Good day everyone and welcome to American Superconductor’s third quarter conference call. (Operator Instructions). With us on the call this morning are American Superconductor’s Founder and CEO, Greg Yurek; Senior Vice President and CFO, David Henry, and Investor Relations Director Jason Fredette. For opening remarks, I would like to turn the call over to Mr. Jason Fredette.

Thanks Jimmy. I would like to point out that certain remarks we make this morning regarding our financial forecasts and other beliefs, plans and expectations constitute forward-looking statements. There are number of risks and uncertainties that may cause actual results to differ significantly from these statements. Please refer to our 10-K, which was filed with the SEC on June 14, 2007 and our subsequent 10-Qs for information about these risks and uncertainties. I would also like to note that we will be referring to EBITDAS this morning for earnings before interest income, other non-operating expense, income taxes, depreciation, amortization and stock compensation. EBITDAS is a non-GAAP financial metric. A reconciliation of EBITDAS to net loss on a GAAP basis is included in the press release we issued and filed with the SEC this morning on Form 8-K. All of our SEC filings can be accessed in the Investor Section of our website at www.amsc.com. And now, I’ll turn the call over to Greg.

Thanks Jason. And good morning everyone. I’m very pleased to report that in the third fiscal quarter, we achieved the strongest quarterly results in the history of our company. More specifically, we achieved record revenues with third quarter sales more than tripling over our prior year numbers, and we achieved record gross margins for the quarter, solidly above our year ago performance, based on increasing sales of our AMSC Power Systems business. We’re also on the cusp of being EBITDAS positive, an important milestone on our path to GAAP profitability. And our current business, as well as our outlook for next fiscal year and beyond, is quite strong. The fundamental reason for this positive outlook is that we’re addressing two long-term global mega-trends that are resistant to slowdown that may be experienced in other sectors. These two sectors are wind generation of electricity and the build-out of the electric power grid infrastructure here and around the world. Let me expand a bit on these core market drivers. First, adoption of wind power continues to escalate globally. Earlier this month the Global Wind Energy Council issued a report saying that another 20 gigawatts of wind power was installed worldwide in 2007, increasing global capacity to 94 gigawatts − that’s up 27% from a year ago. And were it not for the industry’s turbine supply constraints, those numbers would’ve been even higher. Issues like pollution and global warming have prompted virtually every established and emerging country to set long-term incentives and targets for renewable sources of energy. For instance, just last week the European Commission issued a directive for all member states to cut greenhouse gas emissions by 20%, and increase their use of renewable energy to 20% by 2020. Recent reports out of China estimate that wind power capacity in that…

Thanks Craig, and good morning everyone. A transformation has been taking place here at AMSC over the past two years. What had been an R&D company with great ideas and revolutionary technologies has evolved into a business with commercial products and strengthening financials. Our Q3 numbers clearly reflect this exciting transition. Revenue for the third quarter of fiscal 2007 was a record $32.6 million, up 51% sequentially and 245% from $9.5 million in the year ago quarter. This was our fourth consecutive quarter of sequential revenue growth. Of this total, AMSC Power Systems generated a record $28.9 million, which is up more than 300% from $7.1 million in the third quarter of fiscal 2006. The major driver of the increase is sales of electrical components and systems for wind turbine. Our AMSC Superconductor segment generated $3.7 million of Q3 revenue, which is up 58% from $2.3 million in the year ago quarter. This increase is primarily the result of work performed on new development contracts such as the fault current limiter project for Southern California Edison and Project HYDRA in Manhattan. We entered the fourth quarter of fiscal 2007 with approximately $168 million in backlog. That’s down a bit from $180 million on September 30. However, we’ve added more than $25 million in new orders and contracts in January 2008. We remain on track to achieve our revenue forecast for the current fiscal year and will enter our new fiscal year in April with a substantial fraction of our fiscal 2008 revenues in backlog. I’ll get to our updated forecast in just a few minutes. Gross profits for the third quarter was $9.4 million, resulting in a record gross margin of 28.7%. This compares to gross margin of 26% in the second quarter of fiscal 2007 and a negative 21.1%…

(Operator Instructions) We’ll go ahead and take our first question from Carter Shoop - Deutsche Bank.

For my one question, could you help out a little bit in understanding the upside in the quarter relative to expectations and assuming that Sinovel, could you give us a percentage of revenue for the quarter from Sinovel?

