American Superconductor Corporation

Good day and welcome to the AMSC Second Quarter Fiscal 2023 Financial Results Call. All participants will be in listen-only mode. If you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation or main opportunity to ask questions, please note that this event is being recorded. I'd like to turn the call over to Mr. John Househorn, LAH. Please go ahead.

Thank you, Nick. Good morning, everyone, and welcome to American Superconductor Corporation's second quarter of fiscal 2023 earnings conference call. I am John Hileshorn of LHA Investor Relations, AMSE's investor relations agency of record. With us on today's call are Daniel McGann, Chairman, President, Chief Executive Officer, and John Kaseba, Senior Vice President, Chief Financial Officer, and Treasurer. American Superconductor issued its earnings release for the second quarter of fiscal 2023 yesterday after the market closed. For those of you who have not yet seen the release, a copy is available at the investor's 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 Superconductor's future expectations, including expectations regarding the company's third quarter, 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 america's superconductor's annual report on form 10k 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 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 will refer to non-GAAP net income loss, which are non-GAAP financial measures. The company believes that non-GAAP net income 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 core operating performance. The reconciliation of GAAP net loss to GAAP net profit net income loss can be found on the second quarter fiscal 2020 earnings press release that the company issued and furnished to 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.amsc.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. I'll begin today by providing an update and sharing a few remarks on our business. John Cassiva will then provide a detailed review of our financial results for the second fiscal quarter, which ended September 30, 2023, and provide guidance for the third fiscal quarter, which will end December 31, 2023. Following our comments, we'll open up the line to questions from our analysts. Several quarters ago, we discussed possible business performance scenarios that could lead to increased shareholder value. We discussed revenue growth, margin expansion, and expense control as factors driving potential cash break even and cash generating scenarios. Our second quarter results stand as proof that this can be done. For the second quarter of fiscal 2023, we generated a modest non-GAAP net income. We had positive operating cash flow. We showed expanded gross margins, we showed higher revenue, and we delivered another quarter of strong orders. All signs this quarter are quite positive. I believe we are ahead of schedule. Total revenues for the second quarter of fiscal year 2023 exceeded our expectations and came in above our guidance range. Our second quarter revenue of $34 million was driven primarily by strong new energy power system shipments. Our grid segment revenue for the second quarter accounted for over 80% of AMSC's total revenue and grew over 10% versus the year-ago period. The remainder of the revenue came from our wind business, which also grew significantly as a percentage from a year ago. We had very strong bookings in the second quarter with both new and existing customers for our products. We announced a near record $37 million of new energy power systems orders in October and have a strong 12-month backlog of over $128 million. Our backlog grew nearly 30% versus the year-ago period. If you look at the 12-month backlog over time, back in fiscal 2020, we had about $50 million in backlog. In fiscal 2021, backlog grew to $80 million. Last fiscal year, it reached $100 million, and as you can see, we're now approaching $130 million again in 12-month backlog. We see general improvement in our pipeline, orders, and overall business. We have a more diversified and more sustainable business with new and existing customers. Our business has turned a corner. It feels like we've arrived. Over the past several quarters, the business secured an average of $40 million of total orders per quarter. Orders for the second quarter totaled over $40 million, giving us visibility into fiscal year 2024. We see lead times for certain products starting to decrease to under 12 months. We were seeing long lead times take about 15 or more months to procure. This is good news for our business and for our customers. During our second quarter, we ship systems to renewable projects in the U.S. and Canada, a mining project in Canada, semiconductor projects in the U.S. and Taiwan. And please note, this is to multiple different ship manufacturers. SPS systems to the U.S. Navy projects and projects supporting the supply chain for batteries and electric vehicles in the U.S. We saw a diverse set of orders from renewables to semiconductors to materials and mining to industrials, as well as for utilities and military applications. We are pleased with these results and excited about the rest of our year. Now I'll turn the call over to John Kasiba to review our financial results for the second quarter of fiscal 2023 and provide guidance for the third quarter of fiscal 2023. which will end December 31, 2023. John.