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?

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…

Thanks, Dan, and good morning, everyone. We're pleased to be able to issue our financials for fiscal year 2010 and Q1, and as a result, we expect that we will now be back in compliance with NASDAQ Listing rules. I'd like to touch briefly on the reasons for the restatements and the late filings. First, Sinovel's receivables were aging out and then they stopped paying us. As a result, it was necessary to reassess our prior judgment around collectibility. Second, we shipped some of our smaller customers in China under open credit with limited payment history. Shipping under open credit represented a concession because the sales contracts require letters of credit or bank guarantees prior to shipments. From an accounting standpoint, this also called into question the fixed and determinable nature of that revenue. And third, these decisions with regard to credit were decentralized. The people making the decisions did not have the requisite knowledge of revenue recognition principles under GAAP, and our corporate finance department was not made fully aware of the decisions that were being made. The control deficiencies and our remediation plans are summarized in full in the SEC filings we made today. Our work to remediate these issues is well underway, and all elements of the plan have either been implemented or are in the process of being implemented. One question that I would like to answer proactively is, "Why has it taken so long to issue our financial results?" The accounting issues we have dealt with have been extremely complex. It took a great deal of time to reach proper and supportable conclusions. As time continue to pass, events and new facts require changes in our accounting judgments. Of those notable events was our discovery of the theft of our intellectual property and our determination…

Thanks, Dave. In conclusion, we are responding to our challenges head on. We are bringing strong legal cases to court. We reduced our cost structure by $30 million annually, and are reducing our cash burn. We have instituted improved financial controls, which include the requirement for letters of credit or bank guarantees before shipments to China. We have flattened our organization to establish better collaboration and clarity of responsibilities. And we have clear priorities in place. We have realigned the business from technologies, Power Systems and Superconductors; to markets, Wind and Grid. We have a sound 3-point strategy in place for each of these businesses. And we have already landed nearly $100 million of new contracts this fiscal year, and as David said, most of which have occurred after June. Our team of managers and employees are energized and they are totally committed to AMSC's success. We have the partners, the products and the people we need to succeed. And we're all committed to bettering our customers' businesses, diversifying our business and in the process, rebuilding shareholder value. We are very pleased to be able to put these financials behind us and our full attention is now focused on our bright future. With that, let's open the call to your questions.

[Operator Instructions] And we'll go first to Jim Ricchiuti from Needham & Company. James Ricchiuti - Needham & Company, LLC, Research Division: The question I had just relates to backlog. I was wondering if you could say how much of that backlog is shippable over the next 12 months. And then if you can give just some flavor for how that backlog breaks down in terms of Wind and Grid.

Yes. In terms of the overall backlog, roughly 25% of that backlog is shippable this fiscal year. But we're not going to break down the backlog at this time between Wind and Grid.

The good thing, Jim, overall, is what we're seeing a strong traction in the Wind and the Grid market, and we're seeing that as well on all the major geographies that we serve.

And we'll go next to Jesse Pichel from Jefferies. Elaine Kwei - Jefferies & Company, Inc., Research Division: This is Elaine Kwei for Jesse. Could you help us understand a little more the hit to the COGS line and the gross profit, and how that's going to look going forward? And that if we could tease out, what portion of that was due to items one-time nature and then when you could potentially expect to get to the gross profit breakeven?

Yes, Elaine. So if you look at the -- in our press release, there is a non-GAAP table in the back. And you can see that the charges that were listed out for the year. And of those charges, the excess and obsolete inventory charge is $61 million. The purchase commitments of $38 million and then the write-off of -- actually not -- just those 2 related to cost of goods sold. The prepaid value-added tax just went to G&A, and then the goodwill was obviously, amortization and impairments which you see on the face of the financials. On the annual guidance though a lot of things here you can see are changing at AMSC and the way we provided guidance is one of them. At this stage, we'll be providing near-term targets and we're going to focus on demonstrating our progress quarter-over-quarter. We are not providing today longer-term targets or forecasts. That being said, we pry at some directional insight in the second half of this fiscal year being stronger than the first. Elaine Kwei - Jefferies & Company, Inc., Research Division: Okay, that's helpful. And in terms of the expected though can you just clarify again the expected reduction in OpEx was about $30 million annually, was that correct?

That's right. Elaine Kwei - Jefferies & Company, Inc., Research Division: Okay. And that will be -- when will that level of OpEx reduction be reached? Will that be in the next quarter or 2 or...

