August 5, 2015

AMSC Reports First Quarter Fiscal 2015 Financial Results and Provides Business Outlook

Company to Host Conference Call Today at 10:00 am ET

DEVENS, Mass., Aug. 5, 2015 (GLOBE NEWSWIRE) -- AMSC (NASDAQ:AMSC), a global solutions provider serving wind and power grid industry leaders, today reported financial results for its first quarter of fiscal 2015 ended June 30, 2015.

Revenues for the first quarter of fiscal 2015 were $23.7 million, compared with $11.7 million for the same period of fiscal 2014. The year over year increase in revenues was due to increases in both the Company's Wind and Grid segments.

AMSC's net loss for the first quarter of fiscal 2015 decreased to $9.1 million, or $0.75 per share, from $13.5 million, or $1.74 per share, for the same period of fiscal 2014.

The Company's non-GAAP net loss for the first quarter of fiscal 2015 was $8.7 million, or $0.72 per share, compared with a non-GAAP net loss of $11.9 million, or $1.53 per share, in the same period of fiscal 2014. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.

Cash, cash equivalents, and restricted cash at June 30, 2015 totaled $42.6 million, compared with $24.5 million at March 31, 2015. The increase is due primarily to proceeds received from an equity offering undertaken by the Company during the first fiscal quarter of 2015.

"In the first fiscal quarter, we demonstrated financial progress, more than doubling revenues year over year and significantly improving gross margins," said Daniel P. McGahn, President and CEO, AMSC. "We started off the fiscal year by announcing that Eversource Energy, the electric utility in Boston, MA, is conducting a deployment study of the REG system, $9 million in D-VAR® system orders, and a contract from the U.S. Navy for ship protection equipment. In the second fiscal quarter, we continued to develop our REG pipeline, as demonstrated by our announcement that Pepco, the electric utility in Washington DC, is undertaking a deployment study of the REG system."

Business Outlook

For the second quarter ending September 30, 2015, AMSC expects that its revenues will be in the range of $18 million to $20 million. The Company's net loss for the second quarter of fiscal 2015 is expected to be less than $8.5 million, or $0.62 per share. AMSC expects that its non-GAAP net loss (as defined below) for the second quarter of fiscal 2015 will be less than $9.0 million, or $0.65 per share.

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 results and its 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 785-424-1670 and using conference ID 2698667.

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 expectations regarding anticipated financial results 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. Such factors include: We have a history of operating losses, which may continue in the future. Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter; we have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us; Our Term Loans include certain covenants and other events of default. Should we not comply with these covenants or incur an event of default, we may be required to repay our obligation in cash, which could have an adverse effect on our liquidity; We may be required to issue performance bonds or provide letters of credit, which restricts our ability to access any cash used as collateral for the bonds or letters of credit; Changes in exchange rates could adversely affect our results from operations; If we fail to maintain proper and effective internal controls over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data; 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; A significant portion of our revenues are derived from a single customer, Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects; We may not realize all of the sales expected from our backlog of orders and contracts; Our business and operations would be adversely impacted in the event of a failure or security breach of our information technology infrastructure; We may not be able to ramp up production at our newly leased manufacturing facility in Romania, and, if we are able to do so, we may have manufacturing quality issues, which would negatively affect our revenues and financial position; We rely upon third-party suppliers for the components and subassemblies of many of our Wind and Grid products, making us vulnerable to supply shortages and price fluctuations, which could harm our business; Many of our revenue opportunities are dependent upon subcontractors and other business collaborators; If we fail to implement our business strategy successfully, our financial performance could be harmed; Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share; New regulations related to conflict-free minerals may force us to incur significant additional expenses; Our contracts with the U.S. government are subject to audit, modification or termination by the U.S. government and include certain other provisions in favor of the government. The continued funding of such contracts remains subject to annual congressional appropriation which, if not approved, could reduce our revenue and lower or eliminate our profit; Many of our customers outside of the United States, particularly in China, are, either directly or indirectly, related to governmental entities, and we could be adversely affected by violations of the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws outside the United States; We have limited experience in marketing and selling our superconductor products and system-level solutions, and our failure to effectively market and sell our products and solutions could lower our revenue and cash flow; We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits; Our success depends upon the commercial use of high temperature superconductor (HTS) 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 and economic incentives; We have operations in and depend on sales in emerging markets, including India and China, and global conditions could negatively affect our operating results or limit our ability to expand our operations outside of these countries. Changes in India's or China's political, social, regulatory and economic environment may affect our financial performance; Our products face intense competition, which could limit our ability to acquire or retain customers; Our international operations are subject to risks that we do not face in the United States, which could have an adverse effect on our operating results; Adverse changes in domestic and global economic conditions could adversely affect our operating results; We may be unable to adequately prevent disclosure of trade secrets and other proprietary information; Our patents may not provide meaningful protection for our technology, which could result in us losing some or all of our market position; There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products; Third parties have or may acquire patents that cover the materials, processes and technologies we use or may use in the future to manufacture our Amperium products, and our success depends on our ability to license such patents or other proprietary rights; Our technology and products could infringe intellectual property rights of others, which may require costly litigation and, if we are not successful, could cause us to pay substantial damages and disrupt our business; We have filed a demand for arbitration and other lawsuits against our former largest customer, Sinovel, regarding amounts we contend are overdue. We cannot be certain as to the outcome of these proceedings; We have been named as a party in various legal proceedings, and we may be named in additional litigation, all of which will require significant management time and attention, result in significant legal expenses and may result in an unfavorable outcome, which could have a material adverse effect on our business, operating results and financial condition; and Our common stock has experienced, and may continue to experience, significant market price and volume fluctuations, which may prevent our stockholders from selling our common stock at a profit and could lead to costly litigation against us that could divert our management's attention.

