AMSC Reports Fiscal Second Quarter 2013 Financial Results

AMSC Reports Fiscal Second Quarter 2013 Financial Results

Focused on Achieving Positive Net Cash Flows by the Fourth Quarter of Fiscal
Year 2014

DEVENS, Mass., Nov. 7, 2013 (GLOBE NEWSWIRE) -- AMSC (Nasdaq:AMSC), a global
solutions provider serving wind and power grid industry leaders, today
reported financial results for its fiscal second quarter ended September 30,

Revenues for the second quarter of fiscal 2013 were $24.2 million, compared
with $20.9 million for the same period of fiscal 2012. The year-over-year
growth is due to higher revenues in both the Company's Wind and Grid segments.

AMSC's net loss for the second quarter of fiscal 2013 narrowed to $14.6
million, or $0.24 per share, compared with a net loss of $15.9 million, or
$0.31 per share, for the same period of fiscal 2012.

The Company's non-GAAP net loss for the second quarter of fiscal 2013 was
$10.8 million, or $0.18 per share, compared with a non-GAAP net loss of $16.0
million, or $0.31 per share, for the second quarter of fiscal 2012. Please
refer to the financial table below for a reconciliation of GAAP to non-GAAP

Cash, cash equivalents, and restricted cash at September 30, 2013 totaled
$32.8 million, compared with $39.5 million as of June 30, 2013.

"We are pleased with the year-over-year revenue growth and improved operating
performance that we delivered during the second fiscal quarter," said Daniel
P. McGahn, AMSC President and CEO. "We grew revenues by 16 percent year over
year, improved gross margins nearly threefold and reduced our non-GAAP net
loss by more than 30 percent. We continue to be focused on achieving our
target of positive net cash flows on a quarterly basis by the end of fiscal
year 2014."

"Looking forward, we believe there are risks to achieving our full year
revenue target, as a result of governmental factors impacting the renewable
industries in Australia, China, and India. Wind projects in Australia are
being impacted by political uncertainty from the recent election, causing
delays for projects in our Grid segment. The recovery of the Chinese wind
market is being slowed by the continued grid infrastructure challenges. In
India, the regulatory framework intended to stimulate the wind industry was
put in place six months after the beginning of the Indian fiscal year, which
created uncertainty," continued McGahn. "We see these challenges as short-term
and we continue to believe that the long-term growth opportunities remain for
both our wind and grid businesses in established and emerging markets."

Financing Arrangements

During the second fiscal quarter, AMSC filed a shelf registration statement
and amended certain terms of its convertible note with the note holder. As a
result of this amendment, AMSC is now permitted to increase the amount of
senior debt from $10 million to $15 million. In order to enhance liquidity,
the Company may, subject to market and other considerations, seek additional
debt and/or equity financing arrangements. There can be no assurance that the
Company will be able to consummate any such financings on acceptable terms, if
at all.

Financial Guidance

For the third fiscal quarter ending December 31, 2013, AMSC expects that its
revenues will exceed $18 million and that its net loss will be less than $17
million, or $0.28 per share. This forecast excludes any impact from
mark-to-market adjustments related to the Company's derivative liability and
warrants. AMSC expects that its non-GAAP net loss for its third quarter of
fiscal 2013 will be less than $12 million, or $0.19 per share. AMSC expects to
have more than $25 million in cash, cash equivalents and restricted cash on
December 31, 2013.

Conference Call Reminder

In conjunction with this announcement, AMSC management will host a conference
call with investors beginning at 10:00 a.m. Eastern Time today to discuss the
Company's results and its business outlook. To listen to the live or archived
conference call webcast please visit the "Investors" section of the Company's
website at The live call also can be accessed
by dialing 647-438-1131 and using conference ID 2611527.


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

AMSC, Windtec, Gridtec, D-VAR, 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.

