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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

AMSC Reports Second Quarter Fiscal Year 2019 Financial Results and Provides Business Outlook

November 5, 2019 GMT

AYER, Mass., Nov. 05, 2019 (GLOBE NEWSWIRE) -- AMSC (Nasdaq: AMSC), a global solutions provider serving power grid and wind industry leaders, today reported financial results for its second quarter of fiscal year 2019 ended September 30, 2019.

Revenues for the second quarter of fiscal 2019 were $14.0 million compared with $14.9 million for the same period of fiscal 2018. The year-over-year decrease was a result of lower ECS shipments to Inox during the period, partially offset by higher Grid segment revenues versus the year ago period. The higher Grid segment revenues are primarily due to increased D-VAR revenues and increased REG revenue versus the year ago period.

AMSC’s net loss for the second quarter of fiscal 2019 was $0.8 million, or $0.04 per share, compared to net income of $22.6 million, or $1.11 per share, for the same period of fiscal 2018. The Company’s non-GAAP net loss for the second quarter of fiscal 2019 was $1.5 million, or $0.07 per share, compared with a non-GAAP net loss of $2.7 million, or $0.13 per share, in the same period of fiscal 2018. Please refer to the financial table below for a reconciliation of GAAP to non-GAAP results. Cash, cash equivalents, marketable securities and restricted cash on September 30, 2019 totaled $68.6 million, compared with $74.7 million at June 30, 2019.

“Our Grid business grew over 50% in the second quarter of fiscal 2019 versus the year ago period,” said Daniel P. McGahn, Chairman, President and CEO, AMSC. “The strong growth in our Grid business for the quarter was driven by another quarter of strong D-VAR shipments, as well as increased REG revenue versus a year ago. We believe we are on-track to deliver strong Grid revenue growth in fiscal year 2019.”

Business OutlookFor the third quarter ending December 31, 2019, AMSC expects that its revenues will be in the range of $14 million to $17 million. The Company’s net loss for the third quarter of fiscal 2019 is expected not to exceed $7.2 million, or $0.34 per share. The Company’s non-GAAP net loss (as defined below) is expected not to exceed $6.5 million, or $0.31 per share. The Company expects operating cash flow to be a burn of $4 million to $6 million in the third quarter of fiscal 2019. This guidance does not include any tax payments or other costs related to the final settlement payment from Sinovel. The Company expects cash, cash equivalents, marketable securities and restricted cash on December 31, 2019, to be no less than $61 million.

Conference Call ReminderIn conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. Eastern Time on Wednesday, November 6, 2019, to discuss the Company’s financial results and business outlook. Those who wish to listen to the live or archived conference call webcast should visit the “Investors” section of the Company’s website at http://www.amsc.com/investors. The live call also can be accessed by dialing 877-260-1479 or 334-323-0522 and using conference ID 2682372. A replay of the call may be accessed 2 hours following the call by dialing (888-203-1112 or 719-457-0820 and using conference ID 2682372.

About AMSC (Nasdaq: AMSC)AMSC generates the ideas, technologies and solutions that meet the world’s demand for smarter, cleaner … better energy™. Through its Gridtec™ Solutions, AMSC provides the engineering planning services and advanced grid systems that optimize network reliability, efficiency and performance. Through its Windtec™ Solutions, AMSC provides wind turbine electronic controls and systems, designs and engineering services that reduce the cost of wind energy. The Company’s solutions are now powering gigawatts of renewable energy globally and are enhancing the performance and reliability of power networks in more than a dozen countries. Founded in 1987, AMSC is headquartered near Boston, Massachusetts with operations in Asia, Australia, Europe and North America. For more information, please visit www.amsc.com.