We'll start seeing the cash benefit of that within the next quarter. And I said earlier in the call, we expect to exit this quarter on a $25 million quarterly run rate for OpEx, excluding Sinovel litigation costs.

And we'll go to our next question from Theodore O'Neill from Wunderlich Securities.

I was wondering if you are going to talk about the superconductor Amperium wire sales, and what proportion of that would be in next quarter's revenue and how it would trend over time?

I think that what we're going to try to focus on, I think the news today is that LS Cable is diligently working on their projects with KEPCO. They've required to start to take wire early. If you recall, originally, that contract has scheduled shipment starting in 2012. You're now going to see those happening sooner. And I think it's -- the way I see it, it's more a validation on the relationship and the fact that KEPCO is going forward with superconductor cables.

And just to point out, Theo, that some of the $18 million of revenue that we are forecasting for this quarter includes shipments to LS Cable.

Okay. And David, what kind of revenue level would I expect to see where you'll be at breakeven?

Yes. Dan just to mention, we're not really looking to provide long-term extended guidance at this time. We're focused on the near-term and coming to you -- telling you what we're going to do one quarter out and then show you how we did it. And that's right now our focus rather than providing long-term information. I will say though that we did provide some long-term guidance in terms of looking forward to our revenues for the second half of the year and also, our operating expense rate exiting the quarter.

And we'll go to our next question from Chris Kovacs from Robert Baird. Christopher M. Kovacs - Robert W. Baird & Co. Incorporated, Research Division: Now that Sinovel is no longer a customer, can you maybe give us an idea of who your top wind customers are, and maybe give us a ranking of your largest contracts?

Sure. One of the things that I think is going to become nicer about our business here is you're going to see a more diversified set of revenue. So you're going to see a good balance between Wind and Grid. In the near term, Wind will be the driver, particularly out of the Asian countries. But we are seeing revenues coming from all of our geographies and from nearly all of our substantial partners that we've talked about in our past. So we're looking to build a very diversified business and to make sure that we have strong health and strong growth in the near term.

And we'll go to our next question from Paul Clegg with Mizuho.

My first question is really, why still go ahead with The Switch acquisition? Why not just conserve cash and build the existing businesses? It just seems that the capital markets and the stock price would put some dilutive pressure on you, so why still push ahead?

Well, Paul, we see it still strategically as a nice fit for our business. We are out, and as you said in the markets, and they are challenged but we're looking to determine a pathway to finance the deal. But we want to do what we believe will be in the best interest for our shareholders.

Okay. And I guess what is the agreement to buy The Switch then legally right now? Are you past the deadline? Do you need to do further amendments? And does the EUR 190 million still remain the purchase price?

In June, we amended the contract, we added some changes to the contract. The purchase price was still the same as announced. We added an extension in time where we have a hard stop the year [ph] at September 30 and we're able to extend that 2x when we can extend this position now to the end of November, as long as we are out looking to pursue financing.

And we'll go to our next question from Carter Driscoll with Capstone Investments.

I was hoping you guys could elaborate a little on the JCNE contract. Is it similar? Is it uniform, meaning you're shipping same amount every month or every quarter, or is it kind of based on demand? And is it back- or front-end loaded based on that?

I realized everybody's going to struggle with their models. There's a lot of new information out there and it's going to take some time for us all to get on the same page there, but we're not going to break down the JCNE contract. But just to reiterate what I have said, it's for electrical control system. So to make that clear, the shipments are to begin the end of this calendar year and go forward out through calendar 2014.

Okay. If I -- just a little read through, and obviously, like you said, you don't want to go out and talk about beyond one quarter. But it sounds as though you are anticipating at best reaching breakeven by the end of the fiscal year. Would that be a fair statement?

We're not going to really comment. I mean, I think you guys are sensitized with the situation that we're in. This management team, we want to be able to set bars for ourselves here in the short-term, that get us back to growth here in the near term and put us in position to get back to profitability. What we want to be able to do were to set your expectations accordingly and make sure that we can run the business appropriately.

And we'll go to our next question from Timothy Arcuri from Citi.

A couple of things. I can get that you don't want to get any kind of revenue targets because it's very difficult to predict, but can you just give us some mild pose around cash flow breakeven. That's something that's within your control, so can you give us some estimate in terms of where cash flow breakeven will be in September and maybe looking out into the fourth calendar quarter as well? I mean, there has to be some metric for us to measure the business by.

