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AMSC Reports Third Quarter Fiscal 2007
Financial Results
-- Power Electronic
Systems Achieves Third Quarter Operating
Profit on Significant Increase in
Revenues
-- Consolidated Backlog Expected to Increase to
Approximately $70
Million by March 31, 2007; $60
Million Expected to be
Recognized as Revenues in Fiscal 2008
-- Ship Propulsion Motor and SuperVAR(R) Machines to be
Shipped
by March 31
-- Manufacturing Scale-Up and Shipments of 344
Superconductors on
Track
Westborough, MA, 1 February 2007:
American Superconductor
Corporation (NASDAQ:
AMSC), a leading energy technologies company, today reported financial
results for its fiscal third quarter ended December 31, 2006.
Revenues for the third quarter of fiscal 2007
were $9.5 million, and the company's net loss was $9.5 million, or $0.29 per
share. In December 2006, the company announced that it expected revenues for the
third quarter of approximately $9 million and a net loss of $9 million to $11
million as a result of funding delays from the U.S. Department of Energy (DOE)
and a technical delay relating to the need to repair a crack in a
non-superconductor component of the 36.5 megawatt motor being manufactured for
the U.S. Navy. Revenues for the third quarter of the previous fiscal year were
$13.5 million, and the company's net loss was $7.5 million, or $0.23 per share.
Revenues for the first nine months of fiscal 2007
were $33.1 million, and the company's net loss was $23.2 million, or $0.71 per
share. Revenues for the first nine months of fiscal 2006 were $36.6 million, and
the company's net loss was $19.8 million, or $0.61 per share.
Earnings before interest, taxes, depreciation,
amortization and stock-based compensation, or EBITDAS, was $(8.1 million) for
the third quarter of fiscal 2007 and $(6.2 million) for the third quarter of
fiscal 2006. EBITDAS was $(19.2 million) for the first nine months of fiscal
2007 and $(15.7 million) for the first nine months of fiscal 2006. Please refer
to the financial schedules attached to this press release for a reconciliation
between net loss and EBITDAS.
The company reaffirmed its forecast for revenues
of $50 million to $52 million and a net loss of $29 million to $32 million, or
$0.87 to $0.96 per share, for fiscal 2007. The company also said it expects to
achieve positive EBITDAS within two years.
The company ended the third quarter of fiscal
2007 with no debt and $41.6 million in cash, cash equivalents and short-term
investments, compared with $46.1 million on September 30, 2006 and $65.7 million
on March 31, 2006. As announced in December 2006, the company's ending balance
of cash and investments as of March 31, 2007 may be less than the $38 million it
previously forecast due to the possible delay in cash collections from the U.S.
Navy and the DOE to the first quarter of fiscal 2008.
The company's total backlog of orders and
contracts was $43.2 million on December 31, 2006. This compares with $37.1
million in backlog as of December 31, 2005. As previously announced, backlog
increased to more than $65 million on January 5, 2007 as a result of the
company's acquisition of Windtec(TM). At least $17 million is expected to be
recognized as revenue in the fourth quarter of fiscal 2007 and an additional $46
million is expected to be recognized as revenue in fiscal 2008. Based on new
orders expected to be closed in the fourth fiscal quarter, total consolidated
backlog is expected to increase to approximately $70 million as of March 31,
2007.
"Of the total backlog of $70 million expected as
of March 31, 2007, we believe $60 million will be recognized as revenues in
fiscal 2008," said Greg Yurek, founder and chief executive officer. "This will
provide us with a strong platform for growth entering fiscal 2008. Order growth
thus far in the fourth quarter has been quite strong, particularly in our Power
Electronic Systems business. Demand for wind energy solutions remains the key
engine for growth in this business unit. We expect orders from utilities to
begin gaining momentum in fiscal 2008 based primarily on traction with our
Dynamic-VAR Compensator (DVC(TM)) solution. We also expect to secure new
contracts in fiscal 2008 for the demonstration of superconductor cables and
fault current limiters."
