AMSC Reports Second Quarter Fiscal Year 2009 Financial Results

http://www.businesswire.com/news/home/20091029005069/en

- Increased Revenues 85 Percent Year Over Year

- Grew Non-GAAP EPS to $0.19

- Generated $35.8 million in Cash From Operations

- Increased Backlog to $587 million

- Revenue and Net Income Forecasts Increased for Full Year Fiscal 2009
DEVENS, Mass.--(Business Wire)--
American Superconductor Corporation (NASDAQ: AMSC), a global energy technologies
company, today reported record financial results for the second quarter of its
fiscal year 2009 ended September 30, 2009.

Revenues for the second quarter of fiscal 2009 were $74.7 million, an 85 percent
increase over $40.4 million in revenues for the second quarter of fiscal 2008.
Gross margin for the second quarter of fiscal 2009 was 38.9 percent, which
compares with 26.5 percent for the second quarter of fiscal 2008.

AMSC generated GAAP net income of $4.3 million, or $0.10 per diluted share, for
the second quarter of fiscal 2009. This compares with a GAAP net loss for the
second quarter of fiscal 2008 of $4.1 million, or $0.10 per share. The company
generated non-GAAP net income of $8.7 million, or $0.19 per diluted share, for
the second quarter of fiscal 2009. This compares with a non-GAAP net loss of
$1.4 million, or $0.03 per share, for the second quarter of fiscal 2008. Please
refer to the financial table included below for a reconciliation of GAAP to
non-GAAP results.

Cash, cash equivalents, marketable securities and restricted cash at September
30, 2009 were $141.1 million. This compares with $103.2 million as of June 30,
2009 and $117.2 million as of March 31, 2009.

The company reported backlog as of September 30, 2009 of approximately $587
million compared with $497 million as of June 30, 2009.

"Our team executed extremely well on all fronts, and we exceeded all of our
financial objectives for the second fiscal quarter," said Greg Yurek, AMSC`s
founder and chief executive officer. "In addition to the 3 MW core electrical
component contract we signed with Sinovel Wind Co., Ltd. valued at more than
$100 million, our second-quarter bookings also included electrical system orders
from several other wind turbine customers and a series of power grid sales in
Australia, China, the United Kingdom and the United States. This positions us
for continued strong growth in the second half of our fiscal year, and we have
therefore increased our forecasts for revenues and net income for full year
fiscal 2009."

Financial Forecast

"For the full year fiscal 2009, we are increasing our revenue guidance from a
range of $260 million to $270 million to a range of $300 million to $310
million," said David Henry, AMSC senior vice president and chief financial
officer. "We are increasing our gross margin forecast from a range of 32 percent
to 34 percent to a range of 34 percent to 35 percent. Our GAAP net income
forecast for fiscal 2009is being increased from a range of $5.0 million to $7.0
million, or $0.11 to $0.16 per diluted share, to a range of $11.0 million to
$13.0 million, or $0.24 to $0.29 per diluted share. AMSC`s non-GAAP net income
forecast has increased from a range of $18 million to $21 million, or $0.41 to
$0.47 per diluted share, to a range of $27.0 million to $29.0 million, or $0.59
to $0.64 per diluted share."

"We expect to increase revenues quarter over quarter through the remainder of
fiscal 2009," Henry continued. "We now expect to generate a GAAP profit in the
third fiscal quarter, whereas we previously forecasted the potential for a small
GAAP net loss. Non-GAAP earnings per share for the third fiscal quarter are
expected to be approximately half of our second-quarter non-GAAP earnings per
share due to lower-margin shipments and a planned increase in operating expenses
to support future growth. Earnings are expected to increase again in our fourth
fiscal quarter, consistent with our current full fiscal year forecast."

Please refer to the financial table included below for a reconciliation of GAAP
to non-GAAP forecasts.

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
913-312-1482 and using conference ID 7640398. A telephonic playback of the call
will be available from 1:00 p.m. ET on October 29, 2009 through 1:00 p.m. ET on
November 5, 2009. Please call 888-203-1112 and refer to conference ID 7640398 to
access the playback.

About American Superconductor (NASDAQ: AMSC)

AMSC offers an array of proprietary technologies and solutions spanning the
electric power infrastructure - from generation to delivery to end use. The
company is a leader in alternative energy, providing proven, megawatt-scale wind
turbine designs and electrical control systems. The company also offers a host
of Smart Grid technologies for power grid operators that enhance the
reliability, efficiency and capacity of the grid, and seamlessly integrate
renewable energy sources into the power infrastructure. These include
superconductor power cable systems, grid-level surge protectors and power
electronics-based voltage stabilization systems. AMSC`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.amsc.com.

