AMSC - Earnings call transcript Q1 2020 | American Superconductor Corporation

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Operator

Good day and welcome to the American Superconductor First Quarter Fiscal 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. John Heilshorn. Please go ahead, sir.

John Heilshorn

Ella. you, Thank and Fiscal everyone, American Corporation's Superconductor Good Earnings welcome Conference Quarter XXXX Call. First morning, to I'm John Heilshorn, of LHA Investor Relations, AMSC's record. Investor Relations agency Chief Officer and With McGahn, Kosiba, call today's Treasurer. Vice Executive President, Senior Financial us John Officer; Chief are President, and on Chairman, Daniel yesterday issued XXXX earnings of its closed. market Superconductor for the the American quarter first release fiscal after www.amsc.com. page Those is available copy of release, of company's the the a you who seen have website at the not Investors yet in

and Factors of filed on the the with in provisions to remind important Actual company statements about as XXXX, annual on set Before that ended call, for expectations, such starting the harbor Act the would like make statements forward-looking not the the call and differ report XX-K today. the SEC with that company factors, remarks today's Form Reform These forth plans a forward-looking that today SEC. statements June indicated section Litigation be XX, which management's may of date has expectations as results of of as relied the represent the result including by safe upon American you management as of views XXXX. those purposes various constitute I various representing Private future reports only of year for X, to Risk management's and materially March under XXXX, subsequent forward-looking any American Superconductor's Securities filed during prospects should Superconductor's may subsequent from those

the these statements. measures, certain refer the to management call, obligation cause that Also non-GAAP the for While flow any on non-GAAP non-GAAP the cash developments the cash company is to defined adjustments views company effect expenses can forward-looking the and or to found today's furnished SEC warrants, update and flow disclaims calculated acquisition-related operating amortization by in specifically of anticipates the may fees cash most China of fair financial fiscal that loss defined settlement, Non-GAAP items. GAAP the issued legal company the to operating of company operating flow company's other Form directly unusual metric. The net is charges, net non-GAAP company reconciliation before first change, and subsequent earnings night events will changes comparable quarter loss measures before rate press net and the compensation, at tax intangibles, unusual of other by cash net flow. of last as non-cash and relevant of stock-based income X-K. the the and in loss non-GAAP Non-GAAP be company's as on value measures the XXXX the to release

can over All With Officer, call Daniel will McGahn. at Superconductor's filings Daniel? I of accessed its from press President SEC Chief that, American be of www.amsc.com. page Chairman, to website releases Investors the turn now and the and Executive

Daniel McGahn

fiscal quarter, XXXX. John, detailed and I will September June Kosiba for our provide guidance the today provide and for which review John Thanks, and XXXX, on ended business of financial end update second first then will will units. an fiscal grid begin our by providing quarter, good a wind results XX, which everyone. the XX, morning,

we'll to from the open questions our comments, our up Following line analysts.

than guidance and ago year by diversifying above in growing We XXXX top more for fiscal the are grew quarter XX% came range our year the and versus Revenue the our first business. of of period.

revenue ago versus nearly segment year grid period. XX% grew Our the

nearly which that in fact, quarter we have was the time a grid decade, the the we've In is reporting grid this been reported segment. largest

We growth million ended contributed than quarter REG, in in quarter. our VVO, All D-VAR, lines, to $XX the cash. with product of strong grid first and the SPS the more

fiscal to SPS business revenues. stronger for grid record-breaking we strong for year. by shipments XXXX and our backlog the that class driven track first remainder grid was and fiscal or year, Industries the VVO ECS D-VAR, of believe of yet our our robust electrical fiscal against on grid a Heavy Our start With scheduled is our We control segment during Korean order made systems for the X-megawatt another partner, XXXX. quarter very from Doosan our

to this complete We expect order shipments this year. fiscal under

growth Our through is working. grid strategy

this expected Our record projects is backlog D-VAR of ship to fiscal year.

