American Superconductor Corporation, a leading energy technologies company, announced today that it completed its previously announced acquisition of Windtec on Friday, January 5, 2007. Windtec, now a wholly-owned subsidiary of American Superconductor, is operated by the company's Power Electronic Systems business unit.
Windtec, based in Klagenfurt, Austria, designs a variety of wind turbine systems from the ground up, and licenses these designs to third parties for an upfront fee and royalty payments for each installation of a Windtec-designed wind turbine system. Windtec also provides consulting services for its licensees who want to upgrade or optimize their wind turbine systems. Windtec normally sells wind turbine electrical systems, which utilize AMSC's PowerModule(TM) systems, to its licensees. Windtec's customers and targeted markets are typically industrial equipment manufacturers and engineering construction companies in fast-growing economies seeking to become manufacturers of wind turbine systems.
"This acquisition opens an important chapter in American Superconductor's history, positioning our company for strong additional sales in one of the most exciting growth sectors in energy today," said Greg Yurek, chief executive officer and founder of American Superconductor. "Our company has been serving the wind market for more than three years with our D-VAR(R) and PowerModule power electronics products. We now will be able to offer a much more diverse and unique array of products and services - from the design and licensing of entire wind energy systems to turbine electrical systems to wind farm grid interconnection solutions. From a financial perspective, Windtec provides American Superconductor with a powerful revenue growth catalyst as well as an immediate source of strong cash flow."
For the 12 months ending December 31, 2006, Windtec estimates that its total revenues were approximately $13 million and its net income was approximately $1 million, or eight percent of revenues. This is up significantly from $2.7 million in revenues and a break-even bottom line for the 12 months ended December 31, 2005. As of January 5, 2007, Windtec had approximately $35 million of existing backlog, more than $20 million of which AMSC expects to recognize as revenues in fiscal 2008, ending March 31, 2008. AMSC expects profit margins on these future sales will increase over Windtec's historical levels. Going forward, Windtec's financial results will be reported as part of AMSC's Power Electronic Systems business unit.
Including Windtec, AMSC had more than $65 million in total backlog as of January 5, 2007. Based on this existing backlog, AMSC expects Power Electronic Systems revenues to double from approximately $25 million in the fiscal year ending March 31, 2007 to approximately $50 million for the fiscal year ending March 31, 2008. The company expects the acquisition to have an accretive impact on AMSC's earnings beginning in the quarter ending June 30, 2007, which will be Windtec's first full quarter of operations as an AMSC subsidiary.
"In addition to its existing customers in China, Japan and the Czech Republic, Windtec is experiencing strong demand for its offerings in Canada, France, India and South Korea, among other countries," added Yurek. "Each of these leads represents a multi-million-dollar revenue opportunity for AMSC. Having completed this acquisition, we are now focused on closing additional orders this quarter and in the quarters ahead to ensure strong financial performance for AMSC going forward."
Posted January 9th, 2007
