AMSC (Nasdaq: AMSC), a leading system provider of
megawatt-scale power resiliency solutions
that orchestrate the rhythm and harmony of power on the
grid™ and protect and expand the capability of our Navy’s fleet,
today announced that it has acquired Northeast Power Systems, Inc.
(NEPSI), a private company based in upstate New York that supplies
medium voltage metal-enclosed capacitor banks, harmonic filters,
fast switching reactive power solutions and surge protection
products, and has paid $26 million in cash and additionally the
sellers have received 873,657 restricted shares of AMSC common
stock.
The acquisition of NEPSI directly aligns with AMSC’s strategic
priorities to accelerate profitable growth independent of its wind
business, broaden its product offerings and expand both market
reach and market share. NEPSI has a long history of profitable
revenue with a three-year average of approximately $25 million of
revenue per year, and operating margins approaching 20 percent. By
leveraging NEPSI’s leadership position in the static voltage
management market for industrial applications, AMSC expects to
expand its grid business offerings and deliver greater value to
existing and new customers, business partners and shareholders.
“NEPSI has established a leadership position in the industrial
market for power electronics that complements our recent push into
the industrial market,” said Daniel P. McGahn, Chairman, President
and CEO of AMSC. “The addition of NEPSI to AMSC’s Grid solutions is
expected to accelerate our ability to achieve our goal of
profitability and expand our offering of proprietary power
electronics products in the industrial sector.”
As part of the transaction, in the future the selling
shareholders may receive additional restricted shares of AMSC
Common Stock upon the achievement of certain specified revenue
objectives. For more information about the stock
purchase agreement, please refer to AMSC’s Form 8-K filed with the
SEC today.
Preliminary Second Quarter Fiscal 2020 Results
For the second quarter of fiscal 2020, AMSC expects its revenues
will be in the range of $20.5 million—$21.5 million, compared to
its previous second quarter revenue guidance of $17 million—$21
million. AMSC’s net loss and non-GAAP net loss for the second
quarter of fiscal 2020 are both expected to be lower than its
previous guidance provided on August 5, 2020.
The Company expects its cash, cash equivalents, marketable
securities and restricted cash at September 30, 2020 to be
approximately $57 million, which is in line with the Company’s
previous guidance provided on August 5, 2020. As noted above, on
October 1, 2020, the Company paid $26 million in cash in connection
with its acquisition of NEPSI.
The preliminary, unaudited information provided above is based
on the Company’s current estimate of results from operations for
the second quarter of fiscal 2020 and its cash, cash equivalents,
marketable securities and restricted cash at September 30,
2020, and remains subject to change based on the Company’s closing
procedures, including the Company’s execution of its internal
controls over financial reporting, and the subsequent occurrence or
identification of events prior to the formal issuance of the
unaudited quarterly financial statements. The Company expects to
report its second quarter of fiscal 2020 financial results on or
about November 5, 2020.
Preliminary Third Quarter Fiscal 2020
Business OutlookFor the third quarter ending
December 31, 2020, AMSC currently expects that its revenues
will be in the range of $22 million—$25 million. The Company
expects to generate positive operating cash flow in the third
quarter. This guidance includes NEPSI’s expected impact on
the financial results for the third quarter ending December 31,
2020.
Conference Call In conjunction with this
announcement, AMSC management will conduct a conference call with
investors beginning at 8:30 a.m. Eastern Time on Tuesday, October
6, 2020. Those who wish to listen to the live or archived
conference call webcast should visit the "Investors" section of the
Company's website at https://ir.amsc.com. The live call also can be
accessed by dialing 800-367-2403 or 334-777-6978 and using
conference ID 5317355.
About Northeast Power Systems,
Inc.
(NEPSI)Northeast
Power Systems, Inc. (NEPSI) is the leading global provider of
medium-voltage metal-enclosed power capacitor banks and harmonic
filter banks for use on electric power systems. Founded in 1995,
the New York based company has grown to be the world's market
leader and most trusted name for the supply of medium-voltage
metal-enclosed power factor correction and harmonic filter systems.
NEPSI products help deliver electric power more efficiently and
reliably by improving power factor, reducing voltage distortion,
and leveling the load voltage profile to large power producers and
consumers. NEPSI’s products are used in large remote mine and
rectifier applications where non-linear load equipment dominates
the facilities energy consumption making the filter system's
reliability a critical component to the operation of the plant. Its
equipment is also used by the renewable energy industry to meet
strict interconnect requirements to remain in operation, and by
small industrial and commercial power systems to alleviate power
factor penalties. All NEPSI products are proudly designed and built
in upstate New York.