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,
prospects, and additional financing arrangements for the Company, including
without limitation our beliefs regarding our achievement of our target of
positive net cash flows on a quarterly basis by the end of fiscal year 2014,
our beliefs that there are risks to achieving our full year revenue target,
our beliefs regarding the long-term growth opportunities for both our wind and
grid businesses in established and emerging markets, our expectations
regarding our future financial results and cash balance 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

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
experienced recurring operating losses and recurring negative cash flows from
operations which raise substantial doubt about our ability to continue as a
going concern. This substantial doubt has resulted in a qualified opinion from
our auditors with an explanatory paragraph regarding our ability to continue
as a going concern. We believe this opinion 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; 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; 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; 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; 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 experienced recurring losses from operations and
negative operating cash flow; these factors raise substantial doubt regarding
our ability to continue as a going concern; 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; we may require additional
funding in the future and may be unable to raise capital when needed; our 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; 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 warrants and 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;. 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, 2013, 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

(In thousands, except per share data)
                                  Three months ended    Six months ended
                                  September 30,         September 30,
                                  2013       2012       2013       2012
Wind                               $14,691  $12,002  $29,392  $28,513
Grid                               9,490      8,865      17,875     21,070
Total Revenues                     24,181     20,867     47,267     49,583
Cost of revenues                   22,611     20,384     40,598     37,310
Gross profit (loss)                1,570      483        6,669      12,273
Operating expenses:                                              
Research and development           3,083      3,621      6,110      7,532
Selling, general and               8,682      11,736     19,508     25,535
Restructuring and impairments      751        16         764        143
Amortization of acquisition        82         80         164        161
related intangibles
Total operating expenses           12,598     15,453     26,546     33,371
Operating loss                     (11,028)   (14,970)   (19,877)   (21,098)
Change in fair value of            886        3,285      1,355      897
derivatives and warrants
Interest expense, net              (3,505)    (2,919)    (5,617)    (5,637)
Other expense, net                 (635)      (1,266)    (566)      (1,143)
Loss before income tax expense     (14,282)   (15,870)   (24,705)   (26,981)
Income tax (benefit) expense       341        79         430        (757)
Net loss                           $(14,623) $(15,949) $(25,135) $(26,224)
Net loss per common share                                        
Basic                              $(0.24)   $(0.31)   $(0.42)   $(0.51)
Diluted                            $(0.24)   $(0.31)   $(0.42)   $(0.51)
Weighted average number of common                      
shares outstanding
Basic                              61,116     51,907     59,712     51,551
Diluted                            61,116     51,907     59,712     51,551


(In thousands)
                                                     September 30, March 31,
                                                     2013           2013
Current assets:                                                     
Cash and cash equivalents                             $25,867        $39,243
Accounts receivable, net                              9,289          18,864
Inventory                                             24,474         33,473
Prepaid expenses and other current assets            19,337         22,469
Restricted cash                                       2,021          6,136
Total current assets                                  80,988         120,185
Property, plant and equipment, net                    69,584         74,626
Intangibles, net                                      2,348          2,749
Restricted cash                                       4,901          4,820
Deferred tax assets                                   5,421          5,354
Other assets                                          9,283          9,020
Total assets                                          $172,525       $216,754
LIABILITIES AND STOCKHOLDERS' EQUITY                                
Current liabilities:                                                
Accounts payable and accrued expenses                 $22,724        $30,138
Note payable, current portion, net of discount of
$260 as of September 30, 2013 and $458 as ofMarch    4,355          4,158
31, 2013
Convertible note, current portion, net of discount of
$2,230 as of September 30, 2013 and$4,289 as of      7,255          4,610
March 31, 2013
Derivative liability                                  2,807          4,162
Adverse purchase commitments                          962            1,440
Deferred revenue, current portion                     11,490         29,805
Deferred tax liabilities                              5,452          5,444
Total current liabilities                             55,045         79,757
Note payable, net of discount of $16 as of September  1,138          3,367
30, 2013 and $95 as of March 31, 2013
Convertible note net of discount of $0 as of          926            5,881
September 30, 2013 and $600 as of March 31, 2013
Deferred revenue                                      1,374          1,340
Other liabilities                                     1,184          1,291
Total liabilities                                     59,667         91,636
Stockholders' equity:                                               
Common stock                                          640            603
Additional paid-in capital                            936,086        923,847
Treasury stock                                        (370)          (313)
Accumulated other comprehensive income                1,768          1,112
Accumulated deficit                                   (825,266)      (800,131)
Total stockholders' equity                            112,858        125,118
Total liabilities and stockholders' equity            $172,525       $216,754

