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AMSC Reports Third Quarter Financial Results

AMSC Reports Third Quarter Financial Results

Company to Host Conference Call Today at 5 p.m. ET

DEVENS, Mass., Feb. 11, 2013 (GLOBE NEWSWIRE) -- AMSC (Nasdaq:AMSC), a global
solutions provider serving wind and power grid industry leaders, today
reported financial results for its third quarter of fiscal year 2012 ended
December 31, 2012.

Revenues for the third quarter of fiscal 2012 were $17.4 million, which
compares with $18.1 million for the third quarter of fiscal 2011. Revenues
were lower than the company's previous forecast due primarily to delayed
revenue recognition with a customer in the company's Wind segment. As a result
of this delay, the company's Wind revenues for the third quarter of fiscal
2012 declined by 33 percent year over year. The company increased its Grid
revenues by 34 percent year over year in the third fiscal quarter as a result
of greater D-VAR® system shipments.

For the third quarter of fiscal 2012, AMSC reported a net loss of $20.1
million, or $0.38 per share. This figure includes approximately $6.7 million
in restructuring and impairment charges, partially offset by a $5.2 million
non-cash "mark-to-market" gain driven by the re-valuation of the derivative
liability and warrants associated with the company's debt financings. For the
third quarter of fiscal 2011, AMSC's net loss was $26.3 million, or $0.52 per
share. This figure included an aggregate of $6.5 million in costs associated
with corporate restructuring, impairment and litigation charges.

The company's non-GAAP net loss for the third quarter of fiscal 2012 was $13.5
million, or $0.26 per share. This compares with a non-GAAP net loss of $17.5
million, or $0.34 per share, for the third quarter of fiscal 2011. Please
refer to the financial table below for a reconciliation of GAAP to non-GAAP
results.

AMSC's cash, cash equivalents, marketable securities, and restricted cash at
December 31, 2012 totaled $56.4 million. This compares with $73.1 million as
of September 30, 2012. The company's cash usage during the third fiscal
quarter included payments toward its adverse purchase commitments, which were
reduced from approximately $12.1 million as of September 30, 2012 to
approximately $1.8 million as of December 31, 2012.

"Our non-GAAP net loss and ending cash balance came in better than our
forecast in the third fiscal quarter despite the revenue shortfall," said
Daniel P. McGahn, President and CEO, AMSC. "In response to the recent
challenges in the global wind power market, we also took action during the
third quarter to lower our cost structure while continuing to focus on
building our order book."

Looking Forward

For the fourth fiscal quarter ending March 31, 2013, AMSC expects that its
revenues will exceed $18 million and that its net loss will be less than $18
million, or $0.32 per share. This forecast excludes any impact from
mark-to-market adjustments related to the derivative liability and warrants.
AMSC expects that its non-GAAP (as defined below) net loss for the fourth
quarter of fiscal 2012 will be less than $13 million, or $0.23 per share. AMSC
expects to have more than $48 million in cash, cash equivalents and restricted
cash on March 31, 2013.

"As we approach the start of fiscal year 2013, the tenor in the global wind
power market has been changing for the better," McGahn continued. "A healthy
rebound has been forecast in our core Asian markets, while the U.S., U.K. and
Australia – key adopters of our D-VAR grid interconnection solution – remain
stable and compelling. At the same time, we have begun to pursue opportunities
related to a broader adoption of renewables in emerging markets such as South
America, South Africa and Eastern Europe. Given these trends, activities and
the diversity of our global revenue streams, we believe that we will be able
to generate annual revenue growth of at least 25% in fiscal 2013."

Conference Call Reminder

In conjunction with this announcement, AMSC management will participate in a
conference call with investors beginning at 5:00 p.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 719-325-2454 and using
conference ID 3192954.

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.

The AMSC logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11339

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

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 future expectations, plans and
prospects for the company, including without limitation our prospects for
future growth, expectations regarding our future financial results and cash
balance, conditions in the global wind power market and our ability to
generate revenue from the company's activities in emerging markets, 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: Our
success in addressing the wind energy market is dependent on the manufacturers
that license our designs; we may not realize all of the sales expected from
our backlog of orders and contracts; we may require additional funding in the
future and may be unable to raise capital when needed; our business and
operations would be adversely impacted in the event of a failure or security
breach of our information technology infrastructure; 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 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; our contracts with
the United States government are subject to audit, modification or termination
by the United States 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; 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;
many of our customers outside of the United States 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 have a
history of operating losses, and we may incur additional losses in the future;
our operating results may fluctuate significantly from quarter to quarter and
may fall below expectations in any particular fiscal quarter; our new debt
obligations include certain covenants and other events of default. Should we
not comply with the covenants or incur an event of default, we may be required
to repay our debt obligations in cash, which could have an adverse effect on
our liquidity; we have recorded a liability for adverse purchase commitments
with certain of our vendors; should we be required to settle these liabilities
in cash, our liquidity could be adversely affected; 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; 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; growth of the wind energy market depends largely on
the availability and size of government subsidies and economic incentives; we
depend on sales to customers in China, and global conditions could negatively
affect our operating results or limit our ability to expand our operations
outside of China; changes in 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; the commercial uses of
superconductor products are limited today, and a widespread commercial market
for our products may not develop; 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; we have not manufactured our Amperium wire
in commercial quantities, and a failure to manufacture our Amperium wire in
commercial quantities at acceptable cost and quality levels would
substantially limit our future revenue and profit potential; 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 to purported stockholder class
actions and stockholder derivative complaints, 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; our 7% convertible note
contains provisions that could limit our ability to repay the note in shares
of common stock and should the note be repaid in stock, shareholders could
experience significant dilution; 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; and new regulations related to conflict-free minerals
may force us to incur additional expenses. These and the important factors
discussed under the caption "Risk Factors" in Part II. Item 1A and Part 1.
Item 1A of our Form 10-K/A for the fiscal year ended March 31, 2012, 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      Nine months ended
                              December 31,            December 31,
                             2012        2011        2012        2011
                                                              