American Superconductor and design, Revolutionizing the Way the World Uses
Electricity, AMSC, Powered by AMSC, D-VAR, dSVC, PowerModule, PQ-IVR, Secure
Super Grids, Windtec and SuperGEAR are trademarks or registered trademarks of
American Superconductor Corporation or its subsidiaries. All other brand names,
product names or trademarks belong to their respective holders. The Windtec logo
and design is a registered European Union Community Trademark.

Any statements in this release about future expectations, plans and prospects
for the company, including our expectations regarding the future financial
performance of the company 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: we have a history of operating
losses, and we may incur losses in the future; a significant portion of our
revenues are derived from a single customer, and a reduction in business with
this customer could adversely affect our operating results; adverse changes in
domestic and global economic conditions could adversely affect our operating
results; changes in exchange rates could adversely affect our results from
operations; our common stock may experience extreme market price and volume
fluctuations, which may prevent our stockholders from selling our common stock
at a profit and could lead to costly litigation against us that could divert our
management`s attention; if we fail to implement our business strategy, our
financial performance and our growth could be materially and adversely affected;
we may not realize all of the sales expected from our backlog of orders and
contracts; many of our revenue opportunities are dependent upon subcontractors
and other business collaborators, and a reduction in orders stemming from these
companies could adversely affect our operating results; our products face
intense competition, which could limit our ability to acquire or retain
customers; our success is dependent upon attracting and retaining qualified
personnel and our inability to do so could significantly damage our business and
prospects; and our international operations are subject to risks that we do not
face in the U.S., which could have an adverse effect on our operating results.
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, any 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.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

Three months ended Six months ended
September 30, September 30,
2009 2008 2009 2008
Revenues:
Power Systems $ 71,791 $ 35,576 $ 142,487 $ 71,506
Superconductors 2,881 4,799 5,185 8,686
Total revenues 74,672 40,375 147,672 80,192

Cost of revenues 45,637 29,670 96,054 57,866

Gross profit 29,035 10,705 51,618 22,326

Operating expenses:
Research and development 5,416 4,688 9,944 9,601
Selling, general and administrative 12,712 8,849 23,597 17,742
Amortization of acquisition related intangibles 460 481 905 984
Restructuring and impairments 117 500 451 500
Total operating expenses 18,705 14,518 34,897 28,827

Operating income (loss) 10,330 (3,813 ) 16,721 (6,501 )

Interest income 190 801 433 1,576
Other income (expense), net (871 ) 481 (2,847 ) (1,990 )

Income (loss) before income tax expense 9,649 (2,531 ) 14,307 (6,915 )

Income tax expense 5,309 1,537 8,175 3,256

Net income (loss) $ 4,340 $ (4,068 ) $ 6,132 $ (10,171 )

Net income (loss) per common share
Basic $ 0.10 $ (0.10 ) $ 0.14 $ (0.24 )
Diluted $ 0.10 $ (0.10 ) $ 0.14 $ (0.24 )

Weighted average number of common shares outstanding
Basic 44,247 42,745 44,020 42,380
Diluted 45,233 42,745 44,922 42,380

UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)

September 30, March 31,
2009 2009
ASSETS
Current assets:
Cash and cash equivalents $ 86,752 $ 70,674
Marketable securities 36,177 39,255
Accounts receivable, net 47,004 50,103
Inventory 29,187 35,129
Restricted cash 6,398 5,872
Prepaid expenses and other current assets 10,143 10,313
Deferred tax assets, net 1,102 1,160
Total current assets 216,763 212,506

Property, plant and equipment, net 54,435 54,838
Goodwill 39,217 26,233
Intangibles, net 8,763 8,859
Restricted cash 1,634 1,406
Marketable securities 10,127 -
Other assets 12,765 5,264

Total assets $ 343,704 $ 309,106

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses $ 57,832 $ 60,253
Deferred revenue 18,244 21,066
Total current liabilities 76,076 81,319

Deferred revenue 9,156 4,902
Deferred tax liabilities, net 877 840
Other 241 184
Total liabilities 86,350 87,245