This is the revenue upside, correct? And I think where that came from was on the Power System side. I think Sinovel was a contributor and also the exchange rates is also a contributor; the dollar continues to weaken and our Sinovel revenue were denominated in Euro. And that provided maybe about a million dollars of favorable impact this quarter, and also utilities as well. But then also, you asked a question about Sinovel, Sinovel was around 52% of revenue in the third quarter.

And we’ll go and take our next question from Jim Ricchiuti - Needham & Company. Jim Ricchiuti - Needham & Company: Just with respect to gross margins in the current quarter you are coming off a very strong quarter in December, but I was just wondering with the ramp up in the wire business where we see more of the R&D going up into cost of goods and as a result, could we see a gross margin come down this quarter?

I would say that the gross margin driver will be more Power Systems I think than it is going to be Superconductors, simply because that during the first year of production, the yields they are not going to be great, when we are just starting to initiate production. So, I would say that the gross margin driver is really going to be on the Power System side. And the fact that we’re starting up in China, we’ll be producing product in China sometime in the first half of calendar year 2008. So, I would say that’s going to be the primary gross margin driver and not necessarily capacity utilization year for Superconductors.

Jim let me just add to that as well. There will be nothing unusual that we see this quarter while going through the rest of this year, calendar year 2008, in terms of ramping up the expenses in the Superconductor business units. We’re kind of at steady-state until we have to ramp up capacity. And we will let you know when that occurs, beyond our current level, that is.

We’ll hear next from Corey Tobin - William Blair.

Very nice quarter. A couple of things Greg, you mentioned on the proposal activity. Just very quickly, can you just give us more details on this? You mentioned it was up dramatically in the last 12 months. Any details in terms of what types of products; what regions; when they would be awarded and delivered? Stuff like that would be helpful.

In our product areas, I’m speaking about the Static VAR Compensators, or SVCs as we call them, as well as the D-VAR, so it is reactive compensation market there have been a slew of new requests for proposals that have come out from the utilities through calendar ‘07. There are five larger SVC contracts that were let, and we got two out of the five, by the way. And we don’t see anything slowing down there. It is only increasing. We will be addressing those opportunities with both our SVC and D-VAR opportunities. And more generally speaking, if I look at the need for building out the grid in terms of power lines and cables, cables are underground. Clearly the activity has picked up strongly in terms of the desire to adopt high temperature superconductor power cables, so our activity also on the side of superconductor cables with utilities has ramped quite a bit. Utilities are fixing up the grid; they are in that mode now, doubling their investment year-over-year from 4 to $8 billion this is decade, which has only two years left in it. So it’s a great opportunity for us, and we’re taking advantage of it.

Stuart Bush with RBC Capital Markets has our next question.

Can you give us some more color on why the booking level was so weak in the quarter? I calculate a 0.6 book-to-bill, which seems rather low given the macro end market environment. And can you clarify if the $25 million payment from the Department of Homeland Security is a pass-through cost at zero margin?

We had a quite a buildup in backlog through the September quarter. Things slowed down during that third quarter in terms of the bookings. Clearly that picked up strongly again in this quarter, already January having booked over $25 million of new orders. And on the Homeland Security project, $25 million of revenue expected on that, I will let Dave answer that in terms of the amount of pass-through there.

We won’t disclose how much of that revenue will come from internally generated costs as opposed to external, but the majority will be external. And so, yes, a lot of that will be pass-through revenue. But not, that’s not all occurring next year; that’s going to occur through 2010.

We’ll take our next question from Walter Nasdeo - Ardour Capital.

I’d like to jump back over to the wires, if I could. Can you tell what your current capacity is; how many machines you have in place? And what is the lead-time for each new machine that you order?

Walter, I couldn’t give too much detail, that’s competition-sensitive. But in fact our gross capacity is what we said: 720,000 meters per year gross capacity. How many machines? I’m not going to give that information out per se. There are ten steps in the manufacturing process. That’s out there publicly. But to your question of lead time, the machines have been designed and now in the implementation are being used. We believe we have six months, maybe as long as nine months, but about a six month lead time from put the order in, get it bolted down and commissioned qualified in the overall process. So it’s a pretty rapid turnaround. That’s been our strategy for some time now: keep the brakes on until you see those orders flowing in; look over the horizon a bit, and then put the orders in and break whatever the bottlenecks might be in the line to increase that capacity. Another $5 to $7 million of CapEx takes us from a gross capacity of 720,000 meters to about 2.7 million meters per year gross capacity, if that helps you out.

Next we will take a question from Paul Clegg - Jefferies.

Congrats on the quarter also. Your backlog is looking nice here if you include the January numbers. And it sound like 2008 is fairly well covered by the backlog. Can you talk a bit about the components of that backlog and how it breaks up between different products? And maybe how that differs from the current revenue mix in 2007?

