American Superconductor Corp 10-K for FY2020

American Superconductor Corp (AMSC)

10-K 2020-06-02 For: 2020-03-31

Added on April 11, 2026

About this 10-K

American Superconductor Corp filed this 10-K on June 2, 2020, covering the fiscal year ended March 31, 2020 (FY2020).

Headline figures

Fiscal year ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $63.84M; up 13.6% from $56.21M a year earlier
Net loss: $17.1M; compared with net income of $26.76M a year earlier
Diluted EPS: -$1.03; compared with $1.29 a year earlier

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Delaware	04-2959321
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)

114 East Main Street Ayer, Massachusetts	01432
(Address of Principal Executive Offices)	(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

Item		Page
PART I
1.	Business	5

1A.	Risk Factors	12

1B.	Unresolved Staff Comments	20

2.	Properties	21

3.	Legal Proceedings	21

4.	Mine Safety Disclosures	21
PART II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22

6.	Selected Financial Data	23

7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

7A.	Quantitative and Qualitative Disclosures About Market Risk	36

8.	Financial Statements and Supplementary Data	37

9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	69

9A.	Controls and Procedures	69

9B.	Other Information	69
PART III
10.	Directors, Executive Officers and Corporate Governance	70

11.	Executive Compensation	70

12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70

13.	Certain Relationships and Related Transactions and Director Independence	70

14.	Principal Accountant Fees and Services	70
PART IV
15.	Exhibits and Financial Statement Schedules	71

16.	Form 10-K Summary	72

Name	Age	Position
Daniel P. McGahn	48	President, Chief Executive Officer and Chairman
John W. Kosiba, Jr.	47	Senior Vice President, Chief Financial Officer and Treasurer

Location	Supporting	Square footage	Owned/Leased
United States
Ayer, Massachusetts	Corporate & Grid Segment	88,000	Leased
Romania
Timisoara	Wind Segment	62,000	Leased

	Fiscal year ended March 31,
Company/Index	2015		2016		2017		2018		2019		2020
American Superconductor Corporation		100.00		118.01		106.52		90.37		199.69		85.09
Nasdaq Composite Index		100.00		100.55		123.56		149.21		165.07		166.22
Nasdaq Electrical Components & Equipment Index		100.00		91.19		114.90		128.35		127.52		105.75

	Fiscal Years Ended March 31,
	2020		2019
Revenues:
Grid	$	49,585	$	34,290
Wind		14,253		21,917
Total	$	63,838	$	56,207

	Year ended March 31,
	2020			2019
Net (loss) income	$	(17,096	)	$	26,761
Gain on sale of interest in minority investments		—			(127	)
Gain on Sinovel settlement, net		—			(52,698	)
Stock-based compensation		1,922			3,030
Amortization of acquisition-related intangibles		340			340
Change in fair value of warrants		(4,648	)		3,725
Tax effect of adjustments, primarily related to Settlement		—			5,925
Non-GAAP net loss		(19,482	)		(13,044	)

Non-GAAP net loss per share	$	(0.93	)	$	(0.64	)
Weighted average shares outstanding - basic and diluted		20,985			20,335

	March 31, 2020		March 31, 2019
Cash and cash equivalents	$	24,699	$	77,483
Marketable securities		35,195		—
Restricted cash		6,165		715
Total cash, cash equivalents, marketable securities and restricted cash	$	66,059	$	78,198

	March 31, 2020			March 31, 2019
Operating cash flow	$	(16,497	)	$	42,714
Sinovel settlement (net of legal fees and expenses)		1,000			(52,740	)
Tax effect of Sinovel settlement, net		3,323			2,377
Non-GAAP operating cash flow	$	(12,174	)	$	(7,649	)

	March 31,			March 31,
	2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	24,699		$	77,483
Marketable securities		30,149			—
Accounts receivable		16,987			7,855
Inventory		18,975			12,119
Notes receivable, current portion		—			2,888
Prepaid expenses and other current assets		2,959			3,053
Restricted cash		508			—
Total current assets		94,277			103,398

