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 2023 ended June
30, 2023.
Revenues for the first quarter of fiscal 2023
were $30.3 million compared with $22.7 million for the same
period of fiscal 2022. The year-over-year increase
was driven primarily by higher new energy power
systems revenues, versus the year ago period.
AMSC’s net loss for the first quarter of
fiscal 2023 was $5.4 million, or $0.19 per share,
compared to a net loss of $8.7 million, or $0.32 per
share, for the same period of fiscal 2022. The Company’s
non-GAAP net loss for the first quarter of fiscal
2023 was $2.1 million, or $0.08 per share, compared
with a non-GAAP net loss of $6.8 million, or $0.25 per
share, in the same period of fiscal 2022. Please refer to the
financial table below for a reconciliation of GAAP to non-GAAP
results.
Cash, cash equivalents, and restricted cash
on June 30, 2023, totaled $23.1 million, compared with
$25.7 million at March 31, 2023.
“Fiscal 2023 is off to a good start with first
quarter revenues exceeding our expectations. Solid execution on
strong demand from our new energy power systems and Navy
markets drove revenue for the quarter. Additionally, stronger
margins drove a narrowed cash burn,” said Daniel P. McGahn,
Chairman, President and CEO, AMSC. “During the quarter,
we booked over $34 million of new energy power systems orders
across a diversity of end markets including new military
applications, which provide efficient and reliable shore power
to naval vessels. We look forward to continued solid momentum as we
move into the next quarter.
Business OutlookFor the second quarter ending
September 30, 2023, AMSC expects that its revenues will be in the
range of $29 million to $32 million. The Company’s net
loss for the second quarter of fiscal 2023 is expected not to
exceed $5.3 million, or $0.19 per share. The
Company’s net loss guidance assumes no changes in contingent
consideration. The Company's non-GAAP net loss (as defined
below) is expected not to exceed $3.5 million, or
$0.12 per share. The Company expects operating cash flow
to be a burn of $1.0 million to a positive cash generation of
$1.0 million in the second quarter of fiscal 2023. The Company
expects cash, cash equivalents, and restricted cash on
September 30, 2023, to be no
less than $21 million.
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
Thursday, August 10, 2023, 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. The live call can be accessed by
dialing 1-844-481-2802 or 1-412-317- 0675 and asking to
join the AMSC call. A replay of the call may be accessed 2 hours
following the call by dialing 1-877-344-7529 and using
conference passcode 1779022.
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, Neeltran, NEPSI, 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,
market demand, and order pipeline; our expected GAAP and
non-GAAP financial results for the quarter ending September
30, 2023; our expected cash burn during the quarter ending
September 30, 2023; our expected cash, cash equivalents, and
restricted cash balance on September 30, 2023; functionality,
performance and capabilities of our products, systems and
solutions; momentum; 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 adversely impacted our business, financial condition and
results of operations and other future pandemics or health crises
may have similar impacts; 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 have not manufactured our Amperium wire in commercial
quantities, and a failure to manufacture our Amperium wire in
commercial quantities at acceptable cost and quality levels would
substantially limit our future revenue and profit potential; Our
success is dependent upon attracting and retaining qualified
personnel and our inability to do so could significantly damage our
business and prospects; A significant portion of our Wind segment
revenues are derived from a single customer. 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 or any critical third parties
information technology infrastructure and networks; 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; We or third parties on whom we
depend may be adversely affected by natural disasters, including
events resulting from climate change, and our business continuity
and disaster recovery plans may not adequately protect us or our
value chain from such events; Adverse changes in domestic
and global economic conditions could adversely affect our operating
results; Our international operations are subject to risks that we
