American Superconductor Corporation
(
AMSC
) reported results for its fourth quarter fiscal 2011 ending March
31, 2012. In the reported quarter, the company incurred an adjusted
loss of 34 cents per share which beat the Zacks Consensus Estimate
of a loss of 38 cents. Loss in the reported quarter was also better
than the year-ago quarterly adjusted loss of 58 cents per share. On
a reported basis, the company digested a net loss of 42 cents per
share versus a net loss of $3.67 per share, which included
aggregate one-time asset write-downs, impairments and accrued
charges.
Operational Statistics
American Superconductor's total revenue of $28.6 million in the
reported quarter was below the $59.8 million in the year-ago
period. The downcast in revenues was due primarily to lower sales
in the Wind segment, which suffered from a lack of revenue from its
former customer Sinovel Wind Group Co. Ltd. Revenue was also below
the Zacks Consensus Estimate of $29.0 million for the quarter.
American Superconductor digested a net loss of $21.2 million in
the reported quarter versus a net loss of $185.1 million in the
year-ago period, which included $155.3 million in aggregate
one-time asset write-downs, impairments and accrued charges.
Financial Update
Cash and cash equivalents as of March 31, 2012, were $46.3
million versus $123.8 million as of March 31, 2011. Cash used in
operating activities during the twelve month period ending March
31, 2012, was $141.0 million versus $22.8 million of cash used in
operating activities in the year-ago period. To strengthen its
liquidity position the company on June 5, 2012, entered into a $10
million loan and security agreement with Hercules Technology Growth
Capital.
Looking Forward
Founded in 1987, Boston, Massachusetts-based American
Superconductor has operations spread in Asia, Australia, Europe and
North America. The company offers an array of proprietary
technologies and solutions spanning the electric power
infrastructure, including generation to delivery to end-use. The
company is a lead player in megawatt-scale wind turbine designs and
electrical control systems.
American Superconductor's performance was impacted by business
and contractual issues with its largest customer in China - Sinovel
Wind Group Co. Ltd. Earlier, American Superconductor's revenue
growth largely relied on its customer Sinovel, China's largest and
the world's third largest wind turbine manufacturer. However, since
April 2011, Sinovel bogged down by high inventory levels refused to
accept further shipments from the company and was unable to pay for
past shipments.
American Superconductor sued Sinovel in November 2011, for
payments for past shipments, and compensation for infringement of
intellectual property rights. American Superconductor alleges that
Sinovel illegally obtained and used its proprietary technology to
upgrade its 1.5 megawatt wind turbines to meet proposed Chinese
grid codes. The matter is now sub-judice, with American
Superconductor seeking to recover more than $1.2 billion from
Sinovel through civil cases filed in various Chinese courts.
American Superconductor, looking forward to the quarter ending
June 30, 2012, expects that its revenues will exceed $26 million.
The company expects that its net loss for that quarter will be less
than $10 million, or $0.19 per share, which includes a benefit of
approximately $7 million for the settlement of adverse purchase
commitments with certain vendors. The company also estimates that
it will have approximately $85 million in cash, cash equivalents,
marketable securities and restricted cash on June 30, 2012.
In the near term, the Zacks #2 Rank (Buy) clearly suggests a
window for short-term gains. Over the longer run however we
maintain our market Neutral recommendation on the American
Superconductor stock. American Superconductor competes with
Anaren Inc.
(
ANEN
),
AVX Corporation
(
AVX
) and
Rogers Corporation
(
ROG
).
AMER SUPERCON (AMSC): Free Stock Analysis
Report
ANAREN INC (ANEN): Free Stock Analysis Report
AVX CORP (AVX): Free Stock Analysis Report
ROGERS CORP (ROG): Free Stock Analysis Report
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