Good day, everyone, and welcome American Superconductor’s Second 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 Managing Director of Corporate Communications, Jason Fredette. For opening remarks, I would like to turn the call over to Mr. Jason Fredette. Please go ahead, sir.

Thanks, Natasha, and welcome to the call everyone. Before we begin, please note that various remarks management may make on this conference call about American Superconductor’s future expectations, plans and prospects constitute forward-looking statements for the 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 the fiscal year ended March 31, 2010, which is 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 American Superconductor anticipates that the 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 the 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 with 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 SEC filings can be accessed from the Investors’ page of our website at amsc.com. Finally, I would like to mention that we’ll be taking part in the Citigroup Small and Mid-Cap Conference in Las Vegas and the Jefferies & Company to Clean Tech Conference in London, both of these events will take place on November the 16th, and the Jefferies event will be webcast, more details on that webcast will be available next week. With that, let me now turn the call over to CEO, Greg.

Thanks, Jason, and good morning to all of you, who have joined us on today’s call. Before I begin my comments, I’d like to note that Dan McGahn, who was promoted to the position of President and Chief Operating Officer in December 2009, is with us on the call today. Dan has done a terrific job in his new position over the last 10 months. In the question and answer period later in this call, I may call on Dan in order for you to get his perspective regarding certain questions. Now, let me review some of our key results and provide some insights regarding our future directions and forecast. In the past few months, the past few months have been particularly eventful period for our company. Most importantly, the second quarter, we celebrated the coming of age for Superconductors by booking the world’s largest high temperature superconductor wire order. I’ll discuss this seminal event and other key highlights in more detail in just a moment. But first, here are the high points on the financial results. The industry continued at solid performance in the second fiscal quarter, achieving its 15th consecutive quarter of revenue growth while also generating record earnings. We are the only power technology company in the U.S. market to have grown revenues for 15 consecutive quarters, right through the great recession. We are one of only three industrial companies worldwide to achieve this level of performance. In the category of, what have you done for me lately? We are positioned to continue revenue and earnings growth for years to come based on our strategy of first focusing on and energy and power grid market, and second focusing on doing business in the growth economies of China and Asia Pacific region. In our fiscal second quarter, we…

Thanks Greg, and good morning everyone. As you’ve all heard, AMSC delivered its strongest financial performance to date in the second fiscal quarter. We generated a 36% year-over-year increase in revenues and achieved our 15th consecutive quarter of sequential revenue growth. We also maintained solid growth and operating margins, which helped us grow our earnings to a new record level. AMSC generated $101.5 million in revenues for the second quarter of fiscal year 2010. This is up approximately 4% from $97.2 million for the first quarter of fiscal 2010 and 36% from $74.7 million for the second quarter of fiscal 2009. Shipments of our wind turbine power electronic control systems and components to customers in the Asia Pacific region accounted for the majority of this growth. We expect this market to continue to be very strong for us through the remainder of this year, next year and beyond. Sales to Sinovel represented 79% of total revenues in the second fiscal quarter with winds representing 91% of total revenues. Geographically, we generated 94% of our revenues outside of the U.S., so we certainly do not depend on the U.S. and European wind markets, which have been challenging for other companies in 2010. We do believe, however, that we can look forward to significant additional growth on our business when the U.S. and European wind markets get back on track as discussed by Greg earlier. Gross profit for the second quarter of fiscal 2010 was $41.3 million and our gross margin was a record 40.7%. This compares with a gross margin for the first quarter of fiscal 2010 of 40.1 % and a gross margin for the second quarter of fiscal 2009 of 38.9%. The sequential improvement in gross margin was primarily the result of a favorable product mix. As we have…

Certainly. (Operator Instructions) We’ll take our first question from Colin Rusch with ThinkEquity. Please, go ahead.

Thanks so much. Congratulations, guys.

Thanks, Colin.

Can you give us some additional detail on the dozen or so HTS projects you’re working on and what stages or development you’re at, how many of those are in pilots, how many of those are kind of in conversation stage and how many are in full [inaudible] mode.

It’s a variety of stages. Some are well-advanced because we’ve been working on those in the U.S., for example, before the great recession hit. And so, we have made a lot of progress and we thought we were in fact going to wrap up those projects in order in the last year or two. The recession slowed that all down, but those are in advance stage. One of those includes Project Hydra for the deployment of fault locker cables in the grid in New York, which was delayed because of the recession. But as I think we said in the last call, we and Con Ed and Department of Homeland Security have identified the new site and we’re seeking financing and we’re optimistic about that. We expect that the State Grid in China is going to put out a request for bid for wire and cable systems in the next three to four months, somewhere in that timeframe. That’s been under development by State Grid for a good year now, so that’s coming to a – it will be a positive conclusion for our company in the relatively near future. There are some that have been worked in Europe for quite a long time now. So, sites have been defined. The site walk downs have occurred and so forth. So, it’s a pipeline of $300 million in revenue for just our scope of supply. We expect that some of this will start hitting over the next year and beyond and start reducing our losses and superconductors.

