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American Superconductor Announces Termination of Research Program with ABB and EDF on Development of HTS Transformer Wire.


Companies to Explore Alternate HTS Wire Methodologiesand Architectures
American Superconductor Corporation (Nasdaq: AMSC) announced today the termination of funding for a research program it has been conducting to develop high temperature superconductor (HTS) wires for use in transformers. The research program was started April 1, 1997 and has been funded equally by ABB, Electricite de France (EDF) and American Superconductor.
American Superconductor, EDF (one of the world's largest electric utilities and a major shareholder in American Superconductor), and ABB intend to continue joint evaluation of American Superconductor's HTS technologies for use in transformers on a no-funds-exchanged basis.
"Based on the results of our work with EDF and ABB, we have made a mutual strategic decision to end the current development program on HTS transformer wire," commented Greg Yurek, American Superconductor's chief executive officer. "Our efforts will now focus on exploring alternate approaches and wire architectures for HTS transformers."
Yurek noted that American Superconductor's business model has reflected that the market for HTS transformers is expected to commence and grow rapidly in the second half of this decade. "We believe that HTS transformer wires will be a major market opportunity for American Superconductor in the future," said Yurek.
The intellectual property rights developed on HTS wires during the course of the research program remain the property of American Superconductor. ABB retains an exclusive license from American Superconductor for intellectual property rights on transformers developed during the course of the research program. "We intend to use this new base of knowledge in creating the most effective and profitable pathways to developing HTS transformer wires to meet the needs of this future market opportunity," said Yurek.
ABB and EDF would have provided an additional $1.2 million in development funds over the next 12 months had they continued with the program.
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 for electric power applications. The company's products, and products sold by electrical equipment manufacturers that incorporate its products, can dramatically increase the capacity 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. American Superconductor manufactures its SMES product line in Middleton, Wisconsin. For more information, please visit us at 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.

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