AMERICAN SUPERCONDUCTOR CORP DE
For the period ended Mar 31, 2025. Filed May 21, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed May 21, 2025
AMSC$23.39-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-03-31; filed 2024-05-29.
0001437749-24-018602
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-03-31; filed 2025-05-21.
0001437749-25-017986
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 80 current paragraphs.
38 unchanged; 35 reworded; 6 added; 18 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
On August 1, 2024, we entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the selling stockholders named therein. Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, we acquired all of the issued and outstanding shares of Megatran, Industries, Inc. ("Megatran"), for aggregate consideration in an amount equal to $61.4 million, as may be adjusted pursuant to the Stock Purchase Agreement (the “Purchase Price”), including a cash payment after closing of $5.0 million, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement (the “Additional Cash Purchase Price”). At closing, we paid to Megatran's selling stockholders $25.0 million in cash on hand, and 1,297,600 restricted shares of our common stock. On September 23, 2024, we paid the Additional Cash Purchase Price to the selling stockholders, which was calculated based on the agreed upon formula set forth in the Stock Purchase Agreement, in the amount of $8.3 million which includes the Additional Cash Purchase Price and the make whole payment. Megatran's wholly-owned subsidiary, NWL, Inc. ("NWL"), is a U.S.-based global provider of engineered power conversion solutions for demanding industrial and military applications. As a result of this transaction, Megatran became a wholly-owned subsidiary and is operated by our Grid business segment. We refer to this transaction as the "acquisition of NWL".
Current report
Operating income (loss)
Current report
Our operating income (loss)is summarized as follows (in thousands):
Current report
Net income (loss)
Current report
On August 1, 2024, we entered into the Stock Purchase Agreement with the selling stockholders named therein. Pursuant to the terms of the Stock Purchase Agreement and concurrently with entering into such agreement, we acquired all of the issued and outstanding shares of Megatran, for the Purchase Price of $61.4 million, which consideration amount was subject to various adjustments set forth in the Stock Purchase Agreement (including those described below) and consisted of: (a) (i) $25.0 million, minus (ii) the Indebtedness (as defined in the Stock Purchase Agreement) outstanding as of immediately prior to the closing, minus (iii) Company Expenses (as defined in the Stock Purchase Agreement); (b) a number of restricted shares (rounded up or down to the nearest whole share, as applicable) of our common stock equal to the quotient obtained by dividing (x) $31.4 million by (y) the closing price per share of our common stock on the Nasdaq Global Select Market on the last trading day immediately preceding the Acquisition Date; and (c) an additional cash payment equal to $5.0 million, as adjusted pursuant to Sections 5.6(c), (d), and (f) of the Stock Purchase Agreement. Megatran is now a wholly-owned subsidiary of the Company and, together with its wholly-owned subsidiaries and affiliates, is operated and reported as a component of its Grid business segment. On September 23, 2024, the Company paid $3.3 million to the selling stockholders, which was calculated based on the agreed upon formula set forth in the Stock Purchase Agreement. As of September 30, 2024, there are no remaining obligations to the selling stockholders of Megatran.
Current report
In November 2024, the FASB issued ASU 2024-03,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. The amendments in ASU 2024-03 address investor requests for more disclosure of disaggregated financial reporting information about expenses presented in the income statement. Following the release of ASU 2024-03 in November 2024, the effective date will be annual reporting periods beginning after December 15, 2026. We are evaluating the impact on our consolidated financial statements.
Removed paragraphs (18)
Previous report
From time-to-time we may undertake restructuring activities in order to align our global organization in a manner that we believe will better position us to achieve our long-term goals. In January 2023, we undertook a reduction in force that involved approximately 5% of our global workforce. This restructuring has caused us to incur $1.0 million of cash expense which has been fully paid as of March 31, 2024 and is expected to result in annualized cost savings of approximately $5.0 million, which we began to realize in fiscal 2023.
Previous report
In February 2023, we completed the process of determining and verifying our eligibility and amount of payroll tax credits known as the Employee Retention Credit (“ERC”) under the CARES Act which Congress enacted as part of the Taxpayer Certainty and Disaster Tax Relief Act of 2020. This resulted in filing certain amended payroll tax forms for eligible quarters in 2020 and 2021, which, in the aggregate, totaled $3.3 million. We recognized a receivable in prepaid expenses and other current assets and a benefit to cost of revenues and operating expenses in the quarter ended March 31, 2023. In the year ended March 31, 2024, the Company received $3.0 million in payments for the initial claims that were processed. The remaining balance is expected to be paid during fiscal 2024.