About AMSC (Nasdaq: AMSC)AMSC generates the
ideas, technologies and solutions that meet the world’s demand for
smarter, cleaner … better energy™. Through its Gridtec™ Solutions,
AMSC provides the engineering planning services and advanced grid
systems that optimize network reliability, efficiency and
performance. Through its Marinetec™ Solutions, AMSC provides
ship protection systems and is developing propulsion and
power management solutions designed to help fleets increase system
efficiencies, enhance power quality and boost operational
safety. Through its Windtec™ Solutions, AMSC provides wind
turbine electronic controls and systems, designs and engineering
services that reduce the cost of wind energy. The Company’s
solutions are enhancing the performance and reliability of power
networks, increasing the operational safety of navy fleets and
powering gigawatts of renewable energy globally. 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.
©2020 AMSC. AMSC, American Superconductor, Amperium, Gridtec,
Marinetec, Windtec, Orchestrate the Rhythm and Harmony of Power on
the Grid 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”). Such statements include, but are not limited to,
statements about our expectation that the addition of NEPSI to
AMSC’s Grid solutions will accelerate our ability to achieve our
goal of profitability; the expected effects and benefits of our
acquisition of NEPSI; our expectation that the NEPSI acquisition
will be accretive to our earnings per share; our expected financial
results for the quarter ended September 30, 2020, and our expected
cash, cash equivalents, marketable securities and restricted cash
balance on September 30, 2020; our expected financial results for
the quarter ending December 31, 2020, and other statements
containing the words “believes,” “anticipates,” “plans,” “expects,”
“will” and similar expressions. 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: Risks related to the financial performance of
NEPSI and its affiliated entities; The NEPSI business may not be
integrated successfully; We may not realize the expected benefits
of our acquisition of NEPSI; 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; 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 of operations; If we fail
to maintain proper and effective internal control 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 not realize all of
the sales expected from our backlog of orders and contracts; 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; Our financial condition may have an
adverse effect on our customer and supplier relationships; The
novel coronavirus (COVID-19) pandemic could adversely impact our
business, financial condition and results of operations; We may
experience difficulties re-establishing our HTS wire production
capability in our Ayer, Massachusetts facility; Our success is
dependent upon attracting and retaining qualified personnel and our
inability to do so could significantly damage our business and
prospects; Historically, a significant portion of our revenues have
been derived from a single customer and if this customer’s business
is negatively affected, it could adversely impact our business; Our
success in addressing the wind energy market is dependent on the
manufacturers that license our designs; Our business and operations
would be adversely impacted in the event of a failure or security
breach of our information technology infrastructure; Failure to
comply with evolving data privacy and data protection laws and
regulations or to otherwise protect personal data, may adversely
impact our business and financial results; We rely upon third-party
suppliers for the components and subassemblies of many of our Grid
and Wind 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; Many of
our customers outside of the United States may be 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 had limited success marketing
and selling our superconductor products and system-level solutions,
and our failure to more broadly 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 adoption of the REG system, which is currently limited,
and a widespread commercial market for our products may not
develop; Adverse changes in domestic and global economic conditions
could adversely affect our operating results; We have operations
in, and depend on sales in, emerging markets, including India, and
global conditions could negatively affect our operating results or
limit our ability to expand our operations outside of these
markets. Changes in India’s political, social, regulatory and
economic environment may affect our financial performance; Our
products face 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; Growth of the wind energy
market depends largely on the availability and size of government
subsidies, economic incentives and legislative programs designed to
support the growth of wind energy; Lower prices for other fuel
sources may reduce the demand for wind energy development, which
could have a material adverse effect on our ability to grow our
Wind business; Unfavorable results of legal proceedings could have
a material adverse effect on our business, operating results and
financial condition; 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;
We face risks related to our intellectual property; We face risks
related to our technologies; We face risks related to our legal
proceedings; We face risks related to our common stock; 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, 2020, 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.
AMSC ContactsInvestor
Relations Contact:LHA Investor RelationsCarolyn Capaccio(212)
838-3777amscIR@lhai.com
Public Relations Contact:RooneyPartners LLC Bob
Cavosi646-638-9891rcavosi@rooneyco.com
AMSC Communications Manager:Nicol GolezPhone:
978-399-8344Nicol.Golez@amsc.com
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