We won’t provide in this call the components of the backlog and how it breaks down between Power Systems and Superconductors. What I will say though is just reiterate some of the things that we mentioned in the call that we expect roughly 85% of revenue to come from Power Systems this year. And that when we talked about our model at Analyst Day, when we talked about where our breakeven lines were for EBITDAS and things like that, those were all predicated on a model that said 90% Power Systems, 10% Superconductors revenue. You could probably extrapolate from that that our order patterns are following along those same lines.

And we’ll hear next from Michael Carboy - Signal Hill.

Given the DSOs inventory turn improvement, which suggests that maybe the quarter closed down a little early, and given the tremendous performance, I am wondering whether a positive, but not as exuberant increase in outlook perhaps reflects concerns that you folks may have with regard to double bookings throughout the wind power industry worldwide. Can I get you to elaborate a little bit on that, Greg?

Michael thanks for that interesting question. Look, we’re very positive about our outlook not only for the rest of this fiscal year but for next year. Previous question related to how much backlog we have toward the $150 million plus in revenue we expect for our next fiscal year. We’ve got a good, strong running start there. Not quite sure where you’re going with this, but if you look at ZELRI starting to ramp up and AAER Systems starting to ramp up in terms of the core electrical components, as well as the full electrical systems, that’s all in the right direction. We do think we’re going to sign on more licensees, which will give us some upfront license fees or development costs that come in. But there will be more razor blades we’ll be able to sell there. We’re very positive and upbeat about our outlook for next fiscal year starting on April 1. But I don’t see any need to overdo it either in terms of what we say here.

But, Mike, let me add that we’re not seeing any double bookings. And the DSO in terms of growth may not be because per se that the quarter was wrapped up early. As I mentioned at Analyst Day as well, I do have an objective of trying to reduce our usage of working capital so that we can obviously generate more cash. Besides our EBITDAS positive goals and our GAAP profitable goals we want to get to operating, and at the end of the day, net cash flow positive. So we are cautiously trying to reduce the amount of cash that’s used by working capital. And this is just a start. I’m not claiming victory yet. We’ve got a long way to go. You might be reading in too much to what you’re seeing there.

We’ll take our next question from Brian Yerger - Jesup & Lamont. Brian Yerger - Jesup & Lamont: The two issues related to the backlog, which I may have missed, real quickly. The $25 million in bookings for January, that excludes the HYDRA contract?

No, it does not. It includes HYDRA. It’s basically the net of what we had already received under letter contracts previously executed with them, and the amount of the final contract that we just initiated with them.

There’s also included in that, of course, are the new orders from ZELRI and AAER Systems.

(Operator Instructions) We’ll go back to Carter Shoop with Deutsche Bank.

Maybe before my question, if you would talk a little bit about the linearity in the quarter from they revenue side, that might help on the balance sheet question. And then for my question, I wanted to talk a little bit about the strategic transformation that we’re seeing here on American Superconductor that Greg talked about in moving from an R&D company more to a full production and manufacturing company. And what investment in people and personnel are you making for that adjustment in the business model?

Let me address the second one first, and then we’ll turn it back to Dave for the first part of your question. So you’re right. We’re ramping up and have ramped up. We have 350 people now. We were less than 300 at the beginning of the fiscal year. I commented on China, for example. We’re starting up our manufacturing operation there for PowerModule. This is the first half of calendar ‘08. Well on our way there. We’re going to meet that objective. And we are at 40 Chinese employees there right now. And again, it is not just manufacturing, it’s field service and sales as well. But by this time next year we’ll be over 100 Chinese employees to meet the growth of our business in China; just alone China, so a lot going on there. In terms of our operations in Austria, the design of wind turbine systems ramped up our people there. We’re adding more people there because in order to take on more licensees and do more development, custom-designed wind turbines for other customers, we need the people there. And we’re adding those people there as well. By the way, the same is true out in Wisconsin, our North American operations for Power Systems. Here at Superconductors we have added people and we’re continuing to add people. But we had most of those people in place over the summer time, so these are relatively small adds as we now go into production of the 344 Superconductors. Overall from a people side, that number is going up considerably to support growth. People ask me what’s the biggest challenge? What keeps you up at night? It is managing growth. Good news is I think we’re doing a great job here at AMSC managing that growth. I don’t know if I’m addressing your question there, but that would be my general answer. And I will turn it back to Dave on the first part of your question.

