AMSC Reports Fourth Quarter 2013 Financial Results and Provides Business Outlook Company to Host Conference Call Today at 10:00 am ET DEVENS, Mass., June 5, 2014 (GLOBE NEWSWIRE) -- AMSC (Nasdaq:AMSC), a global solutions provider serving wind and power grid industry leaders, today reported financial results for its fourth quarter and full year fiscal 2013 ended March 31, 2014. Revenues for the fourth quarter of fiscal 2013 were $16.3 million, compared with $20.4 million for the same period of fiscal 2012 and $20.6 million for the third quarter of fiscal 2013. The year over year decrease in revenues in the fourth fiscal quarter was a result of lower revenues in the Company's Grid segment, partially offset by higher Wind segment revenues. AMSC's net loss for the fourth quarter of fiscal 2013 increased to $22.7 million, or $0.33 per share, from $19.8 million, or $0.35 per share, for the same period of fiscal 2012. For the third quarter of fiscal 2013, AMSC's net loss was $8.4 million, or $0.14 per share. Net loss in the fourth fiscal quarter included restructuring and impairment charges of $2.1 million, as well as a non-cash charge of approximately $5.2 million for a loss on extinguishment of debt associated with the final conversion of the Company's then outstanding convertible note. Excluding the aforementioned charges and other items, the Company's non-GAAP net loss for the fourth quarter of fiscal 2013 was $9.4 million, or $0.14 per share, compared with a non-GAAP net loss of $11.8 million, or $0.21 per share, in the same period of fiscal 2012 and $5.7 million, or $0.09 per share, in the third quarter of fiscal 2013. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results. Revenues for the full year fiscal 2013 were $84.1 million as compared to $87.4 million in fiscal year 2012. Wind revenue grew by 26% in fiscal 2013 compared with fiscal 2012, but this growth was offset by lower Grid revenue in fiscal 2013. AMSC reported a net loss for full year fiscal 2013 of $56.3 million, or $0.90 per share, compared to a net loss of $66.1 million, or $1.25 per share, for fiscal year 2012. The Company's non-GAAP net loss for full year fiscal 2013 was $34.1 million, or $0.54 per share, compared with a non-GAAP net loss of $52.3 million, or $0.98 per share, for fiscal year 2012. Cash, cash equivalents, and restricted cash at March 31, 2014 totaled $49.4 million, compared with $41.7 million as of December 31, 2013. The sequential increase in cash was driven by both positive cash flows from operations during the fourth quarter as well as proceeds received from the Company's At-Market Sales Facility ("ATM"). During the fourth quarter of fiscal 2013, the Company received net proceeds under the ATM, after deducting sales commissions, of $4.1 million from the issuance of approximately 2.5 million shares of common stock at an average sales price of $1.74 per share. "In fiscal year 2013, we were able to reduce our operating expenses as well as decrease our cash burn. These efforts, combined with our financing activities, resulted in a year-over-year decrease of under $1 million in our cash balance, including restricted cash. We believe our current liquidity position provides us the flexibility to focus on positioning the Company for future growth," said Daniel P. McGahn, President and CEO, AMSC. "In fiscal 2014, we are focused on putting into place the pieces that will help us drive towards our vision of sustained revenue growth in 2015 and beyond. We have delivered on a first piece through the $40 million order that we announced with Inox Wind today." Business Outlook For the first fiscal quarter ending June 30, 2014, AMSC expects that its revenues will be in the range of $11 million to $13 million. Revenues are expected to be sequentially lower in the Company's Wind segment due to temporary manufacturing issues at one of its Wind customers. The Company's net loss for the first quarter of fiscal 2014 is expected to be less than $16 million, or $0.20 per share. AMSC expects that its non-GAAP net loss (as defined below) for the first quarter of fiscal 2014 will be less than $13.5 million, or $0.17 per share. For the full fiscal year 2014, the Company expects revenues to be down slightly compared to fiscal 2013. Conference Call Reminder In conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.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 719-325-2432 and using conference ID 2739570. 