been decade. quarter the grid of our of was in is a and fiscal quarter D-VAR XXXX about revenue Grid The business. largest has revenue D-VAR the growth, driving first foundation

development and The a of revenue installations renewable D-VAR the fab. industrial very like energy generation grid. comes energy working on majority today mine plants product renewable to installations or is business semiconductor the D-VAR from manufacturing interconnection hard. Our and addressing The electricity teams currently of are focused our

fiscal shipments to continue in shipments We applications fiscal of for First connectivity were States XXXX XXXX. quarter Kingdom. quarter D-VAR wind of the D-VAR United United and Australia, in anticipate farm the second strong the

level addresses Optimizer whereas product new product VVO As Volt/VAR power is transmission D-VAR distribution the power our or you know, market. a

team utilities' to by our reaction Our are has job solution. excellent and the positive of encouraged our sales educating about an we product, utilities done VVO

fiscal had our team to United of XXXX, product the Our utility a a multi-unit order VVO States. strong shipping first in start to

a volume this anticipating are year. of We VVO higher fiscal shipments

do multi-unit contribute see fiscal in multiple to from our We are utility growth VVO to We beginning expect to grid XXXX. orders customers.

the AMSC designed also a of gaining LPD be AMSC, developments SPS on deployment announced take manage for Class lighter Navy SPS ability to power-efficient can tort a or Navy's the has signature plan we XX became is AMSC's order LPD to design build are AMSC's Antonio This Our Antonio protection amphibious to SPS our Navy. third as I the and LPD significant to them to known we ship, XX. our In warfare San is develop ship systems. The to recap damage the of ship. call the for additional ships San Navy for we system. the systems selling detect will more are July, worked which the order with San the degaussing degaussing starting SPS SPS moment an high-temperature The want platform. with The superconductor with baseline XX. is the magnetic the platform. Antonio class LPD SPS, U.S. SPS. business Navy. this latest undersea to At weight, momentum. mine's with version and a now ship Class

We have an for XX. LPD order for SPS

have for We an LPD LPD have XX. SPS order for and order an for we now XX, SPS

next SPS will is for LPD Our order XX. expectation that our be

busy continuing and SPS Our first business we is the very deliver systems. on to expand while focused our team

ensure supply are We working closely to chain timely of our X very Navy and system our orders. delivery the with ship

the as systems. engaged, call, to capabilities perspective, planning are reported a of we capacity concurrent in been deliver SPS the the the multiple establishing last for orders. on We SPS manufacturing From we have

distancing not aircraft including protocols, Antonio is Grid XXXX. and Combat limited in on The our our destroyers, first factory safety our platforms Class Littoral implemented revenues include, floor. the design to, SPS win first but potential quarter San fiscal of segment Other have We carriers, Navy. are strong with social Ships. the to frigates contributed

or system. electric power utilities, within electric largest Grid July, expected nation's has We LPD We're program have become system SPS. timing new a Navy is Electric a unit Chicago-based Exelon permanent REG reached begun grid. its understand The Chicago's month, the a of Last of the ComEd, revenue threshold for to announced one to that and we in REG with working XX. construction for the Resilient on Corporation closely asset

XXXX. establishing in systems manufacturing to project, schedule expected been delivery are have in ComEd's this is of for and and system We REG on operational be system our product REG XXXX. for we the delivery first

work continue We on projects, to show with specific of believe which lot major we promise. utilities a

the quarter shipments made our We Systems, from business. during fiscal Korean XXXX. Industries wind X-megawatt for against ECS, our Electrical diversifying Control our our Doosan are of Heavy partner, We order class or first

