Good day, everyone, and welcome to AMSC's conference call. This call is being recorded. [Operator Instructions] With us on the call this morning are AMSC'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 Jason Fredette. Please go ahead, sir.

Thank you, Jessica, and welcome to our second quarter conference call, everyone. Before we begin, I'd like to note that various remarks management may make on this conference call about AMSC'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 fiscal year ended March 31, 2011, which we filed with the SEC on September 23, 2011, and subsequent reports that we have filed with the SEC. 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. While AMSC anticipates that subsequent events and developments may cause the company's views to change, the company specifically disclaims any obligation to update these forward-looking statements. I also would like to note that we'll be referring on today's call to non-GAAP net income or net income before amortization of acquisition-related intangibles, restructuring and impairments, stock-based compensation, other unusual charges and any tax effects related to those items. Non-GAAP net income is a non-GAAP financial metric, a reconciliation of non-GAAP to GAAP. Net income can be found in the press release we issued and filed with the SEC this morning on Form 8-K. All of our press releases and SEC filings can be accessed from the Investors Page of our website at amsc.com. And finally, I'd like to note that we'll be participating in the Baird 2011 Clean Technology Conference on November 30. Our presentation from this conference will be webcast. More details on this will follow. Now, CEO Dan McGahn will begin our quarterly review. Dan?

Thank you, Jason, and good morning, everyone. When we last spoke to you in September, we described the actions we were taking to return AMSC to growth and create a sustainably profitable company. We described how we were aligning the business more strongly with our core wind and grid markets and how we are highlighting the value proposition for our Windtec and Gridtec Solutions. We detailed how we are prioritizing our strategic investments and business development efforts. We talked about the cost reduction efforts we have underway and the new policies and financial controls we have put in place. We discussed how we are flattening the organization to establish better collaboration and clarity of responsibilities. We provided a sense of direction on where we're headed financially. And we discussed the actions we have begun to take with respect to our former customer, Sinovel. Today, we'll update you on these areas, but let me give you a quick summary before turning the call over to Dave to discuss the financials. We made good progress with our wind turbine manufacturing customers and they in turn helped us diversify our business in the second quarter. On the grid side, we grew our D-VAR system revenues quarter-over-quarter. And along with our partners, we have achieved important power cable milestones. From a financial standpoint, we executed on our plan in the second fiscal quarter and exceeded our financial forecast. This forecast did not contemplate the termination of our acquisition agreement with The Switch. And finally, on the legal front, we made all of our legal filings in China against our former customer, and all of the civil single filings have now been accepted by arbitrators and the courts. Finally, before beginning our financial discussions, let me bring you up the speed on our litigation activity…

Thanks, Dan, and good morning, everyone. First, I'd like to focus on our major accomplishments in a few key areas. We posted a solid quarter-over-quarter increase in revenues and also increased year-over-year when contributions from Sinovel are excluded. We began to benefit from the cost reduction efforts that we have implemented thus far this fiscal year, and we reduced our cash usage and put the foundation in place to ensure that our cash burn is significantly decreased in the second half of the fiscal year. As I walk through our financials I'll be focusing on quarter-over-quarter comparisons, because this is a more meaningful comparison than our prior year numbers, which included Sinovel. In terms of revenue and operating expenses however, we can provide some year-over-year perspective. AMSC generated $20.8 million in revenue for the second fiscal quarter of 2011. This is more than double the $9.1 million in revenue that we reported for the first quarter of fiscal 2011. And excluding contributions from Sinovel, it is up nearly 20% from $17.6 million in the year ago quarter. We also recorded a nice uptick in backlog from $225 million at the end of the first quarter to $298 million at the end of the second quarter. As a reminder, we have excluded our Sinovel contracts from our backlog. Excluding unusual items, our operating expenses were down in the second quarter both sequentially and year-over-year. In total, including the $3.3 million we spent on Sinovel litigation, our R&D and SG&A expenses for the second fiscal quarter were $24.8 million. Excluding unusual charges in both the first and second quarters, R&D and SG&A decreased by more than $6 million sequentially. This reduction demonstrates the positive financial impact that our cost reduction efforts are having on the business. As we disclosed last week, we…

