American Superconductor (US:AMSC)2022-08-07 16:07Financial Data and Key Metrics Changes - The company reported revenues of $22.7 million for Q1 fiscal 2022, a decrease from $25.4 million in the same quarter last year, representing a decline of approximately 10.6% [11] - The net loss for Q1 fiscal 2022 was $8.7 million or $0.32 per share, compared to a net loss of $5.4 million or $0.20 per share in the year-ago quarter [13] - Non-GAAP net loss for Q1 fiscal 2022 was $6.8 million or $0.25 per share, compared to $2.7 million or $0.10 per share in the previous year [13] - Gross margin for Q1 fiscal 2022 was 10%, down from 13% in the year-ago quarter, impacted by an unfavorable product mix and backlog issues [11][12] Business Line Data and Key Metrics Changes - The Grid business unit accounted for 87% of total revenues, with a 16% decrease in revenues compared to the previous year [11] - The Wind business unit saw a 49% increase in revenues, contributing 13% to total revenues [11] Market Data and Key Metrics Changes - The company established an order book of over $100 million, indicating strong demand across various sectors including renewables, semiconductors, materials, and industrial [7][8] - The backlog grew by approximately 30% during Q1 fiscal 2022, with a book-to-bill ratio of over 2, meaning orders received were more than double the units shipped [22] Company Strategy and Development Direction - The company is focusing on the transition to a low carbon economy, which is expected to drive demand for semiconductors and critical materials [16] - The recent U.S. legislative acts, such as the Inflation Reduction Act and the CHIPS Act, are anticipated to provide significant tailwinds for the clean energy and semiconductor sectors [8][9][38] - The company aims to leverage its new energy power systems business to capitalize on the growing demand in the renewables and semiconductor markets [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a stronger second half of fiscal 2022, driven by new energy shipments and a reduction in backlog [10][22] - The company is navigating supply chain challenges but expects stabilization in component costs and availability [21] - Management highlighted the importance of maintaining strong customer relationships and adapting to their needs to ensure repeat business [48] Other Important Information - The company ended Q1 fiscal 2022 with $43.1 million in cash, down from $49.5 million at the end of the previous fiscal year [13] - Inventory levels increased by over $9 million to nearly $33 million, primarily to support new energy product lines [14] Q&A Session Summary Question: Breakdown of recent orders and expectations for the second half of 2022 - Management indicated that orders are diverse, spanning renewables, semiconductors, and industrial sectors, with most business expected to occur within the fiscal year [25][26] Question: Customer concentration in the semiconductor sector - Management clarified that they are working with multiple fabs and chip makers, reducing customer concentration risks [27][28] Question: Update on the Resilient Electric Grid (REG) system in Chicago - Management noted that the Chicago utility is pleased with the REG system's performance and is looking to expand its deployment [29][30] Question: Expectations for revenue growth in fiscal Q2, Q3, and Q4 - Management confirmed guidance for growth in Q2 and indicated that they are focused on delivering products on time to support revenue growth [32][33] Question: Potential for margin improvement with the Neeltran backlog rolling off - Management suggested that margins could approach historic averages, depending on revenue levels and project mix [34][35] Question: Impact of the CHIPS Act on order flow - Management confirmed increased conversations with customers regarding the CHIPS Act and its potential to drive growth [36][38] Question: Opportunities for geographic expansion in power management solutions - Management acknowledged historical business in various regions and expressed intent to expand further into Central and South America and Europe [40][43] Question: Risks associated with supply chain and labor in the second half of the year - Management acknowledged potential project delays due to supply chain and labor issues but emphasized a focus on customer needs [47][48] Question: Updates on Navy contracts and R&D orders - Management indicated ongoing discussions with the Navy for potential follow-on projects and emphasized the importance of successful integration of systems [49][50]