American Superconductor Corporation

Good morning, and welcome to the AMSC First Quarter Fiscal Year 2022 Financial Results Conference Call. All participants will be in a listen-only mode for the duration of the call. And should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. And to withdraw a question, you may press star, then two. Please also note that this event is being recorded today. I would now like to turn the conference over to John Halshorn of LHA. Please go ahead, sir.

Thank you, Joe. Good morning, everyone, and welcome to American Superconductor Corporation's fourth quarter and full fiscal year 2022 earnings conference call. I am John Halshorn of LHA Investor Relations, AMSC's Investor Relations Agency of Record. With us on today's call are Daniel McGann, Chairman, President, and Chief Executive Officer, and John Casiba, Senior Vice President, Chief Financial Officer, and Treasurer. American Superconductor issued its earnings release for the fourth quarter full fiscal year 22 yesterday after the market closed. For those of you who have not seen the release, the copy is available in the Investors page of the company's website at www.amsc.com. Before starting the call, I'd like to remind you that various remarks that management may make during today's call about American superconductors' future expectations, including expectations regarding the company's first quarter of fiscal 2023 financial performance, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those set forth in the risk factors section of American Superconductors' annual report on Form 10-K for the year ended March 31, 2023, which the company filed with the Securities and Exchange Commission on May 31, 2023, and the company's other reports filed with the SEC. These forward-looking statements represent management's expectations only as of today and should not be relied upon as representing management's views as of any date subsequent to today. While the company anticipates that subsequent events and developments may cause the company's views to change, the company specifically disclaims any obligation to update these forward-looking statements. Also on today's call, management referred to non-GAAP net loss and non-GAAP financial 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 co-operating performance. The reconciliation of GAAP net loss to non-GAAP net loss can be found in the fourth quarter of full fiscal year 2022 earnings press release that the company issued and furnished the SEC last night on Form 8K. All of American Superconductors' press releases and SEC filings can be accessed from the investors' page of its website at www.amsd.com. With that, I will now turn the call over to Chairman, President, and Chief Executive Officer Daniel McGann. Daniel. Thanks, John.

Good morning, everyone, and thank you for joining us. I'll begin today by providing an update and sharing a few remarks on the business. John Kaseba will then provide a detailed review of our financial results for the fourth quarter and full fiscal year 2022. He will also provide guidance for the first quarter of fiscal 2023, which will end June 30, 2023. Following our remarks, we'll open up the line for questions from our analysts. I'll begin today with a brief recap of our fourth quarter before discussing fiscal year 2022. In the March ending quarter, our fourth quarter, We saw revenues grow by more than 10% against the year-ago period as we reached a recent record level of revenues, eclipsing $30 million for the quarter. Both wind and grid grew. Our wind business revenue increased by more than 30% over the year-ago quarter, while our grid business revenue grew by 10% over the same period. We believe this unprecedented quarterly revenue level represents an inflection point for our company. As we have stated, margins will be compressed as we work off the interim backlog. The good news is we were able to complete several of these projects during our fourth quarter and only have a couple more to deliver. Orders that we have been generating across our product lines have been in many cases at higher prices and with expected higher margins. As we work off the remainder of this backlog, we expect to see gross margin expansion as well as dramatic operating cash flow improvement. I think this is one of the main themes you'll hear throughout this call. Additionally, our 12-month backlog of more than $125 million indicates that we could be able to maintain these revenue levels going forward. During fiscal 2022, we've decreased overhead spending and have raised prices across all product lines where possible. Fiscal year 2022 is one of continued business diversification and strong global orders growth. We announced $150 million of new energy power systems orders during the year. This is an increase of more than 75% over the prior year levels. In fiscal 2022, we saw robust order bookings for the entire company of over $165 million. Our revenues for fiscal 2022 were $106 million. Clearly, our backlog is telegraph and growth. We delivered our first ship protection system and are installing it on the ship. We are in the process of delivering the second ship protection system. We received an order for our fifth ship protection system. We began engineering work to specify a potential solution for foreign navies. We have been talking about more ship content coming, and you can see this with our recent announcement of our mine countermeasure system. If and when this program goes into production, it would dramatically impact the business's cash generation capabilities. We met specified performance requirements with our resilient electric grid system, releasing $5 million of restricted cash in the quarter. Our installed system in Chicago is performing as planned and has become a showcase for the technology. We are in active, detailed discussions with several utilities about specific possible projects for each utility. We've been working on developing more than a dozen projects here in the United States. We saw nearly 20% year-over-year growth in our wind business as INOX business prospects begin to improve. We'll talk more about the prospects for this part of our business and our recent announcement later in the call. We saw nearly 20% increase in international revenues versus fiscal 2021. Similar to fiscal 2021, we saw diverse revenue in renewable, industrial, semiconductor, mining, and Navy projects. About one-fourth of our sales were for renewable projects. Industrials represented about a fourth as well. Semiconductor projects accounted for about 15%. Metal mining and materials were nearly 10%, and the Navy was just above 10%. The diversity of orders and sales allowed us to transition from almost a pure play on wind to a company now focused on the power grid and military resiliency markets. The primary challenge now will be, can we stabilize at these revenue levels and demonstrate margin improvement? Secondly, what is the pathway to grow to even higher levels of quarterly revenue? We will discuss more on this after John talks to the financial results for the quarter. Now, I'll turn the call over to John Kasiba to review our financial results for the fourth quarter and full fiscal year 2022, and provide guidance for the first quarter of fiscal 2023, which will end June 30, 2023. John? Thanks, Daniel, and good morning, everyone.