Thanks, Dave. The second quarter was a time of significant progress at AMSC. We executed our business plan, got back to growth and increased our total backlog by about 20% quarter-over-quarter to nearly $300 million. We also significantly lowered our headcount and our cost structure. We dealt with our new financial reality by streamlining and flattening our management. And shortly, after the quarter ended, we clarified and refocused our working relationship with The Switch. To put it mildly, my first quarter as CEO was eventful. I am proud of the way our team has been navigating and overcoming the obstacles we have faced. Certainly, more hard work lies ahead of us as we take the company through this transition. But I can assure you, we're up for that challenge. Now let's turn to the state of the markets we serve and our business performance. While it's clear that the economic and industry conditions are challenging, it is also clear that the wind power and power grid markets will continue to attract tens of billions of dollars in annual investments. The demand for clean energy solutions will continue to be a key global focus, and AMSC is well-positioned to benefit. Within the past several weeks, we introduced our new corporate identity and structure. We began doing business as AMSC, transitioning away from American Superconductor. Why? Well, when this company was founded nearly 25 years ago, its sales and operations were limited to the United States and its sole focus was on superconductors. Today, we have operations in strategic locations around the world and we have a whole host of solutions for the wind and grid markets. Simply put, we are a different company, one better-positioned to address the world's energy challenges. While our headquarters remain in the U.S. and superconductors remain…

[Operator Instructions] We'll take our first question from Paul Clegg with Mizuho.

How did the end of the bid for The Switch change your strategic view, if at all? Do you still see expanding your wind product portfolio as core to the new strategy? And are you still mulling any additional M&A opportunities?

Paul, I think you can simply think of The Switch, strategically, as providing more value per megawatt to our partners and customers. We've been able to do this with other strategic supply chain partners, and the relationship with The Switch is quite strong to enable that to happen. In many ways, The Switch's vision in the long term are for larger wind turbines, as well as AMSC's vision in the longer term are for larger wind turbines. And much of our internal investment revolves around providing that type of technology to our partners.

Okay. So any thoughts on additional M&A opportunities or if is there anything as part of your core portfolio of products that you still need to fill in?

I think at this point, Paul, our focus is, first and foremost, on cash and cash management. We want to continue demonstrate to ourselves, to our employees to our customers, as well as to our investors, that the business is rebounding and any thoughts of M&A would be considered perhaps in the future. But in the near term, we're focused on managing the core business and managing our cash.

And we'll take our next question from Jesse Pichel with Jefferies & Company. Elaine Kwei - Jefferies & Company, Inc., Research Division: This is Elaine for Jessie. You sold quite a few claims there for a pretty good sum of money, and just a 2-part on this one. First, has there been any history of actual payments in a case like this in Chinese courts? And then secondly, how likely is that Sinovel would even be able to pay any portion of these claims given the headwinds they're facing?

Jessie, so one of the things we wanted to do today -- so that was Elaine, sorry. You sound a lot like Jessie. I'm just kidding. So one of the things that we wanted to do today is to be very clear what our claims are. We want to make sure that you all understand what the cases are and what the numbers are because we would anticipate things to start to come out in the media, they may talk about one case but maybe not all of the cases in whole. Yes, it is a big number. Yes, there's been significant impact on our business. We will leave it to Sinovel to figure out how they would pay, and we will leave it to the arbitrators and the courts to hopefully move this forward here in the next several months. But we anticipate and believe that we would see a positive outcome from this, and it's the main reason that we're doing this. Elaine Kwei - Jefferies & Company, Inc., Research Division: Great. And could you also go through in the backlog, what portion is now wind versus D-VAR versus superconductor, and the period for recognizing the backlog?

Sure. So we're talking, kind of general, we know in the backlog and things are something that you all need to understand a little bit better to see the clarity of how we're going to go forward. In general, we haven't given breakdowns of backlog but we want to try to help facilitate you all today. So in general terms, the backlog tends to break out around 2/3 wind, 1/3 grid. And then from a year standpoint, we have backlog that obviously is concentrated here in 2011 and 2012, but it also extends out into 2013 and a bit beyond.

And then the majority of -- Elaine this is Dave, the majority of our -- looking out for revenue in this fiscal year, the vast majority is covered by what's already in the backlog.

And we'll take our next question from Tim Arcuri with Citi.

I was just hoping to accept. I was just wondering if you can give any idea as to where breakeven levels might be in terms of revenues now, given that The Switch is not around and Sinovel is not a customer anymore?

Yes. Consistent with what we're doing from a guidance standpoint, we're just really trying to focus on the near-term and execution. We're not providing longer-term information like that at this time. Once there's a -- we may consider it later when there's more of a beat to the business if you will. But for right now, we're sticking with the guidance that we provide. But one of the things I would point out is that we exited the second quarter, we were on a run rate without -- when you exclude the onetime charges and the unusual charges, about $22 million on R&D and SG&A. And we expect to be able to maintain that level of spending run rate going forward. As we have said when we exited the first quarter, we were on a $25 million expense run rate, so we have improved upon that. And aside from that, that's probably as far we're willing to go in terms of providing any kind of a longer-term breakeven model at this time.