XXXX. our has anticipate of quarters. ECS units second X been Doosan quarter largest the of We the the customer fact, for in wind delivering additional X.X-megawatt fiscal In past

and As are wind part According strategy, Trade, renewables South the South XXXX, XXXX. of of by Korea's of that by the and South XX% generation Industry least power generate to business, XX XXXX. XX% publication be to is by Korean offshore Korea, government Ministry promoting at will Korean its electricity gigawatts targeted Energy

global offshore Doosan We supply a farm. offshore In in to well Korea XX By turbines is there is gigawatts offshore capacity. we share. about southwestern Doosan to date, large-scale project To wind intends world's and wind wind the will gigawatts. gigawatts. producers, nearly pipeline, understand which reached the wind offshore XXXX, South wind XXX for Gunsan market power the X one expected top development wind increase farms X high six-fold power wind of power offshore approximately generation believe offshore XXXX, become very X are for positioned and wind the to global of totaled

farms. Taiwan and to to the of development offshore power Japan Korea, contribute are South wind expected

lower the expectation of to year. announced class has this and energy wind closely design. desire with India, to publicly working look global partner. penetrating a of its transition by the stated by is Inox team a new, to turbine larger Our Inox's to cost with important next Doosan, wind levelized forward are way we we In offshore X-megawatt potentially encouraged by market turbine

need need still Inox. turbines wind our and However, support integral new support strategy and X-megawatt to they ECS partner its see we at has have is agreement part in saw as supply indicated the of not ready yet new Indian X-megawatt of India. stand signed We stock with a to new in We wind long-term in an or ECS. power deploy turbine uncertainty market a Inox. India commissioning Inox

some been in regain contracts. contract. Inox some Inox supply with of diligently constant is paid Inox. outstanding working communication has the to its We compliance X-megawatt with on have amounts

our business. expansion the support capabilities both We parties. believe to a we positive of of resolution any situation to well help for to the positioned are are contracts using Inox Inox's We with bring

Now results John? fiscal I'll first September second end for XXXX of the our the review over guidance XXXX, financial of which John turn and to XX, year XXXX. fiscal will call Kosiba quarter quarter provide the for to

John Kosiba

for and quarter. year Thank AMSC generated million XXXX morning, good revenues the you, everyone. in million of the compared $XX.X quarter first of $XX.X ago fiscal to Daniel,

accounted the business increased XX%. D-VAR unit revenues, the quarter ECS the year ago quarter first our partially fewer offset primarily of as Wind ago Our decreased XX% accounted revenues grid shipments versus for during to to revenues was business unit total XX% in the the quarter business year due while This by Inox. result and XX% versus a period. revenues. quarter to shipments in Doosan unit by higher ECS for SPS first increased wind unit of Grid business

expenses for P&L in increased margin the revenue year-over-year margin first the more to SG&A The was and factory the resulted of within compared $X.X expenses increased R&D $X.X same quarter. primarily The driven for to of contributing the margin revenue XX% increase absorption, at XXXX gross ago million first and our million. year in the year-over-year Gross and were up Looking Approximately in quarter of This mix product the a SG&A XX% year in growth XXXX first fiscal was quarter the detail. period both a by fiscal from R&D business. were of XXXX non-cash. XX% the in grid was favorable quarter improvement. fiscal ago. for

Our per ago share in the compared $X.XX XXXX of quarter share non-GAAP million million first loss with the fiscal $X.X year or $X.XX per net $X.X quarter. for was or

million change per Our was ago This associated equivalents, last results. net fiscal XXXX. March warrants. share. first our with quarter XXXX reconciliation the impacted night quarter of million cash Please of This of or of press XXXX cash. quarter XXXX loss for the $XX.X first the cash, GAAP year the million on $X.XX year $X.X million in gain per Included net This quarter. a non-cash issued ended marketable XX, our release compares the value share in with in $X.X of loss non-GAAP a ago with or We securities fair restricted $X.X $XX.X and first was the fiscal see fiscal in million to with results. favorably $X.XX in compares

fiscal million guidance cash Our $X to cash the quarter in million in stronger of previous first operating burn. $X our was $X.X came of XXXX burn operating a than million. This

on quarterly When business at the any fluctuates projects. our you previous individual working As quarter-to-quarter working tends working capital over recent for quarters, look depending out cash calls, mentioned from requirements our for capital variations. in our to requirements capital average

business on Over a our first $X million. quarters, in expect non-GAAP working the where to operating quarter, X Each changes cash flow approximately quarter the the revenue believe cash requirements within operate. quarter our burn the due cash fiscal to capital. in of or was XXXX our $XX range quarterly of cash the be approximately higher average lower - may averaged operating our We well we last million burn of has an was requirements of would