(In thousands)
                                               Six months ended September 30,
                                               2013            2012
Cash flows from operating activities:                          
Net loss                                        $(25,135)       $(26,224)
Adjustments to reconcile net income to net cash                
used in operations:
Depreciation and amortization                   5,343           6,628
Stock-based compensation expense                4,287           4,039
Restructuring charges, net of payments          161             (49)
Provision for excess and obsolete inventory     192             421
Adverse purchase commitment recoveries, net     —               (8,309)
Loss on minority interest investments           499             1,490
Change in fair value of derivatives and         (1,355)         (897)
Non-cash interest expense                       4,765           4,443
Other non-cash items                            892             350
Changes in operating asset and liability                       
Accounts receivable                             10,704          2,856
Inventory                                       9,315           (971)
Prepaid expenses and other current assets       3,531           8,394
Accounts payable and accrued expenses           (9,105)         (14,900)
Deferred revenue                                (18,873)        (2,236)
Net cash used in operating activities           (14,779)        (24,965)
Cash flows from investing activities:                          
Net cash provided by (used in) investing        3,443           (4,935)
Cash flows from financing activities:                          
Net cash (used in) provided by financing        (2,266)         33,037
Effect of exchange rate changes on cash and     226             (280)
cash equivalents
Net (decrease) increase in cash and cash        (13,376)        2,857
Cash and cash equivalents at beginning of year  39,243          46,279
Cash and cash equivalents at end of period      $25,867         $49,136

(In thousands, except per share data)
                                      Three months ended  Six months ended
                                      September 30,       September 30,
                                      2013      2012      2013      2012
Net loss                               $(14,623) $(15,949) $(25,135) $(26,224)
Adverse purchase commitment            —         (1,009)   —         (8,309)
recoveries, net
Stock-based compensation               2,152     2,044     4,287     4,039
Amortization of acquisition-related    82        80        164       161
Restructuring and impairment charges   751       16        764       143
Sinovel litigation                     (5)       304       (7)       424
Consumption of zero cost-basis         (1,319)   (401)     (2,493)   (788)
Change of fair value of derivatives    (886)     (3,285)   (1,355)   (897)
and warrants
Non-cash interest expense              3,093     2,161     4,765     4,443
Non-GAAP net loss                      $(10,755) $(16,039) $(19,010) $(27,008)
Non-GAAP loss per share                $(0.18)   $(0.31)   $(0.32)   $(0.52)
Weighted average shares outstanding    61,116    51,907    59,712    51,551

(In millions, except per share data)
                                               Three months ending
                                               Dec. 31, 2013
Net loss                                        $(17.0)
Amortization of acquisition-related intangibles 0.1
Stock-based compensation                        2.8
Non-cash interest expense                       3.3
Consumption of zero-cost inventory              (1.2)
Non-GAAP net loss                               $(12.0)
Non-GAAP net loss per share                     $(0.19)
Shares outstanding                              61.8

Note: Non-GAAP net loss is defined by the company as net loss before adverse
purchase commitments (recoveries) losses, net; stock-based compensation;
amortization of acquisition-related intangibles; restructuring and impairment
charges; Sinovel litigation costs; 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 or other non-recurring 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 and
cash flow 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.

         Kerry Farrell
         Phone: 978-842-3247

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