Previous report
On February 2, 2024, we completed an offering of 6,210,000 shares of our common stock at a public offering price of $11.25 per share under our then-existing Registration Statement on Form S-3. We received net proceeds of approximately $65.2 million after deducting underwriting discounts and commissions and offering expenses. See Note 1, “Nature of the Business and Operations and Liquidity,” for further information about this offering.
Previous report
During fiscal 2023, we issued 399,999 shares of common stock and cash in lieu of a fractional share of common stock, related to the achievement of specified revenue objectives in connection with the acquisition of NEPSI at a fair value of $3.1 million. One specified revenue objective, which would have earned the selling stockholders 300,000 shares of our common stock, was not achieved, leaving 300,000 shares of common stock remaining for potential issuance upon the achievement of the last specified revenue objective by September 30, 2024. The change in fair value was primarily driven by an increased likelihood of achieving certain revenue targets and an increase in our stock price.
Previous report
Operating loss
Previous report
Our operating lossis summarized as follows (in thousands):
Previous report
China dissolution
Previous report
China dissolution expense was $1.9 million in fiscal 2022. The China dissolution expense during fiscal 2022 was driven by the liquidation of our China entity, resulting in a foreign currency loss from the cumulative translation release of $1.9 million in fiscal 2022. There was no similar transaction in fiscal 2023.
Previous report
Net loss
Previous report
We have experienced recurring operating losses and as of March 31, 2024 had an accumulated deficit of $1,066.7 million.
Previous report
Our cash requirements depend on numerous factors, including the successful completion of our product development activities, our ability to commercialize our Resilient Electric Grid and ship protection system solutions, the rate of customer and market adoption of our products, collecting receivables according to established terms, the continued availability of U.S. government funding during the product development phase of our superconductor-based products and whether Inox is successful in executing on Solar Energy Corporation of India Limited orders or in obtaining additional orders under the new central and state auction regime. We continue to closely monitor our expenses and, if required, expect to reduce our operating and capital spending to enhance liquidity.
Previous report
On February 14, 2024, we completed a public offering of 6,210,000 shares of our common stock at a price of $11.25 per share under our then-existing Registration Statement on Form S-3. We received net proceeds of approximately $65.2 million after deducting underwriting discounts and commissions and offering expenses.
Previous report
In June 2016, the Finan cial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13,Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in ASU 2016-13 will provide more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Following the release of ASU 2019-10 in November 2019, the effective date, as long as the Company remained a smaller reporting company, was annual reporting periods beginning after December 15, 2022. As of April 1, 2023, we have adopted ASU 2016-13, and noted no material impact on our consolidated financial statements.
Previous report
In October 2021, the FASB issued ASU 2021-08,Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in ASU 2021-08 will improve the accounting for acquired revenue contracts with customers in a business combination. Following the release of ASU 2021-08 in October 2021, the effective date was annual reporting periods beginning after December 15, 2022. As of April 1, 2023, we have adopted ASU 2021-08, and noted no material impact on our consolidated financial statements.
Previous report
Valuation of long-lived assets
Previous report
We periodically evaluate our long-lived assets, consisting principally of fixed and amortizable intangible assets for potential impairment. We evaluate our long-lived assets whenever events or circumstances suggest that the carrying amount of an asset or group of assets may not be recoverable from the estimated undiscounted future cash flows.
Previous report
Our judgments regarding the existence of impairment indicators are based on market and operational performance. Indicators of potential impairment include:
Previous report
We evaluate recoverability of long-lived assets and definite-lived intangible assets by estimating the undiscounted future cash flows associated with the expected uses and disposition of those assets. When those comparisons indicate that the carrying value of those assets is greater than the undiscounted cash flows, we recognize an impairment loss for the amount that the carrying value exceeds the fair value. The Company has not made any material changes to the method of evaluating for impairment during the last three years. There were no indicators requiring further impairment testing on our long-lived assets during the fiscal years ended March 31, 2024 or 2023.
