UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 8, 2008
American Superconductor Corporation
(Exact Name of Registrant as Specified in Charter)
| Delaware | 0-19672 | 04-2959321 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 64 Jackson Road, Devens, MA | 01434 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (978) 842-3265
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition |
On May 8, 2008, American Superconductor Corporation announced its financial results for the quarter and full fiscal year ended March 31, 2008. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01. | Financial Statements and Exhibits |
Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
| 99.1 | Press release issued by American Superconductor Corporation on May 8, 2008. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AMERICAN SUPERCONDUCTOR CORPORATION | ||||||
| Date: May 8, 2008 | By: | /s/ David A. Henry | ||||
| David A. Henry | ||||||
| Senior Vice President and Chief Financial Officer | ||||||
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press release issued by American Superconductor Corporation on May 8, 2008. |
Exhibit 99.1
Press Release
AMSC REPORTS FOURTH QUARTER AND FULL YEAR
FISCAL 2007 FINANCIAL RESULTS
| • | Fourth-Quarter Revenues Increased 101 Percent Year Over Year |
| • | Full Fiscal 2007 Revenues More Than Doubled to $112.4 Million |
| • | Record Gross Margin of 28.5 Percent Achieved for Full Fiscal 2007 |
| • | Total Backlog as of March 31, 2008 Increased to $199 Million |
| • | Fiscal 2008 Revenue Forecast Revised Upward |
DEVENS, Mass., May 8, 2008 – American Superconductor Corporation (NASDAQ: AMSC), a leading energy technologies company, today reported financial results for the fourth quarter and full fiscal year 2007 ended March 31, 2008.
Revenues for the fourth quarter of fiscal 2007 were a record $38.4 million, a 101 percent increase from $19.1 million in revenues for the fourth quarter of fiscal 2006. Gross margin for the fourth quarter of fiscal 2007 was 33.2 percent, which compares with 5.7 percent for the fourth quarter of fiscal 2006.
The company’s net loss for the fourth quarter of fiscal 2007 was $1.8 million, or $0.04 per share. This figure includes $3.6 million in restructuring and impairment charges related primarily to the previously announced consolidation of AMSC’s operations in Massachusetts, and a gain of $0.9 million primarily resulting from a mark-to-market adjustment on an outstanding warrant. This compares to a net loss for the fourth quarter of fiscal 2006 of $11.4 million, or $0.33 per share. Net loss in each period includes non-cash, pre-tax charges for amortization of acquisition-related intangibles, stock compensation expense and mark-to-market adjustments on an outstanding warrant. Such charges totaled $1.0 million for the fourth quarter of fiscal 2007, compared to $2.1 million for the fourth quarter of fiscal 2006.
Earnings before interest, taxes, other income and expense, depreciation, amortization and stock-based compensation (EBITDAS) was a positive $0.4 million for the fourth quarter of fiscal 2007. This figure was negatively impacted by the aforementioned $3.6 million in restructuring and impairment charges. This compares to an EBITDAS loss of $8.7 million for the fourth quarter of fiscal 2006. Please refer to the financial schedules attached to this press release for reconciliation of EBITDAS to GAAP net loss.
Revenues for full year fiscal 2007 were $112.4 million, an increase of 115 percent from $52.2 million for full year fiscal 2006. Gross margin for full year fiscal 2007 was 28.5 percent, which compares with a negative gross margin of 0.6 percent for full year fiscal 2006. The company’s net loss for full year fiscal 2007 was $25.4 million, or $0.65 per share, which compares to a net loss for full year fiscal 2006 of $34.7 million, or $1.04 per share. Net loss for fiscal 2007 includes approximately $12.4 million of non-cash, pre-tax charges for amortization of acquisition related intangibles, stock compensation and mark-to-market adjustments on an outstanding warrant, compared to $4.7 million of such non-cash, pre-tax charges for fiscal 2006. The company’s EBITDAS loss for full year fiscal 2007 was $9.1 million, which compares with an EBITDAS loss of $28.1 million for the prior fiscal year.
Cash, cash equivalents, and marketable securities at March 31, 2008 were $106.2 million, a decrease of $1.6 million from cash, cash equivalents and marketable securities of $107.8 million at December 31, 2007. Of the aforementioned decrease, $0.7 million of cash was reclassified as restricted cash. Cash, cash equivalents and marketable securities decreased by approximately $0.9 million in the fourth quarter of fiscal 2007 net of amounts reclassified to restricted cash.
