|
x
|
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Delaware
|
04-2959321
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
64 Jackson Road, Devens, Massachusetts
|
01434
|
(Address of principal executive offices)
|
(Zip Code)
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Large accelerated filer
¨
|
|
|
|
|
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Accelerated filer
x
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Non-accelerated filer
¨
|
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
¨
|
||
|
|
|
|
|
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Emerging growth company
¨
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Common Stock, par value $0.01 per share
|
|
20,925,142
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Class
|
|
Outstanding as of November 2, 2017
|
|
|
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Page No.
|
PART I—FINANCIAL INFORMATION
|
|
|
|
|
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Item 1.
|
||
|
|
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Item 2.
|
||
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Item 3.
|
||
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Item 4.
|
||
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PART II—OTHER INFORMATION
|
|
|
|
|
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Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
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Item 2.
|
||
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Item 3.
|
||
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Item 4.
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||
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Item 5.
|
||
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Item 6.
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||
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September 30,
2017 |
|
March 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
30,320
|
|
|
$
|
26,784
|
|
Accounts receivable, net
|
8,193
|
|
|
7,956
|
|
||
Inventory
|
15,983
|
|
|
17,462
|
|
||
Prepaid expenses and other current assets
|
3,323
|
|
|
2,703
|
|
||
Restricted cash
|
—
|
|
|
795
|
|
||
Total current assets
|
57,819
|
|
|
55,700
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
36,438
|
|
|
43,438
|
|
||
Intangibles, net
|
3,496
|
|
|
301
|
|
||
Goodwill
|
1,711
|
|
|
—
|
|
||
Restricted cash
|
165
|
|
|
165
|
|
||
Deferred tax assets
|
538
|
|
|
407
|
|
||
Other assets
|
381
|
|
|
233
|
|
||
Total assets
|
$
|
100,548
|
|
|
$
|
100,244
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
14,016
|
|
|
$
|
14,490
|
|
Note payable, current portion, net of discount of $19 as of March 31, 2017
|
—
|
|
|
1,481
|
|
||
Derivative liabilities
|
1,224
|
|
|
1,923
|
|
||
Deferred revenue
|
16,069
|
|
|
14,323
|
|
||
Total current liabilities
|
31,309
|
|
|
32,217
|
|
||
|
|
|
|
||||
Deferred revenue
|
8,325
|
|
|
7,631
|
|
||
Deferred tax liabilities
|
125
|
|
|
125
|
|
||
Other liabilities
|
137
|
|
|
45
|
|
||
Total liabilities
|
39,896
|
|
|
40,018
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 14)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock
|
211
|
|
|
147
|
|
||
Additional paid-in capital
|
1,039,458
|
|
|
1,017,510
|
|
||
Treasury stock
|
(1,645
|
)
|
|
(1,371
|
)
|
||
Accumulated other comprehensive income (loss)
|
718
|
|
|
(503
|
)
|
||
Accumulated deficit
|
(978,090
|
)
|
|
(955,557
|
)
|
||
Total stockholders' equity
|
60,652
|
|
|
60,226
|
|
||
Total liabilities and stockholders' equity
|
$
|
100,548
|
|
|
$
|
100,244
|
|
|
Three months ended
September 30, |
|
Six months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
$
|
11,049
|
|
|
$
|
18,507