Perfect. And then two questions on the solar business, can you just give us initial calculations [ph] for sales on the solar business and calendar 2011 and by geography. And then, if you could talk a little bit about the functionality of integrating your product with the communication systems for grid operators, if you’ve got anything really concretely in place there in terms of transferring information on performance of those systems back to grid operators, right now. Just kind of how you expect that road, the technology roadmap to play out over the next couple of years.

Well, Colin, I’m going to be nice to you here because you broke the rules. You asked the second question and a third one. But SolarTie is a product that we said I think in our call earlier; we expect to get our first order in about a year. We certainly expect to see revenue in about a year. Let’s say from SolarTie, we already have our first D-VAR that we announced back in May for a solar scale form here in the U.S. Now, all of that is based on our debar solution that we use for grid interconnection of wind farms. So, we have of highly differentiated product from those who just sell plain old-fashioned inverters. Inverters to take D.C. turn them to A.C. What’s missing in the equation there for these large scale utility scale that is PV plat is the reactive compensation and voltage control needed both on the grid side and on the solar farm side, we provide that through our D-VAR capability. And in terms of communications, everything we put in a wind farm today is having all of the wind turbines communicating with each other, our SCADA systems that we included in all of these systems, all of that experience base will be brought to bear in the solar farms. So, I hope that helps on your question. We’ll go to the next one.

(Operator Instructions) Jesse Pichel with Jaffray’s. Please, go ahead.

Good morning, Mr. Yurek. Congratulations there on a strong quarter and multiple successes. I don’t know if I can limit myself to one, you have a lot going on.

Well, Mr. Pichel, pick a winner Mr. Pichel.

Has Sinovel booked this 3-megawatt order for the 1-gigawatt offshore program because the May press release seems to cover just the 1.5s. And can we expect that the western traditional turbine makers may either license Sea Titan or at least buy the Imperium wire? And I do have a follow-up?

Well, let me take the first part of this and then I’ll ask Dan to take the second part on Sea Titan. Dan McGahn that is. So, yes, Sinovel just won 60% of the 1-gigawatt tender that offshore wind farm tender that was occurred in China. 60% and 600 megawatts, all of that’s going to be the 3-megawatt wind turbines that they’ve already deployed offshore in Shanghai. So, with the full year, highly successful product and that’s what they’re going to be deploying in the 600-megawatt of offshore in the next stage. Dan, there was a second question here on Sea Titan and what the scope of supply basically, I think it is.

Hi. Yes, we have a broad IP estate when it comes to rotating machines using superconductors. So, we’re actively out promoting, licensing that technology as well as scope of supply for mass [ph] that could be the wire, it could be value at a component that use that wire and we’re looking also to couple the two together. So, to take our scope of supply to the superconductor components plus the converters. So, we see our overall dollars per megawatt per turbine actually being able to increase with Sea Titan. We talked a bit about China already on the call, but obviously there’s going to be a need in Europe for offshore and America, if we ever get our act together and the western companies show similar interest as the Chinese companies do today.

Next question, please.

Our next question comes from the side of Paul Clegg with Mizuho. Please, go ahead.

Hi, guys. First of all, congratulations on everything. You got a lot of stuff to be happy about this quarter. Question about the full conversion drives for Sinovel. How should we think about that in the context of your existing agreements with Sinovel? Is it kind of technology upgrade or diversification, if you will, to allow Sinovel to capture more market share and then you benefit from the volumes? Or is there any real sort of revenue per turbine enhancement on your part?

It’s both, Paul. So, yes, to further differentiate your product that Sinovel – I think will allow Sinovel to capture more market share in China and certainly, as they now go up into the western world. I think most of you know that Sinovel just landed a $6.5 billion line of credit from a Chinese bank to expand offshore and it’s going there. It’s already have offices in Houston, in Toronto and London. So, this is going to be helpful to them to increase their market share offshore, from China that is. So, the first part of the question was, lost it already.

No, the revenue for turbine enhancement.

