AMSC (NASDAQ:AMSC), a global solutions provider serving wind and
power grid industry leaders, today reported financial results for
its second quarter of fiscal 2015 ended September 30, 2015.
Revenues for the second quarter of fiscal 2015 were $19.0
million, compared with $12.5 million for the same period of fiscal
2014. The year over year growth in revenues was provided by both
operating segments, but particularly the Company’s Wind
segment.
AMSC’s net loss for the second quarter of fiscal 2015 decreased
to $7.7 million, or $0.57 per share, from $25.4 million, or $3.12
per share, for the same period of fiscal 2014. Prior year
results included a one-time charge of $10.2 million for settlement
of an arbitration award and $3.7 million in restructuring and
impairment charges.
The Company’s non-GAAP net loss for the second quarter of fiscal
2015 was $8.7 million, or $0.64 per share, compared with a non-GAAP
net loss of $11.8 million, or $1.45 per share, in the same period
of fiscal 2014. Please refer to the financial table below for a
reconciliation of GAAP to non-GAAP results.
Cash, cash equivalents, and restricted cash at September 30,
2015 totaled $36.6 million, compared with $42.6 million at June 30,
2015.
“In the second quarter of fiscal 2015, we increased revenue by
more than 50% year-over-year as a result of strength in our wind
business and we delivered significantly improved gross margin as
compared to the same quarter a year ago,” said Daniel P. McGahn,
President and CEO, AMSC. “During the quarter we completed the near
term business objectives that we outlined at the beginning of the
fiscal year, including receiving a large wind order, booking
additional D-VAR orders, and identifying an additional U.S.
utility to perform a deployment study of our Resilient Electric
Grid system.”
Business Outlook For the third quarter ending
December 31, 2015, AMSC expects that its revenues will be in the
range of $19 million to $22 million. The Company’s net loss for the
third quarter of fiscal 2015 is expected to be less than $5.5
million, or $0.40 per share. Forecasted net loss in the third
fiscal quarter includes a gain of $2.5 million expected to be
realized from the Company’s sale of its minority equity interest in
Blade Dynamics, which was sold in October 2015 to a subsidiary of
General Electric Company. Excluding this and other unusual
items, AMSC expects that its non-GAAP net loss (as defined below)
for the third quarter of fiscal 2015 will be less than $8.5
million, or $0.62 per share.
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 financial results and business outlook,
including an update on the Resilient Electric Grid system program.
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 785-424-1667 and using conference ID
9790948.
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 StatementsThis 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 expectations regarding
anticipated financial results and a gain of $2.5 million to be
realized from the Company’s sale of its minority equity interest in
Blade Dynamics, 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 financial condition 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; A significant portion of our revenues are derived from a
single customer, 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 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 ramp up production 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,
particularly in China, 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 India and China, and global conditions could
negatively affect our operating results or limit our ability to
expand our operations outside of these countries. Changes in
India’s or 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;
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; 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; and 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, 2015, 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 |
|
|
Six months ended |
|
|
September 30, |
|
|
September 30, |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Wind |
$ |
|
13,583 |
|
$ |
|
7,462 |
|
|
$ |
|
31,747 |
