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New
Release -- Superconductor Week does not edit or endorse the following
news release: AMSC Reports
Fourth Quarter and Full Fiscal Year Financial Results
-- Company Generates $52.2 Million in Revenue and Reports $1.04
Per Share Net Loss for Fiscal 2006 Ended March 31, 2007
-- AMSC Power Systems Increases Revenue by 106% Year Over Year
-- Ending Cash, Cash Equivalents and Investments Remains Strong
at More Than $35 Million
-- Approximately 50% Growth in Consolidated Revenues Forecast for
Fiscal 2007
-- EBITDAS Losses for Fiscal 2007 Expected to be Cut by More Than
50%; On-Track to Achieve Positive EBITDAS in Fiscal 2008
Westborough, MA, 24 May 2007:
American Superconductor
Corporation (NASDAQ:
AMSC), a leading energy technologies company, today reported financial
results for its fourth quarter and full fiscal year ended March 31, 2007. Please
note that the company has changed the designation of its fiscal years to align
more closely with calendar years. As such, fiscal 2006 now refers to the fiscal
year ended March 31, 2007.
Revenues for the fourth quarter of fiscal 2006
ended March 31, 2007 were $19.1 million. This compares with $14.3 million in
revenues for the fourth quarter of fiscal 2005. The company's net loss in the
fourth quarter of fiscal 2006 was $11.4 million, or $0.33 per share. The
company's net loss in the prior-year quarter was $11.0 million, or $0.34 per
share.
Earnings before interest, taxes, depreciation,
amortization and stock-based compensation, or EBITDAS, was $(9.3 million) for
the quarter ended March 31, 2007 and $(9.9 million) for the prior-year quarter
ended March 31, 2006. Please refer to the financial schedules attached to this
press release for reconciliation between net loss and EBITDAS.
Revenues for the full fiscal year 2006 were $52.2
million, compared with $50.9 million for fiscal 2005. The company's net loss was
$34.7 million, or $1.04 per share, compared with a net loss of $30.9 million, or
$0.94 per share, for fiscal 2005. The net loss for fiscal 2006 was approximately
two percent above the high end of the company's previous forecast provided on
March 29, 2007 due to additional program expenses and write downs taken in the
restructured AMSC Superconductors business.
In addition to the restructuring costs announced
on March 29, 2007, the company incurred higher than planned costs in the fourth
quarter to successfully complete the assembly and factory acceptance testing of
a 36.5MW motor for the U.S. Navy. The company also wrote off one of the
SuperVAR(R) synchronous condensers it had planned to ship to a customer. The
company announced in March 2007 that AMSC Superconductors is focusing on
manufacturing and selling high temperature superconductor (HTS) wires and coils
and licensing the HTS rotating machine technology and intellectual property
rights it has developed. Based on this plan, the company said it intends to
offer SuperVAR synchronous condensers through future licensees of AMSC
technology and patents.
EBITDAS was $(28.5 million) for fiscal year 2006
and $(25.6 million) for fiscal year 2005. Please refer to the financial
schedules attached to this press release for reconciliation between net loss and
EBITDAS for fiscal 2006 and fiscal 2005.
The company ended the fourth quarter of fiscal
2006 with $35.3 million in cash, cash equivalents and short-term investments,
compared with $41.6 million on December 31, 2006 and $65.7 million on March 31,
2006.
The company's total backlog of orders and
contracts was approximately $80 million on March 31, 2007. This compares with
$23.8 million in backlog as of March 31, 2006. The company said it expects to
recognize $58 million of the $80 million in backlog in fiscal 2007, ending March
31, 2008. The company said it has received an additional $10 million worth of
new orders and contracts in April and May that will be recognizable as revenue
in fiscal 2007.
"Our fourth quarter was a period of tremendous
progress at AMSC, and the momentum has continued into fiscal 2007," said Greg
Yurek, founder and chief executive officer. "With the recent completion of two
acquisitions, a restructuring and realignment of our business units, an influx
of new orders and projects, and near-record revenues in the fourth quarter, we
have set the stage for strong growth going forward.
"AMSC Power Systems, formerly known as Power
Electronic Systems, posted great organic growth and set a new high water mark
for sales. Our D-VAR(R) systems continue to serve as a catalyst for this
business, particularly in the wind power market. We also bolstered our wind
power business significantly by completing our acquisition of Windtec early in
the fourth quarter. Windtec proved its worth immediately by signing a series of
multi-million-dollar contracts in quick succession. In addition, the acquisition
of Power Quality Systems, completed just a few weeks ago, expands AMSC Power
Systems' offerings in the utility and industrial sectors.