Marketable securities, long term portion		5,046			—
Property, plant and equipment, net		8,565			8,972
Intangibles, net		3,550			2,890
Right-of-use asset		3,359			—
Goodwill		1,719			1,719
Restricted cash		5,657			715
Deferred tax assets		1,551			1,357
Other assets		385			279
Total assets	$	124,109		$	119,330


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	22,091		$	15,885
Lease liability, current portion		439			—
Derivative liabilities		—			4,942
Deferred revenue, current portion		18,430			7,557
Total current liabilities		40,960			28,384

Deferred revenue, long term portion		7,712			7,962
Lease liability, long term portion		3,000			—
Deferred tax liabilities		180			1,698
Other liabilities		38			93
Total liabilities		51,890			38,137

Commitments and contingencies (Note 16)

Stockholders' equity:
Common stock, $0.01 par value, 75,000,000 shares authorized; 22,902,288 and 21,651,631 shares issued and 22,604,410 and 21,413,113 shares outstanding at March 31, 2020 and 2019, respectively		229			216
Additional paid-in capital		1,053,507			1,044,622
Treasury stock, at cost, 297,878 and 235,518 shares at March 31, 2020 and 2019, respectively		(2,666	)		(2,101	)
Accumulated other comprehensive loss		(216	)		(5	)
Accumulated deficit		(978,635	)		(961,539	)
Total stockholders' equity		72,219			81,193
Total liabilities and stockholders' equity	$	124,109		$	119,330

	Common Stock				Additional						Accumulated Other						Total
	Number of Shares		Par Value		Paid-in Capital			Treasury Stock			Comprehensive Income (Loss)			Accumulated Deficit			Stockholders' Equity
Balance at March 31, 2018		21,139	$	211	$	1,041,113		$	(1,645	)	$	883		$	(988,333	)	$	52,229
Issuance of common stock - ESPP		20		—		157			—			—			—			157
Issuance of common stock - restricted shares		451		4		(4	)		—			—			—			—
Stock-based compensation expense		—		—		3,030			—			—			—			3,030
Issuance of stock for 401(k) match		42		1		326			—			—			—			327
Repurchase of treasury stock		—		—		—			(456	)		—			—			(456	)
Cumulative translation adjustment		—		—		—			—			(888	)		—			(888	)
Cumulative impact of adoption of ASU No. 2014-09		—		—		—			—			—			33			33
Net income		—		—		—			—			—			26,761			26,761
Balance at March 31, 2019		21,652	$	216	$	1,044,622		$	(2,101	)	$	(5	)	$	(961,539	)	$	81,193
Issuance of common stock - ESPP		37		—		201			—			—			—			201
Issuance of common stock - restricted shares		360		4		(4	)		—			—			—			—
Stock-based compensation expense		—		—		1,922			—			—			—			1,922
Issuance of stock for 401(k) match		44		1		341			—			—			—			342
Issuance of common stock-warrant exercise		809		8		6,425			—			—			—			6,433
Repurchase of treasury stock		—		—		—			(565	)		—			—			(565	)
Cumulative translation adjustment		—		—		—			—			(211	)		—			(211	)
Net loss		—		—		—			—			—			(17,096	)		(17,096	)
Balance at March 31, 2020		22,902	$	229	$	1,053,507		$	(2,666	)	$	(216	)	$	(978,635	)	$	72,219

Asset Classification		Estimated Useful Life in Years
Machinery and equipment		3-10
Furniture and fixtures		3-5
Leasehold improvements		Shorter of the estimated useful life or the remaining lease term

	Year Ended March 31, 2020
Product Line:	Grid		Wind
Equipment and systems	$	44,065	$	12,282
Services and technology development		5,520		1,971
Total	$	49,585	$	14,253

Region:
Americas	$	33,207	$	87
Asia Pacific		10,407		13,996
EMEA		5,971		170
Total	$	49,585	$	14,253

	Year Ended March 31, 2019
Product Line:	Grid		Wind
Equipment and systems	$	26,645	$	19,287
Services and technology development		7,645		2,630
Total	$	34,290	$	21,917

