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AMSC Reports First Quarter Fiscal Year 2021 Financial Results and Provides Business Outlook

AYER, Mass., Aug. 04, 2021 (GLOBE NEWSWIRE) -- 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 and resiliency of our Navy’s fleet, today reported financial results for its first quarter of fiscal year 2021 ended June 30, 2021.

Revenues for the first quarter of fiscal 2021 were $25.4 million compared with $21.2 million for the same period of fiscal 2020. The year-over-year increase was a result of higher Grid segment revenues versus the year ago period.  The higher Grid segment revenues were primarily due to increased new energy power systems shipments and higher ship protection systems revenue, versus the year ago period. 

AMSC’s net loss for the first quarter of fiscal 2021 was $5.4 million, or $0.20 per share, compared to a net loss of $3.4 million, or $0.16 per share, for the same period of fiscal 2020.  The Company’s non-GAAP net loss for the first quarter of fiscal 2021 was $2.7 million, or $0.10 per share, compared with a non-GAAP net loss of $2.4 million, or $0.11 per share, in the same period of fiscal 2020. 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 June 30, 2021, totaled $63.1 million, compared with $80.7 million at March 31, 2021.

“We delivered a very strong start to fiscal 2021,” said Daniel P. McGahn, Chairman, President and CEO, AMSC. “Grid segment revenues grew over 30% versus year ago results and were, in fact, the highest we have ever reported. Our new energy power systems products contributed to the strong growth in the quarter, along with growth from ship protection systems. We are on track for sequentially higher quarterly revenue levels this fiscal year. We believe our growth through Grid strategy is working.”

Business Outlook
For the second quarter ending September 30, 2021, AMSC expects that its revenues will be in the range of $24 million to $27 million.  The Company’s net loss for the second quarter of fiscal 2021 is expected not to exceed $6.7 million, or $0.25 per share. The Company’s net loss guidance assumes no changes in contingent consideration nor any purchase accounting adjustments associated with the Neeltran Acquisition.  The Company's non-GAAP net loss (as defined below) is expected not to exceed $5.0 million, or $0.18 per share.  The Company expects operating cash flow to be a burn of $4 million to $6 million in the second quarter of fiscal 2021.  The Company expects cash, cash equivalents, marketable securities and restricted cash on September 30, 2021, to be no less than $56 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 Thursday, August 5, 2021, 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://ir.amsc.com. To preregister for the call, go to ClickToJoinLink. Callers who click on the link will be able to enter their information to gain immediate access to the call and bypass the live operator. Participants may preregister 15 minutes prior to the scheduled start time.  The live call can also be accessed by dialing 800-437-2398 or 323-289-6576 and using conference ID 9736574. A replay of the call may be accessed 2 hours following the call by dialing 888-203-1112 or 719-457-0820 and using conference passcode 9736574.

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.

AMSC, American Superconductor, D-VAR, D-VAR VVO, Gridtec, Marinetec, 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, including being on track for sequentially higher quarterly revenue levels this fiscal year, our belief regarding our growth through Grid strategy, our expected GAAP and non-GAAP financial results for the quarter ending September 30, 2021, our expected cash burn during the quarter ending September 30, 2021, our expected cash, cash equivalents, marketable securities and restricted cash balance on September 30, 2021, 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; The COVID-19 pandemic could adversely impact our business, financial condition and results of operations; Changes in U.S. government defense spending could negatively impact our financial position, results of operations, liquidity and overall business; 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; Uncertainty surrounding our prospects and financial condition may have an adverse effect on our customer and supplier relationships; 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 customers 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; 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 Indias 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; 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, 2021, 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 
  June 30, 
  2021  2020 
Revenues        
Grid $23,501  $17,715 
Wind  1,919   3,498 
Total revenues  25,420   21,213 
         
Cost of revenues  22,051   16,173 
         
Gross margin  3,369   5,040 
         
Operating expenses:        
Research and development  3,041   2,499 
Selling, general and administrative  7,142   5,637 
Amortization of acquisition-related intangibles  585   121 
Change in fair value of contingent consideration  100    
Total operating expenses  10,868   8,257 
         
Operating loss  (7,499)  (3,217)
         
Interest income, net  32   158 
Other expense, net  (64)  (170)
Loss before income tax expense (benefit)  (7,531)  (3,229)
         
Income tax expense (benefit)  (2,128)  188 
         
Net loss $(5,403) $(3,417)
         
Net loss per common share        
Basic $(0.20) $(0.16)
Diluted $(0.20) $(0.16)
         
Weighted average number of common shares outstanding        
Basic  26,826   21,689 
Diluted  26,826   21,689 
         


UNAUDITED CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)