|
|
|
$
|
19,971
|
|
|
$
|
31,852
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues
|
10,777
|
|
|
16,404
|
|
|
24,186
|
|
|
28,886
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross margin
|
272
|
|
|
2,103
|
|
|
(4,215
|
)
|
|
2,966
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
2,951
|
|
|
2,867
|
|
|
5,667
|
|
|
5,819
|
|
||||
Selling, general and administrative
|
5,339
|
|
|
6,347
|
|
|
11,477
|
|
|
13,563
|
|
||||
Amortization of acquisition-related intangibles
|
—
|
|
|
39
|
|
|
13
|
|
|
78
|
|
||||
Change in fair value of contingent consideration
|
(201
|
)
|
|
—
|
|
|
(201
|
)
|
|
—
|
|
||||
Restructuring
|
(12
|
)
|
|
—
|
|
|
1,328
|
|
|
—
|
|
||||
Total operating expenses
|
8,077
|
|
|
9,253
|
|
|
18,284
|
|
|
19,460
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating loss
|
(7,805
|
)
|
|
(7,150
|
)
|
|
(22,499
|
)
|
|
(16,494
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Change in fair value of warrants
|
144
|
|
|
1,244
|
|
|
1,069
|
|
|
567
|
|
||||
Gain on sale of minority interest
|
951
|
|
|
—
|
|
|
951
|
|
|
—
|
|
||||
Interest income (expense), net
|
54
|
|
|
(107
|
)
|
|
45
|
|
|
(243
|
)
|
||||
Other expense, net
|
(796
|
)
|
|
(518
|
)
|
|
(2,170
|
)
|
|
(393
|
)
|
||||
Loss before income tax (benefit) expense
|
(7,452
|
)
|
|
(6,531
|
)
|
|
(22,604
|
)
|
|
(16,563
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax (benefit) expense
|
(171
|
)
|
|
794
|
|
|
(71
|
)
|
|
1,117
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(7,281
|
)
|
|
$
|
(7,325
|
)
|
|
$
|
(22,533
|
)
|
|
$
|
(17,680
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.38
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
(1.26
|
)
|
|
$
|
(1.29
|
)
|
Diluted
|
$
|
(0.38
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
(1.26
|
)
|
|
$
|
(1.29
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
19,060
|
|
|
13,769
|
|
|
17,925
|
|
|
13,723
|
|
||||
Diluted
|
19,060
|
|
|
13,769
|
|
|
17,925
|
|
|
13,723
|
|
|
Three months ended
September 30, |
|
Six months ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(7,281
|
)
|
|
$
|
(7,325
|
)
|
|
$
|
(22,533
|
)
|
|
$
|
(17,680
|
)
|
Other comprehensive gain (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss)
|
401
|
|
|
111
|
|
|
1,221
|
|
|
(541
|
)
|
||||
Total other comprehensive gain (loss), net of tax
|
401
|
|
|
111
|
|
|
1,221
|
|
|
(541
|
)
|
||||
Comprehensive loss
|
$
|
(6,880
|
)
|
|
$
|
(7,214
|
)
|
|
$
|
(21,312
|
)
|
|
$
|
(18,221
|
)
|
|
Six months ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
|
|
|
|
||||
Net loss
|
$
|
(22,533
|
)
|
|
$
|
(17,680
|
)
|
Adjustments to reconcile net loss to net cash used in operations:
|
|
|
|
||||
Depreciation and amortization
|
7,682
|
|
|
3,735
|
|
||
Stock-based compensation expense
|
1,232
|
|
|
1,653
|
|
||
Provision for excess and obsolete inventory
|
351
|
|
|
671
|
|
||
Gain on sale of minority interest
|
(951
|
)
|
|
—
|
|
||
Change in fair value of warrants and contingent consideration
|
(1,270
|
)
|
|
(567
|
)
|
||
Non-cash interest expense
|
19
|
|
|
98
|
|
||
Other non-cash items
|
(97
|
)
|
|
(103
|
)
|
||
Changes in operating asset and liability accounts:
|
|
|
|
||||
Accounts receivable
|
124
|
|
|
7,118
|
|
||
Inventory
|
1,354
|
|
|
(8,696
|
)
|
||
Prepaid expenses and other current assets
|
85
|
|
|
2,843
|
|
||
Accounts payable and accrued expenses
|
(770
|
)
|
|
(4,481
|
)
|
||
Deferred revenue
|
1,235
|
|
|
4,497
|
|
||
Net cash used in operating activities
|
(13,539
|
)
|
|
(10,912
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property, plant and equipment
|
(483
|
)
|
|
(359
|
)
|
||
Proceeds from the sale of property, plant and equipment
|
12
|
|
|
15
|
|
||
