American Superconductor (AMSC) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues increased 60% to $54.5 million for the three months ended September 30, 2024, and 47$94.8 million for the six months ended September 30, 2024, compared to the same periods in 2023[146] - Grid business unit revenues increased 65% to $46.9 million in the three months ended September 30, 2024, and 46$79.3 million in the six months ended September 30, 2024, driven by the acquisition of Megatran and increased shipments of new energy power systems[147] - Wind business unit revenues increased 37% to $7.5 million in the three months ended September 30, 2024, and 55$15.5 million in the six months ended September 30, 2024, driven by additional shipments of electrical control systems at increased prices[149] - Gross margin improved to 29% for both the three and six months ended September 30, 2024, compared to 25% and 23% in the same periods in 2023, due to higher revenues, favorable product mix, and pricing increases[150] - Net income improved to $4.9 million in the three months ended September 30, 2024, and$2.4 million in the six months ended September 30, 2024, compared to net losses of $2.5 million and$7.9 million in the same periods in 2023, driven by deferred tax liability from the Megatran acquisition and increased revenues[162] - Non-GAAP net income was $10.0 million in the three months ended September 30, 2024, and$13.2 million in the six months ended September 30, 2024, compared to $0.1 million and a loss of$2.1 million in the same periods in 2023, driven by higher revenues and gross margins[164] Business Operations - The company operates under two business units: Grid and Wind, focusing on power grid solutions and wind turbine technologies respectively[134][135][136] - The company's Grid business segment provides transmission planning services and grid interconnection solutions for renewable energy projects[135] - The Wind business segment supplies advanced power electronics and control systems, and licenses wind turbine designs[136] - The company's core technologies include PowerModule™ programmable power electronic converters and Amperium® high temperature superconductor wires[133] - The company's success depends on the commercial adoption of its REG system, which is currently limited[128] Acquisitions and Investments - The company acquired Megatran for $61.4 million, including a cash payment of$5.0 million and 1,297,600 restricted shares of common stock[143] - Megatran's subsidiary, NWL, Inc., is a U.S.-based provider of engineered power conversion solutions for industrial and military applications[143] - The acquisition of Megatran was completed on August 1, 2024, for an aggregate consideration of $61.4 million, with an additional cash payment of$8.3 million made on September 23, 2024[171] - The company recorded a $3.3 million payment relating to the Megatran acquisition to settle remaining obligations, with the contingent consideration value being de minimis at the acquisition date[154] Financial Transactions and Liquidity - The company completed an offering of 6,210,000 shares of common stock at$11.25 per share, receiving net proceeds of approximately $65.2 million[142] - The company completed a public offering of 6,210,000 shares of common stock at$11.25 per share, raising net proceeds of approximately $65.2 million in February 2024[170] - The company filed a shelf registration statement (First Form S-3) in January 2024, allowing it to offer and sell up to$250 million of securities[169] - A second shelf registration statement (Second Form S-3) was filed in August 2024, allowing the company to offer and sell securities and assist selling stockholders in reselling their common stock[172] - The company believes it has sufficient liquidity to fund operations and capital expenditures for the next twelve months, supported by the $65.2 million equity raise in February 2024[178] Expenses and Costs - Research and development expenses increased 61$2.6 million in the three months ended September 30, 2024, and 41% to $4.9 million in the six months ended September 30, 2024, driven by higher compensation and additional supplies[151] - Selling, general, and administrative expenses increased 32$10.5 million in the three months ended September 30, 2024, and 23% to $19.4 million in the six months ended September 30, 2024, due to higher compensation and acquisition costs[152] - The company faces inflationary pressure and supply chain disruptions, which have increased costs and decreased gross margins[139] Cash Flow and Financial Position - Cash, cash equivalents, and restricted cash decreased to$74.8 million as of September 30, 2024, from $92.3 million as of March 31, 2024, a decrease of$17.5 million[173] - Net cash provided by operating activities for the six months ended September 30, 2024, was $16.1 million, compared to cash used in operations of$1.3 million for the same period in 2023[173] - Net cash used in investing activities for the six months ended September 30, 2024, was $33.5 million, primarily due to the acquisition of Megatran[174] - Restricted cash included in long-term assets increased to$1.5 million as of September 30, 2024, from $1.3 million as of March 31, 2024[175] - As of September 30, 2024, the company had an accumulated deficit of$1,064.3 million[167] Tax and Accounting - The company received $3.0 million in payments for Employee Retention Credit (ERC) claims, with the remaining balance expected to be paid during fiscal 2024[141] - The company is evaluating the impact of recent accounting pronouncements, including ASU 2023-07, ASU 2023-09, and ASU 2024-02, on its financial statements[180][181][182]