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. Forward-Looking Statements 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 our beliefs regarding the flexibility provided by our current liquidity position, our beliefs regarding our progress in connection with an order with Inox Wind, our focus on achieving sustained revenue growth in 2015 and beyond, our expectations regarding our future financial results 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 a history of operating losses, which may continue in the future. Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter; We have a history of negative operating cash flows, and we may require additional financing in the future, which may not be available to us; Our Term Loans include certain covenants and other events of default. Should we not comply with these covenants or incur an event of default, we may be required to repay our obligation in cash, which could have an adverse effect on our liquidity; 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; 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; Our success in addressing the wind energy market is dependent on the manufacturers that license our designs; Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects; We may not realize all of the sales expected from our backlog of orders and contracts; Our financial condition may have an adverse effect on our customer and supplier relationships; Failure to successfully execute the consolidation of our Grid manufacturing operations or achieve expected savings could adversely impact our financial performance; Our business and operations would be adversely impacted in the event of a failure or security breach of our information technology infrastructure; We may not be able to launch operations at our newly leased manufacturing facility in Romania, and, if we are able to do so, we may have manufacturing quality issues, which would negatively affect our revenues and financial position; 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; 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 may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits; Our success depends upon the commercial use of high temperature superconductor (HTS) products, which is currently limited, and a widespread commercial market for our products may not develop; Growth of the wind energy market depends largely on the availability and size of government subsidies and economic incentives; We have operations in and depend on sales in emerging markets, including 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; 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 in various legal proceedings, 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 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, 2014, 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 Years ended March 31, March 31, 2014 2013 2014 2013 Revenues Wind $12,671 $8,910 $55,608 $44,231 Grid 3,616 11,509 28,509 43,188 Total Revenues 16,287 20,419 84,117 87,419 Cost of revenues 16,397 18,094 72,858 71,937 Gross profit (loss) (110) 2,325 11,259 15,482 Operating expenses: Research and development 3,112 3,846 12,173 15,325 Selling, general and 9,490 13,348 37,230 49,652 administrative Restructuring and impairments 2,126 1,076 2,998 7,922 Amortization of acquisition 39 82 287 324 related intangibles Total operating expenses 14,767 18,352 52,688 73,223 Operating loss (14,877) (16,027) (41,429) (57,741) Change in fair value of (18) 1,442 1,872 7,556 derivatives and warrants Loss on extinguishment of debt (5,197) — (5,197) — Interest expense, net (2,411) (4,757) (9,661) (14,948) Other expense, net (83) (10) (991) (1,262) Loss before income tax expense (22,586) (19,352) (55,406) (66,395) Income tax (benefit) expense 119 420 852 (264) Net loss $(22,705) $(19,772) $(56,258) $(66,131) Net loss per common share Basic $(0.33) $(0.35) $(0.90) $(1.25) Diluted $(0.33) $(0.35) $(0.90) $(1.25) Weighted average number of common shares outstanding Basic 68,853 56,576 62,622 53,070 Diluted 68,853 56,576 62,622 53,070 UNAUDITED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, March 31, 2014 2013 ASSETS Current assets: Cash and cash equivalents $43,114 $39,243 Accounts receivable, net 7,556 18,864 Inventory 20,694 33,473 Prepaid expenses and other current assets 9,004 22,469 Restricted cash 2,913 6,136 Total current assets 83,281 120,185 Property, plant and equipment, net 64,574 74,626 Intangibles, net 1,995 2,749 Restricted cash 3,394 4,820 Deferred tax assets 7,724 5,354 Other assets 7,541 9,020 Total assets $168,509 $216,754 