XXXX. the guidance Now of turning fiscal for second financial quarter our to

that $XX expect million range of $XX will in be the our to We revenues million.

per on exceed of XXXX. to our second non-GAAP that fiscal The or $X.X and loss exceed not cash share. $X in is net revenue million of expected per flow million to not to $X $X.XX Our $X.X million loss share, or quarter million to company operating be is expected net a the burn expects $X.XX

We cash, securities million Daniel. and expect in over than no less the equivalents, turn I'll $XX to end the back marketable With with second restricted cash to cash. that, call quarter

Daniel McGahn

Thanks, John.

protocols in of have of As challenges missed at we it has created and for uncertainty. has COVID-XX demonstrated we through were operational to and operate our discussed macroeconomic is all beat demonstrating We early emergence production. businesses. separation and a sites, both last quarter, not implement the effectively times manufacturing can physical concerns AMSC

instituted and healthy, everyone help is protocols have offices We our paramount. safe for keep which cleaning to

focused our on are parts quality. and our supplies as We well our products, product customer strong people and service on for as

have the We been operational throughout pandemic.

quarter fiscal fiscal have on a in We strongest XXXX XX% decade. our started and a the revenue grid first Grid of nearly represented strong of quarter over note. very our in was XXXX

Our is clearly D-VAR strong. very business

our We to market, the VVO are developing multiple customers delivering purchase customers to units. need or repeat the especially pipeline, for seeing

on orders SPS recently, for LPD deployment LPD now have XX, and LPD We XX. XX, most

production ComEd's system. We of REG are in first

We efforts the megawatt market offshore to turbine. X.X with are supporting penetrate Doosan's wind our

that hard against and employees of the dedication. is executing work credit our their and We to are due our goals to

Our are you now we'll our products. XXXX. fiscal look to focused reporting resilient analysts. our questions people our forward at back of from second the I completion resilient on of to quarter Operator, take

Operator

we take [Operator Capital Shen first question will Partners. Philip you. And Thank with our Instructions] from ROTH

Philip Shen

taking for questions. Thanks the everyone. Hi,

First D-VAR. one on is

growth saw You some there. nice

renewables, long more expect talked I wind you to see if could ahead. Australia. the was this selling about and could you I seeing in talk in you you how know specifically. quarter, you're And I sustain? This wondering Daniel, about strength UK U.S., think

in offering So overall grow countries, to business as it continue other think your X? to can beyond to you nice winning what the with a Daniel. seems degree just value are these the winning wind the like - do proposition formula your you compared Thanks, seems you industry to And be of competition.

Daniel McGahn

Phil. Thanks,

bigger bit with just little a start grid. me Let

year. today some show growth say grid we that clearly did think by anticipated have surge backlog That's D-VAR. a believe support driven business. obviously is in I a of we We what that we to I for the the seeing we're now.

us fall to going it's that U.S. fact given think for the to the go given the election. and into I through the hard an pandemic look out and very winter, into is the

second the that, typical quarter. think of few future think, we than the becomes at We levels. prognosticate again I next doesn't We'll We're you going macro So have with our acceleration necessarily market even is looking now to us. are that it continue know effects looking to clearly, I as these projects But that slow probably remains already is go part that that I more market of quarters really probably we down. pipeline want robust. though an to as difficult quarter in holds seen, year. Phil, to But kinds don't are certainly we the many nice have deliver to for They're be. quarters. we mean, for position at demands things how what the for realize team sales have next the sales what in That What or won't X what future. the seen see forward a guided out X beyond very business. in But that years at

Philip Shen

Okay, thanks.