Change in restricted cash
|
795
|
|
|
4
|
|
||
Cash paid for acquisition, net of cash acquired
|
134
|
|
|
—
|
|
||
Proceeds from sale of minority interest
|
951
|
|
|
—
|
|
||
Change in other assets
|
(130
|
)
|
|
(28
|
)
|
||
Net cash provided by/(used in) investing activities
|
1,279
|
|
|
(368
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Employee taxes paid related to net settlement of equity awards
|
(274
|
)
|
|
(490
|
)
|
||
Repayment of debt
|
(1,575
|
)
|
|
(2,000
|
)
|
||
Proceeds from public equity offering, net
|
16,952
|
|
|
—
|
|
||
Proceeds from exercise of employee stock options and ESPP
|
85
|
|
|
—
|
|
||
Net cash provided by/(used in) financing activities
|
15,188
|
|
|
(2,490
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
608
|
|
|
(298
|
)
|
||
|
|
|
|
||||
Net increase/(decrease) in cash and cash equivalents
|
3,536
|
|
|
(14,068
|
)
|
||
Cash and cash equivalents at beginning of year
|
26,784
|
|
|
39,330
|
|
||
Cash and cash equivalents at end of year
|
$
|
30,320
|
|
|
$
|
25,262
|
|
|
|
|
|
||||
Supplemental schedule of cash flow information:
|
|
|
|
||||
Issuance of common stock in connection with the purchase of Infinia Technology Corporation
|
$
|
3,557
|
|
|
$
|
—
|
|
Cash paid for income taxes, net of refunds
|
753
|
|
|
894
|
|
||
Issuance of common stock to settle liabilities
|
185
|
|
|
212
|
|
||
Cash paid for interest
|
42
|
|
|
187
|
|
|
Three months ended September 30,
|
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of revenues
|
$
|
23
|
|
|
$
|
49
|
|
|
$
|
59
|
|
|
$
|
99
|
|
Research and development
|
61
|
|
|
62
|
|
|
110
|
|
|
92
|
|
||||
Selling, general and administrative
|
394
|
|
|
542
|
|
|
1,063
|
|
|
1,462
|
|
||||
Total
|
$
|
478
|
|
|
$
|
653
|
|
|
$
|
1,232
|
|
|
$
|
1,653
|
|
|
September 30,
2017 |
|
September 30,
2016 |
|
September 30,
2017 |
|
September 30,
2016 |
||
Expected volatility
|
N/A
|
|
67.6
|
%
|
|
N/A
|
|
67.6
|
%
|
Risk-free interest rate
|
N/A
|
|
1.3
|
%
|
|
N/A
|
|
1.3
|
%
|
Expected life (years)
|
N/A
|
|
5.7
|
|
|
N/A
|
|
5.7
|
|
Dividend yield
|
N/A
|
|
None
|
|
|
N/A
|
|
None
|
|
|
Three months ended September 30,
|
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(7,281
|
)
|
|
$
|
(7,325
|
)
|
|
$
|
(22,533
|
)
|
|
$
|
(17,680
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of common stock outstanding
|
19,531
|
|
|
14,190
|
|
|
18,316
|
|
|
14,161
|
|
||||
Weighted-average shares subject to repurchase
|
(471
|
)
|
|
(421
|
)
|
|
(391
|
)
|
|
(438
|
)
|
||||
Shares used in per-share calculation ― basic
|
19,060
|
|
|
13,769
|
|
|
17,925
|
|
|
13,723
|
|
||||
Shares used in per-share calculation ― diluted
|
19,060
|
|
|
13,769
|
|
|
17,925
|
|
|
13,723
|
|
||||
Net loss per share ― basic
|
$
|
(0.38
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
(1.26
|
)
|
|
$
|
(1.29
|
)
|
Net loss per share ― diluted
|
$
|
(0.38
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
(1.26
|
)
|
|
$
|
(1.29
|
)
|
|
September 25, 2017
|
||
Consideration
|
|
||
Cash
|
$
|
0.1
|
|
Equity (884,890 shares of common stock at $4.02 per share)
|
3.6
|
|
|
Contingent consideration
|
0.6
|
|
|
Total Consideration
|
$
|
4.3
|
|
|
|
||
Recognized amounts of identifiable assets acquired and liabilities assumed
|
|
||
Core technology and know-how
|
$
|
3.4
|
|
Working capital
|
0.2
|
|
|
Property, plant and equipment
|
0.0
|
|
|
Total identifiable net assets
|
$
|
3.6
|
|
Long-term deferred tax liability
|
1.1
|
|
|
Goodwill allocated
|
$
|
1.7
|
|
|
Level 1
|
-
|
Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
|
|
|
|
|
Level 2
|
-
|
Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
|
|
|
|
|
|
Level 3
|
-
|
Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.
|
|
Total
Carrying
Value
|
|
Quoted Prices in
Active Markets
(
Level 1)
|
|
Significant Other
Observable Inputs
(
Level 2)
|
|
Significant
Unobservable Inputs
(
Level 3)
|
||||||||
September 30, 2017:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
24,392
|
|
|
$
|
24,392
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Acquisition contingent consideration
|
$
|
370
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
370
|
|
Warrants
|
854
|
|
|
—
|
|
|
—
|
|
|
854
|
|
||||
Total derivative liabilities
|
$
|
1,224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,224
|
|
|
Total
Carrying Value |
|
Quoted Prices in
Active Markets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
March 31, 2017:
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
14,105
|
|
|
$
|
14,105
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative liabilities:
|
|
|
|
|
|
|
|
||||||||
Warrants
|
$
|
1,923
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,923
|
|
|
Warrants
|
|
Acquisition Contingent Consideration
|
||||
April 1, 2017
|
$
|
1,923
|
|
|
$
|
—
|
|
Issuance of contingent consideration
|
—
|
|
|
571
|
|
||
Mark to market adjustment
|
(1,069
|
)
|
|
(201
|
)
|
||
Balance at September 30, 2017
|
$
|
854
|
|
|
$
|
370
|
|
|
Warrants
|
||
April 1, 2016
|
$
|
3,227
|
|
Mark to market adjustment
|
(1,304
|
)
|
|
Balance at March 31, 2017
|
$
|
1,923
|
|
|
September 30,
2017 |
|
March 31,
2017 |
||||
Accounts receivable (billed)
|
$
|
7,620
|
|
|
$
|
7,436
|
|
Accounts receivable (unbilled)
|
627
|
|
|
574
|
|
||
Less: Allowance for doubtful accounts
|
(54
|
)
|
|
(54
|
)
|
||
Accounts receivable, net
|
$
|
8,193
|
|
|
$
|
7,956
|
|
|
September 30,
2017 |
|
March 31,
2017 |
||||
Raw materials
|
$
|
5,776
|
|
|
$
|
4,263
|
|
Work-in-process
|
1,010
|
|
|
426
|
|
||
Finished goods
|
6,543
|
|
|
8,016
|
|
||
Deferred program costs
|
2,654
|
|
|
4,757
|
|
||
Net inventory
|
$
|
15,983
|
|
|
$
|
17,462
|
|
|
September 30,
2017 |
|
March 31,
2017 |
||||
Land
|
$
|
3,643
|
|
|
$
|
3,643
|
|
Construction in progress - equipment
|
606
|
|
|
601
|
|
||
Buildings
|
34,549
|
|
|
34,549
|
|
||
Equipment and software
|
73,798
|
|
|
73,445
|
|
||
Furniture and fixtures
|
1,154
|
|
|
1,201
|
|
||
Leasehold improvements
|
1,912
|
|
|
2,442
|
|
||
Property, plant and equipment, gross
|
115,662
|
|
|
115,881
|
|
||
Less accumulated depreciation
|
(79,224
|
)
|
|
(72,443
|
)
|
||
Property, plant and equipment, net
|
$
|
36,438
|
|
|
$
|
43,438
|
|
|
September 30,
2017 |
|
March 31,
2017 |
||||
Accounts payable
|
$
|
4,089
|
|
|
$
|
3,207
|
|
Accrued inventories in-transit
|
86
|
|
|
313
|
|
||
Accrued other miscellaneous expenses
|
1,628
|
|
|
2,240
|
|
||
Accrued restructuring
|
493
|
|
|
—
|
|
||
Accrued compensation
|
3,674
|
|
|
5,042
|
|
||
Income taxes payable
|
2,194
|
|
|
1,344
|
|
||
Accrued warranty
|
1,852
|
|
|
2,344
|
|
||
Total
|
$
|
14,016
|
|
|
$
|
14,490
|
|
|
Three months ended September 30,
|
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance at beginning of period
|
$
|
2,026
|
|
|
$
|
2,774
|
|
|
$
|
2,344
|
|
|
$
|
3,601
|
|
Change in accruals for warranties during the period
|
86
|
|
|
316
|
|
|
127
|
|
|
417
|
|
||||
Settlements during the period
|
(260
|
)
|
|
(396
|
)
|
|
(619
|
)
|
|
(1,324
|
)
|
||||
Balance at end of period
|
$
|
1,852
|
|
|
$
|
2,694
|
|
|
$
|
1,852
|
|
|
$
|
2,694
|
|
Fiscal Year 17
|
September 30,
2017 |
June 30,
2017 |
Risk-free interest rate
|
1.05%
|
1.05%
|
Expected annual dividend yield
|
