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
administrative |
9,490 |
13,348 |
37,230 |
49,652 |
Restructuring and
impairments |
2,126 |
1,076 |
2,998 |
7,922 |
Amortization of acquisition
related intangibles |
39 |
82 |
287 |
324 |
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 derivatives and
warrants |
(18) |
1,442 |
1,872 |
7,556 |
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 as of March 31, 2014 and $458 as of March
31, 2013 |
6,240 |
4,158 |
Current portion of convertible
note, net of discount of $4,289 as of March 31, 2013 |
-- |
4,610 |
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 $287 as of March 31, 2014 and $95 as of March 31,
2013 |
6,380 |
3,367 |
Convertible note net of current portion and
discount of $600 as of March 31, 2013 |
-- |
5,881 |
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
by investing 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 equivalents |
333 |
(339) |
|
|
|
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 (recoveries),
net |
-- |
660 |
-- |
(7,768) |
Stock-based compensation |
3,368 |
2,170 |
10,696 |
8,138 |
Amortization of acquisition-related
intangibles |
39 |
82 |
287 |
324 |
Restructuring and impairment charges |
2,126 |
1,076 |
2,998 |
7,922 |
Sinovel litigation |
23 |
280 |
18 |
691 |
Loss contingency for shareholder
litigation |
-- |
1,800 |
-- |
1,800 |
Consumption of zero cost-basis inventory |
(674) |
(721) |
(4,308) |
(2,111) |
Prepaid VAT reserve |
1,426 |
-- |
1,426 |
-- |
Change of fair value of derivatives and
warrants |
18 |
(1,442) |
(1,872) |
(7,556) |
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 outstanding |
68,853 |
56,576 |
62,622 |
53,070 |
|
|
|
|
|
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
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