Reworded paragraphs (35)
Previous wording
Our power system solutions help to improve energy efficiency, alleviate power grid capacity constraints, improve system resiliency, and increase the adoption of renewable energy generation. Demand for our solutions is driven by the growing needs for modernized smart grids that improve power reliability, security and quality, the U.S. Navy's effort to upgrade onboard power systems to support fleet electrification, and the need for increased renewable sources of electricity, such as wind and solar energy. Concerns about these factors have led to increased spending by corporations and the military, as well as supportive government regulations and initiatives on local, state, and national levels, including renewable portfolio standards, tax incentives and international treaties.
Current wording
Our power system solutions help to improve energy efficiency, alleviate power grid capacity constraints, improve system resiliency, and increase the adoption of renewable energy generation. Demand for our solutions is driven by the growing needs for modernized smart grids that improve power reliability, security and quality, the U.S. Navy's effort to upgrade onboard power systems to support fleet electrification, and the needs for increased renewable sources of electricity, such as wind and solar energy. Concerns about these factors have led to increased spending by corporations and the military, as well as supportive government regulations and initiatives on local, state, and national levels, including renewable portfolio standards, tax incentives and international treaties.
Previous wording
We operate our business under two market-facing business units: Grid and Wind. We believe this market-centric structure enables us to more effectively anticipate and meet the needs of power generation project developers, the Navy's ship protection systems, electric utilities and wind turbine manufacturers.
Current wording
We operate our business under two market-facing business segments: Grid and Wind. We believe this market-centric structure enables us to more effectively anticipate and meet the needs of power generation project developers, the Navy's ship protection systems, electric utilities and wind turbine manufacturers.
Previous wording
We continue to experience some inflationary pressure in our supply chain and some delays in sourcing materials needed for our products, resulting in some production disruption both of which have increased our cost of revenues and decreased gross margin. While the impact of inflation has been challenging, we continue to take actions to limit this pressure including adjusting the pricing of our products and services. Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine, and Israel and Hamas, inflation, rising interest rates, labor force availability, sourcing, material delays and global supply chain disruptions could have a material adverse effect on the Company's business, financial condition and results of operation.
Current wording
Changes in macroeconomic conditions arising from various reasons, such as the ongoing wars between Russia and Ukraine, and Israel and Hamas, tariffs, trade restrictions and resulting trade conflicts, labor force availability, sourcing, material delays and global supply chain disruptions could have a material adverse effect on our business, financial condition and results of operation.
Previous wording
Total revenues increased by 37% to $145.6 million in fiscal 2023 from $106.0 million in fiscal 2022. Our revenues are summarized as follows (in thousands):
Current wording
Total revenues increased by 53% to $222.8 million in fiscal 2024 from $145.6 million in fiscal 2023. Our revenues are summarized as follows (in thousands):
Previous wording
Revenues in our Grid business unit are derived from our D-VAR product sales, Northeast Power Systems, Inc. ("NEPSI") product sales, Neeltran product sales, HTS wire sales, ship protection systems ("SPS"), government-sponsored electric utility projects and other prototype development contracts. We also engineer, install and commission our products on a turnkey-basis for some customers. The Grid business unit accounted for 84% of total revenues in fiscal 2023 and 89% in fiscal 2022. Grid revenues increased 29% to $122.1 million in fiscal 2023 from $94.6 million in fiscal 2022. The increase in revenues was driven by higher NEPSI, Neeltran, and SPS revenues than in the prior year period.
Current wording
Revenues in our Grid business segment are derived from our D-VAR product sales, Northeast Power Systems, Inc. ("NEPSI") product sales, Neeltran, Inc. ("Neeltran") product sales, NWL product sales, HTS wire sales, ship protection systems ("SPS"), government-sponsored electric utility projects and other prototype development contracts. We also engineer, install and commission our products on a turnkey-basis for some customers. The Grid business segment accounted for 84% of total revenues in both fiscal 2024 and 2023. Grid revenues increased 53% to $187.2 million in fiscal 2024 from $122.1 million in fiscal 2023. The increase in revenues was driven by higher D-VAR and NEPSI revenues than in the prior year period along with the NWL revenues earned after the acquisition of NWL.
