AMSC (NASDAQ:AMSC), a global solutions provider serving wind and
power grid industry leaders, today reported financial results for
its second quarter of fiscal 2016 ended September 30,
2016.
Revenues for the second quarter of fiscal 2016
were $18.5 million, compared with $19.0 million for the same period
of fiscal 2015. The year-over-year decrease in revenues was due to
modestly lower Wind segment revenues during the second quarter of
fiscal 2016.
AMSC’s net loss for the second quarter of fiscal
2016 decreased to $7.3 million, or $0.53 per share, from $7.7
million, or $0.57 per share, for the same period of fiscal 2015.
The Company’s non-GAAP net loss for the second quarter of fiscal
2016 was $8.2 million, or $0.60 per share, which was improved
compared with a non-GAAP net loss of $8.7 million, or $0.64 per
share, in the same period of fiscal 2015. 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, 2016 totaled $26.6 million, compared with $36.6
million at June 30, 2016.
“Revenues in our Wind segment returned to a more
normal run-rate in the second quarter, while our Grid revenues
continued to achieve year-over-year growth,” said Daniel P. McGahn,
President and CEO, AMSC. “While the first half of the fiscal year
was challenging, we expect a stronger second half of the fiscal
year, with growing revenues and minimal cash burn.”
Business Outlook“We anticipate higher Wind
revenues and that our Grid revenues remain strong in the third
quarter,” said McGahn. For the third quarter ending December 31,
2016, AMSC expects that its revenues will be in the range of $23.0
million to $25.0 million. The Company’s net loss and non-GAAP loss
(as defined below) for the third quarter of fiscal 2016 are each
expected to be less than $8.0 million, or $0.57 per share.
Conference Call ReminderIn
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. 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 785-830-7989 and
using conference ID 1601966.
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, a stronger
second half of the fiscal year, higher Wind revenues and Grid
revenues remaining strong in the third quarter 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. These important factors include, but are not limited
to: A significant portion of our revenues are derived from a single
customer, Inox, and shipments to Inox may not commence in the time
frame we expect or at all; We have a history of operating losses
and negative operating cash flows, which may continue in the future
and require us additional financing in the future; Our operating
results may fluctuate significantly from quarter to quarter and may
fall below expectations in any particular fiscal quarter; 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;
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 rely upon third-party suppliers for the components
and sub-assemblies of many of our Wind and Grid products, making us
vulnerable to supply shortages and price fluctuations; We may not
realize all of the sales expected from our backlog of orders and
contracts; 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; We face risks
related to our intellectual property; We face risks related to our
legal proceedings; 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, 2016, and our other reports filed with
the SEC. These important factors, 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 September 30, |
|
Six months ended September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenues |
|
|
|
|
|
|
|
|
Wind |
|
$ |
12,898 |
|
|
$ |
13,583 |
|
|
$ |
18,573 |
|
|
$ |
31,747 |
|
Grid |
|
5,609 |
|
|
5,421 |
|
|
13,279 |
|
|
10,980 |
|
Total revenues |
|