Yes, it’s revenue per turbine enhancement. Normally, because full conversion means that all of the electricity from the generated goes right through the converter. It’s a higher power rating inverter system that has to be used here, control system as well. So, we’d expect more revenue per turbine for full conversion.

Next question, please.

Our next question comes from the side of Carter Shoop with Deutsche Bank. Please, go ahead.

Good morning. Congratulations on a nice quarter. I have one question, a couple of different parts to it. The first part is was there any noticeable shift at Sinovel in the quarter sequentially between the 3-megawatt and 1.5-megawatt shipment in the quarter. And then as a follow-up, can you discuss your outlook for 3-megawatt turbines for the onshore market in China on the next six to 12 months. And then lastly, is the current level of profitability, at least, that the right to gross margins sustainable?

So, we’re shipping core electrical components and control systems for both 1.5-megawatt and 3-megawatt on predetermined schedules, Carter. So, there’s been no shift from our contracts that are in place here. Of course you know Sinovel has always surprised us by accelerating things in the past, but that’s not the case right now. We’re shipping on schedule for both of those. As I said earlier on the call though and I think this maybe partly what you’re getting at and that is the new offshore tender that Sinovel won 600-megawatt is all going to be 3-megawatt wind turbine. So, as soon as those get going that will flood in off of the current orders and we said, we expect more orders for 3-megawatt wind turbines in the next six to 12 months. We think, and Sinovel has clearly stated, it’s also going to deploy 3 megawatts for onshore applications in China as well. So, I think that answer your question. Last part, Dan?

We’re seeing a stronger trend 2 to 3 megawatts in China for onshore, just in general from the wind show and from all of our partners and he asked about the sustainability of the profit. I mean that’s the whole point you heard in the last answer where were looking at ways to increase the number of absolute megawatts globally that used our technology and we’re trying to increase our dollar per megawatts as well and that all relates to increases in profitability.

Next question.

Our next question Carter Driscoll with Capstone Investments. Please, go ahead.

Good morning, gentlemen. I was hoping maybe compare and contrast kind of the LSP as you begin to target the soil utility space and obviously expand your developments in the smart grid, maybe talk about timing, number of bidders and just kind of the competitive environment between those two markets.

Between those two markets, that’s an interesting question. So, look we’re really entering the solar, large-scale, utility scale solar PV sector. So, it’s hard for us to state exactly what the timescale is going to be. But I can tell you that one of the reasons we are in this market are entering this market is because the developers of the solar PV farms and even those produced panels and some of them are becoming developers or forms as well have come to us and say they don’t have a solution out in the marketplace that’s going to meet their needs. So, that has driven us to take our expertise for wind farm grid interconnection control systems and pull that together into SolarTie. So, we feel we’re in a very strong position. We do have to get our first alpha sites and this is all in our press release that we put out about SolarTie, get those through the beta sites stages as well and then we expect to see our first revenue from SolarTie within about 12 months from now. So then at that time we’ll have a better idea about the cycle from initial contact through booking and billing the SolarTie. In terms of the power grid, Dan, you may take a whack at that? It’s a little bit different sector altogether. So, more use the term smart grid, but in fact were talking about smart grid infrastructure, we don’t make muse. I think everybody knows that. We do the real stuff that makes things work.

Well, what you’re seeing at [inaudible] solar and one is kind of the same theme that’s happened on a different time scale. So, what we’ve experienced over the past decade with D-VAR and wind, we’re trying to be in position to do that again the solar. So, the bid out for solar looking out into the future is going to be in excess of 100-megawatt type projects and there seems to be a technology project gap there to have a solution that’s really grid friendly to make all that work. When you look at them on the grid side for the wind products, you know those cycles all kind of beginning and end within about 12 months. We’ve been able to build a brand there, where people come to us, turbine manufacturers come to us, developers come to us. It’s kind of a requested solution many of the time. So, you’re seeing a mature business not that 10 years in the making, on the D-VAR side, for grid and for wind and we hope to try to repeat that with solar.

Our next comes from the side of Vishal Shah with Barclays Capital. Please, go ahead.

Yes. Hi, thanks for taking my question. Two questions basically on the China web or just overall backlog, can you provide a breakdown between Sinovel and non-Sinovel. I think you said 80 million of backlog to superconductors. And then is your guidance implying sequential improvements in gross margins or operating margins in the third and fourth quarter? Thank you.

