American Superconductor Reports Fiscal 2001 Year-End Results.

Business/Technology Editors

WESTBOROUGH, Mass.--(BUSINESS WIRE)--May 15, 2001

American Superconductor Corporation (Nasdaq: AMSC) today reported that revenues for the fiscal year 2001 ended March 31, 2001 increased 11 percent to $16.8 million from $15.1 million in fiscal 2000. The net loss for fiscal 2001 was $21.7 million or $1.08 per share, compared with a net loss of $17.6 million, or $1.11 per share, for the prior year.

The company's cash, cash equivalents and long-term investments totaled $160.2 million as of March 31, 2001, compared with $218.7 million a year earlier. The company ended the year with cash and investments within 5 percent of its plan.

The reported loss and decrease in cash and cash equivalents reflect planned investments primarily in research and development to commercialize high temperature superconductors for advanced electric power applications and planned expansions in wire manufacturing and power electronics operations. Planned increases in property, plant and equipment totaled $36 million.

"We are pleased with the progress we made during our last fiscal year in developing our technologies and products," said Greg Yurek, chief executive officer. "During the last year, we further established our clear leadership in high temperature superconducting wires and applications. We delivered 29 kilometers of HTS wire to Pirelli Cables and Systems for the Detroit Edison cable project, and we successfully demonstrated the world's first 1,000-horsepower HTS motor with Rockwell Automation. We also decreased our price/performance ratio for large volume orders of HTS wire by 33 percent, and we broke ground for the world's first commercial HTS wire manufacturing plant."

Yurek commented that all HTS components for the company's 5,000-horsepower, ultra-compact motor had been fabricated and tested successfully and that the company expects to assemble and test the full motor by the end of July 2001. "The successes we have had with HTS motors during the last fiscal year, including significant new U.S. Navy contracts for the design and development of HTS ship propulsion motors, is very exciting and bodes well for creation of a jointly owned business with a motor OEM this year," Yurek stated. "We are in discussions with potential partners that we believe would help provide a faster path to commercial HTS motors and generators."

Yurek also noted that the company recently received its first non-SMES orders for its commercial power electronic converters known as PowerModules(TM). "We have received one order for a wind turbine application and another for a battery-backed uninterruptible power supply system," he said. "We have provided quotes to 20 additional potential customers for PowerModules in the last 60 days. The strong interest in this highly differentiable power electronics product is gratifying and we intend to continue to build this business aggressively."

American Superconductor successfully deployed the first commercial superconductor product in the power grid when it installed six of its distributed superconducting magnetic energy storage devices (D-SMES) in a power grid run by Wisconsin Public Service. "We are excited by this first-ever application of superconductor technology in the grid," Yurek said. "However, the worldwide economic downturn negatively impacted our planned sales to semiconductor manufacturers, and the continuing uncertainties in the power industry hurt our planned sales to utilities. Although SMES revenues grew 166 percent to $9.3 million from $3.5 million last year, our plan was for much higher revenues.

"Because of the current uncertainties in the marketplace, we have taken measures to control costs in our SMES business through a reduction in non-critical employees, a redeployment of engineering talent to other business units, and a delay in expansion of our SMES assembly and test facilities," said Yurek. "These plans are structured to allow us to ramp up SMES production fairly rapidly as demand for this product grows."

During the last fiscal year, American Superconductor continued to build a strong, vertically integrated patent portfolio, which it sees as core to commercial success. "In addition to building our patent estate during the last fiscal year, we also maintained and built strategic alliances directed to bringing our products to market," Yurek stated. "Last year, GE Industrial Systems joined us as a marketing and sales partner for SMES, and we expect this alliance to continue going forward. In December, we formed a strategic alliance with Litton Ship Systems to bring our HTS and advanced power electronic solutions to commercial and Navy ships, and we also selected ALSTOM Power Conversion, Inc. as a motor subcontractor for our follow-on Navy contracts. These alliance partners are all leaders in their fields and strengthen considerably our hand in product development and commercial success."

The company plans to conduct a conference call to discuss its results and future goals at 11:00 a.m. EDT May 15, 2001. To listen to the call, interested parties may dial [phone] and use access code 18363726. The conference call will also be available via Webcast at http://www.amsuper.com.

The company also plans to post the text of Mr. Yurek's comments on the conference call on its Website the afternoon of May 15, 2001.

American Superconductor

American Superconductor Corporation, headquartered in Westborough, Mass., was founded in 1987 and is a world leader in developing and manufacturing products utilizing superconducting materials and power electronic devices for the power infrastructure. The company's products can dramatically increase the bandwidth and reliability of power delivery networks, significantly reduce the manufacturing costs of electrical equipment such as motors and generators, lower electrical operating costs and conserve resources that are used to produce electric power. See http://www.amsuper.com.

Certain statements in this release, including statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are a number of important factors that could cause actual results to differ materially from those indicated by such forward-looking statements. Such factors include the uncertainties that: the company will be able to obtain the anticipated funding from corporate and government contracts; the company will be able to successfully develop and manufacture commercial products; a robust market will develop for the company's products; and the company will secure anticipated orders. Additionally such factors include: the risk that strategic alliances and other contracts may be terminated; the risk that certain technologies utilized by the company will infringe intellectual property rights of others; the competition encountered by the company, including several large Japanese companies; the amount and timing of the company's future cash requirements and the availability of satisfactory financing sources. Reference is made to these and other factors discussed in the "Management's Discussion and Analysis of Financial Condition and Results of Operation" section of the company's periodic reports filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company's estimates as of May 15, 2001. While the Company anticipates that subsequent events and developments may cause the Company's estimates to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the Company's estimates or views as of any date subsequent to May 15, 2001.

                  American Superconductor Corporation
                             (Nasdaq:AMSC)

                    Results Report for Fiscal 2001


Statement of Operations Data


 Fiscal Year Ended March 31              2001          2000


Revenues
HTS Segment                          $ 7,452,539    $11,610,772
SMES Segment                           9,314,985      3,502,363

Total Revenues (1)                    16,767,524     15,113,135


Net loss                             $21,676,011    $17,597,830

Net loss per share                   $      1.08    $      1.11
(Basic & Diluted)

Weighted average
shares outstanding                    20,127,348     15,820,074


Other Data

Adjusted R&D Expenses (2)            $28,845,762    $22,631,547



Selected Balance Sheet Data        March 31, 2001   March 31, 2000


Cash, Cash Equivalents and           $160,225,103   $218,655,217
   Long-Term Investments

Total Assets                         $239,926,912   $248,914,256

Stockholders Equity                  $227,563,890   $240,944,100


(1)  In fiscal 2001, in addition to reported revenues, the Company
     recorded $261,522 in cost-sharing funding compared with
     $1,967,090 in the prior-year period.

(2)  Consists of company-funded research and development expenses plus
     (i) research and development expenses related to externally
     funded development contracts included in costs of revenue and
     (ii) research and development expenses offset by cost-sharing
     funding under government contracts. The Company believes that
     adjusted research and development expenses provides useful
     information as to the Company's aggregate research and
     development spending.