compared with a non-GAAP net loss of $3.8 million or $0.28 per share, in the same period of fiscal 2015. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.

Revenues for the full fiscal year 2016 were $75.2 million as compared to $96.0 million in fiscal year 2015. AMSC reported a net loss for fiscal 2016 of $27.4 million, or $1.98 per share, compared to a net loss of $23.1 million, or $1.76 per share in fiscal 2015. The Company's non-GAAP net loss for full year fiscal 2016 was $27.0 million, or $1.95 per share, compared with a non-GAAP net loss of $26.2 million, or $1.99 per share, for fiscal 2015.

Cash, cash equivalents and restricted cash at March 31, 2017 totaled $27.7 million, compared with $26.0 million at December 31, 2016.

"Our grid business grew this year for the second year in a row. We have been able to make progress in our grid business. We grew D-VAR revenues year to year. We are diversifying our product lineup by introducing a new offering for our grid business.  We announced the fourth and fifth cities that are publicly working on a deployment study for our resilient electric grid solution. We are preparing for anticipated insertion of our ship protection systems into the U.S. Navy's surface fleet with a services contract from the U.S. Navy, while continuing to make progress on our second ship protection solution for the U.S. Navy," said Daniel P. McGahn, President and Chief Executive Officer of AMSC. "We believe we will continue to further diversify our business with additional orders in fiscal 2017."

Business Outlook
For the first quarter ending June 30, 2017, AMSC currently expects that its revenues will be in the range of $8 million to $9 million, taking into account anticipated seasonally lower ECS shipments to Inox as well as the temporary demand dislocation previously discussed in our preliminary fourth quarter financial results announced on April 26, 2017. The Company's net loss for the first quarter of fiscal 2017 is expected to be less than $18.0 million, or $1.05 per share.  The Company's expected net loss in the first quarter of fiscal 2017 includes approximately $2.0 million in restructuring charges associated with the actions announced on April 4, 2017.  The Company's non-GAAP net loss (as defined below) is expected to be less than $17.5 million, or $1.02 per share. Excluding the proceeds from the recent equity offering, the Company expects a cash burn of $7 million to $8 million in the first quarter of fiscal 2017.

Conference Call Reminder
In conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. Eastern Time today to discuss the Company's financial results and business outlook. Those who wish to listen to the live or archived conference call webcast should visit the "Investors" section of the Company's website at http://www.amsc.com/investors. The live call also can be accessed by dialing 800-905-0392 and using conference ID 8247681.

About AMSC (NASDAQ:AMSC)
AMSC generates the ideas, technologies and solutions that meet the world's demand for smarter, cleaner … better energy™. Through its Windtec™ Solutions, AMSC provides wind turbine electronic controls and systems, designs and engineering services that reduce the cost of wind energy. Through its Gridtec™ Solutions, AMSC provides the engineering planning services and advanced grid systems that optimize network reliability, efficiency and performance. The Company's solutions are now powering gigawatts of renewable energy globally and are enhancing the performance and reliability of power networks in more than a dozen countries. Founded in 1987, AMSC is headquartered near Boston, Massachusetts with operations in Asia, Australia, Europe and North America. For more information, please visit www.amsc.com.