The company reported backlog as of March 31, 2008 of approximately $199 million compared with $168 million as of December 31, 2007 and $76.8 million as of March 31, 2007.
“The fourth quarter was a resounding financial success for AMSC,” said Greg Yurek, AMSC’s founder and chief executive officer. “We generated record revenues and gross margins based on the strength of our commercial sales into the wind power and electric utility markets. In addition, AMSC achieved positive EBITDAS for the fourth quarter. This capped off a strong year of growth and operational enhancements at AMSC, including the integration of two acquisitions, the consolidation of our Massachusetts operations and the formation of AMSC China. We are confident that fiscal 2008 will be an even greater success for AMSC.”
Financial Forecast
“AMSC entered the first quarter of fiscal 2008 with significant momentum and visibility, providing us with confidence that our strong growth rate will continue through this fiscal year,” said David Henry, senior vice president and chief financial officer. “We anticipate that revenues for fiscal 2008 will increase to a range of $165 million to $175 million. We expect our bottom line to improve significantly again and anticipate a net loss of $9 million to $12 million, or $0.21 to $0.28 per share, for fiscal 2008. For fiscal 2008, we expect EBITDAS in the range of $3 million to $7 million.”
Conference Call Reminder
In conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. ET today to discuss the company’s results and its business outlook. Those who wish to listen to the live conference call webcast should visit the “Investors” section of the company’s website at www.amsc.com/investors. The live call also can be accessed by dialing (913) 312-0419 and using conference ID 3463050. A telephonic playback of the call will be available from 1:00 p.m. ET on May 8, 2008 through 1:00 p.m. ET on May 15, 2008. Please call (719) 457-0820 and refer to conference ID 3463050 to access the playback.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
| Three months ended March 31, | Year ended March 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Revenues: |
||||||||||||||||
| Power Systems |
$ | 34,333 | $ | 13,712 | $ | 96,823 | $ | 30,850 | ||||||||
| Superconductors |
4,046 | 5,374 | 15,573 | 21,333 | ||||||||||||
| Total revenues |
38,379 | 19,086 | 112,396 | 52,183 | ||||||||||||
| Cost of revenues |
25,635 | 18,006 | 80,363 | 52,502 | ||||||||||||
| Gross profit |
12,744 | 1,080 | 32,033 | (319 | ) | |||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
3,689 | 5,753 | 15,651 | 17,453 | ||||||||||||
| Selling, general and administrative |
7,746 | 5,476 | 28,752 | 17,503 | ||||||||||||
| Amortization of acquisition related intangibles |
489 | 590 | 5,058 | 590 | ||||||||||||
| Restructuring and impairments |
3,641 | 667 | 7,462 | 667 | ||||||||||||
| Total operating expenses |
15,565 | 12,486 | 56,923 | 36,213 | ||||||||||||
| Operating loss |
(2,821 | ) | (11,406 | ) | (24,890 | ) | (36,532 | ) | ||||||||
| Interest income |
1,085 | 399 | 3,977 | 2,179 | ||||||||||||
| Other income (expense), net |
904 | (524 | ) | (1,654 | ) | (424 | ) | |||||||||
| Loss before income tax |
(832 | ) | (11,531 | ) | (22,567 | ) | (34,777 | ) | ||||||||
| Income tax expense (benefit) |
980 | (102 | ) | 2,880 | (102 | ) | ||||||||||
| Net loss |
$ | (1,812 | ) | $ | (11,429 | ) | $ | (25,447 | ) | $ | (34,675 | ) | ||||
| Net loss per common share |
||||||||||||||||
| Basic and Diluted |
$ | (0.04 | ) | $ | (0.33 | ) | $ | (0.65 | ) | $ | (1.04 | ) | ||||
| Weighted average number of common shares outstanding |
||||||||||||||||
| Basic and Diluted |
41,169 | 34,394 | 39,137 | 33,261 | ||||||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
| March 31, 2008 |
March 31, 2007 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 67,834 | $ | 15,925 | ||||
| Marketable securities |
38,398 | 19,399 | ||||||
| Accounts receivable, net |
37,108 | 18,053 | ||||||
| Inventory |
10,907 | 6,853 | ||||||
| Prepaid expenses and other current assets |
16,779 | 1,505 | ||||||
| Deferred tax assets |
2,293 | 514 | ||||||
| Total current assets |
173,319 | 62,249 | ||||||
| Property, plant and equipment, net |
54,308 | 49,928 | ||||||
| Goodwill |
18,530 | 5,126 | ||||||
| Other intangibles, net |
11,584 | 12,849 | ||||||