|
$ |
|
15,113 |
|
Grid |
|
|
5,421 |
|
|
|
4,993 |
|
|
|
|
10,980 |
|
|
|
9,038 |
|
Total Revenues |
|
|
19,004 |
|
|
|
12,455 |
|
|
|
|
42,727 |
|
|
|
24,151 |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
15,992 |
|
|
|
13,773 |
|
|
|
|
36,495 |
|
|
|
25,860 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss) |
|
|
3,012 |
|
|
|
(1,318 |
) |
|
|
|
6,232 |
|
|
|
(1,709 |
) |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,003 |
|
|
|
3,078 |
|
|
|
|
6,165 |
|
|
|
6,198 |
|
Selling, general and
administrative |
|
|
6,773 |
|
|
|
8,046 |
|
|
|
|
14,308 |
|
|
|
15,984 |
|
Arbitration award expense |
|
|
— |
|
|
|
10,188 |
|
|
|
|
— |
|
|
|
10,188 |
|
Restructuring and impairments |
|
|
38 |
|
|
|
3,731 |
|
|
|
|
779 |
|
|
|
4,909 |
|
Amortization of acquisition related
intangibles |
|
|
39 |
|
|
|
39 |
|
|
|
|
78 |
|
|
|
79 |
|
Total operating expenses |
|
|
9,853 |
|
|
|
25,082 |
|
|
|
|
21,330 |
|
|
|
37,358 |
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(6,841 |
) |
|
|
(26,400 |
) |
|
|
|
(15,098 |
) |
|
|
(39,067 |
) |
|
|
|
|
|
|
|
|
|
|
Change in fair value of
derivatives and warrants |
|
|
701 |
|
|
|
795 |
|
|
|
|
1,501 |
|
|
|
760 |
|
Interest expense,
net |
|
|
(286 |
) |
|
|
(496 |
) |
|
|
|
(603 |
) |
|
|
(1,030 |
) |
Other (expense) income,
net |
|
|
(397 |
) |
|
|
740 |
|
|
|
|
(1,169 |
) |
|
|
588 |
|
|
|
|
|
|
|
|
|
|
|
Loss before income tax
expense |
|
|
(6,823 |
) |
|
|
(25,361 |
) |
|
|
|
(15,369 |
) |
|
|
(38,749 |
) |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
875 |
|
|
|
62 |
|
|
|
|
1,450 |
|
|
|
190 |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
|
(7,698 |
) |
$ |
|
(25,423 |
) |
|
$ |
|
(16,819 |
) |
$ |
|
(38,939 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss per common
share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
|
(0.57 |
) |
$ |
|
(3.12 |
) |
|
$ |
|
(1.31 |
) |
$ |
|
(4.89 |
) |
Diluted |
$ |
|
(0.57 |
) |
$ |
|
(3.12 |
) |
|
$ |
|
(1.31 |
) |
$ |
|
(4.89 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,595 |
|
|
|
8,147 |
|
|
|
|
12,808 |
|
|
|
7,959 |
|
Diluted |
|
|
13,595 |
|
|
|
8,147 |
|
|
|
|
12,808 |
|
|
|
7,959 |
|
|
UNAUDITED CONSOLIDATED BALANCE
SHEETS |
(In thousands) |
|
|
|
September 30, |
|
March 31, |
|
|
|
|
2015 |
|
|
|
2015 |
|
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
32,572 |
|
|
$ |
20,490 |
|
|
Accounts
receivable, net |
|
11,119 |
|
|
|
9,879 |
|
|
Inventory |
|
16,150 |
|
|
|
20,596 |
|
|
Prepaid
expenses and other current assets |
|
8,263 |
|
|
|
10,764 |
|
|
Restricted
cash |
|
3,281 |
|
|
|
2,822 |
|
|
|
Total current
assets |
|
71,385 |
|
|
|
64,551 |
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
52,677 |
|
|
|
56,097 |
|
|
Intangibles, net |
|
1,138 |
|
|
|
1,422 |
|
|
Restricted
cash |
|
795 |
|
|
|
1,236 |
|
|
Deferred
tax assets |
|
7,766 |
|
|
|
7,766 |
|
|
Other
assets |
|
499 |
|
|
|
2,753 |
|
|
|
Total assets |
$ |
134,260 |
|
|
$ |
133,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable and accrued expenses |
$ |
17,980 |
|
|
$ |
21,615 |
|
|
Notes
payable, current portion, net of discount of $136 as of September
30, 2015 and $244 as of March 31, 2015 |
|
3,864 |
|
|
|
3,756 |
|
|
Derivative
liabilities |
|
1,498 |
|
|
|
2,999 |
|
|
Deferred
revenue |
|
9,692 |
|
|
|
11,019 |
|
|
Deferred
tax liabilities |
|
7,843 |
|
|
|
7,843 |
|
|
|
Total current
liabilities |
|
40,877 |
|
|
|
47,232 |
|
|
|
|
|
|
|
|
Note
Payable, net of current portion and discount of $191 as of
September 30, 2015 and $290 as of March 31, 2015 |
|
1,976 |
|
|
|
3,877 |
|
|
Deferred
revenue |
|
3,404 |
|
|
|
2,756 |
|
|
Other
liabilities |
|
377 |
|
|
|
67 |
|
|
|
Total liabilities |
|
46,634 |
|
|
|
53,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common
stock |
|
141 |
|
|
|
96 |
|
|
Additional
paid-in capital |
|
1,010,220 |
|
|
|
985,921 |
|
|
Treasury
stock |
|
(881 |
) |
|
|
(771 |
) |
|
Accumulated
other comprehensive income (loss) |
|
10 |
|
|
|
(308 |
) |
|
Accumulated
deficit |
|
(921,864 |
) |
|
|
(905,045 |
) |
|
|
Total stockholders'
equity |
|
87,626 |
|
|
|
79,893 |
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity |
$ |
134,260 |
|
|
$ |
133,825 |