Previous wording
Revenues in our Wind business unit are derived from wind turbine electrical control systems and core components, wind turbine license and development contracts, service contracts and consulting arrangements. Our Wind business unit accounted for 16% of total revenues in fiscal 2023 and 11% in fiscal 2022. Revenues in the Wind business unit increased 108% to $23.6 million in fiscal 2023 from $11.4 million in fiscal 2022. The increase over the prior year period was driven by additional shipments of electrical control systems ("ECS") at increased prices.
Current wording
Revenues in our Wind business segment are derived from wind turbine electrical control systems and core components, wind turbine license and development contracts, service contracts and consulting arrangements. Our Wind business segment accounted for 16% of total revenues in both fiscal 2024 and 2023. Revenues in the Wind business segment increased 51% to $35.6 million in fiscal 2024 from $23.6 million in fiscal 2023. The increase over the prior year period was driven by additional shipments of electrical control systems ("ECS") at increased prices.
Previous wording
Cost of revenues increased by 13% to $110.4 million in fiscal 2023, compared to $97.5 million in fiscal 2022. Gross margin increased to 24% in fiscal 2023 from 8% in fiscal 2022. The increase in gross margin in fiscal 2023 was due to additional revenues while minimizing fixed factory cost. Fiscal 2023 experienced a favorable product mix in the Wind and Grid business units, with increased service revenues and a sharp improvement in Neeltran project margins.
Current wording
Cost of revenues increased by 46% to $161.0 million in fiscal 2024, compared to $110.4 million in fiscal 2023. Gross margin increased to 28% in fiscal 2024 from 24% in fiscal 2023. The increase in gross margin in fiscal 2024 was due to additional revenues, a favorable product mix, and a sharp improvement in Neeltran project margins.
Previous wording
Research and development (“R&D”) expenses decreased by 11% to $8.0 million, or 5% of revenue in fiscal 2023, compared to $9.0 million, or 8% of revenue, in fiscal 2022. The decrease in R&D expenses is primarily a result of lower total compensation expense and lower materials and consulting expenses.
Current wording
Research and development (“R&D”) expenses increased by 43% to $11.4 million, or 5% of revenue in fiscal 2024, compared to $8.0 million, or 5% of revenue, in fiscal 2023. The increase in R&D expenses is primarily a result of additional total compensation and stock compensation expense due in part to additional employees as a result of the acquisition of NWL.
Previous wording
Selling, general and administrative (“SG&A”) expenses increased by 10% to $31.6 million, or 22% of revenue in fiscal 2023 from $28.7 million, or 27% of revenue, in fiscal 2022. The increase in SG&A expenses is primarily a result of higher total compensation expense.
Current wording
Selling, general and administrative (“SG&A”) expenses increased by 36% to $43.1 million, or 19% of revenue in fiscal 2024 from $31.6 million, or 22% of revenue, in fiscal 2023. The increase in SG&A expenses is primarily a result of higher total compensation expense, additional stock compensation expense and acquisition costs related to the acquisition of NWL.
Previous wording
We recorded $2.2 million in fiscal 2023 and $2.7 million in fiscal 2022 in amortization expense related to our core technology and know-how, customer relationships, and other intangible assets. The decrease in amortization expense is primarily a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets related to NEPSI and Neeltran.
Current wording
We recorded $1.7 million in fiscal 2024 and $2.2 million in fiscal 2023 in amortization expense related to our core technology and know-how, customer relationships, and other intangible assets. The decrease in amortization expense is primarily a result of using the economic consumption method as the basis to amortize the acquired customer relationship intangible assets related to NEPSI and Neeltran, partially offset by the increase related to amortization of NWL related intangibles.
Previous wording
The change in fair value of our contingent consideration for the earnout payment on the NEPSI acquisition resulted in a loss of $4.9 million and $0.1 million in fiscal 2023 and 2022, respectively.
Current wording
The change in fair value of our contingent consideration for the earnout payment on the acquisition of NEPSI resulted in a loss of $3.4 million resulting from an increase in fair value in fiscal 2024, and $4.9 million during fiscal 2023. During fiscal 2024, we issued 300,000 shares of our common stock to the selling stockholders following certification of the achievement of specified earnout revenue objectives. We also recorded a $3.3 million payment relating to the acquisition of NWL, as a payment to settle the remaining obligations after the acquisition. The value of this contingent consideration was de minimis at the Acquisition Date and the resulting change in fair value was recorded in September 2024 when the payment was calculated and paid.
