2013 Q2 Form 10-Q Financial Statement

#000119312513324142 Filed on August 07, 2013

View on sec.gov

Income Statement

Concept 2013 Q2 2013 Q1 2012 Q2
Revenue $23.09M $20.42M $28.72M
YoY Change -19.61% -28.68% 216.95%
Cost Of Revenue $17.99M $18.09M $16.93M
YoY Change 6.27% -27.84% -0.2%
Gross Profit $5.099M $2.330M $11.79M
YoY Change -56.75% -34.55% -249.24%
Gross Profit Margin 22.09% 11.41% 41.06%
Selling, General & Admin $10.83M $13.35M $13.80M
YoY Change -21.54% -22.25% -37.25%
% of Gross Profit 212.34% 572.96% 117.04%
Research & Development $3.027M $3.850M $3.910M
YoY Change -22.58% -35.08% -51.97%
% of Gross Profit 59.36% 165.24% 33.16%
Depreciation & Amortization $2.655M $2.910M $3.344M
YoY Change -20.6% -36.46% 3.21%
% of Gross Profit 52.07% 124.89% 28.36%
Operating Expenses $31.94M $17.28M $34.84M
YoY Change -8.35% -25.45% 14.51%
Operating Profit -$8.850M -$14.95M -$6.128M
YoY Change 44.42% -23.8% -84.01%
Interest Expense $2.100M -$3.320M $2.700M
YoY Change -22.22% 482.46% 1025.0%
% of Operating Profit
Other Income/Expense, Net $69.00K -$10.00K $123.0K
YoY Change -43.9% -78.42%
Pretax Income -$10.42M -$19.35M -$11.11M
YoY Change -6.19% -7.77% -70.39%
Income Tax $90.00K $420.0K -$836.0K
% Of Pretax Income
Net Earnings -$10.51M -$19.77M -$10.28M
YoY Change 2.32% -6.61% -72.73%
Net Earnings / Revenue -45.54% -96.82% -35.78%
Basic Earnings Per Share -$1.80 -$0.20
Diluted Earnings Per Share -$1.80 -$3.505M -$0.20
COMMON SHARES
Basic Shares Outstanding 58.30M shares 51.19M shares
Diluted Shares Outstanding 58.30M shares 51.19M shares

Balance Sheet

Concept 2013 Q2 2013 Q1 2012 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $32.60M $39.20M $65.70M
YoY Change -50.38% -24.03% -58.1%
Cash & Equivalents $32.61M $39.24M $60.49M
Short-Term Investments $0.00 $5.200M
Other Short-Term Assets $24.70M $28.60M $47.20M
YoY Change -47.67% -18.98% -29.24%
Inventory $30.75M $33.47M $28.70M
Prepaid Expenses
Receivables $11.09M $18.86M $13.60M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $99.14M $120.2M $155.1M
YoY Change -36.08% -16.31% -41.71%
LONG-TERM ASSETS
Property, Plant & Equipment $71.93M $74.63M $87.70M
YoY Change -17.98% -17.81% -11.05%
Goodwill
YoY Change
Intangibles $2.536M $2.749M
YoY Change
Long-Term Investments
YoY Change
Other Assets $9.067M $9.020M $17.90M
YoY Change -49.35% -46.63% -19.73%
Total Long-Term Assets $95.05M $96.57M $109.1M
YoY Change -12.88% -13.39% -14.5%
TOTAL ASSETS
Total Short-Term Assets $99.14M $120.2M $155.1M
Total Long-Term Assets $95.05M $96.57M $109.1M
Total Assets $194.2M $216.8M $264.2M
YoY Change -26.5% -15.03% -32.89%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $4.174M $7.146M $30.90M
YoY Change -86.49% -12.85% -53.46%
Accrued Expenses $21.10M
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0%
Long-Term Debt Due $11.70M $8.800M $3.600M
YoY Change 225.0%
Total Short-Term Liabilities $67.51M $79.76M $84.10M
YoY Change -19.72% -7.58% -35.7%
LONG-TERM LIABILITIES
Long-Term Debt $5.800M $9.200M $19.90M
YoY Change -70.85%
Other Long-Term Liabilities $1.165M $1.291M $3.500M
YoY Change -66.71% -65.11% 34.62%
Total Long-Term Liabilities $1.165M $1.291M $23.40M
YoY Change -95.02% -65.11% 800.0%
TOTAL LIABILITIES
Total Short-Term Liabilities $67.51M $79.76M $84.10M
Total Long-Term Liabilities $1.165M $1.291M $23.40M
Total Liabilities $75.71M $91.64M $107.8M
YoY Change -29.77% 1.59% -19.49%
SHAREHOLDERS EQUITY
Retained Earnings -$810.6M -$800.1M
YoY Change
Common Stock $610.0K $603.0K
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost) $370.0K $313.0K
YoY Change
Treasury Stock Shares
Shareholders Equity $118.5M $125.1M $156.4M
YoY Change
Total Liabilities & Shareholders Equity $194.2M $216.8M $264.2M
YoY Change -26.5% -15.03% -32.89%