Well, I think, Tim, you'll have your -- as you put out your models and you have the historical information we provided, as Dan mentioned, we're not going to provide that kind of forward-looking information on a cash flows. I can tell you that we are monitoring our cash closely, not only our operating expenses but our capital expenditures as well, and we have enough cash, as I mentioned, at least to get us through the next 12 months.

All right. Well, then can you -- I know you don't want to break down backlog, but given the issues in China and that, the sort of payment, the thoughts around payment are different there in some cases. Can you give us some sense in terms of how much of the remaining backlog is China as it relates to Shenyang and XJ, and companies like that?

The backlog in China -- I mean, we're not breaking down the backlog per se. I mean, China is a good part of the backlog but that's really about as far as I would go at this time. Just note that, as Dan mentioned in his earlier marks, and as I mentioned as well, there's about $77 million of shipments that we made to customers that we have not been paid for and have not recognized revenue on.

And I guess the other point that I'll make, I mean, we're not going to be back out again talking to you all, again relatively soon again as our second quarter is about to close here in about a week.

And we'll go to our next question from Craig Irwin with Wedbush Securities.

This is actually David Giesecke in for Craig. I would like to get a little bit more granularity on the Superconductors side, and perhaps, you guys can talk a little bit more about the LS Cable deal, whether you expect the losses from the superconductors side to be up or down compared from a year ago, or anything along the lines of the new manufacturing line. Is it producing more efficiency? Is that one of the reasons why you're able to meet this accelerated demand? Any granularity you could provide, please.

Sure, I'll try. But I think one key point that we're trying to make today is we're no longer thinking about Superconductors as one of our operating divisions. We see Superconductors as an extension of our offerings in Wind and Grid. It's a uniquely differentiated technology that we have a strong level of, intellectual property and competency in. We're focused into areas, in Wind really on the machine technology for wind turbines. On the Grid side, which is really where most of your questions lie, where the wire and cable part of your business sits. In the near-term here, we're going to start shipping to LS Cable. We are actively working to try to develop additional business, not only with our friends in Korea, but our friends around the world. We've made a statement, I think clearly, in the opening remarks that we are able to deliver the wire to LS Cable early as a result of our strength in manufacturing. We have been able to bring the second-generation product to market now, we have the commercial customer and partner at LS Cable and we have commercial capability to be able to deliver that wire.

Okay. A couple small follow-ups, maybe you'll answer and maybe you won't. Could you give us a sense in the amount of cable you're expected to ship to LS Cable this year? And then also for the backlog, could you tell us of the June quarter how much of it came out of backlog? You may have answered that, I might have missed it.

So we'll go back to the original contract. It was for 3,000 kilometers or 3 million meters over a number of years. It was supposed to begin in 2012, and we're beginning to ship it earlier.

[Operator Instructions] We'll go next to JinMing Liu from Ardour Capital.

My first question is related to your strategy in your Wind segment. In the past, American Superconductor made a few small acquisitions is like Dynamic Blades (sic) [Blade Dynamics]. I think you guys were trying to go vertical. What are you going to do with those investments? And also, since you guys are still are waiting to focus on the Chinese market, a new trend there is the one developers are turning their focus to low wind resources areas, whether your technology can fit into that new trend?

I'll start with the overall strategy part. So about a year ago, a little less, we made a strategic investment in Blade Dynamics with Dow Chemical. We've made other investments, obviously, getting into wind with Windtec. We've developed a group as well to do design of drive trains and bearing solutions as well as part of our team. So I think that the strategy, as you see it, of being vertically integrated, as a technology provider is true. What we're trying to do is position the company now to think not only about state-of-the-art, drive trains and wind turbines, but truly novel and advanced technologies and drive train, not only for the Asian markets but for the global markets. Turning specifically to China. I think you hit very well on one of our key differentiators. We spent a lot of time focusing with our partners to be able to develop different wind condition, turbine configurations as well as different climate condition, turbine configurations. China is a very big country in many ways from climate, as well as to wind conditions. So in many of the more competitive bids right now those occur in low-wind conditions, we believe that we have positioned our partners to be able to gain more market share in China across-the-board.

Okay. My follow-up question is really a quick one. It looks like you guys stopped mentioning CSR-ZELRI as a customer. Can you clarify the situation there, whether that company is among those customers who didn't pay you or this is simply their contracts versus [ph] your company is over?

We don't consider them as a customer. I think one of the things again with the changing AMSC is we're trying to be a bit more specific to you all on who we're focused on to making sure that they succeed. We always get questions about who we think that would be key or strategic customers are, and we've mentioned them in China as being Dongfang, XJ, JCNE and Shenyang Blower.