Previous wording
Our Grid business segment generated an operating loss of $2.8 million in fiscal 2023 and $24.6 million in fiscal 2022. The decrease in the Grid business unit operating loss was due to higher revenues and gross margins, compared to fiscal 2022.
Current wording
Our Grid business segment generated operating income of $1.8 million in fiscal 2024 and operating loss of $6.9 million in fiscal 2023. The improvement in the Grid business segment was due to higher revenues and gross margins in fiscal 2024, compared to fiscal 2023.
Previous wording
The Wind segment generated operating income of $0.9 million in fiscal 2023 and an operating loss of $2.5 million in fiscal 2022. The increase in the Wind business unit operating income was due to higher revenue and gross margins in fiscal 2023, compared to fiscal 2022.
Current wording
The Wind segment generated operating income of $3.8 million in fiscal 2024 and $0.4 million in fiscal 2023. The increase in the Wind business segment operating income was due to higher revenue and gross margins in fiscal 2024, compared to fiscal 2023.
Previous wording
Unallocated corporate expenses in fiscal 2023 consisted of a loss on contingent consideration of $4.9 million and stock-based compensation expense of $4.7 million. Unallocated corporate expenses in fiscal 2022 consisted of a loss on contingent consideration of $0.1 million, stock-based compensation expense of $4.7 million, and a restructuring charge of $1.0 million.
Current wording
Unallocated corporate expenses consisted of a loss on contingent consideration of $6.7 million in fiscal 2024, and a loss on contingent consideration of $4.9 million infiscal 2023.
Previous wording
Interest income, net was $1.3 million in fiscal 2023 compared to $0.3 million for fiscal 2022. The increase in interest income, net, was primarily due to increased interest rates in fiscal 2023 and higher cash balances.
Current wording
Interest income, net was $3.7 million in fiscal 2024 compared to $1.3 million for fiscal 2023. The increase in interest income, net, was primarily due to higher cash balances in fiscal 2024.
Previous wording
Other expense, net was $0.7 million in fiscal 2023, compared to $0.1 million in fiscal 2022. The increase in other expense was driven by the impacts of unfavorable fluctuations in foreign currencies in fiscal 2023.
Current wording
Other expense, net was $0.3 million in fiscal 2024, compared to $0.7 million in fiscal 2023. The decrease in other expense was driven by the impacts of more favorable fluctuations in foreign currencies in fiscal 2024, compared to fiscal 2023.
Previous wording
We recorded an income tax expense of $0.3 million in fiscal 2023, compared to $0.2 million in fiscal 2022. The increase in income tax expense is a result of higher income tax in foreign jurisdictions.
Current wording
We recorded an income tax benefit of $3.7 million in fiscal 2024, compared to income tax expense of $0.3 million in fiscal 2023. The net improvement in income tax is a result of the release of the valuation allowance due to the recording of the deferred tax liability from the acquisition of NWL.
Previous wording
Net loss was $11.1 million in fiscal 2023, compared to net loss of $35.0 million in fiscal 2022. The decrease in net loss was driven primarily by higher revenues and gross margins in fiscal 2023 partially offset by the increase in fair value of contingent consideration in fiscal 2023.
Current wording
Net income was $6.0 million in fiscal 2024, compared to net loss of $11.1 million in fiscal 2023. The improvement in net income was driven primarily by higher revenues and gross margins in fiscal 2024 and other factors described above.
Previous wording
Non-GAAP Financial Measure - Non-GAAP Net Income (Loss)
Current wording
Non-GAAP Financial Measure - Non-GAAP Net Income
Previous wording
We define non-GAAP net income (loss) as net income (loss) before stock-based compensation, amortization of acquisition-related intangibles, change in fair value of contingent consideration, China dissolution, ERC tax benefit, and other non-cash or unusual charges. We believe non-GAAP net income (loss) assists management and investors in comparing our performance across reporting periods on a consistent basis by excluding these non-cash charges and other items that we do not believe are indicative of our core operating performance. In addition, we use non-GAAP net income (loss) as a factor to evaluate the effectiveness of our business strategies. Areconciliation of GAAP to non-GAAP net income (loss) is set forth in the table below (in thousands, except per share data):
Current wording
We define non-GAAP net income as net income (loss) before stock-based compensation, amortization of acquisition-related intangibles, change in fair value of contingent consideration, acquisition costs, and other non-cash or unusual charges. We believe non-GAAP net income assists management and investors in comparing our performance across reporting periods on a consistent basis by excluding these non-cash charges and other items that we do not believe are indicative of our core operating performance. In addition, we use non-GAAP net income as a factor to evaluate the effectiveness of our business strategies. Areconciliation of GAAP net income (loss) to non-GAAP net income is set forth in the table below (in thousands, except per share data):
Previous wording
We incurred non-GAAP net incomeof $0.6 million or $0.02 per share for fiscal 2023, compared to non-GAAP net loss of $28.8 million, or $1.03 per share, for fiscal 2022. The improvement in the non-GAAP net income in fiscal 2023 compared to fiscal 2022 was due to an improved operating loss driven by higher revenues and gross margins.
