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AMSC Reports Third Quarter Fiscal 2016 Financial Results and Provides Business Outlook

DEVENS, Mass., Feb. 06, 2017 (GLOBE NEWSWIRE) -- AMSC (NASDAQ:AMSC), a global solutions provider serving wind and power grid industry leaders, today reported financial results for its third quarter of fiscal 2016 ended December 31, 2016.

Revenues for the third quarter of fiscal 2016 were $27.1 million, compared with $25.8 million for the same period of fiscal 2015. Revenues in both the Wind and Grid segments increased year-over-year.

AMSC’s net loss for the third quarter of fiscal 2016 decreased to $2.8 million, or $0.20 per share, from $3.0 million, or $0.22 per share, for the same period of fiscal 2015. The Company’s non-GAAP net loss for the third quarter of fiscal 2016 was $2.9 million, or $0.21 per share, which was improved compared with a non-GAAP net loss of $4.9 million, or $0.36 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 December 31, 2016 totaled $26.0 million, compared with $26.6 million at September 30, 2016.

“Revenues were seasonally stronger in our Wind segment in the third quarter, while our Grid revenues continued to achieve year-over-year growth,” said Daniel P. McGahn, President and CEO, AMSC. “In the third quarter, we demonstrated significant improvement in our operating results relative to the first and second quarters of fiscal 2016, with positive operating cash flow in the third quarter. We expect our revenues in the fourth quarter of fiscal 2016 to be strong as well.”

Business Outlook
For the fourth quarter ending March 31, 2017, AMSC expects that its revenues will be in the range of $22.0 million to $26.0 million. The Company’s net loss for the fourth quarter of fiscal 2016 is expected to be less than $5.5 million, or $0.39 per share. The Company's non-GAAP net loss (as defined below) is expected to be less than $5.0 million, or $0.36 per share. The Company expects a minimal cash burn of less than $2.0 million in the fourth quarter.

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. 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 888-240-1347 and using conference ID 6209539.

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 expectations regarding anticipated financial results, strong revenues in the fourth 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 occur in the time frame we expect; 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 subassemblies 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
December 31,
Nine months ended
December 31,
2016 2015 2016 2015
Revenues
Wind$18,248 $17,229 $36,822 $48,976
Grid8,900 8,543 22,178 19,523
Total revenues27,148 25,772 59,000 68,499
Cost of revenues22,107 19,263 50,992 55,758
Gross profit5,041 6,509 8,008 12,741
Operating expenses:
Research and development2,985 2,759 8,804 8,924
Selling, general and administrative6,077 7,023 19,640 21,331
Impairment loss 779
Amortization of acquisition related intangibles39 39 118 118
Total operating expenses9,101 9,821 28,562 31,152
Operating loss(4,060) (3,312) (20,554) (18,411)
Change in fair value of derivatives and warrants101 (1,092) 667 409
Gain on sale of minority interest325 2,511 325 2,511
Interest expense, net(89) (238) (331) (841)
Other income (expense), net873 (20) 481 (1,189)
Loss before income tax expense(2,850) (2,151) (19,412) (17,521)
Income tax (benefit) expense(82) 806 1,036 2,256
Net loss$(2,768) $(2,957) $(20,448) $(19,777)
Net loss per common share
Basic$(0.20) $(0.22) $(1.49) $(1.52)
Diluted$(0.20) $(0.22) $(1.49) $(1.52)
Weighted average number of common shares outstanding
Basic13,792 13,539 13,746 13,052
Diluted13,792 13,539 13,746 13,052


UNAUDITED CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)
December 31,
2016
March 31,
2016
ASSETS
Current assets:
Cash and cash equivalents$25,063 $39,330
Accounts receivable, net15,863 19,264
Inventory19,442 18,512
Prepaid expenses and other current assets3,097 5,778
Restricted cash795 457
Total current assets64,260 83,341
Property, plant and equipment, net45,114 49,778
Intangibles, net436 854
Restricted cash140 934
Deferred tax assets115 96
Other assets176 315
Total assets$110,241 $135,318
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses$18,354 $23,156
Note payable, current portion, net of discount of $47 as of December 31, 2016 and $42 as of March 31, 2016 1,453 2,624
Derivative liabilities2,560 3,227
Deferred revenue15,997 12,000
Total current liabilities38,364 41,007
Note payable, net of discount of $133 as of March 31, 2016 1,367
Deferred revenue7,974 9,269
Deferred tax liabilities63 63
Other liabilities47 63
Total liabilities46,448 51,769
Stockholders' equity:
Common stock143 141
Additional paid-in capital1,014,365 1,011,813
Treasury stock(1,371) (881)
Accumulated other comprehensive (loss) income(712) 660
Accumulated deficit(948,632) (928,184)
Total stockholders' equity63,793 83,549
Total liabilities and stockholders' equity$110,241 $135,318



UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine months ended
December 31,
2016 2015
Cash flows from operating activities:
Net loss$(20,448) $(19,777)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization5,606 6,050
Stock-based compensation expense2,266 2,542
Impairment loss 746
Provision for excess and obsolete inventory1,074 1,835
Write-off prepaid taxes 289
Gain from sale of minority interest investments(325) (2,155)
Change in fair value of derivatives and warrants(667) (409)
Non-cash interest expense127 290
Other non-cash items(937) 694
Changes in operating asset and liability accounts:
Accounts receivable3,213 (7,156)
Inventory(2,294) 3,288
Prepaid expenses and other current assets2,283 5,800
Accounts payable and accrued expenses(4,031) (34)
Deferred revenue3,598 198
Net cash used in operating activities(10,535) (7,799)
Cash flows from investing activities:
Net cash provided by investing activities357 4,856
Cash flows from financing activities:
Net cash (used in)/provided by financing activities(3,657) 19,202
Effect of exchange rate changes on cash and cash equivalents(432) (312)
Net (decrease)/increase in cash and cash equivalents(14,267) 15,947
Cash and cash equivalents at beginning of year39,330 20,490
Cash and cash equivalents at end of year$25,063 $36,437



RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share data)
Three months ended
December 31,
Nine months ended
December 31,
2016 2015 2016 2015
Net loss$(2,768) $(2,957) $(20,448) $(19,777)
Gain on sale of interest in minority investments, net of tax effect (325) (2,354) (325) (2,354)
Stock-based compensation613 708 2,266 2,542
Amortization of acquisition-related intangibles39 39 118 118
Impairment loss 779
Consumption of zero cost-basis inventory(478) (1,543) (1,118) (3,612)
Change in fair value of derivatives and warrants(101) 1,092 (667) (409)
Non-cash interest expense30 83 127 290
Tax effect of adjustments77 179
Non-GAAP net loss$(2,913) $(4,932) $(19,868) $(22,423)
Non-GAAP net loss per share$(0.21) $(0.36) $(1.45) $(1.72)
Weighted average shares outstanding - basic and diluted13,792 13,539 13,746 13,052


Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss
(In millions, except per share data)
Three months ending
March 31, 2017
Net loss$(5.5)
Stock-based compensation 0.6
Consumption of zero-cost inventory (0.1)
Non-GAAP net loss$(5.0)
Non-GAAP net loss per share$(0.36)
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

Source: AMSC