Cashflow Statement

Concept 2013 Q2 2013 Q1 2012 Q2
OPERATING ACTIVITIES
Net Income -$10.51M -$19.77M -$10.28M
YoY Change 2.32% -6.61% -72.73%
Depreciation, Depletion And Amortization $2.655M $2.910M $3.344M
YoY Change -20.6% -36.46% 3.21%
Cash From Operating Activities -$9.307M -$4.580M -$11.59M
YoY Change -19.7% -41.06% -79.94%
INVESTING ACTIVITIES
Capital Expenditures $97.00K -$170.0K $88.00K
YoY Change 10.23% -91.01% -101.86%
Acquisitions
YoY Change
Other Investing Activities $205.0K $2.830M -$6.760M
YoY Change -103.03% -191.59% -110.48%
Cash From Investing Activities $3.774M $2.660M -$6.846M
YoY Change -155.13% -153.41% -111.46%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $1.154M
YoY Change
Cash From Financing Activities -1.211M -1.040M 32.93M
YoY Change -103.68% -677.78% 651.71%
NET CHANGE
Cash From Operating Activities -9.307M -4.580M -11.59M
Cash From Investing Activities 3.774M 2.660M -6.846M
Cash From Financing Activities -1.211M -1.040M 32.93M
Net Change In Cash -6.744M -2.960M 14.49M
YoY Change -146.55% -76.45% 127.8%
FREE CASH FLOW
Cash From Operating Activities -$9.307M -$4.580M -$11.59M
Capital Expenditures $97.00K -$170.0K $88.00K
Free Cash Flow -$9.404M -$4.410M -$11.68M
YoY Change -19.48% -25.0% -77.98%

