UPDATE – AMSC Reports Fourth Quarter and Full Fiscal Year 2019 Financial Results and Provides Business Outlook

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    AYER, Mass., June 03, 2020 (GLOBE NEWSWIRE) — In a release issued under the same headline on Tuesday, June 2nd by AMSC (Nasdaq: AMSC), please note the phone number in the ‘Conference Call Reminder’ paragraph of the release has an incorrect area code and should read 800, not 888. The corrected release follows:

    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 that protect and expand the capability and resiliency of our Navy’s fleet, today reported financial results for its fourth quarter and full fiscal year 2019 ended March 31, 2020.

    Revenues for the fourth quarter of fiscal 2019 were $18.1 million compared with $14.6 million for the same period of fiscal 2018. The year-over-year increase was primarily driven by higher Grid segment revenues. 

    AMSC’s net loss for the fourth quarter of fiscal 2019 was $5.9 million, or $0.27 per share, compared to net loss of $8.4 million, or $0.41 per share, for the same period of fiscal 2018.  The Company’s non-GAAP net loss for the fourth quarter of fiscal 2019 was $5.1 million, or $0.24 per share, compared with a non-GAAP net loss of $4.6 million, or $0.23 per share, in the same period of fiscal 2018. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.

    Revenues for the full fiscal year 2019 were $63.8 million as compared to $56.2 million in fiscal year 2018. AMSC reported a net loss for the fiscal year 2019 of $17.1 million, or $1.03 per diluted share, compared to net income of $26.8 million, or $1.29 per diluted share in fiscal year 2018. The Company’s non-GAAP net loss for the full year fiscal 2019 was $19.5 million, or $0.93 per share, compared with a non-GAAP net loss of $13.0 million, or $0.64 per share, for fiscal year 2018.  Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.
      
    Cash, cash equivalents, marketable securities and restricted cash on March 31, 2020 totaled $66.1 million, compared with $78.2 million at March 31, 2019.

    “In fiscal 2019, we grew our Grid business by nearly 45% as a result of higher revenues from each Grid product line – SPS, D-VAR, VVO, and REG,” said Daniel P. McGahn, Chairman, President and CEO, AMSC. “We are executing on our goal of transforming AMSC into what we expect to be a more sustainable and diversified business. We now enter fiscal 2020 with what we believe to be the right products and the right resources to advance our long-term growth strategy.”

    Business Outlook
    For the first quarter ending June 30, 2020, AMSC expects that its revenues will be in the range of $18 million to $20 million.  The Company’s net loss for the first quarter of fiscal 2020 is expected not to exceed $6.2 million, or $0.28 per share.  The Company’s non-GAAP net loss (as defined below) is expected not to exceed $5.5 million, or $0.25 per share.  The Company expects operating cash flow to be a burn of $4 million to $6 million in the first quarter of fiscal 2020.  The Company expects cash, cash equivalents, marketable securities and restricted cash on June 30, 2020, to be no less than $60 million.

    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 on Wednesday, June 3, 2020, 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 https://www.amsc.com/investors.  The live call also can be accessed by dialing (800) 353-6461 and using conference ID 5152939. A replay of the call may be accessed 2 hours following the call by dialing (888) 203-1112 and using conference ID 5152939.

    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 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.

    AMSC, American Superconductor, D-VAR, D-VAR VVO, Gridtec, Marintec, Windtec, Smarter, Cleaner … Better Energy, and Orchestrate the Rhythm and Harmony of Power on the Grid 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 regarding our goals and strategies; our expectation that we will be a more sustainable and diversified business;  our expectation that we have the right products and the right resources to advance our long-term growth strategy; the expected impact of the COVID-19 pandemic on our future financial results and financial condition; our expected GAAP and non-GAAP financial results for the quarter ending June 30, 2020, our expected cash, cash equivalents, marketable securities, and restricted cash balance on June 30, 2020; 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: 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.