| Other assets |
3,493 | 2,281 | ||||||
| Total assets |
$ | 261,234 | $ | 132,433 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued expenses |
$ | 38,356 | $ | 23,532 | ||||
| Deferred revenue and customer deposits |
10,629 | 3,775 | ||||||
| Total current liabilities |
48,985 | 27,307 | ||||||
| Non-current liabilities: |
||||||||
| Deferred revenue and customer deposits |
2,044 | 867 | ||||||
| Deferred tax liabilities |
1,244 | 2,518 | ||||||
| Other non-current liabilities |
509 | 120 | ||||||
| Total liabilities |
52,782 | 30,812 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock |
415 | 350 | ||||||
| Additional paid-in capital |
615,017 | 486,181 | ||||||
| Accumulated other comprehensive income |
3,522 | 145 | ||||||
| Accumulated deficit |
(410,502 | ) | (385,055 | ) | ||||
| Total stockholders’ equity |
208,452 | 101,621 | ||||||
| Total liabilities and stockholders’ equity |
$ | 261,234 | $ | 132,433 | ||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Year ended December 31, | ||||||||
| 2008 | 2007 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (25,447 | ) | $ | (34,675 | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: |
||||||||
| Depreciation and amortization |
10,095 | 4,750 | ||||||
| Stock-based compensation expense |
5,665 | 3,680 | ||||||
| Stock-based compensation expense – non-employee |
232 | 292 | ||||||
| Impairment charges on long-lived assets |
757 | 144 | ||||||
| Inventory write-down charges |
933 | 1,201 | ||||||
| Re-valuation of warrant |
1,652 | 408 | ||||||
| Change in deferred income taxes |
(3,424 | ) | (119 | ) | ||||
| Other non-cash items |
697 | 391 | ||||||
| Changes in operating asset and liability accounts, excluding the effect of acquisition: |
||||||||
| Accounts receivable |
(20,330 | ) | (6,281 | ) | ||||
| Inventory |
(4,410 | ) | 1,072 | |||||
| Prepaid expenses and other current assets |
(2,853 | ) | 140 | |||||
| Accounts payable and accrued expenses |
11,635 | 3,595 | ||||||
| Deferred revenue |
6,975 | 2,641 | ||||||
| Net cash used in operating activities |
(17,823 | ) | (22,761 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Purchase of property, plant and equipment |
(8,598 | ) | (10,046 | ) | ||||
| Proceeds from the sale of property, plant and equipment |
1,360 | 92 | ||||||
| Purchase of marketable securities |
(174,650 | ) | (62,562 | ) | ||||
| Proceeds from the maturity of marketable securities |
155,917 | 73,785 | ||||||
| Increase in restricted cash |
(13,172 | ) | — | |||||
| Acquisition costs, net of cash acquired in acquisitions |
(102 | ) | (387 | ) | ||||
| Purchase of intangible assets |
(1,264 | ) | (862 | ) | ||||
| Change in other assets |
49 | (29 | ) | |||||
| Net cash used in investing activities |
(40,460 | ) | (9 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from secondary public offering, net |
93,612 | — | ||||||
| Proceeds from issuances of common stock, net |
14,820 | 3,524 | ||||||
| Net cash provided by financing activities |
108,432 | 3,524 | ||||||
| Effect of exchange rate changes on cash and cash equivalents |
1,760 | — | ||||||
| Net increase (decrease) in cash and cash equivalents |
51,909 | (19,246 | ) | |||||
| Cash and cash equivalents at beginning of period |
15,925 | 35,171 | ||||||
| Cash and cash equivalents at end of period |
$ | 67,834 | $ | 15,925 | ||||
Reconciliation of Net Loss to EBITDAS (1)
(In thousands)
| Three months ended March 31, | Year ended March 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Net Loss |
$ | (1,812 | ) | $ | (11,429 | ) | $ | (25,447 | ) | $ | (34,675 | ) | ||||
| Interest income |
(1,085 | ) | (399 | ) | (3,977 | ) | (2,179 | ) | ||||||||
| Other income (expense), net |
(904 | ) | 524 | 1,654 | 424 | |||||||||||
| Income tax expense |
980 | (102 | ) | 2,880 | (102 | ) | ||||||||||
| Depreciation and amortization |
1,925 | 1,708 | 10,094 | 4,750 | ||||||||||||
| EBITDA |
(896 | ) | (9,698 | ) | (14,796 | ) | (31,782 | ) | ||||||||
| Stock-based compensation |
1,307 | 962 | 5,665 | 3,680 | ||||||||||||
| EBITDAS |
$ | 411 | $ | (8,736 | ) | $ | (9,131 | ) | $ | (28,102 | ) | |||||
Reconciliation of Forecast Net Loss to Forecast EBITDAS (1)
(In thousands)
| High | Low | |||||||
| Net loss |
$ | (9,000 | ) | $ | (12,000 | ) | ||
| Interest income |
(4,500 | ) | (4,000 | ) | ||||
| Other expense, net |
1,500 | 1,000 | ||||||