there, you follow-up highlighted earlier. talk talked in there? new as actually whether of you're about about not expansion we bidding potentially So a countries? or winning or can As the orders there well an Is new you reach X or

Daniel McGahn

It's going partners. our some to depend of on

Canada, as continue. Latin North markets in Europe announce know can right orders We seeing all UK. core Asia demonstrated Australia. Australia. we'll necessarily typical East. business is very Phil, do we've or the past, that Continental in this much the could pipeline orders. for sometimes the And also doesn't America, we say, for UK, I to some U.S., healthy And renewables, in I but U.S., mean well. now, At point, be our don't the but Middle on obviously what's some know industrial close I and stay going markets, tuned current see nice We're are next. our America. So as in have a focused certainly pipeline, core We is, in industrial that

having we the us, the by product. try beat having hopefully, goal multiple to risk And So for that allows to music on the of today. that diversity shots on manage we're continue

Philip Shen

sounds the Great. as that having Shifting you many how XXXX? orders? are It nice success like well as could many number today? you're do you And expand XXXX you to utilities to selling Can And well. in you how gears there that utilities are also, some about to then VVO. talk then as doing multiple think of

Daniel McGahn

I think more that, go next on or a call probably the detailed through in either the call we'll update VVO. after

of did of but an them at this think but number on that happy throes purchases trying prepared very systems, year. multiples, of for making remarks to will use indications buy of really this hopefully We're be we're that And bundles, think utilities give I don't some is multiple important still in gave we mention therefore, numbers deployments I'm units the will is a I what idea it. this this certain that Phil, we're we color the We we in planning about the beginning systems. year the very, are. it. the easy can in think about we least want as point. hands see put mature, with year more I where the we specific to get at product. multiple into on

we of only as VVO in the forward and beyond. or we look gets year very to think delivery But buy making think I for years. important is multiple a either happy think, XXXX next VVO, it this XXXX stronger these to systems there I with and customers enough year

Philip Shen

Great, thanks, you're seeing success grid. Daniel. Congrats on in the

Daniel McGahn

Thanks, Phil.

Operator

next Craig-Hallum. take from with question Eric Stine We'll our

Aaron Spychalla

Yeah, good taking Thanks for morning, questions. Aaron for on Eric. it's Spychalla the

Daniel McGahn

No to hear problem. Good you. from

Aaron Spychalla

color capacity to identified you business, on for more maybe any then Navy a you other first you, ships? class last other this the and great. on would the of timing more bit And And on those can sizes still LPD the update ship, any there, the more the the expand congrats the Are of has Navy navy thanks just mentioned likewise. first, any color And there? kind but X potential color Maybe XX, the I first for order into - I on ships, about color on the timing more you be any fiscal little thank delivered just to or think year? on talk efforts areas? quarter, next expected mentioned on multiple then, be there? know

Daniel McGahn

works, X Yes. It's it. kind of But until profile we of quarter. give how or the kind a order the color into predict revenue hard going announce we to had more you the next systems give lot to the

Now we've a added third.

the a year. LPD XX the to year. timing the next for We'll fiscal way we'd deliver a I we're about year. fiscal in think this delivering to I one position be fiscal means And think it best probably then delivering basically following be system think is

at growth. them. have because to to beat one So we to we're system more, be the mean new get year. then as threshold, make wins, sure understand when going able a is regular now people expecting I we we'll we for we're we're we what And announce where kind capacity revenue And wanted deliver ship a of said certainly

Aaron Spychalla

grid, just update Understood. starting on really in And mean, there? customer broadly the an it on then really maybe diversification. you you're Can next see that. to sounds D-VAR, give just us like and I

that's customer new the maybe growing? significant just I in and how you queue. talk there I saw the another pipeline Can think about

Daniel McGahn

be nice in that D-VAR. but all they think I'll are are, It we translates seeing, horizon the doesn't maybe large for in numbers in that us. We're surge that the any the say, quarter. a projects projects That these potential very mean larger a XX%-plus Yeah. some would customer for of projects see I on

customer one. U.S. I the come it's additional of side think our XX%-plus - specifically interesting really XX%-plus you project customers project this kind same grid last as all one quarter and of is a are an is at quarter, D-VAR. see And a that our Australia, for in the and in One the from

