AMSC Reports Fiscal Third Quarter 2013 Financial Results

AMSC Reports Fiscal Third Quarter 2013 Financial Results

DEVENS, Mass., Feb. 6, 2014 (GLOBE NEWSWIRE) -- AMSC (Nasdaq:AMSC), a global
solutions provider serving wind and power grid industry leaders, today
reported financial results for its fiscal third quarter ended December 31,
2013.

Revenues for the third quarter of fiscal 2013 were $20.6 million, compared
with $17.4 million for the same period of fiscal 2012. The year-over-year
growth is due to higher revenues in the Company's Wind segment, primarily from
customers in India and China. Wind revenue growth was partially offset by
lower revenues in the Company's Grid segment due to lower D-VAR® revenues.

AMSC's net loss for the third quarter of fiscal 2013 narrowed to $8.4 million,
or $0.14 per share, compared with a net loss of $20.1 million, or $0.38 per
share, for the same period of fiscal 2012.

The Company's non-GAAP net loss for the third quarter of fiscal 2013 was $5.7
million, or $0.09 per share, compared with a non-GAAP net loss of $13.5
million, or $0.26 per share, for the third quarter of fiscal 2012. Please
refer to the financial table below for a reconciliation of GAAP to non-GAAP
results.

Cash, cash equivalents, and restricted cash at December 31, 2013 totaled $41.7
million, compared with $32.8 million as of September 30, 2013. The sequential
increase was driven primarily by financing activities conducted during the
quarter, including a new $10.0 million senior term loan and $3.3 million in
net proceeds after deducting sales commissions and offering expenses from the
issuance of approximately 2.4 million shares of common stock at an average
sale price of $1.51 per share under the At-the-Market (ATM) equity financing
that was put in place in November 2013.

"I'm pleased with our performance in the third fiscal quarter. We increased
revenues and cash, reduced our net loss, operating expenses, and cash burn
year-over-year. We are managing our costs and our cash," said Daniel P.
McGahn, AMSC President and CEO.

McGahn continued, "The long-term prospects in our key markets are promising,
but we continue to anticipate challenges in the near term. Given the strategic
cost-cutting measures we have taken over the past year, we have reduced our
annualized operating expenses and net loss and we have achieved a slower cash
burn. We are focused on achieving positive net cash flows on a quarterly
basis. We believe this will occur by the end of fiscal year 2014."

Financial Guidance

For the fourth fiscal quarter ending March 31, 2014, AMSC expects that its
revenues will exceed $16 million and that its net loss will be less than $16
million, or $0.24 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 fourth quarter of
fiscal 2013 will be less than $12 million, or $0.18 per share. AMSC expects to
have more than $38 million in cash, cash equivalents and restricted cash on
March 31, 2014. This forecast does not assume any proceeds from the ATM in the
fourth fiscal quarter.

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 http://www.amsc.com/investors. The live call also can be accessed
by dialing 785-830-1923 and using conference ID 8185757.

About AMSC (NASDAQ: AMSC)

AMSC generates the ideas, technologies and solutions that meet the world's
demand for smarter, cleaner … better energy™. Through its Windtec™ Solutions,
AMSC provides wind turbine electronic controls and systems, designs and
engineering services that reduce the cost of wind energy. Through its Gridtec™
Solutions, AMSC provides the engineering planning services and advanced grid
systems that optimize network reliability, efficiency and performance. The
Company's solutions are now powering gigawatts of renewable energy globally
and are enhancing the performance and reliability of power networks in more
than a dozen countries. Founded in 1987, AMSC is headquartered near Boston,
Massachusetts with operations in Asia, Australia, Europe and North America.
For more information, please visit www.amsc.com.

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

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 our beliefs regarding our long-term prospects in our key
markets, our anticipated lower operating expenses and net loss along with a
slower cash burn, 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 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 uncertain.

There are a number of important factors that could materially impact the value
of our common stock or cause actual results to differ materially from those
indicated by such forward-looking statements. Such factors include: We have
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 India, and global conditions could negatively affect our
operating results or limit our ability to expand our operations outside of
these countries; changes in China's or India'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
release.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

                               Three months ended     Nine months ended
                               December 31,           December 31,
                               2013       2012        2013        2012
                                                               
Revenues                                                        
Wind                            $ 13,545  $ 6,808    $ 42,937   $35,321
Grid                            7,018     10,609     24,893     31,679
Total Revenues                  20,563    17,417     67,830     67,000
                                                               
Cost of revenues                15,863    16,533     56,461     53,843
                                                               
Gross profit                    4,700     884        11,369     13,157
                                                               
Operating expenses:                                             
Research and development        2,951     3,948      9,061      11,480
Selling, general and            8,232     10,769     27,741     36,304
administrative
Restructuring and impairments   108       6,702      872        6,845
Amortization of acquisition     84        81         247        242
related intangibles
Total operating expenses        11,375    21,500     37,921     54,871
                                                               
Operating loss                  (6,675)   (20,616)   (26,552)   (41,714)
                                                               
Change in fair value of         535       5,217      1,890      6,114
derivatives and warrants
Interest expense, net           (1,634)   (4,553)    (7,250)    (10,191)
Other expense, net              (341)     (109)      (908)      (1,252)
                                                               
Loss before income tax expense  (8,115)   (20,061)   (32,820)   (47,043)
                                                               
Income tax (benefit) expense    302       74         733        (683)
                                                               
Net loss                        $(8,417) $(20,135) $(33,553) $(46,360)
                                                               
