OREANDA-NEWS. AMSC (NASDAQ:AMSC), a global solutions provider serving wind and power grid industry leaders, today reported financial results for its fourth quarter and full year fiscal 2016 ended March 31, 2017. 

Revenues for the fourth quarter of fiscal 2016 were $16.2 million, compared with $27.5 million for the same period of fiscal 2015. The year-over-year decrease was largely due to lower Wind segment revenues, primarily due to lower than expected shipments of electric control systems to Inox during the fourth quarter of fiscal 2016.

AMSC’s net loss for the fourth quarter of fiscal 2016 increased to $6.9 million, or $0.50 per share, from $3.4 million, or $0.25 per share, for the same period of fiscal 2015. The Company’s non-GAAP net loss for the fourth quarter of fiscal 2016 was $7.1 million, or $0.51 per share, which increased compared with a non-GAAP net loss of $3.8 million or $0.28 per share, in the same period of fiscal 2015. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results.

Revenues for the full fiscal year 2016 were $75.2 million as compared to $96.0 million in fiscal year 2015. AMSC reported a net loss for fiscal 2016 of $27.4 million, or $1.98 per share, compared to a net loss of $23.1 million, or $1.76 per share in fiscal 2015. The Company's non-GAAP net loss for full year fiscal 2016 was $27.0 million, or $1.95 per share, compared with a non-GAAP net loss of $26.2 million, or $1.99 per share, for fiscal 2015.

Cash, cash equivalents and restricted cash at March 31, 2017 totaled $27.7 million, compared with $26.0 million at December 31, 2016.

“Our grid business grew this year for the second year in a row. We have been able to make progress in our grid business. We grew D-VAR revenues year to year. We are diversifying our product lineup by introducing a new offering for our grid business.  We announced the fourth and fifth cities that are publicly working on a deployment study for our resilient electric grid solution. We are preparing for anticipated insertion of our ship protection systems into the U.S. Navy's surface fleet with a services contract from the U.S. Navy, while continuing to make progress on our second ship protection solution for the U.S. Navy,” said Daniel P. McGahn, President and Chief Executive Officer of AMSC. “We believe we will continue to further diversify our business with additional orders in fiscal 2017.”

Business Outlook
For the first quarter ending June 30, 2017, AMSC currently expects that its revenues will be in the range of $8 million to $9 million, taking into account anticipated seasonally lower ECS shipments to Inox as well as the temporary demand dislocation previously discussed in our preliminary fourth quarter financial results announced on April 26, 2017. The Company’s net loss for the first quarter of fiscal 2017 is expected to be less than $18.0 million, or $1.05 per share.  The Company’s expected net loss in the first quarter of fiscal 2017 includes approximately $2.0 million in restructuring charges associated with the actions announced on April 4, 2017.  The Company's non-GAAP net loss (as defined below) is expected to be less than $17.5 million, or $1.02 per share. Excluding the proceeds from the recent equity offering, the Company expects a cash burn of $7 million to $8 million in the first quarter of fiscal 2017.

Conference Call Reminder
In conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. Eastern Time today 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 http://www.amsc.com/investors. The live call also can be accessed by dialing 800-905-0392 and using conference ID 8247681.

About AMSC 
AMSC generates the ideas, technologies and solutions that meet the world’s demand for smarter, cleaner … better energy™. Through its Windtec™ Solutions, AMSC provides wind turbine electronic controls and systems, designs and engineering services that reduce the cost of wind energy. Through its Gridtec™ Solutions, AMSC provides the engineering planning services and advanced grid systems that optimize network reliability, efficiency and performance. The Company’s solutions are now powering gigawatts of renewable energy globally and are enhancing the performance and reliability of power networks in more than a dozen countries. Founded in 1987, AMSC is headquartered near Boston, Massachusetts with operations in Asia, Australia, Europe and North America.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
  Three months ended
March 31,		   Twelve months ended
March 31,
  2017   2016   2017   2016
Revenues              
Wind $ 10,447     $ 19,907     $ 47,269     $ 68,883  
Grid 5,748     7,618     27,926     27,140  
Revenues 16,195     27,525     75,195     96,023  
               
Cost of revenues 13,360     18,284     64,352     74,041  
               
Gross profit 2,835     9,241     10,843     21,982  
               
Operating expenses:              
Research and development 3,736     3,379     12,540     12,303  
Selling, general and administrative 6,048     7,530     25,688     28,861  
Restructuring and impairments —     —     —     779  
Amortization of acquisition related intangibles 39     39     157     157  
Total operating expenses 9,823     10,948     38,385     42,100  
               
Operating loss (6,988 )   (1,707 )   (27,542 )   (20,118 )
               
Change in fair value of derivatives and warrants 636     (637 )   1,304     (228 )
Gain on sale of minority interests —     581     325     3,092  
Interest expense, net (52 )   (196 )   (383 )   (1,037 )
Other income (expense), net (415 )   (1,268 )   65     (2,457 )
               
Loss before income tax expense (6,819 )   (3,227 )   (26,231 )   (20,748 )
               
Income tax expense 106     135     1,142     2,391  
               
Net loss $ (6,925 )   $ (3,362 )   $ (27,373 )   $ (23,139 )
               
Net loss per common share              
Basic $ (0.50 )   $ (0.25 )   $ (1.98 )   $ (1.76 )
Diluted $ (0.50 )   $ (0.25 )   $ (1.98 )   $ (1.76 )
               
Weighted average number of common shares outstanding              
Basic 13,981     13,559     13,804     13,178  
Diluted 13,981     13,559     13,804     13,178  
CONSOLIDATED BALANCE SHEET
(In thousands, except per share data)
 
