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): November 4, 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 November 4, 2008, American Superconductor Corporation announced its financial results for the quarter ended September 30, 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 November 4, 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: November 4, 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 November 4, 2008. |
Exhibit 99.1
| Press Release | ||
 |
AMSC REPORTS SECOND QUARTER
FISCAL 2008 FINANCIAL RESULTS
| • | Revenues Increased 87 Percent Year Over Year |
| • | Fiscal 2008 Revenue and Net Income Forecasts Reconfirmed |
| • | Company Expects to Achieve Profitability on a GAAP Basis in Fourth Fiscal Quarter |
DEVENS, Mass., November 4, 2008 – American Superconductor Corporation (NASDAQ: AMSC), a leading energy technologies company, today reported financial results for the second quarter ended September 30, 2008.
Revenues for the second quarter of fiscal 2008 were a record $40.4 million, an 87 percent increase from $21.6 million in revenues for the second quarter of fiscal 2007. Gross margin for the second quarter of fiscal 2008 was 26.5 percent, which compares with 26.0 percent for the second quarter of fiscal 2007.
The company’s net loss for the second quarter of fiscal 2008 was $4.1 million, or $0.10 per share. This compares to a net loss for the second quarter of fiscal 2007 of $6.7 million, or $0.17 per share. Net loss in each period includes non-cash, pre-tax charges for amortization of acquisition-related intangibles and stock compensation as well as mark-to-market adjustments on a stock warrant that was exercised in full in August 2008. Such items totaled $2.3 million for the second quarter of fiscal 2008, compared to $4.0 million for the second quarter of fiscal 2007.
AMSC generated a positive $0.3 million in cash from operations for the second quarter of fiscal 2008. Cash, cash equivalents, marketable securities and restricted cash at September 30, 2008 were $128.9 million, a decrease of $2.6 million from $131.5 million at June 30, 2008. Nearly $2 million of this sequential decrease is due to a foreign-exchange related revaluation of euro-denominated cash balances.
Earnings before interest, taxes, other income and expense, depreciation, amortization and stock-based compensation (EBITDAS) were a positive $1.1 million for the second quarter of fiscal 2008. This compares to an EBITDAS loss of $2.3 million for the second quarter of fiscal 2007. Please refer to the financial schedules attached to this press release for reconciliation of EBITDAS to GAAP net loss.
The company reported backlog as of September 30, 2008 of approximately $597 million compared with $634 million as of June 30, 2008 and $180 million as of September 30, 2007. Nearly $8 million of the sequential decline is attributable to a foreign exchange-related revaluation of backlog.
“We are continuing to execute well on all fronts and expect to achieve profitability on a GAAP basis for the first time in AMSC’s history in the fourth fiscal quarter,” said Greg Yurek, AMSC’s founder and chief executive officer. “The strength of AMSC’s primary markets, our unique offerings and our significant presence in the Chinese wind market positions us for continued solid growth amidst the global economic downturn.”
Financial Forecast
“AMSC is on track to post significant top- and bottom-line improvements for fiscal year 2008,” said David Henry, senior vice president and chief financial officer. “We expect revenues for our third fiscal quarter to be essentially flat relative to the second fiscal quarter due to a strengthening dollar and lower D-VAR® revenues. We also expect a slightly higher net loss in the third quarter due primarily to the mark-to-market stock warrant
gain that was included in our second quarter results. Based on our existing backlog, we expect particularly strong fourth quarter revenues as we increase shipments of our wind turbine core electrical components and D-VAR systems. This should enable us to be profitable on a GAAP basis in our fourth fiscal quarter.”
“For full year fiscal 2008, we are confirming our previous forecast of $175 million to $185 million in revenues and a net loss of $13 million to $15 million, or $0.30 to $0.35 per share. We continue to expect $7 million to $10 million in positive EBITDAS for the full fiscal year,” Henry concluded.
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 913-312-1227 and using conference ID 1054947. A telephonic playback of the call will be available from 1:00 p.m. ET on November 4, 2008 through 1:00 p.m. ET on November 11, 2008. Please call (719) 457-0820 and refer to conference ID 1054947 to access the playback.