And we'll go to our next question from Pavel Molchanov from Raymond James. Pavel Molchanov - Raymond James & Associates, Inc., Research Division: Obviously, we're very happy to see that you're winning additional business in China. But can you talk about which -- what measures you're taking to make sure that the situation with Sinovel, particularly the IP stuff, does not refer what any other Chinese customers in the future?

Sure. I'll start at a high-level then get into maybe some specifics. At a high-level, if you recall, as we described on the previous call, there were a very few people that have access to the information. And today, there are even fewer people that have access to information within the company. We set up additional IT controls to also monitor and be able to control information that we feel that we had a very strong system to start with, we had very limited exposure and now we believe that we've put additionally limited that exposure. From a protection standpoint, it's clear that outright the fab had to occur to be able to get around our product level protections. When we look at the control systems for the partners that we have that pay and our partners that respect intellectual property, we have gotten clear signals from them that they are committed to working with us to be able to utilize current technology as well as new technology going forward.

And we'll go next with Paul Clegg from Mizuho.

Questions really on kind of working capital. What are your other receivables agings look like today, particularly, the Chinese customers? Is there anything out there to China that's not LC-backed or backed by credit insurance? And similarly, any payables for product meant for Sinovel currently that is still on the books? I was a little unclear on that?

Yes, I'll take your first question on the receivables. For the most part, I would say the vast majority, the receivables from Chinese customers. And when you're on cash basis, you, by definition, don't have receivables. So any unpaid amount for some of these customers that were length [ph] a long-time in nature and have aged out have been -- are now off the books as of the end of the fiscal year. And revenue will be recognized going forward as we receive cash. In terms of the vendor liabilities, as we exit the second quarter, I think we will be on a more -- we should have our payables more in line with our business going forward. We will stop paying down some of the payables that we had as a result of the supply-chain buildup that we had in support of Sinovel. But we still will have about $40 million on the balance sheet at the end of June, which relates to purchase commitments, things we have not received yet but had committed to with our suppliers in anticipation of future shipments to Sinovel and having that supply-chain in place. So those liabilities remain, and we're working closely with our vendors. And we're very pleased with the cooperation and the understanding that we're receiving so far.

Okay. And if I could, a follow-up on the strategy for financing The Switch. Are you talking to strategic partners about equity in American Superconductor to help finance that?

We're exploring any and all options at this point. We do believe that the deal is strategic. So we would like to see a pathway to be able to complete the transaction. But I want to make it clear to everybody, we're only going to do what's going to be in the best interest of our shareholders.

[Operator Instructions] We'll go next to Carter Driscoll from Capstone Investments.

Just a follow-up on Paul's question, from receivables standpoint, the cash accounting, that applies to the China market, or that is the strategy for all parts of both the Wind and Grid business in terms of the reverent?

The issues that we had were primarily located in China, that drove us to restate our financial statement. The other areas of our business, we have not seen these same issues that we saw in China, but be that as it may, we do -- it has instituted improved policies and procedures across the company to ensure that this doesn't happen again.

And then if I may, I know you don't want to talk about Sinovel, but can you give us your understanding of their response to the arbitration claim that was put to them by the Beijing Commission [Beijing Arbitration Commission]? Could you time frame when they're supposed to respond by, or your expectation of how long arbitration may play out?

We believe they have probably have another week or so to respond. I would say from our point of view, what is setting up is a path to go into arbitration. We've stated our case, I think, very strongly and very clearly, and we look forward to letting the arbitration process take its course.

And our final question comes from the line of Timothy Arcuri with Citi.

Just a quick follow up. Dave, can you give us some CapEx guidance?

As I mentioned earlier in the call, we're going to be monitoring our CapEx and our operating expenditures very closely as part of an overall strategy to minimize our cash burn here going forward. But other than that, we're not providing specific CapEx value other than we're going to keep a very close eye on it.

We're keeping a close eye on all cash in every part of the business. It's the key objective for, not only for the senior management, Dave and I, but our management team across the company.

And at this time, we have no further questions. I'd like to turn the call back to Mr. Daniel McGahn for any closing remarks.

In general, you're seeing a new AMSC. You're seeing the reemergence of the company, and we're coming out strongly, we believe. I realize and I want to emphasize with everybody's frustration over the past months, we've attempted to share our own on the previous call and this call as well. We really want to thank you all for taking part in this morning's call. We look forward to speaking with you again later in the fall as we report our second quarter results. Thank you very much, and we appreciate your support.

That concludes our call for today. Thank you for your participation.