Current wording
Non-GAAP net income was$24.0 million, or $0.65 per share, for fiscal 2024, compared to $0.6 million, or $0.02 per share, for fiscal 2023. The improvement in non-GAAP net income in fiscal 2024 compared to fiscal 2023 was due to improved operating income driven by higher revenues and gross margins.
Previous wording
At March 31, 2024, we had cash, cash equivalents and restricted cash of $92.3 million, compared to $25.7 million at March 31, 2023, an increase of $66.6 million. As of March 31, 2024, we had approximately $4.0 million in cash, cash equivalents and restricted cash in foreign bank accounts. Our cash, cash equivalents and restricted cash are summarized as follows (in thousands):
Current wording
The Company’s primary sources of liquidity are internally generated cash provided by operating activities, our cash and cash equivalents on hand, along with access to capital markets. The Company believes that these sources of liquidity provide adequate liquidity to meet both its short-term and reasonably foreseeable long-term requirements and obligations. At March 31, 2025, we had cash, cash equivalents and restricted cash of $85.4 million, compared to $92.3 million at March 31, 2024, a decrease of $6.9 million. As of March 31, 2025, we had approximately $4.7 million in cash, cash equivalents and restricted cash in foreign bank accounts. Our cash, cash equivalents and restricted cash are summarized as follows (in thousands):
Previous wording
Net cash provided by operating activities was $2.1 million compared to net cash used in operating activities of $22.5 million in fiscal 2023 and 2022, respectively. The increase in net cash provided by operations in fiscal 2023 compared to fiscal 2022 was driven primarily by higher gross margins, increased cash collections, and relief of deferred revenue from prior fiscal periods.
Current wording
Net cash provided by operating activities was $28.3 million compared to net cash used in operating activities of $2.1 million in fiscal 2024 and 2023, respectively. The increase in net cash provided by operations in fiscal 2024 compared to fiscal 2023 was driven primarily by higher gross margins, favorable changes in accounts payable and accrued expenses, relief of deferred revenue, increased non-cash expenses like stock-based compensation, depreciation and amortization, and change in fair value of contingent consideration, offset by decreased cash collections, increased prepaid balances, and change in deferred income taxes.
Previous wording
Net cash used in investing activities was $1.0 million and $1.5 million in fiscal 2023 and 2022, respectively. The decrease in net cash used in investing activities in fiscal 2023 compared to fiscal 2022 was due primarily to lower investment in property, plant, and equipment in fiscal 2023 compared to fiscal 2022.
Current wording
Net cash used in investing activities was $35.2 million and $1.0 million in fiscal 2024 and 2023, respectively. The increase in net cash used in investing activities in fiscal 2024 compared to fiscal 2023 was due primarily to cash paid for the acquisition of NWL.
Previous wording
Net cash provided by financing activities was $65.4 million and $0.2 million in fiscal 2023 and 2022, respectively. The increase in net cash provided by financing activities in fiscal 2023 compared to fiscal 2022 was primarily dueto the equity raise in February 2024.
Current wording
Net cash provided by financing activities was less than $0.1 million compared to $65.4 million in fiscal 2024 and 2023, respectively. The decrease in cash provided by financing activitieswas primarily related to net proceeds received from an equity offering in fiscal 2023, while the Company had no equity offerings in fiscal 2024.