AMSC, Windtec, Gridtec, and Smarter, Cleaner … Better Energy are trademarks or registered trademarks of American Superconductor Corporation. All other brand names, product names, trademarks or service marks belong to their respective holders.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements in this release about our anticipated insertion of our ship protection systems into the U.S. Navy's surface fleet, our belief that we will continue to further diversify our business with additional orders in fiscal 2017, our anticipated financial results for the quarter ending June 30, 2017, our anticipated cash burn during the quarter ending June 30, 2017 and other statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements represent management's current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: A significant portion of our revenues are derived from a single customer, Inox; We have a history of operating losses and negative operating cash flows, which may continue in the future and require us to secure additional financing in the future; Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter; Our financial condition may have an adverse effect on our customer and supplier relationships; Our success in addressing the wind energy market is dependent on the manufacturers that license our designs; Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects; We rely upon third-party suppliers for the components and sub-assemblies of many of our Wind and Grid products, making us vulnerable to supply shortages and price fluctuations; Failure to successfully execute any move of our Devens, Massachusetts manufacturing facility or achieve expected savings following any move could adversely impact our financial performance; We may not realize all of the sales expected from our backlog of orders and contracts; Our success depends upon the commercial use of high temperature superconductor products, which is currently limited, and a widespread commercial market for our products may not develop; Growth of the wind energy market depends largely on the availability and size of government subsidies, economic incentives and legislative programs designed to support the growth of wind energy; We have operations in and depend on sales in emerging markets, including India, and global conditions could negatively affect our operating results or limit our ability to expand our operations outside of these markets; We face risks related to our intellectual property; We face risks related to our legal proceedings; and the important factors discussed under the caption "Risk Factors" in Part 1. Item 1A of our Form 10-K for the fiscal year ended March 31, 2017, and our other reports filed with the SEC. These important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Any such forward-looking statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
 Three months ended
March 31,
 Twelve months ended
March 31,
 2017 2016 2017 2016
Revenues       
Wind$10,447  $19,907  $47,269  $68,883 
Grid5,748  7,618  27,926  27,140 
Revenues16,195  27,525  75,195  96,023 
        
Cost of revenues13,360  18,284  64,352  74,041 
        
Gross profit2,835  9,241  10,843  21,982 
        
Operating expenses:       
Research and development3,736  3,379  12,540  12,303 
Selling, general and administrative6,048  7,530  25,688  28,861 
Restructuring and impairments      779 
Amortization of acquisition related intangibles39  39  157  157 
Total operating expenses9,823  10,948  38,385  42,100 
        
Operating loss(6,988) (1,707) (27,542) (20,118)
        
Change in fair value of derivatives and warrants636  (637) 1,304  (228)
Gain on sale of minority interests  581  325  3,092 
Interest expense, net(52) (196) (383) (1,037)
Other income (expense), net(415) (1,268) 65  (2,457)
        
Loss before income tax expense(6,819) (3,227) (26,231) (20,748)
        
Income tax expense106  135  1,142  2,391 
        
Net loss$(6,925) $(3,362) $(27,373) $(23,139)
        
Net loss per common share       
Basic$(0.50) $(0.25) $(1.98) $(1.76)
Diluted$(0.50) $(0.25) $(1.98) $(1.76)
        
Weighted average number of common shares outstanding       
Basic13,981  13,559  13,804  13,178 
Diluted13,981  13,559  13,804  13,178 


CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)
 
 March 31,
 2017
 March 31,
 2016
ASSETS   
Current assets:   
Cash and cash equivalents$26,784  $39,330 
Accounts receivable, net7,956  19,264 
Inventory17,462  18,512 
Prepaid expenses and other current assets2,703  5,778 
Restricted cash795  457 
Total current assets55,700  83,341 
    
Property, plant and equipment, net43,438  49,778 
Intangibles, net301  854 
Restricted cash165  934 
Deferred tax assets407  96 
Other assets233  315 
    
Total assets$100,244  $135,318 
    
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
    
Current liabilities:   
Accounts payable and accrued expenses14,490  23,156 
Note payable, current portion, net of discount of $19 as of March 31, 2017 and $42 as of March 31, 20161,481  2,624 
Derivative liabilities1,923  3,227 
Deferred revenue14,323  12,000 
Total current liabilities32,217  41,007 
    
Note payable, net of discount of $133 as of March 31, 2016  1,367 
Deferred revenue7,631  9,269 
Deferred tax liabilities125  63 
Other liabilities45  63 
Total liabilities40,018  51,769 
    
Stockholders' equity:   
Common stock, $0.01 par value, 75,000,000 shares authorized; 14,713,839 and 14,107,126 shares issued at March 31, 2017 and 2016, respectively147  141 
Additional paid-in capital1,017,510  1,011,813 
Treasury stock, at cost, 97,529 and 51,506 shares at March 31, 2017 and 2016, respectively(1,371) (881)
Accumulated other comprehensive (loss) income(503) 660 
Accumulated deficit(955,557) (928,184)
Total stockholders' equity60,226  83,549 
    