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<div> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="4%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>1.</b></font></td> <td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Nature of the Business and Operations and Liquidity</b></font></td> </tr> </table> <!-- xbrl,body --> <p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Nature of the Business and Operations</i></b></font></p> <p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">American Superconductor Corporation (&#x201C;AMSC&#x201D; or the &#x201C;Company&#x201D;) was founded on April&#xA0;9, 1987. The Company is a leading provider of megawatt-scale solutions that lower the cost of wind power and enhance the performance of the power grid. In the wind power market, the Company enables manufacturers to field wind turbines through its advanced engineering, support services and power electronics products. In the power grid market, the Company enables electric utilities and renewable energy project developers to connect, transmit and distribute power through its transmission planning services and power electronics and superconductor-based products. The Company&#x2019;s wind and power grid products and services provide exceptional reliability, security, efficiency and affordability to its customers.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">These unaudited condensed consolidated financial statements of the Company have been prepared on a going concern basis in accordance with United States generally accepted accounting principles (&#x201C;GAAP&#x201D;) and the Securities and Exchange Commission&#x2019;s (&#x201C;SEC&#x201D;) instructions to Form 10-Q. The going concern basis of presentation assumes that the Company will continue operations and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (&#x201C;GAAP&#x201D;) have been condensed or omitted pursuant to those instructions. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The unaudited condensed consolidated financial statements, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the results for the interim periods ended June&#xA0;30, 2013 and 2012 and the financial position at June&#xA0;30, 2013.</font></p> <p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font style="FONT-FAMILY: Times New Roman" size="2"><b><i>Liquidity</i></b></font></p> <p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">The Company has experienced recurring operating losses and as of June&#xA0;30, 2013, the Company had an accumulated deficit of $810.6 million. In addition, the Company has experienced recurring negative operating cash flows, which has resulted in a decrease in its cash balance. These factors raise substantial doubt about the Company&#x2019;s ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. At June&#xA0;30, 2013, the Company had cash and cash equivalents of $32.6 million. Cash used in operations for the three months ended June&#xA0;30, 2013 was $9.3 million. The Company obtained financing totaling approximately $35.0 million during the quarter ended June&#xA0;30, 2012. No additional financing has been obtained since then.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">The Company is currently in the process of consolidating certain business operations to reduce facility costs. The Company expects that its cost reduction efforts and anticipated revenue growth will result in a reduction of cash used for operations during the fiscal year ending March&#xA0;31, 2014, compared to the prior year. In July 2013, the Company reduced its workforce by approximately 7% and expects to record a restructuring charge for severance and other costs of approximately $1.0 million in the quarter ending September&#xA0;30, 2013. The Company plans to closely monitor its expenses and if required, expects to further reduce operating costs and capital spending to enhance liquidity.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">On April&#xA0;4, 2012, the Company completed a private placement of $25.0 million aggregate principal amount of a 7% senior unsecured convertible note (the &#x201C;Initial Note&#x201D;). On June&#xA0;5, 2012, the Company entered into a Loan and Security Agreement (the &#x201C;Term Loan&#x201D;), under which the Company borrowed $10.0 million. On December&#xA0;20, 2012, the Company agreed to exchange the Initial Note for a new unsecured, senior convertible note (the &#x201C;Exchanged Note&#x201D;), which had the same principal amount and accrued interest as the Initial Note at the time of the exchange. See Note 10, &#x201C;Debt&#x201D;, for further information regarding these debt arrangements, including the covenants, restrictions and events of default under the agreements.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">On June&#xA0;5, 2012, the Company entered into a Loan and Security Agreement (as modified by that certain Limited Waiver dated June 11, 2013, the &#x201C;Term Loan&#x201D;), under which the Company borrowed $10.0 million. The Term Loan contains certain covenants and restrictions including, among others, a requirement to maintain a minimum unrestricted cash balance in the U.S. equal to the remaining principal balance. (See Note 10, &#x201C;Debt&#x201D;, for further information regarding these debt arrangements, including the covenants, restrictions and events of default under the agreements.) The Company believes that it is in compliance with the covenants and restrictions included in the agreements governing these debt arrangements as of the date of this Quarterly Report on Form 10-Q.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business, the Company needs to significantly increase sales through executing its strategy to broaden its customer base, enter new markets, and commercialize its superconductor product line. In addition, the Company may need to further reduce operating expenses in line with business conditions in order to decrease the amount of cash used in operations and continue to work with the holder of its convertible note in order to maintain the ability to make monthly amortization payments on the convertible note in shares of common stock. In July 2013, the holder of the Exchanged Note converted $4.0 million of the Exchanged Note into shares of common stock in accordance with the accelerated payment provisions of the Exchanged Note. In addition, the Company is actively seeking to sell its minority investments in Tres Amigas and Blade Dynamics and has recently engaged a financial advisor to assist with that effort. (See Note 13, &#x201C;Equity Investments&#x201D;, for further information about such investments.) There can be no assurance that we will be able to sell one or both of these investments on commercially reasonable terms or at all.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">If the Company successfully executes on its plans discussed above, then the Company believes that its available cash, together with additional reductions in operating costs and capital expenditures that it expects to make, if necessary, will be sufficient to fund its operations, capital expenditures and scheduled cash payments under its debt obligations through June&#xA0;30, 2014. The Company&#x2019;s ability to pay required monthly installment payments under the Exchanged Note in equity instead of cash is based on certain stock price and trading volume conditions that are outside of the Company&#x2019;s control. If one or both of these equity conditions are not met (absent a waiver from the lender), the Company may be required to make required monthly installment payments in cash. As of the date of this Form 10-Q, the Company has only made payments to the lender in shares of common stock and as a result, the principal balance has been reduced by $10.6 million through June&#xA0;30, 2013. If the Company fails one or both of the equity conditions, the Company can still make required payments in its common stock with a waiver from the lender, which has been provided in the past. There is no assurance that the lender will provide any waivers in the future. The Company&#x2019;s liquidity is highly dependent on its ability to profitably grow revenues through both the acquisition of new customers and growth from its existing customers, manage its operating expenses, continue to make amortization payments under the Exchanged Note in shares of the Company&#x2019;s common stock, maintain compliance with the covenants and restrictions on its debt obligations (or obtain waivers from our lenders in the event of non-compliance), and raise additional capital, as required. Potential sources of additional capital include sales of its minority investments in Tres Amigas and Blade Dynamics, (see Note 13, &#x201C;Equity Investments&#x201D;, for further information about such investments) and obtaining additional financing (with the consent of our lenders, if required). There can be no assurance that sources of additional financing or other forms of liquidity will be available on commercially acceptable terms or at all.</font></p> <p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px" align="justify"><font style="FONT-FAMILY: Times New Roman" size="2">The results of operations for an interim period are not necessarily indicative of the results of operations to be expected for the fiscal year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended March&#xA0;31, 2013 (fiscal 2012) which are contained in the Company&#x2019;s Annual Report on Form 10-K.</font></p> </div>
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0.735 pure
CY2012Q4 us-gaap Fair Value Assumptions Risk Free Interest Rate
FairValueAssumptionsRiskFreeInterestRate
0.0023 pure
CY2012Q4 us-gaap Fair Value Assumptions Expected Dividend Rate
FairValueAssumptionsExpectedDividendRate
0.165 pure
CY2012Q4 amsc Fair Value Assumptions Redeemable
FairValueAssumptionsRedeemable
yes
CY2012Q4 amsc Fair Value Assumptions Dilution Effect
FairValueAssumptionsDilutionEffect
yes
CY2012Q4 amsc Fair Value Assumptions Recovery Rate
FairValueAssumptionsRecoveryRate
0.300 pure
CY2012Q4 amsc Percentage Volume Condition Met
PercentageVolumeConditionMet
0.945 pure
CY2012Q4 amsc Convertible Notes Fair Value As Percentage Of Par Value
ConvertibleNotesFairValueAsPercentageOfParValue
0.049 pure

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