AMSC, D-VAR, D-VAR VVO, Gridtec, Windtec, and Smarter, Cleaner … Better Energy are trademarks or registered trademarks of American Superconductor Corporation. All other brand names, product names, trademarks or service marks belong to their respective holders.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this release about our belief that we are on-track to deliver strong Grid revenue growth in fiscal year 2019; our expected GAAP and non-GAAP financial results for the quarter ending December 31, 2019, our expected cash, cash equivalents marketable securities, and restricted cash balance on December 31, 2019; and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements represent management’s current expectations and are inherently uncertain. There are a number of important factors that could materially impact the value of our common stock or cause actual results to differ materially from those indicated by such forward-looking statements. These important factors include, but are not limited to: A significant portion of our revenues are derived from a single customer, Inox, and we cannot predict if and how successful Inox will be in executing on Solar Energy Corporation of India (“SECI”) orders under the new central and state auction regime, and any related failure by Inox to succeed under this regime, or any delay in Inox’s ability to deliver its wind turbines, could result in fewer electric control systems shipments to Inox; We have a history of operating losses and negative operating cash flows, which may continue in the future and require us to secure additional financing in the future; Our operating results may fluctuate significantly from quarter to quarter and may fall below expectations in any particular fiscal quarter; We may be required to issue performance bonds or provide letters of credit, which restricts our ability to access any cash used as collateral for the bonds or letters of credit; Changes in exchange rates could adversely affect our results of operations; If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and may lead investors and other users to lose confidence in our financial data; Our financial condition may have an adverse effect on our customer and supplier relationships; Our contracts with the U.S. government are subject to audit, modification or termination by the U.S. government and include certain other provisions in favor of the government, and additional funding of such contracts may not be approved by U.S. Congress; Our success in addressing the wind energy market is dependent on the manufacturers that license our designs; Our success is dependent upon attracting and retaining qualified personnel and our inability to do so could significantly damage our business and prospects; We may experience difficulties re-establishing our HTS wire production capability in our Ayer, Massachusetts facility; We may not realize all of the sales expected from our backlog of orders and contracts; Our business and operations would be adversely impacted in the event of a failure or security breach of our information technology infrastructure; Failure to comply with evolving data privacy and data protection laws and regulations or to otherwise protect personal data, may adversely impact our business and financial results; We rely upon third-party suppliers for the components and subassemblies of many of our Wind and Grid products, making us vulnerable to supply shortages and price fluctuations, which could harm our business; Many of our revenue opportunities are dependent upon subcontractors and other business collaborators; If we fail to implement our business strategy successfully, our financial performance could be harmed; Problems with product quality or product performance may cause us to incur warranty expenses and may damage our market reputation and prevent us from achieving increased sales and market share; Many of our customers outside of the United States may be either directly or indirectly related to governmental entities, and we could be adversely affected by violations of the United States Foreign Corrupt Practices Act and similar worldwide anti-bribery laws outside the United States; We have had limited success marketing and selling our superconductor products and system-level solutions, and our failure to more broadly market and sell our products and solutions could lower our revenue and cash flow; We may acquire additional complementary businesses or technologies, which may require us to incur substantial costs for which we may never realize the anticipated benefits; Our success depends upon the commercial adoption of the Resilient Electric Grid (“REG”) system, which is currently limited, and a widespread commercial market for our products may not develop; Growth of the wind energy market depends largely on the availability and size of government subsidies, economic incentives and legislative programs designed to support the growth of wind energy; We have operations in, and depend on sales in, emerging markets, including India, and global conditions could negatively affect our operating results or limit our ability to expand our operations outside of these markets; Changes in India’s political, social, regulatory and economic environment may affect our financial performance; Our products face intense competition, which could limit our ability to acquire or retain customers; Our international operations are subject to risks that we do not face in the United States, which could have an adverse effect on our operating results; Lower prices for other fuel sources may reduce the demand for wind energy development, which could have a material adverse effect on our ability to grow our Wind business; Adverse changes in domestic and global economic conditions could adversely affect our operating results; We face risks related to our intellectual property; We face risks related to our technologies; We face risks related to our legal proceedings; We face risks related to our common stock; and the important factors discussed under the caption “Risk Factors” in Part 1. Item 1A of our Form 10-K for the fiscal year ended March 31, 2019, and our other reports filed with the SEC. These important factors, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Six Months Ended September 30, September 30, --------------------- ---------------------- 2019 2018 2019 2018 -------- --------- --------- --------- Revenues Grid $ 11,489 $ 7,569 $ 21,345 $ 16,498 Wind 2,523 7,307 6,437 10,985 - ------ - ------- - ------- - ------- Total revenues 14,012 14,876 27,782 27,483 Cost of revenues 10,248 11,252 22,441 19,966 - ------ - ------- - ------- - ------- Gross margin 3,764 3,624 5,341 7,517 Operating expenses: Research and development 2,398 2,264 4,871 5,103 Selling, general and administrative 5,400 5,175 10,655 10,961 Amortization of acquisition-related intangibles 85 85 170 170 Restructuring 0 93 0 403 (Gain) on Sinovel settlement, net 0 (28,720 ) 0 (28,720 ) - ------ - ------- - ------- - ------- Total operating expenses 7,883 (21,103 ) 15,696 (12,083 ) Operating (loss) income (4,119 ) 24,727 (10,355 ) 19,600 Change in fair value of warrants 1,145 282 4,092 (182 ) Interest income, net 335 232 840 433 Other income, net 1,520 325 976 934 - ------ - ------- - ------- - ------- (Loss) income before income tax expense (1,119 ) 25,566 (4,447 ) 20,785 Income tax (benefit) expense (294 ) 3,008 (83 ) 2,964 - ------ - ------- - ------- - ------- Net (loss) income $ (825 ) $ 22,558 $ (4,364 ) $ 17,821 - ------ - ------- - ------- - ------- Net (loss) income per common share Basic $ (0.04 ) $ 1.11 $ (0.21 ) $ 0.88 - ------ - ------- - ------- - ------- Diluted $ (0.10 ) $ 1.10 $ (0.40 ) $ 0.87 - ------ - ------- - ------- - ------- Weighted average number of common shares outstanding Basic 20,656 20,313 20,586 20,240 - ------ - ------- - ------- - ------- Diluted 20,723 20,581 20,736 20,560 - ------ - ------- - ------- - -------