do not face in the United States, which could have an adverse
effect on our operation results; Our products face competition,
which could limit our ability to acquire or retain
customers. 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 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;
Industry consolidation could result in more powerful
competitors and fewer customers; The increasing focus on
environmental sustainability and social initiatives could increase
our costs, and inaction could harm our reputation and adversely
impact our financial 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; The increasing focus on environmental sustainability
and social initiatives could increase our costs, and inaction could
harm our reputation and adversely impact our financial results; 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; There are a number of
technological challenges that must be successfully addressed before
our superconductor products can gain widespread commercial
acceptance, and our inability to address such technological
challenges could adversely affect our ability to acquire customers
for our products; Third parties have or may acquire patents that
cover the materials, processes and technologies we use or may use
in the future to manufacture our Amperium products, and our success
depends on our ability to license such patents or other proprietary
rights; Our technology and products could infringe intellectual
property rights of others, which may require costly litigation and,
if we are not successful, could cause us to pay substantial damages
and disrupt our business; We face risks related to our legal
proceedings; We face risks related to our common stock; and
the other 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, 2023, 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, |
|
|
|
2023 |
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
|
Grid |
|
$ |
25,737 |
|
|
$ |
19,829 |
|
Wind |
|
|
4,517 |
|
|
|
2,850 |
|
Total revenues |
|
|
30,254 |
|
|
|
22,679 |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
23,972 |
|
|
|
20,458 |
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
6,282 |
|
|
|
2,221 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Research and development |
|
|
1,853 |
|
|
|
2,678 |
|
Selling, general and administrative |
|
|
7,868 |
|
|
|
7,562 |
|
Amortization of acquisition-related intangibles |
|
|
538 |
|
|
|
680 |
|
Change in fair value of contingent consideration |
|
|
1,350 |
|
|
|
170 |
|
Restructuring |
|
|
6 |
|
|
|
- |
|
Total operating expenses |
|
|
11,615 |
|
|
|
11,090 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(5,333 |
) |
|
|
(8,869 |
) |
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
174 |
|
|
|
24 |
|
Other income (expense),
net |
|
|
(118 |
) |
|
|
167 |
|
Loss before income tax
expense |
|
|
(5,277 |
) |
|
|
(8,678 |
) |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
121 |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,398 |
) |
|
$ |
(8,710 |
) |
|
|
|
|
|
|
|
|
|
Net loss per common share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.19 |
) |
|
$ |
(0.32 |
) |
Diluted |
|
$ |
(0.19 |
) |
|
$ |
(0.32 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
28,258 |
|
|
|
27,560 |
|
Diluted |
|
|
28,258 |
|
|
|
27,560 |
|
UNAUDITED CONSOLIDATED BALANCE
SHEET(In thousands, except per share
data)
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
22,005 |
|
|
$ |
23,360 |
|
Accounts receivable, net |
|
|
30,116 |
|
|
|
30,665 |
|
Inventory, net |
|
|
42,874 |
|
|
|
36,986 |
|
Prepaid expenses and other current assets |
|
|
6,703 |
|
|
|
13,429 |
|
Restricted cash |
|
|
496 |
|
|
|
1,733 |
|
Total current assets |
|
|
102,194 |
|
|
|
106,173 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
11,947 |
|
|
|
12,309 |
|
Intangibles, net |
|
|
7,983 |
|
|
|
8,527 |
|
Right-of-use assets |
|
|
2,694 |
|
|
|
2,857 |
|
Goodwill |
|
|
43,471 |
|
|
|
43,471 |
|
Restricted cash |
|
|
622 |
|
|
|
582 |
|
Deferred tax assets |
|
|
1,115 |
|
|
|
1,114 |
|
Other assets |
|
|
608 |
|
|
|
528 |
|
Total assets |
|
$ |
170,634 |
|
|
$ |
175,561 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
28,828 |
|
|
$ |
38,383 |
|
Lease liability, current portion |
|
|
781 |
|
|
|
808 |
|
Debt, current portion |
|
|
64 |
|
|
|
75 |
|
Contingent consideration |
|
|
2,620 |
|
|
|
1,270 |
|
Deferred revenue, current portion |
|
|
50,856 |
|
|
|
43,572 |
|
Total current liabilities |
|
|
83,149 |
|
|
|
84,108 |
|
|
|
|
|
|
|