"In addition to continuing to grow profits in our
Power Electronic Systems business, which will reduce our consolidated losses, we
expect to implement initiatives during the next 12 months that will enable us to
achieve positive EBITDAS on a consolidated basis within two years," said Yurek.
"We intend to achieve this objective as we continue to scale up manufacturing of
344 superconductors, meet customer needs for superconductor rotating machines
and expand our power electronics business globally."
Recent Activities and Accomplishments
-- Superconductor power transmission cable for Long
Island Power
Authority (LIPA): The site for LIPA's
138,000 volt (138kV) HTS
cable system in Hauppauge, New York
has now been fully
prepared and the cryogenics system
has been completed and is
operating. Manufacture of the cables
is expected to be
completed this week and will begin
going into the ground in
the spring of 2007. Commissioning is
scheduled for the summer
of 2007. Funding for the project from
the Department of Energy
(DOE) will continue to be handled
under a "Continuing
Resolution" until at least February
15, 2007. The company will
be submitting several proposals by
February 13, 2007 in
response to a solicitation from the
DOE for new projects.
-- 36.5-megawatt (MW) superconductor motor: The crack
that had
formed in a non-superconductor
component has been fully
repaired and reassembly of the motor
is nearly complete.
Factory testing is planned to be
underway in February and the
motor is expected to be ready for
acceptance by the U.S. Navy
in March 2007.
-- First two commercial SuperVAR synchronous
condensers: The
first superconductor rotor has been
shipped to the company's
motor subcontractor for final
assembly. Both machines are
expected to be delivered to the
Tennessee Valley Authority by
end of March 2007. Revenues for these
products are expected to
be recognized in the first quarter of
fiscal 2008.
-- Acquisition of Windtec: On January 5, 2007, AMSC(TM)
completed
its acquisition of Windtec, an
Austria-based designer and
licensor of wind turbine systems and
a provider of wind
turbine electrical systems. Windtec
reported that its
unaudited revenues grew by almost 400
percent to approximately
$13 million in calendar 2006 while
generating net income of
approximately $1 million, or eight
percent of sales. Windtec
brought to AMSC approximately $35
million in backlog as of
January 5, 2007. It is now a
wholly-owned subsidiary of AMSC
and is operated by the company's
Power Electronic Systems
business unit.
-- New Windtec customers: Windtec signed a contract
with Doosan
Heavy Industries & Construction Co.,
Ltd. in South Korea for
the development of a 3-MW wind energy
system valued at more
than $2 million while ZELRI in China
purchased a 1.65 MW wind
energy system license for
approximately $2 million. AMSC's
potential revenues from ZELRI for
royalty payments and the
sale of electrical components could
exceed $30 million over
the next several years.
-- Fault current limiter product development: AMSC and
Siemens AG
reported achieving commercial-grade
performance levels for a
medium voltage superconductor surge
protection device known as
a fault current limiter. The device
was based on Siemens
proprietary superconductor switching
module technology, which
utilizes coils fabricated with AMSC's
proprietary 344S
superconductors. AMSC and Siemens
also announced the extension
of their strategic alliance to a
third year.
-- Demonstrated world-record-level production rates for
344
superconductors that have
commercial-grade electrical
performance: AMSC is on track for
initial volume production of
commercial-grade product in December
2007, as planned. The
company said it is also on track to
have 70% of the full-scale
manufacturing equipment installed,
commissioned and qualified
in the manufacturing process for 344
superconductors by March
31, 2007.
-- Received a $750,000 Phase II Small Business
Innovation
Research (SBIR) grant in January
2007: The U.S. Air Force is
providing this funding for AMSC's
work in developing 344
superconductors.
-- Appointed John W. Wood Jr. to the company's Board of
Directors: Mr. Wood served as chief
executive officer of
Analogic Corporation (NASDAQ: ALOG),
a leading designer and
manufacturer of medical imaging and
security systems, from
2003 through 2006. Prior to joining
Analogic, Mr. Wood held
senior executive positions over a
22-year career at Thermo
Electron Corporation, now known as
Thermo Fisher Scientific,
Inc.
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