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 turbine 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™, 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, D-VAR, PQ-IVR, PowerModule, 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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three months ended September 30, |
Six months ended September 30, |
|||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Revenues: |
||||||||||||||||
| Power Systems |
$ | 35,576 | $ | 19,186 | $ | 71,506 | $ | 33,554 | ||||||||
| Superconductors |
4,799 | 2,437 | 8,686 | 7,838 | ||||||||||||
| Total revenues |
40,375 | 21,623 | 80,192 | 41,392 | ||||||||||||
| Cost of revenues |
29,670 | 16,004 | 57,866 | 32,191 | ||||||||||||
| Gross profit |
10,705 | 5,619 | 22,326 | 9,201 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
4,688 | 3,792 | 9,601 | 8,006 | ||||||||||||
| Selling, general and administrative |
8,849 | 7,151 | 17,742 | 13,269 | ||||||||||||
| Amortization of acquisition related intangibles |
481 | 1,772 | 984 | 2,934 | ||||||||||||
| Restructuring and impairments |
500 | 93 | 500 | 911 | ||||||||||||
| Total operating expenses |
14,518 | 12,808 | 28,827 | 25,120 | ||||||||||||
| Operating loss |
(3,813 | ) | (7,189 | ) | (6,501 | ) | (15,919 | ) | ||||||||
| Interest income |
801 | 1,204 | 1,576 | 1,550 | ||||||||||||
| Other income (expense), net |
481 | (151 | ) | (1,990 | ) | (1,165 | ) | |||||||||
| Loss before income tax |
(2,531 | ) | (6,136 | ) | (6,915 | ) | (15,534 | ) | ||||||||
| Income tax expense |
1,537 | 537 | 3,256 | 792 | ||||||||||||
| Net loss |
$ | (4,068 | ) | $ | (6,673 | ) | $ | (10,171 | ) | $ | (16,326 | ) | ||||
| Net loss per common share |
||||||||||||||||
| Basic and Diluted |
$ | (0.10 | ) | $ | (0.17 | ) | $ | (0.24 | ) | $ | (0.44 | ) | ||||
| Weighted average number of common shares outstanding |
||||||||||||||||
| Basic and Diluted |
42,745 | 39,208 | 42,380 | 37,249 | ||||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| September 30, 2008 |
March 31, 2008 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 55,794 | $ | 67,834 | ||||
| Marketable securities |
65,809 | 38,398 | ||||||
| Accounts receivable, net |
29,908 | 37,108 | ||||||
| Inventory |
15,586 | 10,907 | ||||||
| Restricted cash |
5,879 | 12,312 | ||||||
| Prepaid expenses and other current assets |
6,023 | 4,467 | ||||||
| Deferred tax assets, net |
1,243 | 2,293 | ||||||
| Total current assets |
180,242 | 173,319 | ||||||
| Property, plant and equipment, net |
54,697 | 54,308 | ||||||
| Goodwill |
26,830 | 18,530 | ||||||
| Intangibles, net |
10,170 | 11,583 | ||||||
| Long-term restricted cash |
1,406 | 860 | ||||||
| Other assets |
2,836 | 2,634 | ||||||
| Total assets |
$ | 276,181 | $ | 261,234 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued expenses |
33,385 | 38,356 | ||||||
| Deferred revenue |
12,011 | 10,629 | ||||||
| Total current liabilities |
45,396 | 48,985 | ||||||
| Non-current liabilities |
||||||||
| Deferred revenue |
3,748 | 2,043 | ||||||
| Deferred tax liabilities, net |
916 | 1,244 | ||||||
| Other non-current liabilities |
58 | 510 | ||||||
| Total liabilities |
50,118 | 52,782 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock |
432 | 415 | ||||||
| Additional paid-in capital |
646,662 | 615,017 | ||||||
| Accumulated other comprehensive income (loss) |
(358 | ) | 3,522 | |||||
| Accumulated deficit |
(420,673 | ) | (410,502 | ) | ||||
| Total stockholders’ equity |
226,063 | 208,452 | ||||||
| Total liabilities and stockholders’ equity |
$ | 276,181 | $ | 261,234 | ||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Six months ended September 30, |
||||||||
| 2008 | 2007 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (10,171 | ) | $ | (16,326 | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: |
||||||||
| Depreciation and amortization |
4,134 | 5,261 | ||||||
| Stock-based compensation expense |