All right, Vishal. This is Dave Henry. Your question on the backlog, the key because we refrain from breaking out the components of our backlog. I mean Sinovel is 79% of our revenues in the quarter, so you – I mean you can pursuing that the majority of our backlog does relate to Sinovel. And as it relates to gross margin in our guidance we don’t guide forward gross margin. I mean there was questions earlier about are the gross margins sustainable? They’re our improvement opportunities that are there I mean that’s why we’re here. I think it’s our job as a management team to do everything we can to sustain growth or gross margin. And so, while I can’t – while I guess not I can’t, I choose not to give gross margin guidance forward. I would say that there is opportunities though, for continuing gross margin improvements just from operationally as we look at our cost, and as also the R&D continues to strengthen as well which is what everybody believes that to be the case.

Our next question comes from the side of Theodore O’Neill with Wunderlich Securities. Please, go ahead. Theodore O’Neill with Wunderlich Securities: Thanks very much. There’s been a number reports that there’s excess capacity of wind turbines production in China. And it looks like the Chinese government is trying to promote the export markets for their manufacturers there, and given that you’ve got Windtec customers in other countries, India, Turkey, et cetera. How do you think this plays out? Does Sonivel’s growth cannibalize sales you’d otherwise get in other countries or do you think they’re all going to grow?

First of all, being part of a long-term plan by the Chinese government and Chinese companies, state owned enterprises to be very specific. It’s all one team working together and the long term plan has been to establish a base, a manufacturing base for wind turbines in China we domestic analogies they could get from companies like Windtec. And once they have that base established and meeting their own needs, which is a continued growth market, I mean we just commented in the call, it’s going to be the largest, I think, in 2011 the largest installed base in the world and 200 gigawatts by 2020, maybe 300 gigawatts according to some analysts. So, a lot of growth in China here. The Chinese government recognize that it had something like 80 different wind turbine manufacturers that have popped up in the last five years in China and that kept us sustainable even with the great growth market and so, they’ve put in, they some loss to whittle that down, probably gets down to around a dozen or so wind turbine manufacturers and certainly the licensees that we have, the five customers we have in China is going to be part of that dozen or so as the smoke clears. And by the way part of the way that they’re cutting this back is that they already don’t have a wind farm that you’re populating today with wind turbines then you’re not getting into the business, you’re not going to get the financing you need to get into the business and grow. You have to have at least 2-megawatt wind turbines that you’ve already developed and demonstrated and deployed and so forth. So, I mean that makes it tough for up starts to get in. So, China has really been shaping…

Our next question comes from the side with Ben Schuman with Pacific Crest Securities. Please, go ahead.

Hi, guys. Can you clarify the difference between preferred supplier and exclusive supplier at Sinovel, specifically if they’re selling anyone else’s core electrical components on the current doubly-fed designers, if they plan to do so? And then also take the update on the Dong Fong and the 2.5-megawatt design there would be helpful.

So, preferred supplier – we’ve only used the term right of first refusal. In turns out when you go back and look at the contracts, it actually says we’re in the preferred suppliers and so that’s just the language thing there. And then so what does it mean? It means that we are going to be supplying the core electrical components and control systems for Sinovel as we have been. Now, would they try to knock us out and maybe replace one of the core components with somebody else’s core component? We anticipate that companies will try that. We said this many, many times in the past. We have designed a full system, the full electrical control systems such that it’s virtually impossible to replace one of our components with another because we make them all work together. But we’re paranoid enough to believe that maybe they can even solve that problem down the road. So, we’ve encrypted, highly encrypted our software that runs all the control system. We made the very tough, and then we’re still paranoid, and so we made that they can’t break the encryption codes and the way that you really get around to make sure you are at the preferred and the only supplier is to you’ve been constantly innovate. So, you go from PM1000 power module to the PM3000 W. We’re now bringing out the PM-3100 W, you’re bringing low voltage wire through capability, which we’d now demonstrate it in China quite effectively and you bring on the next level of software version 2.0, 3.0 and so forth. You could constantly innovate which means you’ve get your clause into your customers and may depend on you to be the preferred supplier. In the new contract on the full conversion systems, we made sure the language was exclusive supplier. Because even with all those protections in there, I don’t like the wording. So, I like exclusive and Sinovel acknowledges that. We should be the exclusive supplier and has so named us in the contracts, pure and simple. Dong Fong, 2.5-megawatt. Dong Fong is the third-largest wind turbine manufacturer in China that’s based on a 1.5-megawatt wind turbine and earlier design to have from somebody else. They now have a 2.5-megawatt design from us, which has gone through the early prototyping stages. It’s been erected as a wind turbine actually, and has since license from us a 3-megawatt design and a 5-megawatt design. Dong Fong has now concluded that they’re not going to continue to push forward with the 2.5-megawatt. They’re probably put up a relatively small number of those, but they’re going to focus on the 3-megawatt, why? Because they know the convenient to be a strong player in the Chinese made market, they need to be in that 3 to 5-megawatt category for both onshore and offshore wind farms.