We did talk about the fourth quarter and the gross in the fourth quarter. So we're stepping out a little bit from what we did last call and indicating that the revenues in the fourth quarter would be roughly double what we expect them in the third quarter.

Okay. Is there any further granularity you might be able to give on the $13 million or so revenues in the wind segment, is that largely turbine-related or is there any other previously related kind of grid associated products in there?

No, it's mostly electrical control system shipments There's a small amount of revenue related to license revenue for development for customers like JCNE and Inox, et cetera. But the vast majority of this were product.

The way to think about the 2 businesses, basically draw the line at the turbine. So controls that go into the sell or revenues that generate around wind turbines go in the Windtec segment, and then grid connection for wind, for solar, voltage stabilization and then the power cables all go in the Gridtec segment.

One of the things I'll mention also is that last year, we put some customers in China on cash basis and we deferred recognizing revenue until we received cash for some of those historical shipments. We did receive some cash this quarter from those customers in China. That amount though, was fairly low. It was less than $1 million.

And we'll take our next question from Ben Kallo with Baird. Benjamin J. Kallo - Robert W. Baird & Co. Incorporated, Research Division: Just looking at your customers on the wind side now, has there been a difference in their ordering pattern? I know that Sinovel did those big, chunky contracts with you guys. Are you seeing that from your current customers? And then has your margin profile on your wind side changed at all, maybe because of what's going on with Sinovel or just the overall wind industry there?

If you look at the orders, Ben, in many ways, it's kind of the way the company was operating a few years ago, when we were going through ramp ups of our revenues were really correlated to the ramp up of Sinovel's revenues and their production. Things got to be very clean and I think very predicable with the Sinovel, business because we have long-term contracts with specific quantities in there. When we look at the contracts that we have with the other Chinese partners, with the Indians and the Koreans, we're starting to see multiple year contracts. But again, this is in the beginning of their full commercial ramp-up. So we would still expect, we would see some, perhaps, lumpiness in the revenue. The great thing we see about the backlog is we have a diverse backlog. So when we look specifically on wind, we have backlog in India, Korea and China, and when we look on the grid side, we have backlog all across the globe. So that would lead you to believe you have the beginnings of a much more stable platform on which to grow, and we look forward to being able to deliver that growth in the future. On the margin point, I'll have to leave that to Dave.

Yes, we haven't provided any, and we don't intend to provide at this time, any margin targets or anything like that for individual products. But to amplify on what Dan said on the revenue, what we saw -- what we're seeing now is different customers in each quarter becoming significant parts of our revenue. For instance, in first quarter, our largest revenue contribution came from Doosan. Now we're here in the second quarter, our largest contribution came from Inox. So the diversification theme that Dan was talking about earlier, both on a geographic and in customer.

And there's more content. So going a little bit further, going back almost to the first question, we're already delivering more content to many of these customers than we were only a few years ago. So that's part of the overall strategy, to deliver more value per megawatt.

And that content in the form of ECS products will have a lower margin percentage but greater revenue dollars than did prior shipments to, say, Sinovel, for example, which were just core components that had a higher margin percentage. Benjamin J. Kallo - Robert W. Baird & Co. Incorporated, Research Division: Right. And then looking forward, I know you have several customers that have been ramping up for a while and they're following you in the production, how should we think about your top 3 largest customers by opportunity here? Could you give us some information on that?

I mean, the good thing, Ben, is we're not really thinking about seeing a top customers or 2 or 3. We're seeing very good diversification, maybe you can think of it as a business in China, a business in India and the business in Korea. And we see all 3 on the wind side driving revenue growth going forward.

We'll take our next question from Jim Ricchiuti with Needham & Company. James Ricchiuti - Needham & Company, LLC, Research Division: This is actually just a follow-up to the earlier question. I don't know if you can give us a sense, as you look at Q3 and Q4, whether there'll be some customer concentration in those quarters, particularly Q4, where you see a pretty significant ramp-up.

Jim, I think specifically no. I mean, the things that we're trying to do -- we're focused much more on the diversification of revenue. We are focused on growth. We want to make sure that as we grow the revenues that we get help to diversify our overall growth between those 3 regions.

And Jim, this is Jason, you will tend to see 10%-ish type customers, but you won't see 50%-type of customers in the near term. So that's a good thing for our business. James Ricchiuti - Needham & Company, LLC, Research Division: Okay. Can you remind us on HYDRA? Is there any other color you could provide on that? I mean, if you go back to when you guys first announced that you were prime, and I think it was a $35 million, $40 million contract, what is this going to look like going forward? And when might you see the revenues associated with this as this begins to come online again?