Revenues                                                       
Wind                          $6,808    $10,125   $35,321   $27,836
Grid                          10,609      7,933       31,679      20,080
Total Revenues                17,417      18,058      67,000      47,916
                                                              
Cost of revenues              16,533      18,918      53,843      57,810
                                                              
Gross profit (loss)           884         (860)       13,157      (9,894)
                                                              
Cost and operating expenses:                                   
Research and development      3,948       5,928       11,480      21,339
Selling, general and          10,769      15,402      36,304      54,952
administrative
Restructuring and impairments 6,702       4,092       6,845       8,393
Write-off of advance payment  --          --          --          20,551
Amortization of acquisition   81          287         242         891
related intangibles
Total cost and operating      21,500      25,709      54,871      106,126
expenses
                                                              
Operating loss                (20,616)    (26,569)    (41,714)    (116,020)
                                                              
Change in fair value of       5,217       --          6,114       --
derivatives and warrants
Interest (expense) income,    (4,553)     (11)        (10,191)    232
net
Other (expense) income, net   (109)       393         (1,252)     1,313
                                                              
Loss before income tax        (20,061)    (26,187)    (47,043)    (114,475)
expense
                                                              
Income tax expense (benefit)  74          84          (683)       1,185
                                                              
Net loss                      $(20,135) $ (26,271) $(46,360) $(115,660)
                                                              
Net loss per common share                                      
Basic                         $(0.38)   $(0.52)   $(0.89)   $(2.28)
Diluted                       $(0.38)   $(0.52)   $(0.89)   $(2.28)
                                                              
Weighted average number of                                     
common shares outstanding
Basic                         52,792      50,933      51,966      50,789
Diluted                       52,792      50,933      51,966      50,789

                                                                   
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                       December 31, March 31,
                                                       2012         2012
ASSETS                                                              
Current assets:                                                     
Cash and cash equivalents                               $42,457      $46,279
Marketable securities                                   --           5,304
Accounts receivable, net                                12,328       18,999
Inventory                                               36,455       29,256
Prepaid expenses and other current assets               26,735       31,444
Restricted cash                                         9,154        12,086
Deferred tax assets                                     203          203
Total current assets                                    127,332      143,571
                                                                   
Property, plant and equipment, net                      78,010       90,828
Intangibles, net                                        2,999        3,772
Restricted cash                                         4,820        2,540
Deferred tax assets                                     3,129        3,129
Other assets                                            9,029        11,216
Total assets                                            $225,319     $255,056
                                                                   
                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY                                
                                                                   
Current liabilities:                                                
Accounts payable and accrued expenses                   $30,320      $37,582
Note payable, current portion, net of discount of $552  4,063        --
as of December 31, 2012
Current portion of convertible note, net of discount of 7,162        --
$5,448 as of December 31, 2012
Derivative liability                                    5,605        --
Adverse purchase commitments                            1,799        25,894
Deferred revenue                                        23,794       19,718
Deferred tax liabilities                                3,129        3,129
Total current liabilities                               75,872       86,323
                                                                   
Note payable, net of discount of $174 as of December    4,442        --
31, 2012
Convertible note net of discount of $1,287 as of        7,047        --
December 31, 2012
Deferred revenue                                        1,445        1,558
Deferred tax liabilities                                203          203
Other liabilities                                       1,497        2,093
Total liabilities                                       90,506       90,177
                                                                   
                                                                   
                                                                   
Stockholders' equity:                                               
Common stock                                            567          520
Additional paid-in capital                              913,107      896,603
Treasury stock                                          (313)        (271)
Accumulated other comprehensive income                  1,812        2,027
Accumulated deficit                                     (780,360)    (734,000)
Total stockholders' equity                              134,813      164,879
                                                                   