Previous wording
At March 31, 2024, we had $1.3 million of restricted cash included in long-term assets and $0.5 million of restricted cash in current assets. At March 31, 2023, we had $0.6 million of restricted cash included in long-term assets and $1.7 million of restricted cash in current assets. These amounts included in restricted cash primarily represent collateral deposits to secure surety bonds and letters of credit for various customer contracts. These deposits are held in interest bearing accounts.
Current wording
At March 31, 2025, we had $4.3 million of restricted cash included in long-term assets and $1.6 million of restricted cash in current assets. At March 31, 2024, we had $1.3 million of restricted cash included in long-term assets and $0.5 million of restricted cash in current assets. These amounts included in restricted cash primarily represent collateral deposits to secure surety bonds and letters of credit for various customer contracts. These deposits are held in interest bearing accounts.
Previous wording
We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the consolidated balance sheet as of March 31, 2024, while others are considered future commitments. We have various contractual arrangements, under which we have committed to purchase certain minimum quantities of goods or services on an annual basis. For information regarding our other contractual obligations, refer to Note 12, "Contingent Consideration," Note 14, "Debt," Note 15, "Leases" and Note 17, "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Current wording
We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the consolidated balance sheet as of March 31, 2025, while others are considered future commitments. We have various contractual arrangements, under which we have committed to purchase certain minimum quantities of goods or services on an annual basis. For information regarding our other contractual obligations, refer to Note 13, "Contingent Consideration," Note 16, "Leases", and Note 18, "Commitments and Contingencies" to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Previous wording
We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months. We recently raised $65.2 million, net of offering expenses, through an equity raise in February 2024. In addition, we may seek to raise additional capital, which could be in the form of loans, convertible debt or equity, to fund our operating requirements and capital expenditures. Our liquidity is highly dependent on our ability to increase revenues, control our operating costs, and raise additional capital, if necessary. There can be no assurance that we will be able to raise additional capital on favorable terms or at all or execute on any other means of improving our liquidity as described above. Additionally, the impact of global sources of instability, including the ongoing wars between Russia and Ukraine and Israel and Hamas, instability of financial institutions and political instability in the United States, on the global financial markets may reduce our ability to raise additional capital, if necessary, which could negatively impact our liquidity. We also continue to closely monitor our expenses and, if required, we intend to reduce our operating and capital spending to enhance liquidity.
Current wording
We believe we have sufficient available liquidity to fund our operations and capital expenditures for the next twelve months. We may seek to raise additional capital, which could be in the form of loans, convertible debt or equity, to fund our operating requirements and capital expenditures. There can be no assurance that we will be able to raise additional capital on favorable terms or at all or execute on any other means of improving our liquidity as described above. Additionally. the impact of global sources of instability, including tariffs, trade restrictions and resulting trade conflicts, the ongoing wars between Russia and Ukraine and Israel and Hamas, instability of financial institutions and political instability in the United States, on the global financial markets may reduce our ability to raise additional capital, if necessary, which could negatively impact our liquidity.
Previous wording
In November 2023, the FASB issued ASU 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. Following the release of ASU 2023-07 in November 2023, the effective date will be annual reporting periods beginning after December 15, 2024. As of March 31, 2024, we are evaluating the impact on our consolidated financial statements.
Current wording
In November 2023, the FASB issued ASU 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in ASU 2023-07 improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. Following the release of ASU 2023-07 in November 2023, the effective date will be annual reporting periods beginning after December 15, 2024. As of March 31, 2025, we have adopted ASU 2023-07 and made the required disclosures, and noted no other material impact on our consolidated financial statements.
Previous wording
In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. Following the release of ASU 2023-09 in December 2023, the effective date will be annual reporting periods beginning after December 15, 2024. As of March 31, 2024, we are evaluating the impact on our consolidated financial statements.
Current wording
In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. Following the release of ASU 2023-09 in December 2023, the effective date will be annual reporting periods beginning after December 15, 2024. We are evaluating the impact on our consolidated financial statements.
Previous wording
In March 2024, the FASB issued ASU 2024-02,Codification Improvements—Amendments to Remove References to the Concepts Statements. The amendments in ASU 2024-02 contain amendments to the Codification that remove references to various FASB Concepts Statements. Following the release of ASU 2024-02 in March 2024, the effective date will be annual reporting periods beginning after December 15, 2024. As of March 31, 2024, weare evaluating the impact on our consolidated financial statements.
