American Superconductor Corporation announced on 11 July that financial statements included in the quarterly reports (on Form 10-Q) for the fiscal quarters ended September 30, 2010 and December 31, 2010 should no longer be relied upon and would have to be revised.
AMSC has determined that revenues associated with unpaid shipments to certain Chinese customers, but specifically not Sinovel Wind Group, after August 31, 2010 should not be recognised until AMSC is paid for these shipments or payment is otherwise reasonably assured.
In respect of Sinovel, AMSC has determined that this cash-based method of accounting should have been applied for shipments after September 30, 2010. AMSC had previously recognised revenues in the second and third fiscal quarters based upon customer receipt of shipments, but prior to its receipt of payment for such shipments. AMSC reported that no shipments were made to Sinovel and no payments were received from this customer during the first quarter of fiscal 2011.
The company expects that revenues for the fiscal quarters in question will be reduced to approximately $98 million and $43 million, respectively. For the fiscal year ended March 31, 2011, the company expects that revenues will be approximately $307 million. These amounts are preliminary and subject to further adjustment in connection with the company's restatement of its financial statements and the independent audit by PricewaterhouseCoopers LLP. The company is in the process of determining the impact of the errors in revenue on other financial statement balances in the Q2 and Q3 2010 and the fiscal year ended March 31, 2011.
AMSC has therefore not yet completed the preparation of its financial statements for that fiscal year and intends to file revised versions as soon as practicable.
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