Total liabilities and stockholders' equity              $225,319     $255,056

                                                             
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
                                                             
                                               Nine months ended December 31,
                                               2012           2011
Cash flows from operating activities:                         
Net loss                                        $ (46,360)     $ (115,660)
Adjustments to reconcile net (loss) to net cash               
(used in) operations:
Depreciation and amortization                   10,143         10,875
Stock-based compensation expense                5,968          7,697
Write-off of advanced payment to The Switch     --             20,551
Restructuring charges, net of payments          261            2,721
Impairment of long-lived and intangible assets  4,507          2,829
Provision for excess and obsolete inventory     957            2,150
Adverse purchase commitment (recoveries)        (8,428)        73
losses, net
Loss on minority interest investments           1,914          1,614
Change in fair value of convertible notes and   (6,114)        --
warrants
Non-cash interest expense                       8,404          --
Other non-cash items                            1,790          613
Changes in operating asset and liability                      
accounts:
Accounts receivable                             6,085          (1,262)
Inventory                                       (8,173)        (10,419)
Prepaid expenses and other current assets       4,699          3,244
Accounts payable and accrued expenses           (20,330)       (63,554)
Deferred revenue                                3,986          5,254
Net cash used in operating activities           (40,691)       (133,274)
                                                             
Cash flows from investing activities:                         
Net cash provided by investing activities       4,691          68,321
                                                             
Cash flows from financing activities:                         
Net cash provided by (used in) financing        32,262         (121)
activities
                                                             
Effect of exchange rate changes on cash and     (84)           (104)
cash equivalents
                                                             
Net (decrease) in cash and cash equivalents     (3,822)        (65,178)
Cash and cash equivalents at beginning of year  46,279         123,783
Cash and cash equivalents at end of year        $42,457        $58,605
                                                             
Supplemental schedule of cash flow information:               
Cash paid for income taxes, net of refunds      $ (704)        $13,482
Issuance of common stock to settle liabilities  10,406         586
Cash paid for interest expense                  543            --

                                                              
Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net (Loss) Income
(In thousands, except per share data)
                                                              
                        Three months ended        Nine months ended
                         December 31,              December 31,
                        2012         2011         2012           2011
Net loss                 $(20,135)  $(26,271)  $(46,360)    $(115,660)
Adverse purchase
commitment (recoveries)  (119)        (94)         (8,428)        73
losses, net
Stock-based compensation 1,929        2,118        5,968          7,697
Amortization of
acquisition-related      81           287          242            891
intangibles
Restructuring and        6,702        4,092        6,845          8,393
impairment charges
Executive severance      --           --           --             2,066
Sinovel litigation       (12)         2,423        411            5,757
Consumption of zero      (602)        (46)         (1,389)        (173)
cost-basis inventory
Change in fair value of  (5,217)      --           (6,114)        --
derivatives and warrants
Non-cash interest        3,867        --           8,404          --
expense
Write-off of advance     --           --           --             20,551
payment
Non-GAAP net loss        $(13,506)  $(17,491)  $(40,421) *  $(70,405)
                                                              
Non-GAAP loss earnings   $(0.26)    $(0.34)    $(0.78)      $(1.39)
per share
Weighted average shares  52,792       50,933       51,966         50,789
outstanding
                                                              
* Non-GAAP net loss for the nine months ended December 31, 2012 includes a
correction of the Non-GAAP net loss for the first and second quarters of
fiscal 2012 relating to the presentation of the effect of the consumption of
zero-cost based inventory. Had Non-GAAP net loss been properly reported in
those periods, Non-GAAP net loss would have increased by $0.8 million in each
of the first and second quarters of fiscal 2012.

                                                   
Reconciliation of Forecast GAAP Net Loss to         
Non-GAAP Net Loss
(In millions, except per share data)                
                                                   
                                                   Three months ending
                                                   March 31, 2013
Net loss                                            $ (18.0)
Amortization of acquisition-related intangibles     0.1
Stock-based compensation                            2.1
Non-cash interest expense                           2.8
Non-GAAP net loss                                   $ (13.0)
Non-GAAP net loss per share                         $ (0.23)
Shares outstanding                                  55.6
                                                   
Note: Non-GAAP net income (loss) is defined by the company as net income
(loss) before adverse purchase commitments (recoveries) losses, net;
stock-based compensation; amortization of acquisition-related intangibles;
restructuring and impairment charges; executive severance; Sinovel litigation
costs; consumption of zero cost-basis inventory; non-cash interest expense;
change in fair value of derivative liability and warrants and other unusual
charges; net of any tax effects related to these items. The company believes
non-GAAP net income (loss) assists management and investors in comparing the
company's performance across reporting periods on a consistent basis by
excluding these non-cash or non-recurring charges that it does not believe are
indicative of its core operating performance. The company also regards
non-GAAP net income (loss) as a useful measure of operating performance and
cash flow to complement operating income, net income (loss) and other GAAP
financial performance measures. In addition, the company uses non-GAAP net
(loss) income 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 income is set forth in the
table above.

CONTACT: Kerry Farrell
         Phone: 978-842-3247
         Email: kerry.farrell@amsc.com

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