Stockholders' equity:
Common stock 441 433
Additional paid-in capital 675,209 653,052
Accumulated other comprehensive loss 2,709 (4,487 )
Accumulated deficit (421,005 ) (427,137 )
Total stockholders' equity 257,354 221,861

Total liabilities and stockholders' equity $ 343,704 $ 309,106

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

For the six months ended
September 30,
2009 2008

Cash flows from operating activities:
Net income (loss) $ 6,132 $ (10,171 )
Adjustments to reconcile net income/(loss) to net cash used in operations:
Depreciation and amortization 4,704 4,134
Stock-based compensation expense 6,918 5,194
Stock-based compensation expense-non-employee 30 42
Allowance for doubtful accounts 52 778
Re-valuation of warrant - 1,334
Deferred income taxes (1,111 ) 616
Other non-cash items 382 489
Changes in operating asset and liability accounts, excluding the effect of acquisition:
Accounts receivable 3,010 4,837
Inventory 6,235 (4,762 )
Prepaid expenses and other current assets 712 (1,780 )
Accounts payable and accrued expenses (4,810 ) (1,044 )
Deferred revenue (567 ) 3,853

Net cash provided by operating activities 21,687 3,520

Cash flows from investing activities:
Purchase of property, plant and equipment (2,741 ) (3,303 )
Purchase of marketable securities (40,533 ) (62,217 )
Proceeds from the maturity of marketable securities 33,374 34,679
Change in restricted cash (546 ) 5,785
Purchase of intangible assets (843 ) (612 )
Change in other assets (617 ) (84 )

Net cash used in investing activities (11,906 ) (25,752 )

Cash flows from financing activities:
Proceeds from exercise of employee stock options 4,068 11,997

Net cash provided by financing activities 4,068 11,997

Effect of exchange rate changes on cash and cash equivalents 2,229 (1,805 )

Net increase (decrease) in cash and cash equivalents 16,078 (12,040 )

Cash and cash equivalents at beginning of period 70,674 67,834

Cash and cash equivalents at end of period $ 86,752 $ 55,794

Supplemental schedule of cash flow information:
Non-cash contingent consideration in connection with acquisitions $ 10,828 $ 9,784
Non-cash issuance of common stock 320 301

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

Three months ended Six months ended
September 30, September 30,
2009 2008 2009 2008
Net income (loss) $ 4,340 $ (4,068 ) $ 6,132 $ (10,171 )
Amortization of acquisition-related intangibles 460 481 905 984
Restructuring and impairments 117 500 451 500
Stock-based compensation 3,852 2,895 6,918 5,194
Re-valuation of stock warrants - (1,062 ) - 1,334
Tax effects (93 ) (98 ) (181 ) (201 )
Non-GAAP net income (loss) $ 8,676 $ (1,352 ) $ 14,225 $ (2,360 )

Non-GAAP earnings (loss) per share $ 0.19 $ (0.03 ) $ 0.32 $ (0.06 )
Weighted average shares outstanding * 45,233 42,745 44,922 42,380

* Diluted shares are used for periods where non-GAAP net income is generated.

Reconciliation of Forecast GAAP Net Income to Non-GAAP Net Income for Fiscal Year 2009
(In millions, except per share data)

Low High
Net Income $ 11.0 $ 13.0
Amortization of acquisition-related intangibles 1.9 1.9
Stock-based compensation 14.0 14.0
Restructuring 0.5 0.5
Tax effects (0.4 ) (0.4 )
Non-GAAP net income $ 27.0 $ 29.0
Non-GAAP net income per share $ 0.59 $ 0.64
Diluted shares outstanding 45.5 45.5

Note: Non-GAAP net income (loss) is defined by the company as net income (loss)
before amortization of acquisition-related intangibles, restructuring and
impairments, stock-based compensation, re-valuation of stock warrants, other
unusual charges and any tax effects related to these items. The company believes
non-GAAP net income (loss) is an important measurement for management and
investors given the effect that these non-cash or non-recurring charges have on
the company's net income (loss). The company regards non-GAAP net income (loss)
as a useful measure of operating performance and cash flow to complement
operating income, net income (loss) and other GAAP financial performance
measures.

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 or superior to, operating income, cash
flows, or other measures of financial performance prepared in accordance with
GAAP. A reconciliation of non-GAAP to GAAP net income (loss) is set forth in the
table above.

American Superconductor Corporation (NASDAQ: AMSC)
Jason Fredette, 978-842-3177
Director, Corporate Communications
jfredette@amsc.com

Copyright Business Wire 2009