UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data) Three Months Ended June 30, 2024 2023 Revenues Grid$32,336 $25,737 Wind 7,954 4,517 Total revenues 40,290 30,254 Cost of revenues 28,065 23,972 Gross margin 12,225 6,282 Operating expenses: Research and development 2,286 1,853 Selling, general and administrative 8,898 7,868 Amortization of acquisition-related intangibles 412 538 Change in fair value of contingent consideration 3,920 1,350 Restructuring — 6 Total operating expenses 15,516 11,615 Operating loss (3,291) (5,333) Interest income, net 1,120 174 Other expense, net (160) (118)Loss before income tax expense (2,331) (5,277) Income tax expense 193 121 Net loss$(2,524) $(5,398) Net loss per common share Basic$(0.07) $(0.19)Diluted$(0.07) $(0.19) Weighted average number of common shares outstanding Basic 35,676 28,258 Diluted 35,676 28,258 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except per share data) June 30, 2024 March 31, 2024 ASSETS Current assets: Cash and cash equivalents$93,455 $90,522 Accounts receivable, net 23,529 26,325 Inventory, net 45,149 41,857 Prepaid expenses and other current assets 10,424 7,295 Restricted cash 468 468 Total current assets 173,025 166,467 Property, plant and equipment, net 10,529 10,861 Intangibles, net 5,957 6,369 Right-of-use assets 4,096 2,557 Goodwill 43,471 43,471 Restricted cash 1,600 1,290 Deferred tax assets 1,114 1,119 Other assets 351 637 Total assets$240,143 $232,771 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses$22,309 $24,235 Lease liability, current portion 862 716 Debt, current portion 9 25 Contingent consideration 7,020 3,100 Deferred revenue, current portion 55,984 50,732 Total current liabilities 86,184 78,808 Deferred revenue, long term portion 6,929 7,097 Lease liability, long term portion 3,359 1,968 Deferred tax liabilities 300 300 Other liabilities 27 27 Total liabilities 96,799 88,200 Stockholders' equity: Common stock 374 373 Additional paid-in capital 1,214,320 1,212,913 Treasury stock (3,765) (3,639)Accumulated other comprehensive income 1,597 1,582 Accumulated deficit (1,069,182) (1,066,658)Total stockholders' equity 143,344 144,571 Total liabilities and stockholders' equity$240,143 $232,771 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Three Months Ended June 30, 2024 2023 Cash flows from operating activities: Net loss$(2,524) $(5,398)Adjustments to reconcile net loss to net cash provided by (used in) operations: Depreciation and amortization 1,008 1,119 Stock-based compensation expense 1,229 1,357 Provision for excess and obsolete inventory 503 384 Amortization of operating lease right-of-use assets 192 195 Deferred income taxes (2) (1)Change in fair value of contingent consideration 3,920 1,350 Other non-cash items (3) 5 Changes in operating asset and liability accounts: Accounts receivable 2,786 549 Inventory (3,799) (6,272)Prepaid expenses and other assets (3,099) 6,738 Operating leases (195) (195)Accounts payable and accrued expenses (1,734) (9,394)Deferred revenue 5,127 7,318 Net cash provided by (used in) operating activities 3,409 (2,245) Cash flows from investing activities: Purchases of property, plant and equipment (265) (214)Change in other assets 245 (79)Net cash used in investing activities (20) (293) Cash flows from financing activities: Repayment of debt (16) (17)Employee taxes paid related to net settlement of equity awards (126) — Net cash used in financing activities (142) (17) Effect of exchange rate changes on cash (4) 2 Net increase (decrease) in cash, cash equivalents and restricted cash 3,243 (2,553)Cash, cash equivalents and restricted cash at beginning of period 92,280 25,675 Cash, cash equivalents and restricted cash at end of period$95,523 $23,122 RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET INCOME (LOSS)(In thousands, except per share data) Three Months Ended June 30, 2024 2023 Net loss$(2,524) $(5,398)Stock-based compensation 1,229 1,357 Amortization of acquisition-related intangibles 412 544 Change in fair value of contingent consideration 3,920 1,350 Non-GAAP net income (loss)$3,037 $(2,147) Non-GAAP net income (loss) per share - basic$0.09 $(0.08)Non-GAAP net income (loss) per share - diluted$0.08 $(0.08)Weighted average shares outstanding - basic 35,676 28,258 Weighted average shares outstanding - diluted 37,032 28,258 Reconciliation of Forecast GAAP Net Loss to Non-GAAP Net Loss(In millions, except per share data) Three Months Ending September 30, 2024 Net loss$(1.7)Stock-based compensation 1.3 Amortization of acquisition-related intangibles 0.4 Non-GAAP net loss$0.0 Non-GAAP net loss per share$0.0 Shares outstanding 35.9 Note: Non-GAAP net income (loss) is defined by the Company as net loss before; stock-based compensation; amortization of acquisition-related intangibles; change in fair value of contingent consideration; other non-cash or unusual charges, and the tax effect of adjustments calculated at the relevant rate for our non-GAAP metric.
If this customer’s business is negatively affected, it could adversely impact our business; Our success in addressing the wind energy market is dependent on the manufacturers that license our designs; Our business and operations would be adversely impacted in the event of a failure or security breach of our or any critical third parties' information technology infrastructure and networks; 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; 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; 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 or third parties on whom we depend may be adversely affected by natural disasters, including events resulting from climate change, and our business continuity and disaster recovery plans may not adequately protect us or our value chain from such events; Adverse changes in domestic and global economic conditions could adversely affect our operating results; 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; Our products face competition, which could limit our ability to acquire or retain customers; 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 success depends upon the commercial adoption of the REG system, which is currently limited, and a widespread commercial market for our products may not develop; Industry consolidation could result in more powerful competitors and fewer customers; Increasing focus and scrutiny on environmental sustainability and social initiatives could increase our costs, and inaction could harm our reputation and adversely impact our financial results; 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: Lower prices for other energy sources may reduce the demand for wind energy development, which could have a material adverse effect on our ability to grow our Wind business; We may be unable to adequately prevent disclosure of trade secrets and other proprietary information; Our patents may not provide meaningful or long-term protection for our technology, which could result in us losing some or all of our market position; There are a number of technological challenges that must be successfully addressed before our superconductor products can gain widespread commercial acceptance, and our inability to address such technological challenges could adversely affect our ability to acquire customers for our products; Third parties have or may acquire patents that cover the materials, processes and technologies we use or may use in the future to manufacture our Amperium products, and our success depends on our ability to license such patents or other proprietary rights; Our common stock has experienced, and may continue to experience, market price and volume fluctuations, which may prevent our stockholders from selling our common stock at a profit and could lead to costly litigation against us that could divert our management’s attention; Unfavorable results of legal proceedings could have a material adverse effect on our business, operating results and financial condition; and the other important factors discussed under the caption "Risk Factors" in Part 1.
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