"AMSC Superconductors, formerly known as AMSC
Wires and SuperMachines, also made great progress," Yurek continued. "Our
manufacturing scale-up of 344 superconductors remains firmly on track for
December 2007, and demand for our 344 superconductors is building thanks in
large part to performance results achieved recently in our HTS fault current
limiter and power cable projects. These accomplishments set the stage for our
Secure Super Grids(TM) technology, which combines the benefits of fault current
limiters and superconductor cables. We are teaming with the Department of
Homeland Security and Consolidated Edison to deploy the first of these systems
in mid-town Manhattan. Because of the significant promise Secure Super Grids
technology holds for urban and metropolitan power delivery networks, we believe
this project will help push superconductor technology over the goal line and
into commercial markets."
Additional Recent Developments
-- Additional D-VAR Orders: AMSC received an influx of orders for
its D-VAR solution. As announced last week, AMSC is supplying
a D-VAR system to a copper-gold mine in South Australia to
mitigate power fluctuations stemming from the mining
operation. In addition, AMSC received recent orders for two
large Australian wind farms as well as wind farms in Northern
Ireland, Scotland, Canada and Texas.
-- Acquisition of Power Quality Systems: In April, AMSC completed
its acquisition of Power Quality Systems, Inc. (PQS). The
company expects the acquisition to be immediately accretive to
EBITDAS.
-- New Windtec Customers: Windtec signed a contract to develop a
portfolio of 2.5 MW wind energy systems for Dongfang Steam
Turbine Works Corporation (DTC) of China. This order came
shortly after Windtec gained Doosan Heavy Industries &
Construction and Zhuzhou Electric Locomotive Research
Institute as new customers.
-- 2G Cable Demonstration: AMSC and Nexans, the worldwide leader
in the cable industry, successfully tested the world's first
power transmission cable made with AMSC's proprietary 2G HTS
wire known as "344 superconductors." This wire is also
required in AMSC's Secure Super Grids systems.
-- Historical Windtec Financials: Due to an error identified in
the historical (2006) financial statements of Windtec, the
company will file an amendment to the Form 8-K/A dated March
23, 2007 to restate the financial statements of Windtec. The
correction in Windtec's historical 2006 financial statements
did not have a material effect on AMSC's post-acquisition
financial statements for the periods ended March 31, 2007. The
error relates to Windtec's failure to properly account for a
loss provision related to a prototype development contract
Windtec entered into in 2006. Windtec currently expects this
adjustment will reduce its previously reported 2006 net income
from 746,015EUR to approximately 531,000EUR . As a result of
this error, the company will also amend its pro forma combined
balance sheet and statements of operations that are also
included in the Form 8K/A.
Financial Forecasts
AMSC expects that revenues for fiscal 2007 will
increase by approximately 50% to a range of $75 million to $80 million. The
company expects its net loss for the full fiscal year will be in the range of
$22 million to $25 million, or $0.62 to $0.70 per share, using 35.5 million
weighted average shares outstanding. AMSC anticipates its EBITDAS loss will be
reduced significantly from $28.5 million for fiscal 2006 to $9 million to $11
million for fiscal year 2007. Please refer to the financial schedules attached
to this press release for reconciliation between the company's net loss forecast
and its EBITDAS forecast for fiscal 2007. The company reaffirmed it expected to
achieve positive EBITDAS in fiscal 2008, ending March 31, 2009.
The net loss and EBITDAS forecasts above exclude
approximately $5 million in potential restructuring costs should the company
relocate its Westborough, Massachusetts headquarters and R&D activities to its
Devens, Massachusetts facility during fiscal 2007. If undertaken, this
consolidation would be expected to decrease expenses in fiscal 2008, ending
March 31, 2009 by approximately $3 million.
The company anticipates its cash burn for fiscal
2007 will decline at least 35 percent from approximately $30.3 million in fiscal
2006 to less than $20 million in fiscal 2007.
Conference Call Reminder
In conjunction with this announcement, AMSC
management will participate in a conference call with investors beginning at
10:00 a.m. ET today to discuss the company's results and its business outlook.
Those who wish to listen to the live conference call webcast should visit the
"Investors" section of the company's website at www.amsc.com/investors. The live
call also can be accessed by dialing (913) 981-4911 and using conference ID
4005652. A telephonic playback of the call will be available from 1:00 p.m. ET
on May 24, 2007 through 1:00 p.m. ET on May 31, 2007. Please call
+1-719-457-0820 and refer to conference ID 4005652 to access the playback.