|
|
|
Deferred revenue, long term portion |
|
|
7,227 |
|
|
|
7,188 |
|
Lease liability, long term portion |
|
|
2,047 |
|
|
|
2,184 |
|
Deferred tax liabilities |
|
|
259 |
|
|
|
243 |
|
Debt, long-term portion |
|
|
9 |
|
|
|
15 |
|
Other liabilities |
|
|
25 |
|
|
|
26 |
|
Total liabilities |
|
|
92,716 |
|
|
|
93,764 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
Common stock |
|
|
307 |
|
|
|
299 |
|
Additional paid-in capital |
|
|
1,140,626 |
|
|
|
1,139,113 |
|
Treasury stock |
|
|
(3,639 |
) |
|
|
(3,639 |
) |
Accumulated other comprehensive gain |
|
|
1,569 |
|
|
|
1,571 |
|
Accumulated deficit |
|
|
(1,060,945 |
) |
|
|
(1,055,547 |
) |
Total stockholders' equity |
|
|
77,918 |
|
|
|
81,797 |
|
Total liabilities and stockholders' equity |
|
$ |
170,634 |
|
|
$ |
175,561 |
|
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
|
|
Three Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,398 |
) |
|
$ |
(8,710 |
) |
Adjustments to reconcile net loss to net cash used in
operations: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,119 |
|
|
|
1,401 |
|
Stock-based compensation expense |
|
|
1,357 |
|
|
|
1,033 |
|
Provision for excess and obsolete inventory |
|
|
384 |
|
|
|
346 |
|
Deferred income taxes |
|
|
(1 |
) |
|
|
61 |
|
Change in fair value of contingent consideration |
|
|
1,350 |
|
|
|
170 |
|
Other non-cash items |
|
|
168 |
|
|
|
(127 |
) |
Changes in operating asset and liability accounts: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
549 |
|
|
|
(1,426 |
) |
Inventory |
|
|
(6,272 |
) |
|
|
(9,633 |
) |
Prepaid expenses and other assets |
|
|
6,901 |
|
|
|
580 |
|
Accounts payable and accrued expenses |
|
|
(9,720 |
) |
|
|
6,343 |
|
Deferred revenue |
|
|
7,318 |
|
|
|
4,099 |
|
Net cash used in operating activities |
|
|
(2,245 |
) |
|
|
(5,863 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(214 |
) |
|
|
(441 |
) |
Change in other assets |
|
|
(79 |
) |
|
|
(55 |
) |
Net cash used in investing
activities |
|
|
(293 |
) |
|
|
(496 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Repayment of debt |
|
|
(17 |
) |
|
|
(20 |
) |
Net cash used in financing activities |
|
|
(17 |
) |
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash |
|
|
2 |
|
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
Net decrease in cash, cash
equivalents and restricted cash |
|
|
(2,553 |
) |
|
|
(6,396 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
25,675 |
|
|
|
49,486 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
23,122 |
|
|
$ |
43,090 |
|
RECONCILIATION OF GAAP NET LOSS TO
NON-GAAP NET LOSS(In thousands, except per share
data)
|
|
Three Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
Net loss |
|
$ |
(5,398 |
) |
|
$ |
(8,710 |
) |
Stock-based compensation |
|
|
1,357 |
|
|
|
1,033 |
|
Amortization of
acquisition-related intangibles |
|
|
544 |
|
|
|
712 |
|
Change in fair value of
contingent consideration |
|
|
1,350 |
|
|
|
170 |
|
Non-GAAP net loss |
|
$ |
(2,147 |
) |
|
$ |
(6,795 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per share -
basic |
|
$ |
(0.08 |
) |
|
$ |
(0.25 |
) |
Weighted average shares
outstanding - basic |
|
|
28,258 |
|
|
|
27,560 |
|
Reconciliation of Forecast GAAP Net Loss
to Non-GAAP Net Loss(In millions, except per share
data)
|
|
Three Months Ending |
|
|
|
September 30, 2023 |
|
Net loss |
|
$ |
(5.3 |
) |
|
Stock-based compensation |
|
|
1.3 |
|
|
Amortization of
acquisition-related intangibles |
|
|
0.5 |
|
|
Non-GAAP net loss |
|
$ |
(3.5 |
) |
|
Non-GAAP net loss per
share |
|
$ |
(0.12 |
) |
|
Shares outstanding |
|
|
28.5 |
|
|
Note: Non-GAAP net loss is defined by the
Company as net loss before; stock-based compensation;
amortization of acquisition-related intangibles; change 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 and non-GAAP net loss per share
assist 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, 2023, including the above
adjustments, may differ materially from those forecasted in the
table above, including as a result of changes in the 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 measures included in this release, however,
should be considered in addition to, and not as a substitute for or
superior to, operating income 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 ContactsInvestor Relations Contact:LHA
Investor RelationsCarolyn Capaccio(212) 838-3777amscIR@lhai.com
AMSC Senior Communications Manager:Nicol
Golez978-399-8344Nicol.Golez@amsc.com
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