UNAUDITED CONSOLIDATED BALANCE SHEET(In thousands, except per share data)

September March 31, 30, 2019 2019 ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 52,829 $ 77,483 Accounts receivable, net 10,073 7,855 Inventory 15,497 12,119 Note receivable, current portion 0 2,888 Prepaid expenses and other current assets 5,036 3,053 - --------- - --------- Total current assets 83,435 103,398 Marketable securities 10,000 0 Property, plant and equipment, net 8,610 8,972 Intangibles, net 2,720 2,890 Right-of-use asset 3,607 0 Goodwill 1,719 1,719 Restricted cash 5,736 715 Deferred tax assets 1,291 1,357 Other assets 325 279 - --------- - --------- Total assets $ 117,443 $ 119,330 - --------- - --------- LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 18,724 $ 15,885 Lease liability, current portion 424 0 Derivative liabilities 556 4,942 Deferred revenue, current portion 8,345 7,557 - --------- - --------- Total current liabilities 28,049 28,384 Deferred revenue, long term portion 7,667 7,962 Lease liability, long term portion 3,240 0 Deferred tax liabilities 1,757 1,698 Other liabilities 44 93 - --------- - --------- Total liabilities 40,757 38,137 - --------- - --------- Commitments and contingencies (Note 15) Stockholders’ equity: Common stock 218 216 Additional paid-in capital 1,045,833 1,044,622 Treasury stock (2,606 ) (2,101 ) Accumulated other comprehensive loss (856 ) (5 ) Accumulated deficit (965,903 ) (961,539 ) - --------- - --------- Total stockholders’ equity 76,686 81,193 - --------- - --------- Total liabilities and stockholders’ equity $ 117,443 $ 119,330 - --------- - ---------

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands)

Six Months Ended September 30, --------------------- 2019 2018 --------- -------- Cash flows from operating activities: Net (loss) income $ (4,364 ) $ 17,821 Adjustments to reconcile net loss to net cash (used in)/provided by operations: Depreciation and amortization 2,262 2,307 Stock-based compensation expense 646 1,610 Provision for excess and obsolete inventory 196 514 Change in fair value of warrants (4,092 ) 182 Non-cash interest income (112 ) (112 ) Other non-cash items (888 ) (727 ) Changes in operating asset and liability accounts: Accounts receivable (2,244 ) (279 ) Inventory (3,589 ) 1,278 Prepaid expenses and other assets (1,810 ) (572 ) Accounts payable and accrued expenses 2,799 2,166 Deferred revenue 711 (593 ) - ------- - ------ Net cash (used in)/provided by operating activities (10,485 ) 23,595 - ------- - ------ Cash flows from investing activities: Purchase of property, plant and equipment (1,736 ) (418 ) Proceeds from the sale of property, plant and equipment 3,001 138 Purchase of marketable securities (10,000 ) — Change in other assets 66 (131 ) - ------- - ------ Net cash used in investing activities (8,669 ) (411 ) Cash flows from financing activities: Net cash used in financing activities (405 ) (325 ) - ------- - ------ Effect of exchange rate changes on cash (74 ) (774 ) - ------- - ------ Net (decrease)/increase in cash, cash equivalents and restricted cash (19,633 ) 22,085 Cash, cash equivalents and restricted cash at beginning of period 78,198 34,249 - ------- - ------ Cash, cash equivalents and restricted cash at end of period $ 58,565 $ 56,334 - ------- - ------