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands) |
|
|
|
Six months ended September 30, |
|
|
|
|
2015 |
|
|
|
2014 |
|
Cash flows
from operating activities: |
|
|
|
|
Net
loss |
$ |
(16,819 |
) |
|
$ |
(38,939 |
) |
|
Adjustments
to reconcile net loss to net cash used in operations: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
4,009 |
|
|
|
4,901 |
|
|
|
Stock-based
compensation expense |
|
1,834 |
|
|
|
3,099 |
|
|
|
Impairment
of long lived assets |
|
746 |
|
|
|
3,464 |
|
|
|
Provision
for excess and obsolete inventory |
|
829 |
|
|
|
1,285 |
|
|
|
Write-off
prepaid taxes |
|
511 |
|
|
|
— |
|
|
|
Loss on
minority interest investments |
|
356 |
|
|
|
410 |
|
|
|
Change in
fair value of derivatives and warrants |
|
(1,501 |
) |
|
|
(760 |
) |
|
|
Non-cash
interest expense |
|
207 |
|
|
|
343 |
|
|
|
Other
non-cash items |
|
921 |
|
|
|
(860 |
) |
|
|
Changes in
operating asset and liability accounts: |
|
|
|
|
|
|
Accounts
receivable |
|
(1,196 |
) |
|
|
(2,264 |
) |
|
|
|
Inventory |
|
3,478 |
|
|
|
(5,283 |
) |
|
|
|
Prepaid expenses and
other current assets |
|
2,957 |
|
|
|
(1,533 |
) |
|
|
|
Accounts payable and
accrued expenses |
|
(3,337 |
) |
|
|
4,154 |
|
|
|
|
Accrued arbitration
liability |
|
— |
|
|
|
10,188 |
|
|
|
|
Deferred revenue |
|
(762 |
) |
|
|
10,426 |
|
|
Net cash
used in operating activities |
|
(7,767 |
) |
|
|
(11,369 |
) |
|
|
|
|
|
|
|
Cash flows
from investing activities: |
|
|
|
|
Net cash
(used in) provided by investing activities |
|
(228 |
) |
|
|
2,264 |
|
|
|
|
|
|
|
|
Cash flows
from financing activities: |
|
|
|
|
Net cash
provided by financing activities |
|
20,202 |
|
|
|
844 |
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
(125 |
) |
|
|
(174 |
) |
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents |
|
12,082 |
|
|
|
(8,435 |
) |
Cash and
cash equivalents at beginning of year |
|
20,490 |
|
|
|
43,114 |
|
Cash and
cash equivalents at end of period |
$ |
32,572 |
|
|
$ |
34,679 |
|
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO
NON-GAAP NET INCOME (LOSS) |
(In thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Six months
ended |
September 30, |
September 30, |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Net
loss |
$ |
(7,698 |
) |
|
$ |
(25,423 |
) |
|
$ |
(16,819 |
) |
|
$ |
(38,939 |
) |
Stock-based
compensation |
|
706 |
|
|
|
1,518 |
|
|
|
1,834 |
|
|
|
3,099 |
|
Arbitration
award expense |
|
— |
|
|
|
10,188 |
|
|
|
— |
|
|
|
10,188 |
|
Amortization of acquisition-related intangibles |
|
39 |
|
|
|
39 |
|
|
|
78 |
|
|
|
79 |
|
Restructuring and impairment charges |
|
38 |
|
|
|
3,731 |
|
|
|
779 |
|
|
|
4,909 |
|
Consumption
of zero cost-basis inventory |
|
(1,223 |
) |
|
|
(1,195 |
) |
|
|
(2,069 |
) |
|
|
(2,567 |
) |
Change of
fair value of derivatives and warrants |
|
(701 |
) |
|
|
(795 |
) |
|
|
(1,501 |
) |
|
|
(760 |
) |
Non-cash
interest expense |
|
96 |
|
|
|
154 |
|
|
|
207 |
|
|
|
343 |
|
Non-GAAP
net loss |
$ |
(8,743 |
) |
|
$ |
(11,783 |
) |
|
$ |
(17,491 |
) |
|
$ |
(23,648 |
) |
|
|
|
|
|
|
|
|
Non-GAAP
loss per share |
$ |
(0.64 |
) |
|
$ |
(1.45 |
) |
|
$ |
(1.37 |
) |
|
$ |
(2.97 |
) |
Weighted
average shares outstanding |
|
13,595 |
|
|
|
8,147 |
|
|
|
12,808 |
|
|
|
7,959 |
|
|
Reconciliation of Forecast GAAP Net Loss to
Non-GAAP Net Loss |
(In millions, except per share
data) |
|
|
|
|
Three months ending |
Dec. 31, 2015 |
Net
loss |
$ |
(5.5 |
) |
Stock-based
compensation |
|
0.7 |
|
Gain on
sale of investment in Blade Dynamics |
|
(2.5 |
) |
Non-cash
interest expense |
|
0.1 |
|
Consumption
of zero-cost inventory |
|
(1.3 |
) |
Non-GAAP
net loss |
$ |
(8.5 |
) |
Non-GAAP
net loss per share |
$ |
(0.62 |
) |
Shares
outstanding |
|
13.8 |
|
|
|
|
|
Note: Non-GAAP net loss is defined by the Company as net loss
before stock-based compensation; amortization of
acquisition-related intangibles; restructuring and impairment
charges; 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, 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.
AMSC Contact:
Brion D. Tanous
CleanTech IR, Inc.
Phone: 978-842-3247
Email: Brion.Tanous@amsc.com
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