With respect to your question on linearity, our sales are not front-end loaded or back-end loaded. And I will give you two reasons why. The first reason is we talked about Sinovel being roughly half of our revenue. We ship and record revenue to Sinovel basically on shipment. We have a fairly linear stream of orders and deliveries, commitments to Sinovel. And so those occur relatively ratably through the quarter. There is no front-end loading or back-end loading to them. The second reason − and we talked about our SVC projects, some of our D-VAR projects and our superconductors projects − a lot of those are recorded on percentage completion. That screams linearity when you’re talking about percentage of completion, because we don’t have the resources to be doing nothing for 2 1/2 months, and then get everybody to do everything in the last couple weeks of the quarter. I would say that our revenues are fairly linear and there’s not a discernible front-end or back-end loading either way.

Next from the Center for Performance Investing, we will hear from Robert Smith. Robert Smith – Center for Performance Investing: My question is centered on a specific project. And I know that one project isn’t key, but I would like to hear your thoughts, Greg, on what’s happening up in Cape Cod and almost in your backyard, so to speak. And how important do you think this is going to be how it plays out?

So I assume you’re talking about the Cape Wind project? Robert Smith – Center for Performance Investing: Yes.

We love the wind industry and it’s a huge engine for growth for our company. Clearly, the trend in the industry is toward offshore wind. The U.K. right now, I would say, is taking the lead in terms of where the build-out is going. We have 100% of the business (inaudible) to grid interconnection in the U.K. with our D-VAR products, so I expect more growth there. When you think of offshore, think of superconductor generators. You can get to the 10 megawatt generators. Recall that we are, since last, I think it was October, in a co-development program with TECO-Westinghouse Motor Company to use basically our Navy technology for rotating machines now with superconductor wind generators, because you want more power generated per tower that you construct offshore. So I don’t know if Cape Wind is going to be the first offshore wind farm in the U.S. More likely, it is going to be off Galveston, Texas, from what I can discern. Offshore is clearly the trend. I think it is only about single digit percentage of the total wind energy generated today is offshore. That’s a big growth area. By the way, by the end of 2009, China expects to have the first offshore wind farm up and operating off Shanghai. We think we’ll be participating there one way or another. So, let’s not get into the politics or whatever it is about Cape Wind project, but think offshore, that’s the direction where the industry is going. We have multiple plays there and already participating in the U.K. in fact, with our D-VAR grid interconnection product.

And we will go back to Jim Ricchiuti - Needham & Company. Jim Ricchiuti - Needham & Company: It looks like Sinovel was about 62% of Power Systems revenue. I wonder how should we think about the customers as we go through the next several quarters? You are adding customers. Can you give us a sense as to where you might see Sinovel as a percentage of Power Systems revenue in the next six to nine months?

We talked about detailed percentages certainly in the Q. But Jim, we said it before, I know we talked about it a lot at Analyst Day. How should we look at Sinovel? Really good customer. We love them. We take care of them. We’ve won the base of operations in China and we’re building that out. They love that, but so does ZELRI, so does Dongfang Steam Turbine Works, which by the way, is now the third largest wind turbine manufacturer in China behind Sinovel and second largest in China. Dongfang Steam Turbine Works is another one of customers, and they are looking to ramp up production in 2009 as well. So we love this customer; I think we’re going to see a lot of business from them over a lot of years. By the way, their production schedule says they are going to put 3 megawatt wind turbines that were designed for them right now in 2009. And they’re focused on some of the offshore opportunities with that 3 megawatt design. So I see a lot of business from Sinovel over a good number of years. But having said that, as a percentage of our total revenues look for them to get diluted, which we think is the right direction to go. Look for growth in sales to these other wind customers moving ahead.

We will go and take our final question from Paul Clegg - Jefferies.

On the AAER win of the electrical system order, just to be clear that order has nothing to do with the Hydra-Quebec bid from TransCanada, right? That RFP is still out there? And if so, do you have any update on that RFP?

You are correct when you just said the 1.5 megawatts are for a separate wind farm project that AAER is supplying the turbines for. And, no, the decisions haven’t been made on the Hydra-Quebec project. And I really don’t have any new information to share with you on that Paul that I am sure that you have heard from the general news. It looks like it is going forward. It’s just not clear exactly when that selection process will be made.

And with that we are out of time for your questions. I will hand the conference back to management for any final or closing comments.

Thanks for your attention today. We had a great quarter. We are looking for great growth going forward. And I just wanted to add one other thing, in particular for our listeners from New York, Go Patriots! Have great weekend. Bye-bye now.

And that will conclude our conference. Again thank you all for your participation. We hope you enjoy the rest of your day.