American Superconductor, (AMSC)
Q1 2011 Earnings Call, Sep 23, 2011
September 23, 2011 9:00 am ET
David A. Henry - Chief Financial Officer, Principal Accounting Officer, Senior Vice President, Secretary and Treasurer
Daniel Patrick McGahn - Chief Executive Officer, President and Director
Jason Fredette - Managing Director of Corporate Communications
Timothy M. Arcuri - Citigroup Inc, Research Division
Theodore R. O'Neil - Wunderlich Securities Inc., Research Division
David Giesecke - Wedbush Securities Inc., Research Division
Pavel Molchanov - Raymond James & Associates, Inc., Research Division
Paul Clegg - Mizuho Securities USA Inc., Research Division
JinMing Liu - Ardour Capital Investments, LLC, Research Division
Carter W. Driscoll - Capstone Investments, Research Division
Elaine Kwei - Jefferies & Company, Inc., Research Division
James Ricchiuti - Needham & Company, LLC, Research Division
Christopher M. Kovacs - Robert W. Baird & Co. Incorporated, Research Division
Previous Statements by AMSC
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Good day, everyone, and welcome to the American Superconductor's Conference Call. This call is being recorded. [Operator Instructions] With us on the call this morning are American Superconductor’s President and CEO, Daniel McGahn; Senior Vice President and CFO, David Henry; and Vice President of Communications and Marketing, Jason Fredette. For opening remarks, I would like to turn the call over to Mr. Jason Fredette. Please go ahead, sir.
Thank you, Christie, and welcome to the call, everyone. We'll be discussing our financial results this morning as well as a separate press release we issued with other business updates and contract wins.
Before we begin, I'd like to note that various remarks management may make on this conference call about American Superconductor’s future expectations, 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 discussed in the Risk Factors section of our annual report on Form 10-K for the fiscal year ended March 31, 2011, which we filed with the SEC earlier today. These forward-looking statements represent the company’s expectations only as of today and should not be relied upon as representing the company’s views as of any subsequent date to today. While American Superconductor anticipates that subsequent events and developments may cause the company’s views to change, we specifically disclaim any obligation to update these forward-looking statements.
I'd also would like to note that all of our press releases and SEC filings can be accessed on the Investors Page of our website at amsc.com.
And now, I'm going to turn the call over to CEO, Daniel McGahn. Dan?
Daniel Patrick McGahn
Thank you, Jason, and good morning, everyone. I'm happy to be speaking with you again and to be able to do it so soon. We're very pleased to be able to put the financials that we issued this morning behind us and focus our full attention on our future.
On the call today, we'll be providing some perspective on our financial results, we'll talk in greater detail about the actions we have taken to rightsize the business and get back to growth and profitability. We will discuss our strategy to build a stronger, sustainable AMSC. We will share some positive news about recent contracts and other accomplishments, and we'll also provide our near-term financial outlook.
Since we just recently focused an entire conference call on the cases we have brought against Sinovel, we won't be spending a lot of time on this topic today. But I would like to mention one significant update. This morning, the former employee that was arrested in Austria pled guilty to charges that included economic espionage and fraudulent misuse of data. We think it's important to point out that the individual not only admitted to stealing our intellectual property but he also admitted to collusion with Sinovel, and admitted that he was paid by Sinovel for this information. Since his arrest, this individual has been quite cooperative and he has provided us with important information that we have brought to the attention of Chinese courts and law enforcement.
In addition to the amount that he had been paid at the time of his arrest, this individual had employment contracts in place with Sinovel and with related parties totaling well over $1 million. These contracts were among the substantial evidence we have compiled. Obviously, we believe this admission of theft and collusion with Sinovel demonstrates the strength of our case.
I would also like to clarify an additional point. While we are not detailing publicly the amount that we are seeking from Sinovel in our commercial and civil suits, it is safe to say that this amount is significant. To date, Sinovel currently owes us $250 million for past shipments and shipments that they're contractually bound to accept to date. On top of this, there are future shipments covered under our existing contracts, vendor liabilities that we will discuss in a few moments and of course, damages for our stolen intellectual property.
So let's move on to our other updates today starting with our restatements and results. I'd like to start by publicly acknowledging the contributions of our financial organization, which has been working around-the-clock in recent months to get current with our SEC filings. We're all happy to have completed this work and get back into compliance with SEC regulations. And in doing so, we believe we'll be also back in compliance with NASDAQ Listing standards. It's been a difficult time for us all. We're very happy to look forward to our bright future.