American Superconductor Corporation (NASDAQ:AMSC) Q1 2019 Earnings Conference Call Transcript

Aug 06, 2019 • 10:00 am ET

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American Superconductor Corporation (NASDAQ:AMSC) Q1 2019 Earnings Conference Call Transcript

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Presentation
Executive
Daniel McGahn

Grid and Wind business units. John Kosiba will then provide a detailed review of our financial results for the first fiscal quarter, which ended June 30, 2019, and provide guidance for the second fiscal quarter, which ends September 30, 2019. Following our comments, we will open up the line to questions from our analysts.

Revenue for the first quarter of fiscal year 2019 exceeded our guidance range. In fact, both our Grid segment and our Wind segment reported increased revenues for the first fiscal quarter of 2019 when compared to the same period last year. Growth in our Grid business for the quarter was driven by strong D-VAR shipments, revenue from our SPS product for the US Navy and initial revenue from our REG deployment project. VVO also contributed to our grid growth in the first quarter of fiscal 2019.

Last quarter, I spoke of a record backlog of D-VAR projects expected to ship this fiscal year. This is a testament to our continued sales success. Our manufacturing team is also performing very well. Our supply chain has been able to respond to the increasing demand for D-VAR. We anticipate that D-VAR shipments should provide a strong base of grid revenues for the remainder of this fiscal year. We expect even stronger grid growth driven by D-VAR in the second half of fiscal 2019 and foresee this pattern continuing into fiscal year 2020. This is based upon a continuation of the high levels of backlog that we have for D-VAR as well as we have for the overall Grid business. In fact, we have now reported two consecutive quarters in which grid revenues comprised over 70% of total revenue. Our sales team is focused on building a backlog of D-VAR orders for fiscal 2020 and beyond. The strength of our D-VAR business is coming from both the renewable connectivity and the industrial segments of the grid market.

Our SPS system is now the Navy's baseline degaussing design for the San Antonio Class ship platform LPD. We anticipate our SPS has the potential for deployment on a total of approximately 15 future ships in this class. We believe our SPS for the San Antonio Class could represent approximately $10 million in revenue per vessel. This could then be expected to equate to a revenue stream of about $150 million over the remaining life of the San Antonio Class. The San Antonio Class is our first design win with the Navy. We are pursuing additional classes of vessels with the US Navy. Other platforms include, but are not limited to, destroyers, aircraft carriers, frigates and littoral combat ships. We began establishing our SPS manufacturing and product delivery capabilities for LPD 28 and LPD 30 during the first quarter of fiscal 2019.

SPS contributed to our Grid segment revenues in the first quarter of fiscal 2019. We are working closely with the Navy to understand the program timing for LPD 29 and LPD 31. We are anticipating additional SPS orders for the San