Region:
Americas	$	22,811	$	112
Asia Pacific		7,267		21,200
EMEA		4,212		605
Total	$	34,290	$	21,917

	Unbilled AR			Deferred Program Costs			Contract Liabilities
Beginning balance as of March 31, 2019	$	2,213		$	318		$	15,521
Increases for costs incurred to fulfill performance obligations		—			4,844			—
Increase (decrease) due to customer billings		(11,516	)		—			47,877
Decrease due to cost recognition on completed performance obligations		—			(3,525	)		—
Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations		15,017			—			(37,009	)
Other changes and FX impact		(3	)		(6	)		(247	)
Ending balance as of March 31, 2020	$	5,711		$	1,631		$	26,142

	Unbilled AR			Deferred Program Costs			Contract Liabilities
Beginning balance as of March 31, 2018	$	3,016		$	2,567		$	21,937
Impact of adoption of ASC 606		—			(1,599	)		(2,657	)
Increases for costs incurred to fulfill performance obligations		—			1,585			—
Increase (decrease) due to customer billings		(12,076	)		—			20,540
Decrease due to cost recognition on completed performance obligations		—			(2,212	)		—
Increase (decrease) due to recognition of revenue based on transfer of control of performance obligations		11,324			(9	)		(23,084	)
Other changes and FX impact		(51	)		(14	)		(1,215	)
Ending balance as of March 31, 2019	$	2,213		$	318		$	15,521

		Year Ended
	Reportable	March 31,
	Segment	2020	2019
Department of Homeland Security	Grid	10%	<10%
Vestas	Grid	<10%	15%
Inox Wind Limited	Wind	<10%	34%

Level 1	-	Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2	-	Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3	-	Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.

	Total Carrying Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2020:
Assets:
Cash equivalents	$	19,394	$	19,394	$	—	$	—
Marketable securities	$	35,195	$	35,195	$	—	$	—

	Warrants
April 1, 2019	$	4,942
Mark to market adjustment		(4,648	)
Exercise of in-the-money warrants		(294	)
March 31, 2020	$	-

	Warrants
April 1, 2018	$	1,217
Mark to market adjustment		3,725
March 31, 2019	$	4,942

	March 31, 2020		March 31, 2019
Accounts receivable (billed)	$	11,276	$	5,642
Accounts receivable (unbilled)		5,711		2,213
Accounts receivable	$	16,987	$	7,855

	March 31, 2020		March 31, 2019
Raw materials	$	10,739	$	5,474
Work-in-process		1,345		1,922
Finished goods		5,260		4,405
Deferred program costs		1,631		318
Inventory	$	18,975	$	12,119

	March 31, 2019
Current assets
Note receivable, current	$	3,000
Note receivable discount		(112	)
Total current note receivable	$	2,888

Long term assets
Note receivable, long term	$	—
Note receivable discount		—
Deferred gain on sale		—
Total long term note receivable	$	—

	March 31, 2020			March 31, 2019
Construction in progress - equipment	$	3,130		$	603
Equipment and software		41,737			45,705
Furniture and fixtures		1,302			1,269
Leasehold improvements		2,477			1,955
Property, plant and equipment, gross		48,646			49,532
Less accumulated depreciation		(40,081	)		(40,560	)
Property, plant and equipment, net	$	8,565		$	8,972

	2020							2019
	Gross Amount		Accumulated Amortization			Net Book Value		Gross Amount		Accumulated Amortization			Net Book Value		Estimated Useful Life
Core technology and know-how	$	5,970	$	(2,420	)	$	3,550	$	4,970	$	(2,080	)	$	2,890	5-10

Fiscal years ending March 31,	Total
2021	$	483
2022		483
2023		483
2024		483
2025		483
Thereafter		1,135
Total	$	3,550

	March 31, 2020		March 31, 2019
Accounts payable	$	10,045	$	2,939
Accrued inventories in-transit		763		244
Accrued other miscellaneous expenses		1,986		1,759
Advanced deposits		666		631
Accrued compensation		5,683		5,404
Income taxes payable		933		3,363
Accrued product warranty		2,015		1,545
Total	$	22,091	$	15,885