  March 31,
 2017		   March 31,
 2016
ASSETS      
Current assets:      
Cash and cash equivalents $ 26,784     $ 39,330  
Accounts receivable, net 7,956     19,264  
Inventory 17,462     18,512  
Prepaid expenses and other current assets 2,703     5,778  
Restricted cash 795     457  
Total current assets 55,700     83,341  
       
Property, plant and equipment, net 43,438     49,778  
Intangibles, net 301     854  
Restricted cash 165     934  
Deferred tax assets 407     96  
Other assets 233     315  
       
Total assets $ 100,244     $ 135,318  
       
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
Current liabilities:      
Accounts payable and accrued expenses 14,490     23,156  
Note payable, current portion, net of discount of $19 as of March 31, 2017 and $42 as of March 31, 2016 1,481     2,624  
Derivative liabilities 1,923     3,227  
Deferred revenue 14,323     12,000  
Total current liabilities 32,217     41,007  
       
Note payable, net of discount of $133 as of March 31, 2016 —     1,367  
Deferred revenue 7,631     9,269  
Deferred tax liabilities 125     63  
Other liabilities 45     63  
Total liabilities 40,018     51,769  
       
Stockholders' equity:      
Common stock, $0.01 par value, 75,000,000 shares authorized; 14,713,839 and 14,107,126 shares issued at March 31, 2017 and 2016, respectively 147     141  
Additional paid-in capital 1,017,510     1,011,813  
Treasury stock, at cost, 97,529 and 51,506 shares at March 31, 2017 and 2016, respectively (1,371 )   (881 )
Accumulated other comprehensive (loss) income (503 )   660  
Accumulated deficit (955,557 )   (928,184 )
Total stockholders' equity 60,226     83,549  
       
Total liabilities and stockholders' equity $ 100,244     $ 135,318  
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
  Twelve months ended March 31,
  2017   2016
Cash flows from operating activities:      
       
Net loss $ (27,373 )   $ (23,139 )
Adjustments to reconcile net loss to net cash used in operations:      
Depreciation and amortization 7,519     7,972  
Stock-based compensation expense 2,892     3,248  
Impairment of minority interest investments —     746  
Provision for excess and obsolete inventory 1,615     2,713  
Write-off prepaid taxes —     289  
Gain on sale from minority interest investments (325 )   (3,092 )
Loss from minority interest investments —     356  
Change in fair value of derivatives and warrants (1,304 )   228  
Non-cash interest expense 156     359  
Other non-cash items (940 )   1,462  
Changes in operating asset and liability accounts:      
Accounts receivable 11,143     (9,318 )
Inventory (815 )   (782 )
Prepaid expenses and other current assets 2,729     5,608  
Accounts payable and accrued expenses (7,938 )   1,543  
Deferred revenue 1,426     7,248  
Net cash used in operating activities (11,215 )   (4,559 )
       
Cash flows from investing activities:      
Net cash provided by investing activities 192     4,873  
       
Cash flows from financing activities:      
Net cash (used in) provided by financing activities (1,130 )   18,202  
       
Effect of exchange rate changes on cash and cash equivalents (393 )   324  
       
Net (decrease)/increase in cash and cash equivalents (12,546 )   18,840  
Cash and cash equivalents at beginning of year 39,330     20,490  
Cash and cash equivalents at end of year $ 26,784     $ 39,330  
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share data)
 
  Three months ended
March 31,		   Twelve months ended
March 31,
  2017   2016   2017   2016
Net loss $ (6,925 )   $ (3,362 )   $ (27,373 )   $ (23,139 )
Gain on sale of interest in minority investments, net of tax effect —     (565 )   (325 )   (2,919 )
Stock-based compensation 626     706     2,892     3,248  
Amortization of acquisition-related intangibles 39     39     157     157  
Restructuring and impairment charges —     —     —     779  
Consumption of zero cost-basis inventory (254 )   (1,348 )   (1,373 )   (4,960 )
Change in fair value of derivatives and warrants (636 )   637     (1,304 )   228  
Non-cash interest expense 28     $ 69     156     359  
Tax effect of adjustments 41     —     220     —  
Non-GAAP net loss $ (7,081 )   $ (3,824 )   $ (26,950 )   $ (26,247 )
               
Non-GAAP net loss per share $ (0.51 )   $ (0.28 )   $ (1.95 )   $ (1.99 )
Weighted average shares outstanding - basic and diluted 13,981     13,559     13,804     13,178  
Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss
(In millions, except per share data)
 
  Three months ending  
June 30, 2017  
Net loss $ (18.0 )  
Stock-based compensation   0.7    
Consumption of zero-cost inventory   (0.2 )  
Non-GAAP net loss $ (17.5 )  
Non-GAAP net loss per share $ (1.02 )  
Shares outstanding   17.1    

Note: Non-GAAP net loss is defined by the Company as net loss before stock-based compensation; restructuring and impairment charges; amortization of acquisition-related intangibles; consumption of zero cost-basis inventory; non-cash interest expense; change in fair value of derivatives and warrants; and other unusual charges, net of any tax effects related to these items. The Company believes non-GAAP net loss assists 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. The Company also regards non-GAAP net loss as a useful measure of operating performance to complement operating loss, net loss and other GAAP financial performance measures. In addition, the Company uses non-GAAP net loss as a factor in evaluating management’s performance when determining incentive compensation and to evaluate the effectiveness of its business strategies.

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

 

AMSC Contact:
Brion D. Tanous
AMSC Investor Relations
Phone: 424-634-8592
Email: Brion.Tanous@amsc.com