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news release:
American Superconductor Completes
Acquisition of Windtec(TM)
Westborough, MA, January 8, 2007:
American Superconductor
Corporation (NASDAQ:
AMSC), a leading energy technologies company, announced today that it
completed its previously announced acquisition of Windtec on Friday, January 5,
2007. Windtec, now a
wholly-owned subsidiary of American Superconductor, is operated by the company's
Power Electronic Systems business unit.
Windtec, based in Klagenfurt, Austria, designs a
variety of wind turbine systems from the ground up, and licenses these designs
to third parties for an upfront fee and royalty payments for each installation
of a Windtec-designed wind turbine system. Windtec also provides consulting
services for its licensees who want to upgrade or optimize their wind turbine
systems. Windtec normally sells wind turbine electrical systems, which utilize
AMSC's PowerModule(TM) systems, to its licensees. Windtec's customers and
targeted markets are typically industrial equipment manufacturers and
engineering construction companies in fast-growing economies seeking to become
manufacturers of wind turbine systems.
"This acquisition opens an important chapter in
American Superconductor's history, positioning our company for strong additional
sales in one of the most exciting growth sectors in energy today," said Greg
Yurek, chief executive officer and founder of American Superconductor. "Our
company has been serving the wind market for more than three years with our D-VAR(R)
and PowerModule power electronics products. We now will be able to offer a much
more diverse and unique array of products and services - from the design and
licensing of entire wind energy systems to turbine electrical systems to wind
farm grid interconnection solutions. From a financial perspective, Windtec
provides American Superconductor with a powerful revenue growth catalyst as well
as an immediate source of strong cash flow."
For the 12 months ending December 31, 2006,
Windtec estimates that its total revenues were approximately $13 million and its
net income was approximately $1 million, or eight percent of revenues. This is
up significantly from $2.7 million in revenues and a break-even bottom line for
the 12 months ended December 31, 2005. As of January 5, 2007, Windtec had
approximately $35 million of existing backlog, more than $20 million of which
AMSC expects to recognize as revenues in fiscal 2008, ending March 31, 2008.
AMSC expects profit margins on these future sales will increase over Windtec's
historical levels. Going forward, Windtec's financial results will be reported
as part of AMSC's Power Electronic Systems business unit.
Including Windtec, AMSC had more than $65 million
in total backlog as of January 5, 2007. Based on this existing backlog, AMSC
expects Power Electronic Systems revenues to double from approximately $25
million in the fiscal year ending March 31, 2007 to approximately $50 million
for the fiscal year ending March 31, 2008. The company expects the acquisition
to have an accretive impact on AMSC's earnings beginning in the quarter ending
June 30, 2007, which will be Windtec's first full quarter of operations as an
AMSC subsidiary.
"In addition to its existing customers in China,
Japan and the Czech Republic, Windtec is experiencing strong demand for its
offerings in Canada, France, India and South Korea, among other countries,"
added Yurek. "Each of these leads represents a multi-million-dollar revenue
opportunity for AMSC. Having completed this acquisition, we are now focused on
closing additional orders this quarter and in the quarters ahead to ensure
strong financial performance for AMSC going forward."
Terms & Conditions
The Windtec purchase price was 1.3 million shares
of AMSC common stock, valued for accounting purposes at approximately $13.1
million based on a five-day average AMSC stock price of $10.08 per share at the
time of signing definitive documents on November 28, 2006. The AMSC shares to be
issued at the closing are subject to a lockup whereby the former sole owner and
founder of Windtec, Gerald Hehenberger, may sell only a certain number of shares
per year through January 2010. AMSC is not assuming any debt in the transaction.
The all-stock transaction also includes an
earn-out opportunity with the potential for up to an additional 1.4 million
shares of AMSC common stock to be issued to Mr. Hehenberger based on the
achievement of certain revenue growth targets for the fiscal years ending March
31, 2008 through March 31, 2011. Mr. Hehenberger, a 20-year wind industry
veteran, will remain with the company as Vice President and Managing Director of
Windtec. The transaction includes the acquisition of Mr. Hehenberger's 27
patents and patents pending worldwide on wind turbine technology.
For more information on AMSC's wind energy
solutions, see: http://www.amsuper.com/products/applications/windEnergy/index.cfm.
AMSC (American Superconductor Corporation) is a
leading energy technologies company. The company develops and sells a wide range
of products and solutions based on power electronic systems and high temperature
superconductor (HTS) wires that dramatically improve the efficiency and quality
of electricity during its generation, transmission, distribution and use. The
company is a dominant force in alternative energy, offering grid interconnection
solutions as well as licensed wind energy designs and electrical systems. As the
world's principal supplier of HTS wire, AMSC is enabling a new generation of
compact, high-power electrical products, including motors, generators, power
cables, grid-level surge protectors, and advanced transportation and defense
systems. AMSC also provides utility and industrial customers worldwide with
voltage regulation systems that dramatically enhance power grid capacity,
reliability and security, as well as industrial productivity. The company's
technologies are protected by a broad and deep intellectual property portfolio
consisting of hundreds of patents and licenses worldwide. More information is
available at www.amsuper.com.
American Superconductor and design,
Revolutionizing the Way the World Uses Electricity, AMSC, Powered by AMSC,
SuperVAR, D-VAR, DVC, PQ-IVR and PowerModule are trademarks or registered
trademarks of American Superconductor Corporation.
Any statements in this release about future
expectations, plans and prospects for the company, including our expectations
regarding the growth of the wind power market 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. There are a number of
important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements. Such factors include:
uncertainties regarding the company's ability to obtain anticipated funding from
corporate and government contracts, to successfully develop, manufacture and
market commercial products, and to secure anticipated orders; the risk that a
robust market may not develop for the company's products; the risk that
strategic alliances and other contracts may be terminated; the risk that certain
technologies utilized by the company will infringe intellectual property rights
of others; the competition encountered by the company. Reference is made to
these and other factors discussed in the "Risk Factors" section of the company's
most recent quarterly or annual report filed with the Securities and Exchange
Commission. In addition, the forward-looking statements included in this press
release represent the company's views as of the date of this release. While the
company anticipates that subsequent events and developments may cause the
company's views to change, the company specifically disclaims any obligation to
update these forward-looking statements. These forward-looking statements should
not be relied upon as representing the company's views as of any date subsequent
to the date this press release is issued.
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