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $21,764 $31,578 Note payable, current portion, net of discount of $555 6,240 4,158 as of March 31, 2014 and $458 as of March 31, 2013 Current portion of convertible note, net of discount of -- 4,610 $4,289 as of March 31, 2013 Derivative liabilities 2,601 4,162 Deferred revenue 9,456 29,805 Deferred tax liabilities 7,761 5,444 Total current liabilities 47,822 79,757 Note Payable, net of current portion and discount of 6,380 3,367 $287 as of March 31, 2014 and $95 as of March 31, 2013 Convertible note net of current portion and discount of -- 5,881 $600 as of March 31, 2013 Deferred revenue 990 1,340 Other liabilities 1,058 1,291 Total liabilities 56,250 91,636 Stockholders' equity: Common stock 789 603 Additional paid-in capital 966,390 923,847 Treasury stock (370) (313) Accumulated other comprehensive loss 1,839 1,112 Accumulated deficit (856,389) (800,131) Total stockholders' equity 112,259 125,118 Total liabilities and stockholders' equity $168,509 $216,754 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year ended March 31, 2014 2013 Cash flows from operating activities: Net loss $(56,258) $(66,131) Adjustments to reconcile net (loss) income to net cash (used in) provided by operations: Depreciation and amortization 10,615 13,054 Stock-based compensation expense 10,696 8,138 Restructuring charges, net of payments 167 902 Impairment of long-lived and intangible assets 1,265 4,984 Provision for excess and obsolete inventory 316 2,230 Adverse purchase commitment recoveries, net — (7,768) Prepaid VAT reserve 1,426 — Loss on minority interest investments 1,008 2,231 Change in fair value of derivatives and warrants (1,872) (7,556) Loss on extinguishment of debt 5,197 — Non-cash interest expense 7,713 12,426 Other non-cash items 1,813 2,427 Changes in operating asset and liability accounts: Accounts receivable 11,379 (751) Inventory 13,043 (6,457) Prepaid expenses and other current assets 12,512 8,887 Accounts payable and accrued expenses (10,861) (21,864) Deferred revenue (21,426) 9,977 Net cash used in operating activities (13,267) (45,271) Cash flows from investing activities: Net cash provided byinvesting activities 4,009 7,353 Cash flows from financing activities: Net cash provided by financing activities 12,796 31,221 Effect of exchange rate changes on cash and cash 333 (339) equivalents Net increase (decrease) in cash and cash equivalents 3,871 (7,036) Cash and cash equivalents at beginning of year 39,243 46,279 Cash and cash equivalents at end of period $43,114 $39,243 RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS) (In thousands, except per share data) Three months ended Year ended March 31, March 31, 2014 2013 2014 2013 Net loss $(22,705) $(19,772) $(56,258) $(66,131) Adverse purchase commitments -- 660 -- (7,768) (recoveries), net Stock-based compensation 3,368 2,170 10,696 8,138 Amortization of acquisition-related 39 82 287 324 intangibles Restructuring and impairment 2,126 1,076 2,998 7,922 charges Sinovel litigation 23 280 18 691 Loss contingency for -- 1,800 -- 1,800 shareholder litigation Consumption of zero cost-basis (674) (721) (4,308) (2,111) inventory Prepaid VAT reserve 1,426 -- 1,426 -- Change of fair value of 18 (1,442) (1,872) (7,556) derivatives and warrants Loss on extinguishment of debt 5,197 -- 5,197 -- Non-cash interest expense 1,811 4,022 7,713 12,426 Non-GAAP net loss $(9,371) $(11,845) $(34,103) $(52,265) Non-GAAP loss per share $(0.14) $(0.21) $(0.54) $(0.98) Weighted average shares 68,853 56,576 62,622 53,070 outstanding RECONCILIATION OF FORECAST GAAP NET LOSS TO NON-GAAP NET LOSS (In millions, except per share data) Three months ending June 30, 2014 Net loss $(16.0) Stock-based compensation 1.9 Restructuring and impairment charges 1.1 Non-cash interest expense 0.2 Consumption of zero-cost inventory (0.7) Non-GAAP net loss $(13.5) Non-GAAP net loss per share $(0.17) Shares outstanding 78.9 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; loss contingency for shareholder litigation;consumption of zero cost-basis inventory; prepaid VAT reserve; non-cash interest expense; change in fair value of derivatives and warrants; and loss on extinguishment of debt; 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, non-recurring or other 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 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 AMSC Logo
AMSC Reports Fourth Quarter 2013 Financial Results and Provides Business Outlook
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