American Superconductor to Acquire Windtec(TM)

American Superconductor Corporation (NASDAQ: AMSC), a leading energy technologies company, announced today it has signed a definitive agreement to acquire Windtec, a private company based in Klagenfurt, Austria that develops and licenses proprietary wind turbine system designs, and sells wind turbine electrical systems. The transaction’s closing is expected in January 2007. "Wind power is one of the most dynamic markets in electrical energy today, and virtually all industry experts predict that it will play an increasingly important role in powering the world’s homes and businesses,” said Greg Yurek, chief executive officer and founder of American Superconductor. "According to the Global Wind Energy Council, the installed base of wind generated electricity worldwide is expected to double from approximately 59,000 megawatts in 2005 to nearly 135,000 megawatts in 2010. We believe this acquisition will strongly enhance AMSC’s revenue growth in the wind energy market and speed the time to achieving overall corporate profitability.” The Windtec purchase price is 1.3 million shares of AMSC common stock, valued at approximately $12.4 million based on yesterday’s closing price. The AMSC shares to be issued at the closing are subject to a lockup whereby the sole owner and founder of Windtec, Gerald Hehenberger, may sell only a certain number of shares per year through January 2010. The all-stock transaction, which is subject to the terms and conditions of the stock purchase agreement, also includes an earn-out opportunity with the potential for another 1.4 million shares of AMSC common stock to be issued to Mr. Hehenberger based on the achievement of certain revenue growth targets for the fiscal years ending March 31, 2008 through March 31, 2011. Mr. Hehenberger, a 20-year wind industry veteran, will remain with the company as Vice President and Managing Director of Windtec. The transaction includes the acquisition of Mr. Hehenberger’s 27 patents and patents pending worldwide on wind turbine technology. For the 12 months ending December 31, 2006, AMSC expects Windtec’s revenues to be approximately $13 million and its net income to be at least eight percent of revenues, or $1 million. This is up significantly from $2.7 million in revenues and a break-even bottom line for full year 2005. Windtec currently has more than $20 million in backlog that AMSC expects to recognize as revenues in its fiscal year ending March 31, 2008 with higher profit margins than in calendar 2006. After closing, Windtec will be a wholly owned subsidiary of American Superconductor. Its financial results will be reported as part of AMSC’s Power Electronic Systems business unit. Based on existing backlogs and forecasts, AMSC expects Power Electronic Systems revenues, with the inclusion of Windtec, to more than double from approximately $22.5 million in fiscal 2007 to approximately $50 million for the fiscal year ending March 31, 2008. AMSC is not assuming any debt in the transaction, and it expects the acquisition to be accretive to earnings beginning in its first full quarter of operations as an AMSC subsidiary. Windtec designs a wide variety of wind turbine systems from the ground up, and in certain cases licenses these designs to third parties for an upfront fee and royalty payments for each installation of a Windtec-designed wind turbine system. Windtec also provides consulting services for its licensees who want to upgrade or optimize their wind turbine systems. Licensees normally purchase the wind turbine electrical systems from Windtec, which utilize AMSC’s PowerModule systems to control power flows. Windtec’s customers and targeted markets include industrial equipment manufacturers and engineering construction companies in countries such as Canada, China, the Czech Republic, Germany and India, who are addressing an unmet need for local manufacturers of wind turbine systems. "During the past 18 months, Windtec has become the primary channel for PowerModule sales in China, and we expect that will soon expand to additional markets,” Yurek said. "The close working relationship between Windtec and AMSC has made it clear that many sales and technical synergies exist between us in power electronics, electrical systems, wind farm grid interconnection solutions, and rotating electrical machines, such as wind energy generators. This acquisition will allow us to leverage our mutual capabilities and to also optimize our sales forces, field service teams and planned manufacturing operations in the Asia-Pacific region.” "Windtec is capitalizing on a vast unmet need in the market,” said Chuck Stankiewicz, Senior Vice President of AMSC Power Systems. "The company’s wind turbine designs, including its new SuperGear™ technology, differentiate it from competing technologies. Its engineering services are in high demand and its licensing arrangements are unique. These capabilities provide us with a competitive advantage, particularly in emerging countries where local content is often government-mandated.” AMSC plans to retain Windtec’s operations in Austria and its staff of approximately 35 employees, including Mr. Hehenberger, the company’s founder, who will continue to lead Windtec’s global business development and sales efforts. "Demand for alternative sources of energy continues to build rapidly and, thanks to our unique offerings, Windtec’s growth has far outpaced the industry average,” Mr. Hehenberger said. "We expect this growth will continue in the years ahead given our combined offerings and expertise. We are very excited to join the AMSC team and look forward to contributing to the company’s success.” American Superconductor also announced today that it has received a new order from Windtec for PowerModule systems to be used to control power flow in 165 additional wind turbines in China. With this order, AMSC’s PowerModule systems will be powering 785 Chinese wind turbine systems and approximately 1,200 megawatts of China’s wind generated electricity. To learn more about Windtec and its products and solutions, please visit http://www.amsuper.com/products/applications/windEnergy/ WindtecHome.cfm. (Due to the length of this URL, it may be necessary to copy and paste it into your Internet browser's URL address field. You may also need to remove an extra space in the URL if one exists.) Conference Call Notice In conjunction with this announcement, AMSC management will participate in a conference call with investors beginning at 10:00 a.m. ET today. Those who wish to listen to the live conference call webcast should visit the "Investors" section of the company's website at www.amsuper.com/investors. The live call also can be accessed by dialing +1-913-981-4911 and using conference ID 5236624. A telephonic playback of the call will be available from 1:00 p.m. ET on November 29, 2006 through 1:00 p.m. ET on December 5, 2006. Please call +1-719-457-0820 and refer to conference ID 5236624 to access the playback. About American Superconductor Corporation (NASDAQ: AMSC) AMSC is the world's principal vendor of high temperature superconductor (HTS) wire and large rotating superconductor machinery, and it is a world-leading supplier of dynamic reactive power grid stabilization products. AMSC’s HTS wire and power electronic converters are at the core of a broad range of new electricity transmission and distribution, alternative electricity generation, transportation, medical and industrial processing applications, including dynamic reactive power grid stabilization solutions, large ship propulsion motors and generators, wind energy systems, smart, controllable, superconductor power cables and advanced defense systems. The company’s products are supported by hundreds of patents and licenses covering technologies fundamental to Revolutionizing the Way the World Uses Electricity™. More information is available at www.amsuper.com. American Superconductor and design, Revolutionizing the Way the World Uses Electricity, AMSC, Powered by AMSC, SuperVAR, D-VAR, DVC, PQ-IVR and PowerModule are trademarks or registered trademarks of American Superconductor Corporation. Any statements in this release about future expectations, plans and prospects for the company, including our expectations regarding the future financial performance of the company, benefits of the Windtec acquisition and other 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: uncertainties regarding the company's ability to obtain anticipated funding from corporate and government contracts, to successfully develop, manufacture and market commercial products, and to secure anticipated orders; the risk that a robust market may not develop for the company's products; 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. Reference is made to these and other factors discussed in the "Risk Factors" section of the company's most recent quarterly or annual report filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the company's views as of the date of this release. While the company anticipates that subsequent events and developments may cause the company's views 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 views as of any date subsequent to the date this press release is issued.