These 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, 2015, and our other reports filed with the SEC, 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
 June 30,
 20152014
     
Revenues    
Wind  $ 18,164  $ 7,650
Grid  5,559   4,046
Total Revenues  23,723  11,696
     
Cost of revenues  20,503  12,087
     
Gross profit (loss)  3,220  (391)
     
Operating expenses:    
Research and development  3,162  3,120
Selling, general and administrative  7,535  7,938
Restructuring and impairments  741  1,179
Amortization of acquisition related intangibles  39  39
Total operating expenses  11,477  12,276
     
Operating loss  (8,257)  (12,667)
     
Change in fair value of derivatives and warrants  800  (35)
Interest expense, net  (318)  (535)
Other expense, net   (772)  (152)
     
Loss before income tax expense  (8,547)  (13,389)
     
Income tax expense  574  128
     
Net loss  $ (9,121)  $ (13,517)
     
Net loss per common share    
 Basic  $ (0.75)  $ (1.74)
 Diluted  $ (0.75)  $ (1.74)
     
Weighted average number of common shares outstanding    
 Basic  12,111   7,769
 Diluted  12,111  7,769
 
 
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
 June 30, March 31,
 20152015
ASSETS  
Current assets:    
Cash and cash equivalents $ 38,561 $ 20,490
Accounts receivable, net 8,491 9,879
Inventory 17,080 20,596
Prepaid expenses and other current assets 9,726 10,764
Restricted cash 3,269 2,822
Total current assets 77,127 64,551
 
 
   
Property, plant and equipment, net 54,421 56,097
Intangibles, net 1,280 1,422
Restricted cash 795 1,236
Deferred tax assets 7,766 7,766
Other assets 1,526 2,753
Total assets $ 142,915 $ 133,825
 
 
   
LIABILITIES AND STOCKHOLDERS' EQUITY  
 
 
   
Current liabilities:    
Accounts payable and accrued expenses $ 18,645 $ 21,615
Note payable, current portion, net of discount of $190 as of June 30, 2015 and $244 as of
March 31, 2015
3,810 3,756
Derivative liabilities  2,198    2,999
Deferred revenue 9,388 11,019
Deferred tax liabilities 7,843 7,843
Total current liabilities 41,884 47,232
 
 
   
Note Payable, net of current portion and discount of $233 as of June 30, 2015 and $290 as of March 31, 2015 2,934 3,877
Deferred revenue 3,387 2,756
Other liabilities 90 67
Total liabilities 48,295 53,932
     
     
Stockholders' equity:    
Common stock  140  96
Additional paid-in capital 1,009,393 985,921
Treasury stock  (869)  (771)
Accumulated other comprehensive income (loss)  (122)  (308)
Accumulated deficit  (914,166)  (905,045)
Total stockholders' equity 94,620 79,893
     
Total liabilities and stockholders' equity $ 142,915 $ 133,825
 
 
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
  
 Three months ended June 30,
 20152014
Cash flows from operating activities:    
Net loss  $ (9,121) $ (13,517)
Adjustments to reconcile net loss to net cash used in operations:    
Depreciation and amortization 2,028  2,475
Stock-based compensation expense 1,128  1,581
Impairment of long lived assets 746
Provision for excess and obsolete inventory 602 649
Write-off prepaid taxes 820
Loss on minority interest investments 356  202
Change in fair value of derivatives and warrants (800)  35
Non-cash interest expense 111  190
Other non-cash items 553  49
Changes in operating asset and liability accounts:    
Accounts receivable 1,414  (2,741)
Inventory 2,968  623
Prepaid expenses and other current assets 271  441
Accounts payable and accrued expenses (3,024)  (1,344)
Deferred revenue (1,087)  5,851
Net cash used in operating activities (3,035)  (5,506)
     
Cash flows from investing activities:    
Net cash used in  investing activities (64)  (267)
     
Cash flows from financing activities:    
Net cash provided by (used in) financing activities 21,183 (633)
     
Effect of exchange rate changes on cash and cash equivalents (13)  (84)
     
Net increase/(decrease) in cash and cash equivalents 18,071  (6,490)
Cash and cash equivalents at beginning of year 20,490  43,114
Cash and cash equivalents at end of period $ 38,561  $ 36,624
     
 
 
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share data)
 
 Three months ended
June 30,
 20152014
Net loss  $ (9,121)  $ (13,517)
Stock-based compensation  1,128 1,581
Amortization of acquisition-related intangibles  39   39
Restructuring and impairment charges  741  1,179
Consumption of zero cost-basis inventory  (846)  (1,372)
Change of fair value of derivatives and warrants   (800)  35
Non-cash interest expense  111  190
Non-GAAP net loss  $ (8,748)  $ (11,865)
     
Non-GAAP loss per share  $ (0.72)  $ (1.53)
Weighted average shares outstanding  12,111  7,769
     
 
 
RECONCILIATION OF FORECAST GAAP NET LOSS TO NON-GAAP NET LOSS
(In millions, except per share data)
 
 Three months ending
Sept. 30, 2015
Net loss $ (8.5)
Stock-based compensation 0.7
Non-cash interest expense 0.1
Consumption of zero-cost inventory (1.3)
Non-GAAP net loss $ (9.0)
Non-GAAP net loss per share $ (0.65)
Shares outstanding 13.8

Note: Non-GAAP net loss is defined by the Company as net loss before stock-based compensation; amortization of acquisition-related intangibles; restructuring and impairment charges; 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.

CONTACT: AMSC Contact:

         Kerry Farrell

         Phone: 978-842-3247

         Email: kerry.farrell @ amsc.com


Close window | Back to top

Copyright 2017 American Superconductor Corporation