Right. So we are -- we continue to be prime. It's basically the same project that we had developed before with the same partners with Con Ed, with Southwire and obviously, Department of Homeland Security. We got through many phases in the original program. The final phase, which was the deployment in the grid, was put on hold. What we announced today is now a clear path to be able to get that system into Con Ed's grid. We would see the program happening over the next several years and that the contract extension is on the order of $24 million.

And our next question comes from Craig Irwin with Wedbush Securities. [Technical Difficulty] And due to no response, we'll go next to Ben Schuman with Pacific Crest Securities.

Dan, we saw in the Furukawa release that they outlined a goal of $100 million in revenue by 2016 for the 2G HTS businesses that they acquired from Superpower. Is that kind of number consistent with your vision for your business? And what type of capital outlays do you think will be required to get there? I know you're worried about keeping up with those guys in a business where, obviously, scale and cost are going to be important to drive adoption.

I'll deal with the scale and cost part, I mean, you guys have heard our strategy going up to 100 millimeter. We believe that the WIWEB [ph] technology that we developed here and we've already started down the path with 100 millimeter program here. We haven't talked about what our capacity is externally for a period of time. We've done that on purpose because we want to remain ahead. We don't necessarily want competition to know how far behind they actually are. We see this as a great indication that the market continues to turn positively for superconductor cables. We've given numbers in the past on pipelines and things like that I believe and exceeded the numbers that Furukawa is talking about. I think that in many ways, Furukawa getting involved only adds credibility to what we talked about here, and we believe from a 2G standpoint that we are and will remain the world's leader.

Okay. And then on the wind side, can you give us a little bit more color on your outlook for, specifically, Dongfang and Hyundai Heavy? We didn't hear anything about Hyundai Heavy in the press release. And then Dongfang, just curious, which products that they're currently ordering from you in terms of size?

Yes. The specific reason why you didn't hear, again we're focused on quarter-to-quarter, and we didn't have significant revenues from either of those customers this quarter, which does not mean that we won't in subsequent quarters. Again, going back to the diversification theme, what we feel is we have a stable of a number of wind turbine partners that we can receive revenue from each of them in different quarters. Specifically for Dongfang, they're focused on -- they developed a 2.5, but they're focused mostly on a 3- and a 5-megawatt turbine. Our bet and our investment in working with Dongfang leads to the general investment bet in China that larger turbines will matter. And we remain the technology provider and the components supplier for Dongfang for these larger turbines. And one of the things that we did this quarter is we actually started to ship the first units for the 5-megawatt turbine for Dongfang. But again, it wasn't a 10% kind of customer, but hopefully that helps.

It was actually around 11% for Dongfang.

We'll go next to Colin Rusch with ThinkEquity.

Can you talk about the strategic structures you might be considering for the superconductor in wire business? Are you open to strategic investments potential for JVs? How do you think about that going forward?

The way we think about superconductors, I think I can say it quite simply, we see it as a strategic differentiator for our wind and our grid business. We've realigned the business in a way where the machines for wind turbines, the generators really come through the Windtec channel, and then the wire and power cables would go through the Gridtec. We see the superconductor products as a differentiated adder to our product line, and we're going to run them as commercial product lines going forward. As for strategic investments or things like that, we tend not to comment on those types of questions, but we anticipate going forward with the product line that we have today.

Great. And then, as the interconnection rules get clarified in China going forward, is there an opportunity for you to see a little bump in sales moving into the first quarter or first half of 2012?

I think that as there becomes a greater clarity on grid connection, it helps all of our businesses in China. We have the ability to help our wind turbine partners with the more grid-friendly turbines and the larger turbines to take more share in the near term. And we also have the capability on the grid side to be able to provide LVRT features through products like D-VAR and that product line to the grid operator or the wind developer. So all in all, I think a bump could be expected as there becomes greater clarity around what those codes are going to be and when the requirements are going to need to be met.

[Operator Instructions] We'll take our next question from Jin Liu with Ardour capital.

First is about, the question is about your strategy in China. We noticed that the wind power converter price start to decline actually started in the first half of 2010, and also, recently, China sent out a -- they put out a roadmap for wind energy to 2015. Essentially we are looking at flat growth of wind installations in China in the next 5 to 10 years at about 20 gigawatt. Without Sinovel as your customer and without Shenyang [ph], of course you have lot of access to Goldwind, how do you compete -- what's your plan to compete over there? Are you going to compete on price or something else?