Results Report for Fourth Quarter Fiscal 2006
----------------------------------------------------------------------
Selected Statement of Operations Data
Three Months ended Twelve Months ended
March 31, March 31,
--------------------------- ---------------------------
Revenues 2007 2006 2007 2006
------------- ------------- ------------- -------------
By business
segment:
Superconductors $5,373,647 $8,719,268 $21,332,520 $35,870,797
Power Systems 13,711,749 5,574,172 30,850,410 15,001,651
------------- ------------- ------------- -------------
Total revenues 19,085,396 14,293,440 52,182,930 50,872,448
Operating
income (loss):
By business
segment:
Superconductors (9,815,569) (10,637,726) (30,751,428) (27,548,551)
Power Systems 457,981 (479,948) 401,747 (3,640,529)
Unallocated
corporate
expenses (1,381,180) (545,531) (5,514,739) (2,297,476)
Restructuring
Charges (667,285) - (667,285) -
------------- ------------- ------------- -------------
Operating loss (11,406,053) (11,663,205) (36,531,705) (33,486,556)
Interest, taxes
and
other income/
(expense) (23,246) 636,045 1,856,312 2,610,246
------------- ------------- ------------- -------------
Net loss ($11,429,299) ($11,027,160) ($34,675,393) ($30,876,310)
============= ============= ============= =============
Net loss per
share-Basic &
Diluted ($0.33) ($0.34) ($1.04) ($0.94)
Weighted
average shares
outstanding 34,393,561 32,652,287 33,260,674 32,685,390
Note: Unallocated corporate expenses include
stock-based compensation expense of $961,559 and $84,547 for the three months
ended March 31, 2007 and March 31, 2006, respectively; and $3,680,493 and
$427,848 for the twelve months ended March 31, 2007 and March 31, 2006.
Selected Balance Sheet Data
March 31, March 31,
2007 2006
------------- -------------
Cash, cash equivalents and short-term
investments $ 35,323,583 $ 65,668,605
Selected current assets:
Accounts receivable, net $18,053,507 $9,014,035
Inventory $6,895,559 $9,006,034
Property, plant and equipment, net $49,928,044 $44,779,567
Goodwill and intangible assets $18,163,811 $4,041,565
Total assets $132,642,001 $133,470,462
Accounts payable & accrued expenses $23,482,447 $16,498,373
Deferred revenue $4,642,533 $1,872,126
Deferred tax liabilities $2,376,512 $0
Stockholders' equity $102,020,853 $115,099,963
Reconciliation of Net Loss to EBITDAS (1)
Three months ended Twelve months ended
March 31, March 31,
--------------------------- ---------------------------
2007 2006 2007 2006
------------- ------------- ------------- -------------
Net loss $(11,429,299) $(11,027,160) $(34,675,393) $(30,876,310)
Interest
income (399,305) (700,593) (2,178,561) (2,610,372)
Income taxes (101,398) ? (101,398) ?
Depreciation
and
amortization 1,708,170 1,726,709 4,766,156 7,475,374
------------- ------------- ------------- -------------
EBITDA (10,221,832) (10,001,044) (32,189,196) (26,011,308)
Stock-based
compensation 961,559 84,547 3,680,493 427,848
------------- ------------- ------------- -------------
EBITDAS $(9,260,273) $(9,916,497) $(28,508,703) $(25,583,460)
Reconciliation of Net Loss Forecast to EBITDAS Forecast (1)
Twelve months ended
March 31, 2008
---------------------------
Low High
------------- -------------
Net loss $(22,000,000) $(25,000,000)
Interest income (1,000,000) (1,000,000)
Income taxes 1,000,000 1,000,000
Depreciation and amortization 8,500,000 9,000,000
------------- -------------
EBITDA (13,500,000) (16,000,000)
Stock-based compensation 4,500,000 5,000,000
------------- -------------
EBITDAS $(9,000,000) $(11,000,000)
(1) EBITDAS is a non-GAAP financial measure
defined by the company as net income before interest, taxes, depreciation and
amortization, and stock-based compensation. The company believes EBITDAS is an
important measurement for management and investors given the increasing effect
that non-cash charges such as stock compensation, amortization related to
acquisitions, taxes associated with Windtec, and depreciation of capital
equipment will have on the company's net income (loss). The company regards
EBITDAS as a useful measure of operating performance and cash flow to complement
operating income, net income and other GAAP financial performance measures.
Additionally, management believes that EBITDAS will provide meaningful
comparisons of past, present and future operating results. 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. This measure, however, should be
considered in addition to, and not as a substitute or superior to, operating
income, cash flows, or other measures of financial performance prepared in
accordance with GAAP. A reconciliation of EBITDAS to GAAP net income (loss) is
set forth in the table above.
About AMSC
AMSC (American Superconductor Corporation -
NASDAQ: AMSC) 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, reliability 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 power cables, grid-level surge protectors, motors,
generators, 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.
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