  June 30, 2021  March 31, 2021 
ASSETS        
Current assets:        
Cash and cash equivalents $50,070  $67,814 
Marketable securities  5,164   5,140 
Accounts receivable, net  23,908   13,267 
Inventory, net  22,155   13,306 
Prepaid expenses and other current assets  5,906   3,546 
Restricted cash  2,313   2,157 
Total current assets  109,516   105,230 
         
Property, plant and equipment, net  15,067   8,997 
Intangibles, net  13,312   9,153 
Right-of-use assets  3,764   3,747 
Goodwill  43,471   34,634 
Restricted cash  5,568   5,568 
Deferred tax assets  1,149   1,223 
Other assets  320   314 
Total assets $192,167  $168,866 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
         
Current liabilities:        
Accounts payable and accrued expenses $33,439  $19,810 
Lease liability, current portion  696   612 
Debt, current portion  72    
Contingent consideration  7,150   7,050 
Deferred revenue, current portion  20,550   13,266 
Total current liabilities  61,907   40,738 
         
Deferred revenue, long term portion  8,072   7,991 
Lease liability, long term portion  3,194   3,246 
Deferred tax liabilities  273   274 
Debt, long-term portion  143    
Other liabilities  25   25 
Total liabilities  73,614   52,274 
         
Stockholders' equity:        
Common stock  287   280 
Additional paid-in capital  1,128,961   1,121,495 
Treasury stock  (3,639)  (3,593)
Accumulated other comprehensive loss  (340)  (277)
Accumulated deficit  (1,006,716)  (1,001,313)
Total stockholders' equity  118,553   116,592 
Total liabilities and stockholders' equity $192,167  $168,866 
         


UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

  Three Months Ended June 30, 
  2021  2020 
Cash flows from operating activities:        
         
Net loss $(5,403) $(3,417)
Adjustments to reconcile net loss to net cash used in operations:        
Depreciation and amortization  1,268   1,000 
Stock-based compensation expense  1,292   909 
Provision for excess and obsolete inventory  624   789 
Deferred income taxes  (2,207)   
Change in fair value of contingent consideration  100    
Non-cash interest income  (24)  (134)
Other non-cash items  124   102 
Unrealized foreign exchange loss on cash and cash equivalents  3   85 
Changes in operating asset and liability accounts:        
Accounts receivable  (7,388)  8,783 
Inventory  (465)  1,132 
Prepaid expenses and other assets  463   (496)
Accounts payable and accrued expenses  8,563   (7,974)
Deferred revenue  (2,779)  (3,894)
Net cash used in operating activities  (5,829)  (3,115)
         
Cash flows from investing activities:        
Purchase of property, plant and equipment  (224)  (637)
Cash paid for acquisition, net of cash acquired  (11,479)   
Change in other assets  (5)  128 
Net cash used in investing activities  (11,708)  (509)
         
Cash flows from financing activities:        
Repurchase of treasury stock  (46)  (376)
Net cash used in financing activities  (46)  (376)
         
Effect of exchange rate changes on cash  (5)  12 
         
Net decrease in cash, cash equivalents and restricted cash  (17,588)  (3,988)
Cash, cash equivalents and restricted cash at beginning of period  75,539   30,864 
Cash, cash equivalents and restricted cash at end of period $57,951  $26,876 
         


RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
(In thousands, except per share data)

  Three Months Ended June 30, 
  2021  2020 
Net loss $(5,403) $(3,417)
Stock-based compensation  1,292   909 
Amortization of acquisition-related intangibles  622   121 
Acquisition costs  688    
Change in fair value of contingent consideration  100    
Non-GAAP net loss $(2,701) $(2,387)
         
Non-GAAP net loss per share - basic $(0.10) $(0.11)
Weighted average shares outstanding - basic  26,826   21,689 
         


Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss
(In millions, except per share data)

  Three months ending
  September 30, 2021
Net loss $(6.7)
Stock-based compensation  1.0 
Amortization of acquisition-related intangibles  0.7 
Non-GAAP net loss $(5.0)
Non-GAAP net loss per share $(0.18)
Shares outstanding  27.1 

Note: Non-GAAP net loss is defined by the Company as net (loss) before: stock-based compensation; amortization of acquisition-related intangibles; acquisition costs; changes in fair value of contingent consideration; 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.  Actual GAAP and non-GAAP net loss for the fiscal quarter ending September 30, 2021, including the above adjustments, may differ materially from those forecasted in the table above, including as a result of the inclusion of the change in fair value of contingent consideration.

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 measure 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
Carolyn Capaccio
(212) 838-3777
amscIR@lhai.com

Public Relations Contact:
RooneyPartners LLC
Joe Luongo
(914) 906-5903
jluongo@rooneyco.com

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


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