Our next question comes from the side of Jim Ricchiuti with Needham and Company. Please, go ahead.

Hi, thank you. Greg, shipper conductor backlog that you talked about the $80 million, can you say how much of that in terms of revenue would be recognized in the next 12 months and roughly how many customers and where do you see that backlog going over the next 12 months? Thank you.

Well, Jim, no, we can’t break that out for you. And so, we choose not to, as the way David said. So, we just don’t want to do that because that could lead pretty quickly getting to numbers like dollars per meter that we’ve priced in for some of our customer and so forth. And so, for competitive reasons, we certainly don’t want to put that out there. In terms of going forward, off of that additional pipeline we’re working on, I’m going to ask Dan to address that, give his perspective.

Yes, these are things that we’re working on Jim. We’re looking at projects that the earliest would start a year or so out. These are things from a backlog standpoint. We’re trying to be the kind of contract writers that we’ve been where we look at things that recognize revenue over multiple years. But it’s still kind of really start trying to put out a line in the sand for how were going to build backlog on the superconductor side. What we really want to do is to move that part of the business to be generating profits as soon as we possibly can.

So, we look forward for the end of this fiscal year, maybe Dan will say to give you a better picture on that.

Our next question comes from the line of Stewart Bush with RBC Capital Markets. Please, go ahead.

Yes. Hi, guys. For the superconducting business, are we still under the metric that 3 to 4 million meters a year are needed for breakeven? With the LS Cable contract in place, do we expect to see that? In the meantime, should we see actual losses grow with the shipments to that LS contract before it reaches breakeven point? Thanks.

Yes, 3 to 4 million meters of wire per year is the P&L breakeven, the gap P&L breakeven for our superconductors business, Stewart. So that remains the same. Our cost models really haven’t altered that metric. But I’m going to ask Dan to comment more broadly because we don’t just intend to be just a wire supplier and maybe his remarks during the call as well, but it’s probably useful to emphasize that Dan, you want to comment also?

Yes, these are the kind of things we’ve talked about analyst day, kind of positioning the superconductor part of our business. Everybody’s always focused on the wire, but the business model at least in the near-term are to do a project installation of cable. We’re not going to make the cable, but we’re going to aid and facilitate in the installation of that. Similar to what we do in the Windtec part of our business, we don’t make the wind turbine, but we certainly help a lot there to make those happen. We said in the past that we’re targeting to get to a couple, to a few different cable projects that would generate profit of the segment. We’re positioning on the Sea Titan standpoint that only within the low 10s of units, we would profitability out a segment and again for cable projects in the 10s of miles, we get to profitability. So, we’re trying to skin the cat a bunch of different ways, and the hope is superconductors can actually be an accelerator for our overall growth to both the wind and the grid parts of our business.

So, Stewart, just one other thing, you’d ask whether increasing sales or as we ship wire to LS Cable to meet that order, will our losses grow and to answer affirmatively to that question would mean that we’re basically going to sell wire at below our variable cost and that’s not just the case. So, even though we’re ramping up superconductors and we’re still – we never sell our wire below variable cost so.

Can we have time for one more question?

Our last question comes from the side of John Hardy with Gleacher and Company. Please, go ahead.

Yes, thanks. Thanks for sneaking me in guys. I have a couple of questions around the booking. I mean the quarter, obviously, it was very strong. I was wondering [ph] if you can give a little bit more detail on what’s in that number and maybe that’s a different way how much of that is maybe bookings that should be recognized in the next 12 months and maybe the same for total backlog. I think you’ve given that number before Dave.

Well, we did say in the call that as compared to our revenue guidance or revised guidance of 430 to 440 million, we have 99% of that, of a low end of that range either shipped or on backlogs. So, you can kind of do some math there to kind of figure out maybe what’s left in backlog for the rest of this fiscal year, but in terms of going out pass that, we don’t provide any guidance, I’m sorry, with respect to how much backlog might be shippable in FY ‘11, for example.

Great. Thank you everybody for participating in the call today and your great questions. We’re very excited and very proud that we’ve achieved 15 quarters of consecutive revenue growth along with that profitable growth now. Of course, we expect, of course to continue that record and can’t wait to tell you about number 16 and number 17 quarters in a row coming up soon. Thanks and make sure you go vote.

This concludes today’s conference call. You may now disconnect, and have a wonderful day.