AMSC (NASDAQ:AMSC), a global solutions provider serving wind and
power grid industry leaders, today reported financial results for
its second quarter of fiscal 2017 ended September 30,
2017.
Revenues for the second quarter of fiscal 2017
were $11.0 million, compared with $18.5 million for the same period
of fiscal 2016. Revenues in both the Wind and Grid segments
decreased year-over-year.
AMSC’s net loss for the second quarter of fiscal
2017 was $7.3 million, or $0.38 per share, compared to $7.3
million, or $0.53 per share, for the same period of fiscal 2016.
The Company’s non-GAAP net loss for the second quarter of fiscal
2017 was $8.3 million, or $0.44 per share, compared with a non-GAAP
net loss of $8.2 million, or $0.60 per share, in the same period of
fiscal 2016. Please refer to the financial table below for a
reconciliation of GAAP to non-GAAP results.
Cash, cash equivalents and restricted cash on
September 30, 2017 totaled $30.5 million, compared with $37.7
million at June 30, 2017.
“Our financial performance in the second quarter
was at the middle of our expected range,” said Daniel P. McGahn,
President and CEO, AMSC. “We are pleased to see the wind market in
India improving. We expect stronger revenues in the second half of
fiscal 2017 for both our Wind and Grid segments.”
Business OutlookFor the third
quarter ending December 31, 2017, AMSC expects that its revenues
will be in the range of $14.0 million to $18.0 million. The
Company’s net loss for the third quarter of fiscal 2017 is expected
to be less than $8.0 million, or $0.40 per share. The
Company's non-GAAP net loss (as defined below) is expected to be
less than $7.6 million, or $0.38 per share. The Company
expects a cash burn of $8.0 million to $9.0 million in the third
quarter of fiscal 2017, including a $1.0 million capital investment
related to the Massachusetts move anticipated to occur in the third
quarter.
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 on Wednesday, November 8th 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 800-289-0438 and using conference ID 7795162.
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 expectation that our Wind and
Grid segments will generate stronger revenues in the second half of
fiscal 2017, our expected financial results for the quarter ending
September 30, 2017, our expected cash burn during the quarter
ending September 30, 2017, our anticipated move of our Devens
facility, 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; We have a
history of operating losses and negative operating cash flows,
which may continue in the future and require us to secure
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 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; Failure to successfully execute any move of our
Devens, Massachusetts manufacturing facility or achieve expected
savings following any move could adversely impact our financial
performance; 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 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,
economic incentives and legislative programs designed to support
the growth of wind energy; 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; 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, 2017, 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, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
|
|
|
|
|
|
|
Wind |
$ |
5,554 |
|
|
$ |
12,898 |
|
|
$ |
7,831 |
|
|
$ |
18,573 |
|
Grid |
5,495 |
|
|
5,609 |
|
|
12,140 |
|
|
13,279 |
|
Total
revenues |
11,049 |
|
|
18,507 |
|
|
19,971 |
|
|
31,852 |
|
|
|
|
|
|
|
|
|
Cost of revenues |
10,777 |
|
|
16,404 |
|
|
24,186 |
|
|
28,886 |
|
|
|
|
|
|
|
|
|
Gross margin |
272 |
|
|
2,103 |
|
|
(4,215 |
) |
|
2,966 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development |
2,951 |
|
|
2,867 |
|
|
5,667 |
|
|
5,819 |
|
Selling,