Aaron Spychalla

little there? important view right. kind the then on you've maybe what And for you give And supply on efforts forward? All how kind Can talked about of of the maybe a that just me, past you've last in chain. as going detail just the done more you

Daniel McGahn

Yeah.

risks think on update chain which in think makes I supply seen, other given I and turmoils we've that sense, markets.

systems Some a of our within good delivering, suppliers in to able on for everything, have where timing. now at position D-VAR been for the for pretty We've we're pull in we're instance, ECS. and been much multi-sources that looking

think able effort I So series supply challenges did the get some on key in spring. seen a which a it to quantities in occur they go the still components, that with basis, and as team lead times the we're that shortened, that we've daily But to good. a on weekly time parts is on basis need. of really maybe ensure is But chain our not actually the we

Aaron Spychalla

And taking the questions. the again, for congrats, Thanks right. on quarter. All

Daniel McGahn

Thanks, Aaron.

Operator

will next question Rusch our We take with Colin Oppenheimer. from

Joe Beninati

Colin provide on for bit a you Joe little It's this Can more color… morning.

Daniel McGahn

Joe. Hi,

Joe Beninati

maybe well color guys. more coming as visibility the when see and revenue market? that little Korean color provide potentially and could a scale into of some around bit Hey, on some from we as wind revenue market Can you

Daniel McGahn

Yeah.

in see get to some up, market seen I've that and up are going projections locally. market XX as gigawatts is way. that that would to it advocate, superior seems support they're think Doosan get I to here in and good It XX this the we now megawatt, in being XX We've the that be we would think open one. of to To we share going they talked set that's potential news between about XX, some that so to about to but and to per have gigawatt attention get the dollars gigawatt per latest our more or megawatt, the is X and same they're translates implies call a could $XX,XXX year. one Doosan. and a rate for that It of up content $XXX,XXX

So opportunity market, gets to dollars. math, alone doing the It it. millions of $X Korea the it the in hundreds quite in reach doesn't close of is total billion with but the pretty

challenge technology out think I the one and differentiate take. offerings will many with Doosan such know as market. able a think we're is will and the be in to superior only share we local large that Korean manufacturer. but technology And think we to going the the a We be question the winter, they're what on to

if impact that, we're show So don't know great years important beyond going cautiously a think in XXXX, an future that's many it. for XXXX forward. years optimistic of point I certainly to ahead going not Doosan year, this in we but has at customer only in be this that but they'll

Joe Beninati

helpful. Very Thanks.

Operator

we At over further turn to any will have back McGahn comments. for conference closing now Daniel questions. this time, no the I

Daniel McGahn

I challenging thank for want to pandemic. it's getting today. the attention through mean I everybody your been

fall-through right, we from where in able show humming we numbers and to gross the that that be good wanted from being the the news the numbers, margin a a revenue John see is standpoint. along. We're at business. level business is this We're look quarter really through very the We good. went I the leverage good getting from, with think

people call. and the got with I today quarter us think information the a lot on the the last that of results asked answered questions

of of And us good coming on, ahead in signs even trajectory Going that continue in showed, think, we're the some made. on the the to of lot some forward, we comments that from we have work we also growth we India a we're that grid.

to to do sure be see we business quarter, that. do position soon. Thank what's going today the the with we're winter to talk and the time you the we every can't results opportunity in happen we're work some sure the to in a the guidance, you, comes our but We really we make election, with to what's in make COVID, the happen coming So everybody, that to take to given lumpiness tell want going again continue and have to do way. going and I advantage fall next of in time, to from we'll able and strong

Operator

Thank you, This ladies concludes gentlemen. teleconference. and today's

now may disconnect. You

American Superconductor (AMSC) 9 Aug 202020 Q1 Earnings call transcript