18,507 |
|
|
19,004 |
|
|
31,852 |
|
|
42,727 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
16,404 |
|
|
15,992 |
|
|
28,886 |
|
|
36,495 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
2,103 |
|
|
3,012 |
|
|
2,966 |
|
|
6,232 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
2,867 |
|
|
3,003 |
|
|
5,819 |
|
|
6,165 |
|
Selling, general and
administrative |
|
6,347 |
|
|
6,773 |
|
|
13,563 |
|
|
14,308 |
|
Impairment of minority interest
investment |
|
— |
|
|
38 |
|
|
— |
|
|
779 |
|
Amortization of acquisition related
intangibles |
|
39 |
|
|
39 |
|
|
78 |
|
|
78 |
|
Total operating expenses |
|
9,253 |
|
|
9,853 |
|
|
19,460 |
|
|
21,330 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(7,150 |
) |
|
(6,841 |
) |
|
(16,494 |
) |
|
(15,098 |
) |
|
|
|
|
|
|
|
|
|
Change in fair value of
derivatives and warrants |
|
1,244 |
|
|
701 |
|
|
567 |
|
|
1,501 |
|
Interest expense,
net |
|
(107 |
) |
|
(286 |
) |
|
(243 |
) |
|
(603 |
) |
Other expense, net |
|
(518 |
) |
|
(397 |
) |
|
(393 |
) |
|
(1,169 |
) |
Loss before income tax
expense |
|
(6,531 |
) |
|
(6,823 |
) |
|
(16,563 |
) |
|
(15,369 |
) |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
794 |
|
|
875 |
|
|
1,117 |
|
|
1,450 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(7,325 |
) |
|
$ |
(7,698 |
) |
|
$ |
(17,680 |
) |
|
$ |
(16,819 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.53 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.29 |
) |
|
$ |
(1.31 |
) |
Diluted |
|
$ |
(0.53 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.29 |
) |
|
$ |
(1.31 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
13,769 |
|
|
13,595 |
|
|
13,723 |
|
|
12,808 |
|
Diluted |
|
13,769 |
|
|
13,595 |
|
|
13,723 |
|
|
12,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONSOLIDATED BALANCE
SHEET |
(In thousands, except per share
data) |
|
|
|
September 30, 2016 |
|
March 31, 2016 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
25,262 |
|
|
$ |
39,330 |
|
Accounts receivable, net |
|
12,130 |
|
|
19,264 |
|
Inventory |
|
26,448 |
|
|
18,512 |
|
Prepaid expenses and other current
assets |
|
2,847 |
|
|
5,778 |
|
Restricted cash |
|
452 |
|
|
457 |
|
Total current assets |
|
67,139 |
|
|
83,341 |
|
|
|
|
|
|
Property, plant and equipment,
net |
|
46,677 |
|
|
49,778 |
|
Intangibles, net |
|
571 |
|
|
854 |
|
Restricted cash |
|
934 |
|
|
934 |
|
Deferred tax assets |
|
96 |
|
|
96 |
|
Other assets |
|
336 |
|
|
315 |
|
Total assets |
|
$ |
115,753 |
|
|
$ |
135,318 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable and accrued
expenses |
|
$ |
18,581 |
|
|
$ |
23,156 |
|
Note payable, current portion, net
of discount of $77 as of September 30, 2016 and $42 as of March 31,
2016 |
|
2,089 |
|
|
2,624 |
|
Derivative liabilities |
|
2,660 |
|
|
3,227 |
|
Deferred revenue |
|
17,341 |
|
|
12,000 |
|
Total current liabilities |
|
40,671 |
|
|
41,007 |
|
|
|
|
|
|
Note payable, net of discount of
$133 as of March 31, 2016 |
|
— |
|
|
1,367 |
|
Deferred revenue |
|
8,262 |
|
|
9,269 |
|
Deferred tax liabilities |
|
63 |
|
|
63 |
|
Other liabilities |
|
54 |
|
|
63 |
|
Total liabilities |
|
49,050 |
|
|
51,769 |
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
Common stock |
|
143 |
|
|
141 |
|
Additional paid-in capital |
|
1,013,676 |
|
|
1,011,813 |
|
Treasury stock |
|
(1,371 |
) |
|
(881 |
) |
Accumulated other comprehensive
income |
|
119 |
|
|
660 |
|
Accumulated deficit |
|
(945,864 |
) |
|
(928,184 |
) |
Total stockholders' equity |
|
66,703 |
|
|
83,549 |
|
Total liabilities and stockholders'
equity |
|
$ |
115,753 |
|
|
$ |
135,318 |
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands) |
|
|