Current wording
In March 2024, the FASB issued ASU 2024-02,Codification Improvements—Amendments to Remove References to the Concepts Statements. The amendments in ASU 2024-02 contain amendments to the Codification that remove references to various FASB Concepts Statements. Following the release of ASU 2024-02 in March 2024, the effective date will be annual reporting periods beginning after December 15, 2024. Weare evaluating the impact on our consolidated financial statements.
Previous wording
For certain arrangements, such as contracts to perform research and development, prototype development contracts and certain customized product sales, we record revenues using the over-time method, measured by the relationship of costs incurred to total estimated contract costs. Over-time revenue recognition accounting is predominantly used on certain turnkey power systems installations for electric utilities and long-term prototype development contracts with the U.S. government. In addition, some contracts contain an element of variable consideration, including liquidated damages and/or penalties, which requires payment to the customer in the event that delivery timelines or milestones are not met. We estimate the total consideration payable by the customer when the contracts contain variable consideration provisions, based on the most likely amount anticipated to be recognized for transferring the promised goods or services. As a result, we may constrain revenue to the extent that a significant reversal in the amount of cumulative revenue recognized will not occur until the uncertainty associated with the variable consideration is subsequently resolved.
Current wording
For certain arrangements, such as contracts to perform research and development, prototype development contracts and certain customized product sales, we record revenues using the over-time method, measured by the relationship of costs incurred to total estimated contract costs. Over-time revenue recognition accounting is predominantly used on certain turnkey power systems installations for electric utilities and long-term prototype development contracts with the U.S. government.
Previous wording
Significant judgement is required to estimate the total expected costs and variable consideration for projects that typically have a timeline of 12-24 months. Any increase or decrease in estimated costs to complete a performance obligation without a corresponding change to the contract price could impact the calculation of cumulative revenue to date and gross profit on the project. Similar, if we recognize revenue based upon our current estimate of variable consideration, and our estimate is later adjusted, we may be required to increase or decrease cumulative revenue to date and gross profit on the project. Factors that may result in a change to our estimate include delays in manufacturing, unforeseen engineering problems, the performance of subcontractors and material suppliers, among others.
Current wording
Significant judgement is required to estimate the total expected costs for projects that typically have a timeline of 12-24 months. Any increase or decrease in estimated costs to complete a performance obligation without a corresponding change to the contract price could impact the calculation of cumulative revenue to date and gross profit on the project. Factors that may result in a change to our estimate include delays in manufacturing, unforeseen engineering problems, the performance of subcontractors and material suppliers, among others.
Previous wording
We account for acquisitions using the purchase method of accounting in accordance with Accounting Standards Codification ("ASC") 805,Business Combinations. The purchase price for each acquisition is allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired is recorded as goodwill. Intangible assets, if identified, are also recorded.
Current wording
We account for acquisitions using the purchase method of accounting in accordance with Accounting Standards Codification ("ASC") 805,Business Combinations. The purchase price for each acquisition is allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess purchase price over the estimated fair value of the net assets acquired and liabilities assumed is recorded as goodwill. Intangible assets, if identified, are also recorded.
Previous wording
We performed our annual assessment of goodwill on February 29, 2024 and noted no triggering events from the analysis date to March 31, 2024 and determined that there was no impairment to goodwill. See Note 4, “Goodwill,” for further information regarding our goodwill valuation assumptions.
Current wording
We performed our annual assessment of goodwill on February 28, 2025 including a quantitative assessment of our goodwill balance acquired from our acquisition of Neeltran, and a qualitative assessment of all other reporting units goodwill, and determined that there was no impairment to goodwill. See Note 5, “Goodwill,” for further information regarding our goodwill valuation assumptions.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In August 2024, the Company filed an automatically-effective shelf registration statement on Form S-3 that will expire no later than August 12, 2027 (the “Second Form S-3”). The Second Form S-3 allows the Company to offer and sell from time-to-time unspecified amounts of common stock, debt securities, warrants or units comprised of any combination of these securities and allows certain selling stockholders to offer and sell from time-to-time common stock. The Second Form S-3 assisted the Megatran selling stockholders in the resale of their common stock and is intended to provide the Company flexibility to conduct registered sales of its securities, subject to market conditions, in order to fund its future capital needs. The terms of any future offering under the Second Form S-3 will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering.