(By Balaseshan) American Superconductor Corp. (NASDAQ: AMSC) said it has cut its workforce by about 25% to weather the wind power industry downturn and minimize its cash usage. The megawatt-scale services provider revised its third quarter forecast.
The company, which made reductions across all its major geographic locations and functions, now has a global workforce of about 340 employees. The company is consolidating office space to lower operating costs and enhance liquidity in response to challenging conditions in the wind power market.
AMSC expects that today's action will reduce its annualized expenditures by about $10 million and will lower its annualized operating expenses, which include non-cash compensation costs, to less than $58 million once the savings are fully realized in the fiscal quarter ending June 30, 2013.
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In total, AMSC anticipates that it will incur restructuring charges of about $3 million to $4 million over the next two quarters relating to the workforce reduction and office consolidations. Of this total, the company expects to pay about $2 million in cash severance costs in the fiscal quarter ending December 31, 2012.
The company has revised its financial forecast for the third quarter as a result of anticipated wind turbine electrical control system shipment delays to certain of its Windtec Solutions partners.
AMSC now expects adjusted loss to be less than $16 million or $0.31 per share and revenue to exceed $20 million for the third quarter, while Street analysts predict loss of $0.24 per share on revenue of $26.50 million. Previously, the company had projected adjusted loss to be less than $14 million or $0.26 per share and revenue to exceed $26 million.
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As previously announced, AMSC expects to reduce its balance of restricted cash in the third fiscal quarter by paying or settling the majority of its remaining liabilities for adverse purchase commitments, which amounted to about $12 million as of September 30, 2012.
Factoring in these expected payments and settlements as well as cash-related severance costs, AMSC now expects to have more than $48 million in cash, cash equivalents, marketable securities and restricted cash on December 31, 2012.
AMSC is trading down 10.11% at $2.49 on Wednesday. The stock has been trading between $2.40 and $6.05 for the past 52 weeks.