Six months ended September 30, |
|
2016 |
|
2015 |
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net loss |
$ |
(17,680 |
) |
|
$ |
(16,819 |
) |
Adjustments to reconcile net loss
to net cash used in operations: |
|
|
|
Depreciation and amortization |
3,735 |
|
|
4,009 |
|
Stock-based compensation
expense |
1,653 |
|
|
1,834 |
|
Impairment of minority interest
investments |
— |
|
|
746 |
|
Provision for excess and obsolete
inventory |
671 |
|
|
829 |
|
Write-off prepaid taxes |
— |
|
|
511 |
|
Loss from minority interest
investments |
— |
|
|
356 |
|
Change in fair value of derivatives
and warrants |
(567 |
) |
|
(1,501 |
) |
Non-cash interest expense |
98 |
|
|
207 |
|
Other non-cash items |
(103 |
) |
|
921 |
|
Changes in operating asset and
liability accounts: |
|
|
|
Accounts receivable |
7,118 |
|
|
(1,196 |
) |
Inventory |
(8,696 |
) |
|
3,478 |
|
Prepaid expenses and other current
assets |
2,843 |
|
|
2,957 |
|
Accounts payable and accrued
expenses |
(4,481 |
) |
|
(3,337 |
) |
Deferred revenue |
4,497 |
|
|
(762 |
) |
Net cash used in operating
activities |
(10,912 |
) |
|
(7,767 |
) |
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Net cash used in investing
activities |
(368 |
) |
|
(228 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Net cash (used in)/provided by
financing activities |
(2,490 |
) |
|
20,202 |
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
(298 |
) |
|
(125 |
) |
|
|
|
|
Net (decrease)/increase
in cash and cash equivalents |
(14,068 |
) |
|
12,082 |
|
Cash and cash
equivalents at beginning of year |
39,330 |
|
|
20,490 |
|
Cash and cash
equivalents at end of year |
$ |
25,262 |
|
|
$ |
32,572 |
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO
NON-GAAP NET INCOME (LOSS) |
(In thousands, except per share
data) |
|
|
|
Three months ended September 30, |
|
Six months ended September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net loss |
|
$ |
(7,325 |
) |
|
$ |
(7,698 |
) |
|
$ |
(17,680 |
) |
|
$ |
(16,819 |
) |
Stock-based
compensation |
|
653 |
|
|
706 |
|
|
1,653 |
|
|
1,834 |
|
Amortization of
acquisition-related intangibles |
|
39 |
|
|
39 |
|
|
78 |
|
|
78 |
|
Restructuring and
impairment charges |
|
— |
|
|
38 |
|
|
— |
|
|
779 |
|
Consumption of zero
cost-basis inventory |
|
(482 |
) |
|
(1,223 |
) |
|
(640 |
) |
|
(2,069 |
) |
Change in fair value of
derivatives and warrants |
|
(1,244 |
) |
|
(701 |
) |
|
(567 |
) |
|
(1,501 |
) |
Non-cash interest
expense |
|
42 |
|
|
96 |
|
|
98 |
|
|
207 |
|
Tax effect of
adjustments |
|
77 |
|
|
$ |
— |
|
|
102 |
|
|
— |
|
Non-GAAP net loss |
|
$ |
(8,240 |
) |
|
$ |
(8,743 |
) |
|
$ |
(16,956 |
) |
|
$ |
(17,491 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per
share |
|
$ |
(0.60 |
) |
|
$ |
(0.64 |
) |
|
$ |
(1.24 |
) |
|
$ |
(1.37 |
) |
Weighted average shares
outstanding - basic and diluted |
|
13,769 |
|
|
13,595 |
|
|
13,723 |
|
|
12,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Forecast GAAP Net Loss to
Non-GAAP Net Loss |
(In millions, except per share
data) |
|
|
|
Three months ending |
|
|
December 31, 2016 |
|
Net loss |
|
$ |
(8.0 |
) |
|
|
Stock-based
compensation |
|
0.6 |
|
|
Consumption of
zero-cost inventory |
|
(0.6 |
) |
|
Non-GAAP net loss |
|
$ |
(8.0 |
) |
|
|
Non-GAAP net loss per
share |
|
$ |
(0.57 |
) |
|
|
Shares outstanding |
|
|
14.0 |
|
|
|
|
|
|
|
|
|
Note: Non-GAAP net loss is defined by the
Company as net loss before stock-based compensation; amortization
of acquisition-related intangibles; 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
AMSC Investor Relations
Phone: 424-634-8592
Email: Brion.Tanous@amsc.com
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