American Superconductor reports fiscal 2003 first quarter results


WESTBOROUGH, Mass., July 24, 2002 — American Superconductor Corp., a global supplier of superconductor products and power electronic converters for the electric power industry, recently reported results for the first quarter fiscal 2003, which ended June 30, 2002.

Net revenues for the first quarter of fiscal 2003 were $2.9 million compared with $1.7 million for the first quarter of fiscal 2002. The net loss for the first quarter of fiscal 2003 was $10.8 million, or $0.53 per share, compared with a net loss of $9.0 million or $0.44 per share for the first quarter of fiscal 2002.

The $11.2 million operating loss for the first quarter of fiscal 2003 was relatively unchanged compared to the $11.1 million operating loss recorded in the first quarter of fiscal 2002. The difference in net and operating losses was due primarily to $1.7 million less in investment income in the first quarter of fiscal 2003 than in the first quarter of fiscal 2002.

The company ended the first quarter of fiscal 2003 with cash, cash equivalents and long-term investments of $45.6 million and no long-term debt, which was in line with expectations, compared to $68.2 million as of March 31, 2002.

Primary uses of cash during the quarter included: funding the $10.8 million net loss for the quarter; $7.6 million to reduce the fiscal- year-end accounts payable and accrued expense liabilities resulting from equipment purchases and restructuring and other one-time charges incurred during the fourth quarter of fiscal 2002; and $4.8 million in capital expenditures in the first quarter, primarily for the company’s new HTS wire manufacturing plant.

“As of June 30, 2002, we have about $7.3 million in revenue backlog for the last nine months of the fiscal year,” said Greg Yurek, chief executive officer of American Superconductor. “The addition of the $2.9 million recognized as revenue in our first quarter brings our revenue commitments for the fiscal year to $10.2 million, compared with our guidance of a total of $20 million to $28 million in revenue for the full fiscal year.”

Yurek noted that the backlog as of June 30, 2002 included orders received during the quarter for the Company’s new Dynamic-VAR, or D-VARà¢â€ž- product. “Sales of our D-VAR and SMES product lines have a direct, positive impact on our cash position because we have more than $9.0 million of inventory to support these sales,” said Yurek. “Although we cannot make any assurances that we will achieve our revenue targets this year for the Power Electronic Systems business unit, prospects for additional sales are looking better.”

Yurek also noted that the company’s planned additional use of cash during the remainder of the fiscal year for the HTS wire manufacturing plant would be about $4 million and about $1 million for the restructuring carried out in March 2002. “Our plan is to end the fiscal year with about $35 million in cash, cash equivalents and long-term investments on our balance sheet with no long-term debt,” Yurek continued.

“We believe we are on track to achieve this goal with no additional cash investments into our company and no monetization of property or equipment assets. We believe our existing capital resources will be sufficient to fund our operations until fiscal 2005, at which time we expect to reach corporate-wide profitability.”

The company is providing segment reporting for each of its three business units (HTS Wire, Electric Motors and Generators, and Power Electronic Systems) for the first time on a quarterly basis. “Reporting separate financial results for each of our three business units aligns with the way in which we manage the company, and it provides investors with more insight into our progress,” stated Yurek.

American Superconductor’s three business units have focused their product development, sales and marketing efforts over the last 12 to 24 months on several high-growth business areas, including transmission grid solutions, military and commercial electric ship propulsion systems and wind farms. “While our products are being applied or demonstrated for many other applications and markets, we believe these particular market segments provide our company with the best growth opportunities over the next several years,” concluded Yurek.

About American Superconductor

American Superconductor Corporation is a developer and manufacturer of products using superconductor wires and power electronic converters for the electric power infrastructure. American Superconductor’s products, and those sold by electrical equipment manufacturers that incorporate its products, can dramatically increase the bandwidth and reliability of power delivery grids, reduce manufacturing and operating costs, and conserve resources used to produce electric power. Founded in 1987, the Company is headquartered in Westborough, Mass. For more information, visit http://www.amsuper.com.


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