5,194 | 3,023 | ||||||
| Stock-based compensation expense - non-employee |
42 | 127 | ||||||
| Impairment charges on long-lived assets |
— | 607 | ||||||
| Inventory write-down charges |
— | 933 | ||||||
| Re-valuation of warrant |
1,334 | 1,256 | ||||||
| Deferred income taxes |
616 | (217 | ) | |||||
| Other non-cash items |
1,267 | 20 | ||||||
| Changes in operating asset and liability accounts, excluding the effect of acquisitions: |
||||||||
| Accounts receivable |
4,837 | (5,247 | ) | |||||
| Inventory |
(4,762 | ) | (1,992 | ) | ||||
| Prepaid expenses and other current assets |
(1,780 | ) | (1,506 | ) | ||||
| Accounts payable and accrued expenses |
(1,044 | ) | (1,828 | ) | ||||
| Deferred revenue |
3,853 | 4,428 | ||||||
| Net cash provided by (used in) operating activities |
3,520 | (11,461 | ) | |||||
| Cash flows from investing activities: |
||||||||
| Purchase of property, plant and equipment, net |
(3,305 | ) | (3,511 | ) | ||||
| Proceeds from the sale of property, plant and equipment |
2 | 390 | ||||||
| Purchase of marketable securities |
(62,217 | ) | (134,552 | ) | ||||
| Proceeds from the maturity of marketable securities |
34,679 | 123,027 | ||||||
| Change in restricted cash |
5,785 | (4,312 | ) | |||||
| Acquisition costs, net of cash acquired in acquisitions |
— | (102 | ) | |||||
| Purchase of intangible assets |
(612 | ) | (439 | ) | ||||
| Change in other assets |
(84 | ) | 34 | |||||
| Net cash used in investing activities |
(25,752 | ) | (19,465 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from follow-on public offering, net |
— | 93,615 | ||||||
| Proceeds from exercise of employee stock options |
11,997 | 8,347 | ||||||
| Net cash provided by financing activities |
11,997 | 101,962 | ||||||
| Effect of exchange rate changes on cash and cash equivalents |
(1,805 | ) | 178 | |||||
| Net increase (decrease) in cash and cash equivalents |
(12,040 | ) | 71,214 | |||||
| Cash and cash equivalents at beginning of period |
67,834 | 15,925 | ||||||
| Cash and cash equivalents at end of period |
$ | 55,794 | $ | 87,139 | ||||
| Supplemental schedule of cash flow information: |
||||||||
| Issuance of common stock in connection with acquisitions |
$ | — | $ | 4,349 | ||||
| Non-cash contingent consideration in connection with acquisitions |
9,784 | — | ||||||
| Non-cash issuance of common stock |
301 | 1 | ||||||
Reconciliation of Net Loss to EBITDAS
(In thousands)
| Three months ended September 30, |
Six months ended September 30, |
|||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Net loss |
$ | (4,068 | ) | $ | (6,673 | ) | $ | (10,171 | ) | $ | (16,326 | ) | ||||
| Interest income |
(801 | ) | (1,204 | ) | (1,576 | ) | (1,550 | ) | ||||||||
| Other income (expense), net |
(481 | ) | 151 | 1,990 | 1,165 | |||||||||||
| Income tax expense |
1,537 | 537 | 3,256 | 792 | ||||||||||||
| Depreciation and amortization |
2,010 | 2,951 | 4,134 | 5,261 | ||||||||||||
| EBITDA |
(1,803 | ) | (4,238 | ) | (2,367 | ) | (10,658 | ) | ||||||||
| Stock-based compensation |
2,896 | 1,945 | 5,194 | 3,023 | ||||||||||||
| EBITDAS |
$ | 1,093 | $ | (2,293 | ) | $ | 2,827 | $ | (7,635 | ) | ||||||
Reconciliation of Forecast Net Loss to Forecast EBITDAS for Fiscal Year 2008
(In thousands)
| High | Low | |||||||
| Net Loss |
$ | (13,000 | ) | $ | (15,000 | ) | ||
| Interest income |
(3,500 | ) | (3,500 | ) | ||||
| Other income (expense), net |
2,000 | 2,000 | ||||||
| Income tax expense |
6,000 | 5,500 | ||||||
| Depreciation and amortization |
8,000 | 8,000 | ||||||
| EBITDA |
(500 | ) | (3,000 | ) | ||||
| Stock-based compensation |
10,500 | 10,000 | ||||||
| EBITDAS |
$ | 10,000 | $ | 7,000 | ||||
Note: 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 loss is set forth in the table above.
Contact Information:
Jason Fredette
Director of Investor & Media Relations
American Superconductor Corporation (NASDAQ: AMSC)
978-842-3177
jfredette@amsc.com