general and administrative |
5,339 |
|
|
6,347 |
|
|
11,477 |
|
|
13,563 |
|
Amortization of acquisition-related intangibles |
— |
|
|
39 |
|
|
13 |
|
|
78 |
|
Change in
fair value of contingent consideration |
(201 |
) |
|
— |
|
|
(201 |
) |
|
— |
|
Restructuring |
(12 |
) |
|
— |
|
|
1,328 |
|
|
— |
|
Total
operating expenses |
8,077 |
|
|
9,253 |
|
|
18,284 |
|
|
19,460 |
|
|
|
|
|
|
|
|
|
Operating loss |
(7,805 |
) |
|
(7,150 |
) |
|
(22,499 |
) |
|
(16,494 |
) |
|
|
|
|
|
|
|
|
Change in fair value of
warrants |
144 |
|
|
1,244 |
|
|
1,069 |
|
|
567 |
|
Gain on sale of
minority interest |
951 |
|
|
— |
|
|
951 |
|
|
— |
|
Interest income
(expense), net |
54 |
|
|
(107 |
) |
|
45 |
|
|
(243 |
) |
Other expense, net |
(796 |
) |
|
(518 |
) |
|
(2,170 |
) |
|
(393 |
) |
Loss before income tax
(benefit) expense |
(7,452 |
) |
|
(6,531 |
) |
|
(22,604 |
) |
|
(16,563 |
) |
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
(171 |
) |
|
794 |
|
|
(71 |
) |
|
1,117 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(7,281 |
) |
|
$ |
(7,325 |
) |
|
$ |
(22,533 |
) |
|
$ |
(17,680 |
) |
|
|
|
|
|
|
|
|
Net loss per common
share |
|
|
|
|
|
|
|
Basic |
$ |
(0.38 |
) |
|
$ |
(0.53 |
) |
|
$ |
(1.26 |
) |
|
$ |
(1.29 |
) |
Diluted |
$ |
(0.38 |
) |
|
$ |
(0.53 |
) |
|
$ |
(1.26 |
) |
|
$ |
(1.29 |
) |
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding |
|
|
|
|
|
|
|
Basic |
19,060 |
|
|
13,769 |
|
|
17,925 |
|
|
13,723 |
|
Diluted |
19,060 |
|
|
13,769 |
|
|
17,925 |
|
|
13,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONSOLIDATED BALANCE
SHEET |
(In thousands, except per share
data) |
|
|
|
|
|
September 30, 2017 |
|
March 31, 2017 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
30,320 |
|
|
$ |
26,784 |
|
Accounts
receivable, net |
8,193 |
|
|
7,956 |
|
Inventory |
15,983 |
|
|
17,462 |
|
Prepaid
expenses and other current assets |
3,323 |
|
|
2,703 |
|
Restricted cash |
— |
|
|
795 |
|
Total
current assets |
57,819 |
|
|
55,700 |
|
|
|
|
|
Property,
plant and equipment, net |
36,438 |
|
|
43,438 |
|
Intangibles, net |
3,496 |
|
|
301 |
|
Goodwill |
1,711 |
|
|
— |
|
Restricted cash |
165 |
|
|
165 |
|
Deferred
tax assets |
538 |
|
|
407 |
|
Other
assets |
381 |
|
|
233 |
|
Total
assets |
$ |
100,548 |
|
|
$ |
100,244 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
$ |
14,016 |
|
|
$ |
14,490 |
|
Note
payable, current portion, net of discount of $19 as of March 31,
2017 |
— |
|
|
1,481 |
|
Derivative liabilities |
1,224 |
|
|
1,923 |
|
Deferred
revenue |
16,069 |
|
|
14,323 |
|
Total
current liabilities |
31,309 |
|
|
32,217 |
|
|
|
|
|
Deferred
revenue |
8,325 |
|
|
7,631 |
|
Deferred
tax liabilities |
125 |
|
|
125 |
|
Other
liabilities |
137 |
|
|
45 |
|
Total
liabilities |
39,896 |
|
|
40,018 |
|
|
|
|
|
Stockholders'
equity: |
|
|
|
Common
stock |
211 |
|
|
147 |
|
Additional paid-in capital |
1,039,458 |
|
|
1,017,510 |
|
Treasury
stock |
(1,645 |
) |
|
(1,371 |
) |
Accumulated other comprehensive income (loss) |
718 |
|
|
(503 |
) |
Accumulated deficit |
(978,090 |
) |
|
(955,557 |
) |
Total
stockholders' equity |
60,652 |
|
|
60,226 |
|
Total
liabilities and stockholders' equity |
$ |
100,548 |
|
|
$ |
100,244 |
|
|
|
|
|
|
|
|
|
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands) |
|
|
|
Six Months Ended September 30, |
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
Net
loss |
$ |
(22,533 |
) |
|
$ |
(17,680 |
) |
Adjustments to reconcile net loss to net cash used in
operations: |
|
|
|
Depreciation and amortization |
7,682 |
|
|
3,735 |
|
Stock-based compensation expense |
1,232 |
|
|
1,653 |
|
Provision
for excess and obsolete inventory |
351 |
|
|
671 |
|
Gain on
sale of minority interest |
(951 |
) |
|
— |
|
Change in
fair value of warrants and contingent consideration |
(1,270 |
) |
|
(567 |
) |
Non-cash
interest expense |