Net loss per common share                                       
Basic                           $(0.14)  $(0.38)   $(0.55)   $(0.89)
Diluted                         $(0.14)  $(0.38)   $(0.55)   $(0.89)
                                                               
Weighted average number of                                      
common shares outstanding
Basic                           62,309    52,792     60,578     51,966
Diluted                         62,309    52,792     60,578     51,966



UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                       December 31, March 31,
                                                       2013         2013
ASSETS                                                              
Current assets:                                                     
Cash and cash equivalents                               $35,394      $39,243
Accounts receivable, net                                8,525        18,864
Inventory                                               25,167       33,473
Prepaid expenses and other current assets               19,538       22,469
Restricted cash                                         1,405        6,136
Total current assets                                    90,029       120,185
                                                                   
Property, plant and equipment, net                      67,163       74,626
Intangibles, net                                        2,147        2,749
Restricted cash                                         4,901        4,820
Deferred tax assets                                     5,421        5,354
Other assets                                            8,710        9,020
Total assets                                            $178,371     $216,754
LIABILITIES AND STOCKHOLDERS' EQUITY                                
                                                                   
Current liabilities:                                                
Accounts payable and accrued expenses                   $23,503      $30,138
Note payable, current portion, net of discount of $677
as of December 31, 2013 and $458 as of                  6,272        4,158
March 31, 2013
Current portion of convertible note, net of discount of
$1,287 as of December 31, 2013 and$4,289 as of March   9,125        4,610
31, 2013
Derivative liability                                    2,587       4,162
Adverse purchase commitments                            429          1,440
Deferred revenue                                        10,023       29,805
Deferred tax liabilities                                5,440        5,444
Total current liabilities                               57,379       79,757
                                                                   
Note Payable, net of current portion and discount of
$384 as of December 31, 2013 and $95 as of March 31,    7,283        3,367
2013
Convertible note, net of discount of $600 as of March   --           5,881
31, 2013
Deferred revenue                                        1,318        1,340
Other liabilities                                       1,179        1,291
Total liabilities                                       67,159       91,636
                                                                   
Stockholders' equity:                                               
Common stock                                            673         603
Additional paid-in capital                              942,466      923,847
Treasury stock                                          (370)       (313)
Accumulated other comprehensive loss                    2,127       1,112
Accumulated deficit                                     (833,684)   (800,131)
Total stockholders' equity                              111,212      125,118
                                                                   
Total liabilities and stockholders' equity              $178,371     $216,754



UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

                                               Nine months ended December 31,
                                               2013            2012
Cash flows from operating activities:                          
Net loss                                        $ (33,553)      $ (46,360)
Adjustments to reconcile net (loss) income to                  
net cash (used in) provided by operations:
Depreciation and amortization                   8,052           10,143
Stock-based compensation expense                7,328           5,968
Restructuring charges, net of payments          167             261
Impairment of long-lived and intangible assets  —               4,507
Provision for excess and obsolete inventory     287             957
Adverse purchase commitment recoveries, net     —              (8,428)
Loss on minority interest investments           789             1,914
Change in fair value of derivatives and         (1,890)         (6,114)
warrants
Non-cash interest expense                       5,902           8,404
Other non-cash items                            1,181           1,790
Changes in operating asset and liability                       
accounts:
Accounts receivable                             10,414          6,085
Inventory                                       8,682           (8,173)
Prepaid expenses and other current assets       3,462           4,699
Accounts payable and accrued expenses           (8,612)         (20,330)
Deferred revenue                                (20,575)        3,986
Net cash used in operating activities           (18,366)        (40,691)
                                                              
Cash flows from investing activities:                          
Net cash provided byinvesting activities       4,398           4,691
                                                              
Cash flows from financing activities:                          
Net cash provided by financing activities       9,750           32,262
                                                              
Effect of exchange rate changes on cash and     369             (84)
cash equivalents
                                                              
Net decrease in cash and cash equivalents       (3,849)         (3,822)
Cash and cash equivalents at beginning of year  39,243          46,279
Cash and cash equivalents at end of period      $ 35,394        $ 42,457



RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share data)

                               Three months ended     Nine months ended
                                December 31,           December 31,
                               2013       2012        2013        2012
Net loss                        $(8,417) $(20,135) $(33,553) $(46,360)
Adverse purchase commitment     --        (119)      --         (8,428)
recoveries, net
Stock-based compensation        3,040     1,929      7,328      5,968
Amortization of                 84       81         247       242
acquisition-related intangibles
Restructuring and impairment    108       6,702     872       6,845
charges
Sinovel litigation              --        (12)      (7)       411
                                                               
Consumption of zero cost-basis  (1,142)   (602)      (3,635)    (1,389)
inventory
Change of fair value of         (535)     (5,217)   (1,890)    (6,114)
derivatives and warrants
Non-cash interest expense       1,137     3,867     5,902      8,404
Non-GAAP net loss               $(5,725) $(13,506) $(24,736) $(40,421)
                                                               
Non-GAAP loss per share         $(0.09)  $(0.26)  $(0.41)   $(0.78)
Weighted average shares         62,309    52,792     60,578     51,966
outstanding



RECONCILIATION OF FORECAST GAAP NET LOSS TO NON-GAAP NET LOSS
(In millions, except per share data)

                                               Three months ending
                                                March 31, 2014
Net loss                                        $(16.0)
Amortization of acquisition-related intangibles 0.1
Stock-based compensation                        3.5
Non-cash interest expense                       1.5
Consumption of zero-cost inventory              (1.1)
Non-GAAP net loss                               $(12.0)
Non-GAAP net loss per share                     $(0.18)
Weighted average shares outstanding             68.0

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.

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

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