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No. of Recommendations: 18
Here are the notes I took from the AMSC Conference Call...

Revenue up 34% this year to $15.1 mil. Revenues from SMES systems rose from $1.5 mil to $3.5 mil while HTS revenue rose from $9.8 mil to $11.6 mil. Order backlog increased to $21.4 mil. Of that is $13.8 mil HTS wire deal with Pirelli.

12 SMES magnetic system orders were received for $10.2 mil. These orders will be recognized as revenue for FY 2003. The First D-SMES units are on schedule for delivery next month.

Currently AMSC manufactures 2 SMES units per month.
By end of 2nd Qtr production capacity increases to 4 SMES units per month. By end of 2001 capacity increases to 15 SMES units per month.

AMSC doubled HTS wire production this year. As recently announced they are building the world's first major HTS wire production plant in Devons, MA. They expect full production in early 2002 with production of 10000km of HTS wire per year. This site can be rapidly expanded.

Yurek says 10000km per year HTS wire production will "just be a drop in the bucket by the second half of this decade."

AMCS's are the highest performance, lowest priced HTS wires on the planet. Pirelli will be installing the wires in Detroit early next summer (June 2001).

Price:Performance Ratio of HTS Wire
AMSC delivers $50 kiloamp/meter. They are working on a second generation HTS wire which gets the price:performance down to $10 kiloamp/meter. Yurek used Intel as an example here, suggesting it was like creating the Pentium while the 486 was hitting the shelves.

The AMSC-GE Deal
Sounds mutually beneficial. GE will distribute D-SMES systems to US utilities and PQ-SMES systems to GE global customers. All SMES units will have AMSC and GE logos emblazened - a nice "Stamp of Approval."

Greg Yurek mentioned the nation's need for far more power, and more power quality. Referred to US as a third world nation when it came to the power grid, and sited the recent Wall Street Journal article on power grid overload.

Full HTS Motor - Disruptive Innovation!

Working with Rockwell to produce first 1000HP full HTS motor. AMSC wants full commercialization of this. He went as far as to say this will be a DISRUPTIVE TECHNOLOGY of the global industrial motor business. He mentioned a motor OEM value chain is forming, and he expects significant advances in the next 12 months.

Proprietary Edge in Power Invertors

Yurek believes AMSC has a proprietary edge in power invertor technology and AMSC can deliver a lower cost, higher power density invertor. Batteries, fuel cells, SMES systems, microturbines, you name it...all power technology applications use power invertor technology.

AMSC protects their edge thru a combination of patents and trade secrets. Though it wasn't explicitly said, obviously they have first mover edge too.

Huge Market for Generators

The power grid needs new generators. AMSC asynchronous motor technology will be used in generators. Yurek believes this is an exciting opportunity.

Bottom line number notes for Anal-ysts

Still expects a loss in the $0.55 range this year as higher costs will be incurred initially by buying the Massachusettes plant outright. However this allows them to get up to production more quickly and will lead to more profitability in the future. I think we can all see the logic in this.


All I can say is WOW! Revenues are about to ramp up incredibly and the AMSC story is indeed coming to fruition. Yurek is obviously a student of the Chasm Group and knows how to position his company for gorilla power within a huge marketplace.

I urge you all to listen to the conference call while
you still can. 1-888-203-1112 #444777

I particularly urge students of Moore's Gorilla Game, as Yurek is definitely trying to play a Gorilla Game here...going as far as to use the terminology. AMSC is crossing the chasm to the bowling alley. The tornado may form soon. Using SMES sales, one could argue the SMES tornado is already starting.

Fool On.
Dan

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