19 |
|
|
98 |
|
Other
non-cash items |
(97 |
) |
|
(103 |
) |
Changes
in operating asset and liability accounts: |
|
|
|
Accounts
receivable |
124 |
|
|
7,118 |
|
Inventory |
1,354 |
|
|
(8,696 |
) |
Prepaid
expenses and other current assets |
85 |
|
|
2,843 |
|
Accounts
payable and accrued expenses |
(770 |
) |
|
(4,481 |
) |
Deferred
revenue |
1,235 |
|
|
4,497 |
|
Net cash
used in operating activities |
(13,539 |
) |
|
(10,912 |
) |
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Net cash
provided by/(used in) investing activities |
1,279 |
|
|
(368 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Net cash
provided by/(used in) financing activities |
15,188 |
|
|
(2,490 |
) |
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
608 |
|
|
(298 |
) |
|
|
|
|
Net increase/(decrease)
in cash and cash equivalents |
3,536 |
|
|
(14,068 |
) |
Cash and cash
equivalents at beginning of year |
26,784 |
|
|
39,330 |
|
Cash and cash
equivalents at end of year |
$ |
30,320 |
|
|
$ |
25,262 |
|
|
|
|
|
|
|
|
|
|
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, |
|
2017 |
|
2016 |
2017 |
|
2016 |
Net loss |
$ |
(7,281 |
) |
|
$ |
(7,325 |
) |
$ |
(22,533 |
) |
|
$ |
(17,680 |
) |
Sale of minority
investments |
(951 |
) |
|
— |
|
(951 |
) |
|
— |
|
Stock-based
compensation |
478 |
|
|
653 |
|
1,232 |
|
|
1,653 |
|
Amortization of
acquisition-related intangibles |
— |
|
|
39 |
|
13 |
|
|
78 |
|
Consumption of zero
cost-basis inventory |
(340 |
) |
|
(482 |
) |
(396 |
) |
|
(640 |
) |
Change in fair value of
warrants and contingent consideration |
(346 |
) |
|
(1,244 |
) |
(1,270 |
) |
|
(567 |
) |
Non-cash interest
expense |
— |
|
|
42 |
|
19 |
|
|
98 |
|
Tax effect of
adjustments |
114 |
|
|
77 |
|
123 |
|
|
102 |
|
Non-GAAP net loss |
$ |
(8,326 |
) |
|
$ |
(8,240 |
) |
$ |
(23,763 |
) |
|
$ |
(16,956 |
) |
|
|
|
|
|
|
|
Non-GAAP net loss per
share |
$ |
(0.44 |
) |
|
$ |
(0.60 |
) |
$ |
(1.33 |
) |
|
$ |
(1.24 |
) |
Weighted average shares
outstanding - basic and diluted |
19,060 |
|
|
13,769 |
|
17,925 |
|
|
13,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Forecast GAAP Net Loss to
Non-GAAP Net Loss |
(In thousands, except per share
data) |
|
|
|
|
Three months ending |
|
|
December 31, 2017 |
|
Net loss |
$ |
(8,000 |
) |
|
Stock-based
compensation |
|
700 |
|
|
Amortization of
acquisition-related intangibles |
|
— |
|
|
Consumption of
zero-cost inventory |
|
(300 |
) |
|
Tax effect of
adjustments |
|
— |
|
|
Non-GAAP net loss |
$ |
(7,600 |
) |
|
Non-GAAP net loss per
share |
$ |
(0.38 |
) |
|
Shares outstanding |
|
20,100 |
|
|
|
|
|
|
|
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
warrants and contingent consideration; tax effect of adjustments;
and other unusual charges. 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 is not able to provide the change in fair value of
warrants and contingent consideration on a forward-looking basis
without unreasonable efforts because the calculation for that
change is primarily driven by the closing price and volatility of
the Company's stock at the end of each fiscal quarter, which cannot
be reasonably estimated at this time. The Company does not
expect to adjust non-GAAP net loss for non-cash interest expense in
future quarters due to the repayment of the Company’s term loan
during the first quarter of fiscal 2017. Actual non-GAAP net
loss for the fiscal quarter ending December 31, 2017, including the
above adjustments, may differ materially from those forecasted in
the table above.
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
GAAP to non-GAAP net loss is set forth in the table above.
AMSC Investor RelationsBrion D. TanousPhone:
424-634-8592Email: Brion.Tanous@amsc.com
AMSC Public RelationsNicol GolezPhone:
978-399-8344Email: Nicol.Golez@amsc.com
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