—
|
—
|
Expected volatility
|
77.95%
|
78.25%
|
Term (years)
|
0.01
|
0.26
|
Fair value
|
$—
|
$—
|
Fiscal Year 16
|
March 31,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016 |
Risk-free interest rate
|
0.91%
|
|
0.56%
|
|
0.59%
|
|
0.48%
|
|
0.66%
|
Expected annual dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Expected volatility
|
44.12%
|
|
58.04%
|
|
70.50%
|
|
76.30%
|
|
76.76%
|
Term (years)
|
0.51
|
|
0.76
|
|
1.01
|
|
1.26
|
|
1.51
|
Fair value
|
$—
|
|
$0.1 million
|
|
$0.2 million
|
|
$0.4 million
|
|
$0.4 million
|
Fiscal Year 17
|
September 30,
2017 |
June 30,
2017 |
Risk-free interest rate
|
1.56%
|
1.58%
|
Expected annual dividend yield
|
—
|
—
|
Expected volatility
|
63.97%
|
67.76%
|
Term (years)
|
2.72
|
2.97
|
Fair value
|
$0.1 million
|
$0.1 million
|
Fiscal Year 16
|
March 31,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016 |
Risk-free interest rate
|
1.55%
|
|
1.57%
|
|
0.97%
|
|
0.86%
|
|
1.08%
|
Expected annual dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Expected volatility
|
66.51%
|
|
67.28%
|
|
67.98%
|
|
68.34%
|
|
70.25%
|
Term (years)
|
3.25
|
|
3.50
|
|
3.75
|
|
4.00
|
|
4.25
|
Fair value
|
$0.2 million
|
|
$0.2 million
|
|
$0.2 million
|
|
$0.3 million
|
|
$0.2 million
|
Fiscal Year 17
|
September 30,
2017 |
June 30,
2017 |
Risk-free interest rate
|
1.49%
|
1.44%
|
Expected annual dividend yield
|
—
|
—
|
Expected volatility
|
65.64%
|
67.21%
|
Term (years)
|
2.12
|
2.37
|
Fair value
|
$0.8 million
|
$0.9 million
|
Fiscal Year 16
|
March 31,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016 |
Risk-free interest rate
|
1.41%
|
|
1.43%
|
|
0.93%
|
|
0.77%
|
|
0.98%
|
Expected annual dividend yield
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Expected volatility
|
66.53%
|
|
69.31%
|
|
68.96%
|
|
70.01%
|
|
69.88%
|
Term (years)
|
2.62
|
|
2.87
|
|
3.12
|
|
3.37
|
|
3.62
|
Fair value
|
$1.8 million
|
|
$2.3 million
|
|
$2.3 million
|
|
$3.2 million
|
|
$2.6 million
|
Fiscal Year 17
|
September 30,
2017 |
September 25,
2017 |
Risk-free interest rate
|
1.09%
|
1.09%
|
Expected annual dividend yield
|
—
|
—
|
Expected volatility
|
66.54%
|
65.71%
|
Term (years)
|
0.31
|
0.32
|
Fair value
|
$0.4 million
|
$0.6 million
|
|
Severance pay
|
||
|
and benefits
|
||
Accrued restructuring balance at April 1, 2017
|
$
|
—
|
|
Charges to operations
|
1,328
|
|
|
Cash payments
|
(746
|
)
|
|
Accrued restructuring balance at September 30, 2017
|
$
|
582
|
|
|
Three months ended September 30,
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
2017
|
|
2016
|
||||||||
Revenues
:
|
|
|
|
|
|
|
||||||||
Wind
|
$
|
5,554
|
|
|
$
|
12,898
|
|
$
|
7,831
|
|
|
$
|
18,573
|
|
Grid
|
5,495
|
|
|
5,609
|
|
12,140
|
|
|
13,279
|
|
||||
Total
|
$
|
11,049
|
|
|
$
|
18,507
|
|
$
|
19,971
|
|
|
$
|
31,852
|
|
|
Three months ended September 30,
|
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating loss:
|
|
|
|
|
|
|
|
||||||||
Wind
|
$
|
(1,440
|
)
|
|
$
|
(1,235
|
)
|
|
$
|
(5,873
|
)
|
|
$
|
(4,264
|
)
|
Grid
|
(6,100
|
)
|
|
(5,262
|
)
|
|
(14,268
|
)
|
|
(10,577
|
)
|
||||
Unallocated corporate expenses
|
(265
|
)
|
|
(653
|
)
|
|
(2,358
|
)
|
|
(1,653
|
)
|
||||
Total
|
$
|
(7,805
|
)
|
|
$
|
(7,150
|
)
|
|
$
|
(22,499
|
)
|
|
$
|
(16,494
|
)
|
|
September 30,
2017 |
|
March 31,
2017 |
||||
Wind
|
$
|
17,328
|
|
|
$
|
18,346
|
|
Grid
|
30,052
|
|
|
31,060
|
|
||
Corporate assets
|
53,168
|
|
|
50,838
|
|
||
Total
|
$
|
100,548
|
|
|
$
|
100,244
|
|
|
Three months ended September 30,