We think, JinMing, that initially we're able to compete really on technology and uniqueness of our offering with our partners. We have a bunch of pathways into China, we've talked today about JCNE and Dongfang, XJ Group, which is part of state grid, which may be important in the future. Shenyang Blower Works, Hyundai Heavy has a joint venture with Guotong, and then TECO from Taiwan also is developing a presence in China. So we have 6 different pathways into the Chinese market. These customers are all getting 2-megawatt and larger turbines, which means, in some ways, the price clock resets. So you're seeing price competition around the 1.5-megawatt level. We think as the turbines get bigger, there will be a period of time where that price pressure perhaps isn't that significant. But going forward, for sure, we have to compete with commercial performance, commercial cost of our products. I think you understand the linkage in the business model between our design and our components. So as these partners start to ramp, what we see more is pressure on us to provide the service that's required and the understanding as these partners try to get their orders. Some of our partners actually are now wind farm developers in China, so it gives them a nice home market to be able to sell. And again, that should perhaps change positively the price pressure. But what you're getting at, I think, in the longer term is accurate and we're going to have to be responsive and compete in the marketplace.

Okay. My next question is just to try to clarify the LVRT situation. If I -- I believe, in all of your previous news releases back in the -- for past 2 or 3 years, you made a claim that all your power electronics have the LVRT capacity. But for instance, you mentioned a few hundreds turbines fall off the grid, including a couple of similar turbines using your power electronics. And also, Sinovel rejected your shipment in March, I believe, the power grid code came out sometime in the summer. So I just want to understand the situation here.

Yes, my understanding as of today there's no ratified code and there's no timetable for compliance, and that adds a lack of clarity on how things are going to go forward. From a product capability standpoint, our products have LVRT capability built in. One of the things that seems unique about the Chinese market is it's taken a bit of time for China to really decide what's the standard that they want to hold turbines to. The events where wind turbines tripped offline, I think, were specific to the configuration of those wind farms. And discussions we've had with power companies and with state grid, I think, they understand how to fix them, and perhaps, we could even be part of that solution.

And Jin, this is Jason. To be very clear, earlier this year, and we've talked about is very publicly, we went through successful testing on LVRT with the proposed grid code in China. So we know we can pass that code. We have already passed that code on multiple wind turbine platforms. And so LVRT has always been a focus for us and we're frankly a leader in the space.

We'll take our next question from Jeremy Hellman within Divine Capital Markets.

First, I just wanted to clarify with respect to your cases over in China, are there any key dates that we should be circling on the calendar? Just wondering how the process plays out relative to how it would in the American courts.

The thing I tried to slow down in the prepared remarks. I'm getting feedback through your line. We tried to call out specifically each court that they were in so you have the capability to be able to search through public record to find progress. What we anticipate is that things probably should really start in earnest here probably within the next few months. All the cases, as we mentioned, have been accepted. Arbitration has a very defined process, but one of the things that isn't defined is the timetable that they have to adhere to. So obviously, if there is significant news or material news, we'll make sure that, that gets out and gets reported. But right now, I think we're ready to start the process to enter arbitration and to enter the legal process with the courts.

Okay. And then one unrelated follow-up. And it's something I've never asked about before, and I don't know if and anyone else has brought it up. But is there any market that you see developing around used turbines, either as wind farm operators move up in size from 1.5-megawatt to a larger turbine or swap out for LVRT? Could you see an opportunity in the swap out right there, and then also the resale of used turbines to maybe some kind of a new-frontier-type economies, Africa, et cetera?

Yes, I think your hypothesis isn't necessarily wrong. I think that the opportunity that our company could benefit from would be trying to take new technology and apply it at grid connection for wind turbines. So to be able to make older turbines operate more like newer technology turbines. We have expertise there. There may be an opportunity there for the company, but that would be probably as far as I would look at focusing. Taking used turbines and bringing them to the further developing world, I think there isn't a lot of money to be made for this company.

And this does conclude the question-and-answer session. I would like to turn the call back to CEO, Dan McGahn for any additional or closing remarks.

Thank you very much and thank you all for your time. I'm very happy and very proud of how our team has been able to manage through this transition. I'm very happy that we've been able to report results today that showed that the company is getting back to growth, getting back to stability. I want to thank you all for taking part in this morning's call. We look forward to speaking with you again when we report our Q3 results in early 2012. And in general, I'm looking forward to 2012 and getting 2011 behind me personally, and behind AMSC. Thank you all.

This does conclude today's conference. We thank you for your participation.