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET INCOME (LOSS)(In thousands, except per share data)

Three Months Ended Six Months Ended September 30, September 30, --------------------- --------------------- 2019 2018 2019 2018 -------- --------- -------- --------- Net (loss) income $ (825 ) $ 22,558 $ (4,364 ) $ 17,821 Stock-based compensation 397 825 646 1,610 (Gain) on Sinovel settlement, net — (28,720 ) — (28,720 ) Amortization of acquisition-related intangibles 85 85 170 170 Changes in fair value of warrants (1,145 ) (282 ) (4,092 ) 182 Tax effect of adjustments for (gain) on Sinovel settlement, — 2,829 — 2,829 net - ------ - ------- - ------ - ------- Non-GAAP net loss $ (1,488 ) $ (2,705 ) $ (7,640 ) $ (6,108 ) - ------ - ------- - ------ - ------- Non-GAAP net loss per share - basic $ (0.07 ) $ (0.13 ) $ (0.37 ) $ (0.30 ) - ------ - ------- - ------ - ------- Non-GAAP net loss per share - diluted $ (0.07 ) $ (0.13 ) $ (0.37 ) $ (0.30 ) - ------ - ------- - ------ - ------- Weighted average shares outstanding - basic 20,656 20,313 20,586 20,240 - ------ - ------- - ------ - ------- Weighted average shares outstanding - diluted 20,723 20,313 20,736 20,240 - ------ - ------- - ------ - -------

RECONCILIATION OF GAAP OPERATING CASH FLOW TO NON-GAAP OPERATING CASH FLOW(In thousands)

Six months ended September September 30, 30, 2019 2018 --------- --------- Operating cash flow $ (10,485 ) $ 30,481 Sinovel settlement (net of legal fees and expenses) 1,000 (30,336 ) Tax effect of adjustments — 1,247 - ------- - ------- Non-GAAP operating cash flow $ (9,485 ) $ 1,392 - ------- - -------

Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss(In millions, except per share data)

Three months ending December 31, 2019 Net loss $ (7.2 ) Stock-based compensation 0.6 Amortization of acquisition-related intangibles 0.1 - ----- Non-GAAP net loss $ (6.5 ) - ----- Non-GAAP net loss per share $ (0.31 ) - ----- Shares outstanding 20.9

Note: Non-GAAP net loss is defined by the Company as net income (loss) before; stock-based compensation; gain on Sinovel settlement, net, amortization of acquisition-related intangibles; changes in fair value of warrants; other unusual charges or items, and the tax effect of adjustments calculated at the relevant rate for our non-GAAP metric. The Company believes non-GAAP net loss assists management and investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring or other charges that it does not believe are indicative of its core operating performance. The Company is not able to provide the change in fair value of warrants on a forward-looking basis without unreasonable efforts because the calculation for that change is primarily driven by the closing price and volatility of the Company’s stock at the end of each fiscal quarter, which cannot be reasonably estimated at this time, and therefore the Company’s non-GAAP net loss guidance does not include the impact from any change in fair value of warrants. The Company does not expect a further gain on sale of minority investments or gain on Sinovel settlement, net, and therefore the Company’s non-GAAP net loss guidance does not include the impact from these adjustments. Actual non-GAAP net loss for the fiscal quarter ending December 31, 2019, including the above adjustments, may differ materially from those forecasted in the table above.

Non-GAAP operating cash flow is defined by the Company as operating cash flow before: Sinovel settlement (net of legal fees and expenses); tax effect of adjustments; and other unusual cash flows or items. The Company believes non-GAAP operating cash flow assists management and investors in comparing the Company’s operating cash flow across reporting periods on a consistent basis by excluding these non-recurring cash items that it does not believe are indicative of its core operating cash flow.

Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP measures included in this release, however, should be considered in addition to, and not as a substitute for or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP net loss is set forth in the table above.

AMSC ContactsInvestor Relations Contact:LHA Investor RelationsSanjay M. Hurry(212) 838-3777amscIR@lhai.com

Public Relations Contact:RooneyPartners LLCBob Cavosi646-638-9891rcavosi@rooneyco.com

AMSC Communications Manager:Nicol GolezPhone: 978-399-8344Email: Nicol.Golez@amsc.com