     
    UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
     
      Three Months Ended     Twelve Months Ended  
      March 31,     March 31,  
      2020     2019     2020     2019  
    Revenues                              
    Grid $ 13,008     $ 10,965     $ 49,585     $ 34,290  
    Wind   5,133       3,624       14,253       21,917  
    Total revenues   18,141       14,589       63,838       56,207  
                                   
    Cost of revenues   15,623       11,825       42,190       42,190  
                                   
    Gross margin   2,518       2,764       9,445       14,017  
                                   
    Operating expenses:                              
    Research and development   2,644       2,301       9,565       9,874  
    Selling, general and administrative   5,944       5,720       22,669       22,028  
    Amortization of acquisition-related intangibles   85       85       340       340  
    Restructuring                     450  
    Gain on Sinovel settlement, net         1,000             (52,698 )
    Total operating expense (income)   8,673       9,106       32,574       (20,006 )
                                   
    Operating (loss) income   (6,155 )     (6,342 )     (23,129 )     34,023  
                                   
    Change in fair value of warrants         (1,068 )     4,648       (3,725 )
    Gain on sale of minority interest                     127  
    Interest income, net   226       348       1,327       1,117  
    Other income, net   208       541       253       1,599  
    (Loss) income before income tax expense   (5,721 )     (6,521 )     (16,901 )     33,141  
                                   
    Income tax expense   165       1,832       195       6,380  
                                   
    Net (loss) income $ (5,886 )   $ (8,353 )   $ (17,096 )   $ 26,761  
                                   
    Net (loss) income per common share                              
    Basic $ (0.27 )   $ (0.41 )   $ (0.81 )   $ 1.32  
    Diluted $ (0.27 )   $ (0.41 )   $ (1.03 )   $ 1.29  
                                   
    Weighted average number of common shares outstanding                              
    Basic   21,581       20,442       20,985       20,335  
    Diluted   21,581       20,442       21,069       20,726  
     
    CONSOLIDATED BALANCE SHEET
    (In thousands, except per share data)
     
      March 31,     March 31,  
      2020     2019  
    ASSETS              
    Current assets:              
    Cash and cash equivalents $ 24,699     $ 77,483  
    Marketable securities   30,149        
    Accounts receivable   16,987       7,855  
    Inventory   18,975       12,119  
    Notes receivable, current portion         2,888  
    Prepaid expenses and other current assets   2,959       3,053  
    Restricted cash   508        
    Total current assets   94,277       103,398  
                   
    Marketable securities, long term portion   5,046        
    Property, plant and equipment, net   8,565       8,972  
    Intangibles, net   3,550       2,890  
    Right-of-use asset   3,359        
    Goodwill   1,719       1,719  
    Restricted cash   5,657       715  
    Deferred tax assets   1,551       1,357  
    Other assets   385       279  
    Total assets $ 124,109     $ 119,330  
                   
                   
    LIABILITIES AND STOCKHOLDERS’ EQUITY              
                   
    Current liabilities:              
    Accounts payable and accrued expenses $ 22,091     $ 15,885  
    Lease liability, current portion   439        
    Derivative liabilities         4,942  
    Deferred revenue, current portion   18,430       7,557  
    Total current liabilities   40,960       28,384  
                   
    Deferred revenue, long term portion   7,712       7,962  
    Lease liability, long term portion   3,000        
    Deferred tax liabilities   180       1,698  
    Other liabilities   38       93  
    Total liabilities   51,890       38,137  
                   
    Stockholders’ equity:              
    Common stock, $0.01 par value, 75,000,000 shares authorized; 22,902,288 and 21,651,631 shares issued at March 31, 2020 and 2019, respectively   229       216  
    Additional paid-in capital   1,053,507       1,044,622  
    Treasury stock, at cost, 297,878 and 235,518 shares at March 31, 2020 and 2019, respectively   (2,666 )     (2,101 )
    Accumulated other comprehensive loss   (216 )     (5 )
    Accumulated deficit   (978,635 )     (961,539 )
    Total stockholders’ equity   72,219       81,193  
    Total liabilities and stockholders’ equity $ 124,109     $ 119,330  
     
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)
     
      Year Ended March 31,  
      2020     2019  
    Cash flows from operating activities:              
    Net (loss) income $ (17,096 )   $ 26,761  
    Adjustments to reconcile net (loss) income to net cash provided by (used in) operations:              
    Depreciation and amortization   4,308       4,609  
    Stock-based compensation expense   1,922       3,030  
    Provision for excess and obsolete inventory   1,276       878  
    Gain on sale from minority interest investments         (127 )
    Deferred income taxes   (1,714 )     735  
    Change in fair value of warrants   (4,648 )     3,725  
    Non-cash interest (income) expense   (308 )     (224 )
    Other non-cash items   329       (852 )
    Unrealized foreign exchange (gain)/loss on cash and cash equivalents   (319 )      
    Changes in operating asset and liability accounts:              
    Accounts receivable   (9,159 )     (529 )
    Inventory   (8,143 )     5,007  
    Prepaid expenses and other current assets   373       (365 )
    Accounts payable and accrued expenses   5,894       2,839  
    Deferred revenue   10,788       (2,773 )
    Net cash (used in) provided by operating activities   (16,497 )     42,714  
                   