Total liabilities and stockholders' equity$100,244  $135,318 


CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
 Twelve months ended March 31,
 2017 2016
Cash flows from operating activities:   
    
Net loss$(27,373) $(23,139)
Adjustments to reconcile net loss to net cash used in operations:   
Depreciation and amortization7,519  7,972 
Stock-based compensation expense2,892  3,248 
Impairment of minority interest investments  746 
Provision for excess and obsolete inventory1,615  2,713 
Write-off prepaid taxes  289 
Gain on sale from minority interest investments(325) (3,092)
Loss from minority interest investments  356 
Change in fair value of derivatives and warrants(1,304) 228 
Non-cash interest expense156  359 
Other non-cash items(940) 1,462 
Changes in operating asset and liability accounts:   
Accounts receivable11,143  (9,318)
Inventory(815) (782)
Prepaid expenses and other current assets2,729  5,608 
Accounts payable and accrued expenses(7,938) 1,543 
Deferred revenue1,426  7,248 
Net cash used in operating activities(11,215) (4,559)
    
Cash flows from investing activities:   
Net cash provided by investing activities192  4,873 
    
Cash flows from financing activities:   
Net cash (used in) provided by financing activities(1,130) 18,202 
    
Effect of exchange rate changes on cash and cash equivalents(393) 324 
    
Net (decrease)/increase in cash and cash equivalents(12,546) 18,840 
Cash and cash equivalents at beginning of year39,330  20,490 
Cash and cash equivalents at end of year$26,784  $39,330 


RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share data)
 
 Three months ended
March 31,
 Twelve months ended
March 31,
 2017 2016 2017 2016
Net loss$(6,925) $(3,362) $(27,373) $(23,139)
Gain on sale of interest in minority investments, net of tax effect  (565) (325) (2,919)
Stock-based compensation626  706  2,892  3,248 
Amortization of acquisition-related intangibles39  39  157  157 
Restructuring and impairment charges      779 
Consumption of zero cost-basis inventory(254) (1,348) (1,373) (4,960)
Change in fair value of derivatives and warrants(636) 637  (1,304) 228 
Non-cash interest expense28  $69  156  359 
Tax effect of adjustments41    220   
Non-GAAP net loss$(7,081) $(3,824) $(26,950) $(26,247)
        
Non-GAAP net loss per share$(0.51) $(0.28) $(1.95) $(1.99)
Weighted average shares outstanding - basic and diluted13,981  13,559  13,804  13,178 


Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss
(In millions, except per share data)
 
 Three months ending 
June 30, 2017 
Net loss$(18.0) 
Stock-based compensation 0.7  
Consumption of zero-cost inventory (0.2) 
Non-GAAP net loss$(17.5) 
Non-GAAP net loss per share$(1.02) 
Shares outstanding 17.1  

Note: Non-GAAP net loss is defined by the Company as net loss before stock-based compensation; restructuring and impairment charges; amortization of acquisition-related intangibles; consumption of zero cost-basis inventory; non-cash interest expense; change in fair value of derivatives and warrants; and other unusual charges, net of any tax effects related to these items. The Company believes non-GAAP net loss assists management and investors in comparing the Company's performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring or other charges that it does not believe are indicative of its core operating performance. The Company also regards non-GAAP net loss as a useful measure of operating performance to complement operating loss, net loss and other GAAP financial performance measures. In addition, the Company uses non-GAAP net loss as a factor in evaluating management's performance when determining incentive compensation and to evaluate the effectiveness of its business strategies.

Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures included in this release, however, should be considered in addition to, and not as a substitute for or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of non-GAAP to GAAP net loss is set forth in the table above.

 

AMSC Contact:
Brion D. Tanous
AMSC Investor Relations
Phone: 424-634-8592
Email: Brion.Tanous@amsc.com


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