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American Superconductor Corporation Message Board

  • barrygeo barrygeo Jun 17, 2013 3:51 PM Flag

    Going concern

    From the 10k:

    "We have experienced recurring losses from operations and negative operating cash flows. These factors raise substantial doubt regarding our ability to continue as a going concern ... As of March 31, 2013, we have an accumulated deficit of $800.1 million and have experienced recurring operating losses and negative operating cash flows, which have resulted in a reduction of our cash balance. These factors raise substantial doubt about our ability to continue as a going concern. ... In order for us to continue operations beyond the next twelve months and be able to discharge our liabilities and commitments in the normal course of business, we must increase sales through executing our strategy to broaden our customer base, enter new markets, and commercialize our superconductor product line. In addition, we must potentially reduce our operating expenses in line with business conditions in order to decrease the amount of cash used in operations and continue to be able to make the monthly amortization payments on our convertible note in shares of our common stock. We cannot guarantee that we will be able to increase sales, manage operating expenses, or maintain the ability to make monthly amortization payments on our convertible note in stock."

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    • "We ended the fiscal year with $50.2 million in cash, cash equivalents and restricted cash. This compares with $56.4 million as of December 31, 2012."..."As of March 31, 2013, our -- the principal balance of our debt arrangements excluding the debt discount was $23.5 million compared to $30.2 million as of December 31, 2012."...."However, the going-concern evaluation assumes that we will not meet these conditions and that we will make the monthly payments entirely in cash totaling more than $11 million in fiscal year 2013. So despite our payment history, that $11 million is not considered as cash payable to fund operations in the evaluation. Similarly, the going-concern evaluation gives little weight to other actions the company could take such as sales of noncore assets, which include our minority investments.

      With respect to our noncore assets, we are actively seeking to sell our minority investments in Tres Amigas and Blade Dynamics and have entered into an engagement with a financial advisor to assist us in this effort.

      Before I discuss our forward-looking guidance, I'd like to highlight a few things. First, our reported 12-month backlog as of March 31 of approximately $85 million is roughly equivalent to our full year fiscal 2012 revenue.

      Second, we are reiterating our guidance for 25% revenue growth in fiscal 2013. This means we are entering fiscal 2013 with more than 75% of our forecasted fiscal 2013 revenue on backlog in line with previous years.

      Third, our cash burn slowed to $6 million in the fourth quarter, and we expect a continuing reduction in our cash burn in fiscal 2013 compared to fiscal 2012. Proceeds from the potential sale of our minority investments are not contemplated in our cash forecast.

      If we successfully execute to the guidance for fiscal year 2013 that I will discuss in a moment, then we believe there is sufficient liquidity to fund our operations as well as our financing and investing requirements over the next 12 months."

    • I think stakeholders are aware of this. Apparently there is not a way to manage expenses to match up with current revenue while they continue to "broaden the customer base". This management team talks a good game but more and more seem incompetent. KD needs to do something without delay.

    • all companies losing money are "going concerns". AMSC has been a going concern since it's inception.

 
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