|
|
Six months ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
INOX Wind Limited
|
46
|
%
|
|
68
|
%
|
|
35
|
%
|
|
51
|
%
|
U.S. Navy
|
—
|
%
|
|
—
|
%
|
|
16
|
%
|
|
—
|
%
|
YMC Inc.
|
15
|
%
|
|
—
|
%
|
|
<10%
|
|
|
—
|
%
|
•
|
I
n March 2016, the FASB issued ASU No. 2016-08,
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations
, which clarifies the implementation guidance on principal versus agent considerations.
|
•
|
In April 2016, the FASB issued ASU No. 2016-10,
Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance.
|
•
|
In May 2016, the FASB issued ASU No. 2016-12,
Revenue from Contracts with Customers (Topic 606): Narrow- Scope Improvements and Practical Expedients
related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers.
|
•
|
In December 2016, the FASB issued ASU No. 2016-20,
Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers
, which amends certain narrow aspects of the guidance issued in ASU 2014-09 including guidance related to the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples.
|
•
|
In August 2016, the FASB issued ASU 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments
. The amendments in ASU 2016-15 will provide more guidance towards the classification of multiple different types of cash flows in order to reduce the diversity in reporting across entities.
|
•
|
In November 2016, the FASB issued ASU 2016-18,
Statement of Cash Flows (Topic 230): Restricted Cash
. The amendments in ASU 2016-18 will explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Wind.
Through our Windtec Solutions
™
, our Wind business segment enables manufacturers to field wind turbines with exceptional power output, reliability and affordability. We supply advanced power electronics and control systems, license our highly engineered wind turbine designs, and provide extensive customer support services to wind turbine manufacturers. Our design portfolio includes a broad range of drive trains and power ratings of 2 megawatts (“MW”) and higher. We provide a broad range of power electronics and software-based control systems that are highly integrated and designed for optimized performance, efficiency, and grid compatibility.
|
•
|
Grid.
Through our Gridtec Solutions
™
, our Grid business segment enables electric utilities and renewable energy project developers to connect, transmit and distribute power with exceptional efficiency, reliability, security and affordability. We provide transmission planning services that allow us to identify power grid congestion, poor power quality, and other risks, which help us determine how our solutions can improve network performance. These services often lead to sales of our grid interconnection solutions for wind farms and solar power plants, power quality systems and transmission and distribution cable systems. We also sell ship protection products to the U.S. Navy through our Grid business segment.
|
|
Three months ended September 30,
|
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
:
|
|
|
|
|
|
|
|
|
|
||||||
Wind
|
$
|
5,554
|
|
|
$
|
12,898
|
|
|
$
|
7,831
|
|
|
$
|
18,573
|
|
Grid
|
5,495
|
|
|
5,609
|
|
|
12,140
|
|
|
13,279
|
|
||||
Total
|
$
|
11,049
|
|
|
$
|
18,507
|
|
|
$
|
19,971
|
|
|
$
|
31,852
|
|
|
Three months ended September 30,
|
Six months ended September 30,
|
||||||||
|
2017
|
|
2016
|
2017
|
|
2016
|
||||
INOX Wind Limited
|
46
|
%
|
|
68
|
%
|
35
|
%
|
|
51
|
%
|
U.S. Navy
|
—
|
%
|
|
—
|
%
|
16
|
%
|
|
—
|
%
|
YMC Inc.