| Income tax expense |
3,000 | 2,500 | ||||||
| Depreciation and amortization |
8,000 | 8,000 | ||||||
| EBITDA |
(1,000 | ) | (4,500 | ) | ||||
| Stock-based compensation |
8,000 | 7,500 | ||||||
| EBITDAS |
$ | 7,000 | $ | 3,000 | ||||
| (1) | EBITDAS is a non-GAAP financial measure defined by the company as net income before interest, taxes, other income and expense, depreciation and amortization, and stock-based compensation. The company believes EBITDAS is an important measurement for management and investors given the increasing effect that non-cash charges such as stock compensation, amortization related to acquisitions, taxes associated with AMSC Windtec, and depreciation of capital equipment will have on the company’s net income (loss). The company regards EBITDAS as a useful measure of operating performance and cash flow to complement operating income, net income and other GAAP financial performance measures. Additionally, management believes that EBITDAS will provide meaningful comparisons of past, present and future operating results. 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. This measure, however, should be considered in addition to, and not as a substitute or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of EBITDAS to GAAP net income (loss) is set forth in the table above. |
About American Superconductor (NASDAQ: AMSC)
AMSC is a leading energy technologies company offering an array of solutions based on two proprietary technologies: programmable power electronic converters and high temperature superconductor (HTS) wires. The company’s products, services and system-level solutions enable cleaner, more efficient and more reliable generation, delivery and use of electric power. AMSC is a leader in alternative energy, offering grid interconnection solutions as well as licensed wind energy designs and electrical systems. As the world’s principal supplier of HTS wire, the company is enabling a new generation of compact, high-power electrical products, including power cables, grid-level surge protectors, Secure Super Grids(TM), motors, generators, and advanced transportation and defense systems. AMSC also provides utility and industrial customers worldwide with voltage regulation systems that dramatically enhance power grid capacity, reliability and security, as well as industrial productivity. The company’s technologies are protected by a broad and deep intellectual property portfolio consisting of hundreds of patents and licenses worldwide. More information is available at www.amsc.com.
# # # #
American Superconductor and design, Revolutionizing the Way the World Uses Electricity, AMSC, Powered by AMSC, SuperVAR, D-VAR, DVC, PQ-IVR, PowerModule, PQ-SVC, Secure Super Grids, Windtec and SuperGEAR are trademarks or registered trademarks of American Superconductor Corporation or its subsidiaries.
Any statements in this release about future expectations, plans and prospects for the company, including our expectations regarding the future financial performance of the company 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. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements. Such factors include:
uncertainties regarding the company’s ability to obtain anticipated funding from corporate and government contracts, to successfully develop, manufacture and market commercial products, and to secure anticipated orders; the risk that a robust market may not develop for the company’s products; the risk that strategic alliances and other contracts may be terminated; the risk that certain technologies utilized by the company will infringe intellectual property rights of others; and the competition encountered by the company. Reference is made to these and other factors discussed in the “Risk Factors” section of the company’s most recent quarterly or annual report filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the company’s views as of the date of this release. While the company anticipates that subsequent events and developments may cause the company’s views to change, the company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the company’s views as of any date subsequent to the date this press release is issued.
Contact Information:
Jason Fredette
Director of Investor & Media Relations
American Superconductor Corporation (NASDAQ: AMSC)
978-842-3177
jfredette@amsc.com