American Superconductor Corporation (AMSC) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Shareholders Meeting for American Superconductor Corporation. I would now like to hand the conference over to the Chairman, President and Chief Executive Officer, Daniel McGahn.

Thank you. Good morning, and welcome to American Superconductor Corporation's 2020 Annual Meeting of Stockholders. I am Daniel McGahn, Chairman, President and Chief Executive Officer of AMSC. We're excited to be hosting our virtual meeting, which, in light of public health concerns related to the COVID-19 pandemic, allows us to conduct business safely for all our stockholders. We have stockholders attending our virtual annual meeting via the web portal. As is our custom, we will conduct the business portion of our meeting first and then answer questions at the end of the meeting. Though we may not be able to answer every question, we will do our best to provide a response to as many as possible. It is now shortly after 10:30 a.m. Eastern Time on July 31, 2020, and this meeting is officially called to order. And now I'd like to introduce the other members of AMSC's Board of Directors at today's meeting. Vikram S. Budhraja has been President and Chief Executive Officer of Electric Power Group, LLC, Pasadena, California-based consulting firm that provides management and strategic consulting services, smart grid synchrophasor technology services and applications and power grid reliability monitoring solutions to the electric power industry since January 2000. Mr. Budhraja has been a director since 2004. Arthur H. House has served as a cybersecurity policy adviser to the Secretary of State of the State of Connecticut since April 2020 and as an adjunct professor at the University of Connecticut since March of 2020. Mr. House previously served as Chief Cybersecurity Risk Officer for the State of Connecticut from October 2016 to October 2019. Before that, Mr. House was Chairman of the Connecticut Public Utilities Regulatory Authority. Mr. House has been a director since September 2016. Barbara G. Littlefield has most recently served as Chief Financial Officer of Poseidon Water LLC, a leading developer of water infrastructure projects in North America from August 2014 until May of 2020. Ms. Littlefield has been a director since May of 2019. David R. Oliver, Jr. is currently an independent consultant. Before that, he served as a strategic adviser, mergers and acquisitions for European Aeronautic Defense and Space Company North America, known as EADS NA, a large European aerospace corporation and previously held a number of positions in management there. Mr. Oliver has been a director since 2006. Now I would like to introduce members of AMSC's management team at today's meeting. John Kosiba, AMSC's Senior Vice President, Chief Financial Officer and Treasurer. Mr. Kosiba joined AMSC in June of 2010. And John Samia, Vice President, General Counsel and Corporate Secretary. Mr. Samia joined AMSC in April of 2008. We're also joined in today's meeting by Monica Meunier of RSM US LLP, AMSC's independent registered public accounting firm. And finally and maybe most importantly for today, Frank Arren of Broadridge Financial Solutions, Inc. has been appointed to act as inspector of the election. I will now ask our Vice President, General Counsel and Corporate Secretary, John Samia, to conduct the formal part of this annual meeting. Once all of the votes are taken, we will adjourn the formal part of this annual meeting. I'll then answer any questions. John?

Thank you, Daniel. As indicated in the notice of Annual Meeting of Stockholders and accompanying proxy statement, which was filed with the SEC on June 19, 2020, we are here today to consider and vote upon the matters described in the proxy statement. We will consider each item in turn in the same order that they appear in the notice of meeting. The polls opened today, July 31, 2020, at 10:30 a.m. Eastern Time for voting on all matters before the meeting. If you have not already voted or wish to change your vote, the polls will remain open until we finish presenting the proposals and close the polls. You do not need to vote during the meeting if you have already voted and do not wish to change your vote. No votes, proxies or revocations of or changes to votes or proxies will be accepted after the polls are closed. I will announce the results of the voting on each proposal being presented for stockholder approval near the end of this meeting, immediately following the tabulation of the voting. I have received an affidavit from Broadridge Financial Solutions, Inc., certifying that Broadridge processed and distributed records relating to AMSC stockholders of record as of the close of business on June 8, 2020, as shown on the books of AMSC according to AMSC's transfer agent, American Stock Transfer & Trust Company and AMSC's 401(k) provider, Principal Financial Group. This affidavit is available for inspection by any stockholder. Our inspector of election, Mr. Arren, has signed the customary oath of office to execute his duties with strict impartiality. We will file this oath with the records of the meeting. I have also been informed that there are represented at this meeting a majority of the shares of common stock entitled to vote. I hereby declare that a quorum exists. We will now consider each matter being submitted for stockholder approval. The first matter to be voted on by the stockholders is the election of Vikram S. Budhraja; Arthur H. House; Barbara G. Littlefield; Daniel P. McGahn; and David R. Oliver, Jr., as directors of AMSC for a term of office expiring at the 2021 Annual Meeting of Stockholders. The next matter to be voted on by the stockholders is the ratification of the selection by the Audit Committee of the Board of Directors of RSM US LLP as AMSC's independent registered public accounting firm for the current fiscal year. The final matter to be voted on by the stockholders is the approval on an advisory basis of the compensation of AMSC's named executive officers. If there is anyone who has not already voted by proxy or wishes to revoke a proxy which has been given, you may vote by clicking on the voting button on the web portal and following the instructions there. This concludes the business items on the agenda for this meeting. We will pause now for approximately 30 seconds before closing the voting polls. [Voting]

The time is now 10:39 a.m. Eastern Time on July 31, 2020, and the polls are now closed for voting for all matters being considered at this meeting. We have the preliminary report of the results of the meeting, which are as follows. The 5 nominees named in the proxy statement have been elected as directors for a term of office expiring at the 2021 Annual Meeting of Stockholders. The selection of RSM US LLP as the company's independent registered public accounting firm has been ratified, and the stockholders have approved on an advisory basis the compensation of AMSC's named executive officers. We will include in the minutes of this meeting the precise number of shares voted for, against, withheld or abstaining as applicable on each proposal. As there is no further business to come before this meeting, I declare this meeting adjourned. Thank you for your attention. I would now like to turn over the meeting to our Chairman, President and Chief Executive Officer, Daniel McGahn. We'll be happy to answer any questions submitted during the annual meeting in accordance with the annual meeting's rules of conduct and procedures that are pertinent to AMSC and the meeting matters, time permits. Only appropriate questions that adhere to the parameters outlined in the rules of conduct and procedures will be addressed. [Operator Instructions] We will do our best to address any questions that do not -- that we do not get to answer today during our next quarterly earnings call on Thursday, August 6, 2020. Please note that various remarks that we may make during this Q&A session about future expectations, plans and prospects for American Superconductor Corporation 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 these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent quarterly or annual report filed with the Securities and Exchange Commission. In addition, these forward-looking statements represent our expectations only as of today. While we anticipate that subsequent events and developments may cause our views to change, we specifically disclaim any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing our views as of any day subsequent to today. I want to point out that this meeting is not a valid forum for public disclosure. And therefore, the statements that we make, including in response to your questions, are not considered valid public disclosure for purposes of Regulation FD. Please bear that in mind if we are unable to address certain questions you may wish to ask. Daniel? We are reviewing the questions. Just pause for 1 second, please.