    Cash flows from investing activities:              
    Purchase of property, plant and equipment   (3,630 )     (952 )
    Proceeds from the sale of property, plant and equipment   3,001       3,138  
    Purchase of marketable securities   (35,000 )      
    Purchase of intangible assets   (1,000 )      
    Proceeds from sale of minority interests         127  
    Change in other assets   8       (144 )
    Net cash (used in) provided by investing activities   (36,621 )     2,169  
                   
    Cash flows from financing activities:              
    Employee taxes paid related to net settlement of equity awards   (565 )     (456 )
    Proceeds from exercise of warrants   6,139        
    Proceeds from exercise of employee stock options and ESPP   202       157  
    Net cash provided by (used in) financing activities   5,776       (299 )
                   
    Effect of exchange rate changes on cash, cash equivalents and restricted cash   8       (635 )
                   
    Net (decrease) increase in cash, cash equivalents and restricted cash   (47,334 )     43,949  
    Cash, cash equivalents and restricted cash at beginning of year   78,198       34,249  
    Cash, cash equivalents and restricted cash at end of year $ 30,864     $ 78,198  
     
    RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
    (In thousands, except per share data)
     
      Three Months Ended March 31,     Year Ended March 31,  
      2020     2019     2020     2019  
    Net income (loss) $ (5,886 )   $ (8,353 )   $ (17,096 )   $ 26,761  
    Gain on sale of interest in minority investments                     (127 )
    Gain on Sinovel settlement, net         1,000             (52,698 )
    Stock-based compensation   686       629       1,922       3,030  
    Amortization of acquisition-related intangibles   85       85       340       340  
    Change in fair value of warrants         1,068       (4,648 )     3,725  
    Tax effect of adjustments         933             5925  
    Non-GAAP net loss   (5,115 )     (4,638 )     (19,482 )     (13,044 )
                                   
    Non-GAAP net loss per share $ (0.24 )   $ (0.23 )   $ (0.93 )   $ (0.64 )
    Weighted average shares outstanding – basic and diluted   21,581       20,442       20,985       20,335  
                                   
    RECONCILIATION OF GAAP OPERATING CASH FLOW TO NON-GAAP OPERATING CASH FLOW
    (In thousands)
     
      March 31, 2020     March 31, 2019  
    Operating cash flow $ (16,497 )   $ 42,714  
    Sinovel settlement (net of legal fees and expenses)   1,000       (52,740 )
    Tax effect of Sinovel settlement, net   3,323       2,377  
    Non-GAAP operating cash flow $ (12,174 )   $ (7,649 )
     
    Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss
    (In millions, except per share data)
     
      Three months ending  
      June 30, 2020  
    Net loss $ (6.2 )
    Stock-based compensation   0.7  
    Amortization of acquisition-related intangibles   0.0  
    Non-GAAP net loss $ (5.5 )
    Non-GAAP net loss per share $ (0.25 )
    Shares outstanding   21.8  
           

    Note: Non-GAAP net loss is defined by the Company as net income (loss) before; gain on sale of interest in minority investments; stock-based compensation; gain on Sinovel settlement, net, amortization of acquisition-related intangibles; changes in fair value of warrants; other non-cash or unusual charges, and the tax effect of adjustments calculated at the relevant rate for our non-GAAP metric. 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 does not expect a further gain on sale of minority investments or gain on Sinovel settlement, net, and the Company no longer has any warrants outstanding,therefore the Company’s non-GAAP net loss guidance does not include the impact from these adjustments.  Actual non-GAAP net loss for the fiscal quarter ending June 30, 2020, including the above adjustments, may differ materially from those forecasted in the table above.

    Non-GAAP operating cash flow is defined by the Company as operating cash flow before: Sinovel settlement (net of legal fees and expenses); tax effect of Sinovel settlement; and other unusual cash flows or items. The Company believes non-GAAP operating cash flow assists management and investors in comparing the Company’s operating cash flow across reporting periods on a consistent basis by excluding these non-recurring cash items that it does not believe are indicative of its core operating cash flow.

    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 Contacts
    Investor Relations Contact:
    LHA Investor Relations
    Sanjay M. Hurry
    (212) 838-3777
    amscIR@lhai.com

    Public Relations Contact:
    RooneyPartners LLC
    Bob Cavosi
    646-638-9891
    rcavosi@rooneyco.com

    AMSC Communications Manager:
    Nicol Golez
    Phone: 978-399-8344
    Email: Nicol.Golez@amsc.com