					September 30,		June 30,
Fiscal Year 2019					2019		2019
Risk-free interest rate						1.90%		2.11%
Expected annual dividend yield						—		—
Expected volatility						62.84%		60.58%
Term (years)						0.12		0.37
Fair value					$0.6 million		$1.7 million

	March 31,		December 31,		September 30,		June 30,		March 31,
Fiscal Year 2018	2019		2018		2018		2018		2018
Risk-free interest rate		2.43%		2.61%		2.62%		2.40%		2.20%
Expected annual dividend yield		—		—		—		—		—
Expected volatility		75.61%		70.29%		63.66%		67.40%		65.86%
Term (years)		0.62		0.87		1.12		1.37		1.62
Fair value	$4.6 million		$3.6 million		$1.3 million		$1.6 million		$1.1 million

	March 31, 2020			March 31, 2019
Deferred tax assets:
Net operating loss carryforwards	$	195,504		$	181,657
Research and development and other tax credit carryforwards		13,244			13,046
Accruals and reserves		5,352			14,781
Fixed assets and intangible assets		1,697			1,553
Other		1,565			2,785
Gross deferred tax assets		217,362			213,822
Valuation allowance		(199,989	)		(196,340	)
Total deferred tax assets		17,373			17,482

Deferred tax liabilities:
Intercompany Debt		(14,365	)		(16,028	)
Other		(1,637	)		(1,794	)
Total deferred tax liabilities		(16,002	)		(17,822	)
Net deferred tax asset	$	1,371		$	(340	)

	March 31, 2019		ASC 842 Adjustment		April 1, 2019
Operating Leases:
Right of use asset	$	—	$	3,795	$	3,795
Total operating lease right-of-use asset		—		3,795		3,795

Operating lease liabilities – ST	$	—	$	309	$	309
Operating lease liabilities – LT		—		3,512		3,512
Total operating lease liabilities		—		3,821		3,821

Weighted-average remaining lease term					7.69 years
Weighted-average discount rate						7.06	%

	March 31, 2020
Operating Leases:
Right-of-use assets	$	3,359
Total right-of-use assets		3,359

Lease liabilities - ST	$	439
Lease liabilities - LT		3,000
Total operating lease liabilities	$	3,439

Weighted-average remaining lease term	6.91 years
Weighted-average discount rate		7.08	%

	Year ended
	March 31, 2020
Operating Lease:
Operating lease costs - fixed	$	713
Operating lease costs - variable		100
Short-term lease costs		544
Total lease costs	$	1,357

	Operating Leases
Year ended March 31,
2021	$	665
2022		647
2023		621
2024		559
2025		501
Thereafter		1,394
Total minimum lease payments		4,387
Less: interest		(948	)
Present value of lease liabilities	$	3,439

	Options / Shares			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value (thousands)
Outstanding at March 31, 2019		164,265		$	96.30
Granted		5,939			11
Canceled/forfeited		(29,923	)		296.62
Outstanding at March 31, 2020		140,281		$	49.95		2.91	$	—
Exercisable at March 31, 2020		134,342		$	51.68		2.9	$	—
Fully vested and expected to vest at March 31, 2020		140,061		$	50.01		2.63	$	—

	Shares			Weighted Average Grant Date Fair Value		Intrinsic Aggregate Value (thousands)
Outstanding at March 31, 2019		953,948		$	5.26
Granted		389,174			8.74
Vested		(332,375	)		6.21
Forfeited		(28,500	)		7.22
Outstanding at March 31, 2020		982,247		$	6.26	$	5,383

	Severance pay and benefits			Facility exit and Relocation costs			Total
Accrued restructuring balance at April 1, 2018	$	262		$	173		$	435
Charges to operations		—			450			450
Cash payments		(262	)		(623	)		(885	)
Accrued restructuring balance at March 31, 2019	$	—		$	—		$	—