|
15
|
%
|
|
—
|
%
|
<10%
|
|
|
—
|
%
|
|
Three months ended September 30,
|
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Operating loss:
|
|
|
|
|
|
|
|
||||||||
Wind
|
$
|
(1,440
|
)
|
|
$
|
(1,235
|
)
|
|
$
|
(5,873
|
)
|
|
$
|
(4,264
|
)
|
Grid
|
(6,100
|
)
|
|
(5,262
|
)
|
|
(14,268
|
)
|
|
(10,577
|
)
|
||||
Unallocated corporate expenses
|
(265
|
)
|
|
(653
|
)
|
|
(2,358
|
)
|
|
(1,653
|
)
|
||||
Total
|
$
|
(7,805
|
)
|
|
$
|
(7,150
|
)
|
|
$
|
(22,499
|
)
|
|
$
|
(16,494
|
)
|
|
Three months ended September 30,
|
Six months ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(7,281
|
)
|
|
$
|
(7,325
|
)
|
$
|
(22,533
|
)
|
|
$
|
(17,680
|
)
|
Sale of minority investments
|
(951
|
)
|
|
—
|
|
(951
|
)
|
|
—
|
|
||||
Stock-based compensation
|
478
|
|
|
653
|
|
1,232
|
|
|
1,653
|
|
||||
Amortization of acquisition-related intangibles
|
—
|
|
|
39
|
|
13
|
|
|
78
|
|
||||
Consumption of zero cost-basis inventory
|
(340
|
)
|
|
(482
|
)
|
(396
|
)
|
|
(640
|
)
|
||||
Change in fair value of warrants and contingent consideration
|
(346
|
)
|
|
(1,244
|
)
|
(1,270
|
)
|
|
(567
|
)
|
||||
Non-cash interest expense
|
—
|
|
|
42
|
|
19
|
|
|
98
|
|
||||
Tax effect of adjustments
|
114
|
|
|
77
|
|
123
|
|
|
102
|
|
||||
Non-GAAP net loss
|
$
|
(8,326
|
)
|
|
$
|
(8,240
|
)
|
$
|
(23,763
|
)
|
|
$
|
(16,956
|
)
|
|
|
|
|
|
|
|
||||||||
Non-GAAP net loss per share
|
$
|
(0.44
|
)
|
|
$
|
(0.60
|
)
|
$
|
(1.33
|
)
|
|
$
|
(1.24
|
)
|
Weighted average shares outstanding - basic and diluted
|
19,060
|
|
|
13,769
|
|
17,925
|
|
|
13,723
|
|
|
September 30, 2017
|
|
March 31,
2017
|
||||
Cash and cash equivalents
|
$
|
30,320
|
|
|
$
|
26,784
|
|
Restricted cash
|
165
|
|
|
960
|
|
||
Total cash, cash equivalents, and restricted cash
|
$
|
30,485
|
|
|
$
|
27,744
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
Incorporated by Reference
|
|||||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed/Furnished
Herewith
|
10.1
|
|
|
|
|
|
|
|
10.1
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
|
|
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
|
|
|
**
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Definition Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document. ***
|
|
|
|
|
|
|
|
|
|
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
***
|
Submitted electronically herewith
|
|
|
AMERICAN SUPERCONDUCTOR CORPORATION
|
|
|
|
|
|
Date:
|
November 7, 2017
|
By:
|
/s/ John W. Kosiba, Jr.
|
|
|
|
John W. Kosiba, Jr.
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Superconductor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 7, 2017
|
By:
|
/s/D
aniel
P. M
c
G
ahn
|
|
|
|
Daniel P. McGahn
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Superconductor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 7, 2017
|
By:
|
/s/John W. Kosiba, Jr.
|
|
|
|
John W. Kosiba, Jr.
|
|
|
|
Chief Financial Officer
|
Date:
|
November 7, 2017
|
By:
|
/s/D
aniel
P. M
c
G
ahn
|
|
|
|
Daniel P. McGahn
|
|
|
|
Chief Executive Officer
|
Date:
|
November 7, 2017
|
By:
|
/s/John W. Kosiba, Jr.
|
|
|
|
John W. Kosiba, Jr.
|
|
|
|
Chief Financial Officer
|