Monday, January 9, 2006

Defense

Navy adds $10M to AMSC contract

Westborough's American Superconductor Corp., a maker of alternative electricity systems, has finalized a contract amendment with the United States Navy's Office of Naval Research, adding $10 million to the original $70 million contract, announced in 2003. AMSC expects to deliver the project, a 36.5 megawatt high temperature superconductor propulsion motor for electric warships, to the Navy test facility in Philadelphia in September 2006.

Under the terms of the amendment, the $10 million will be added to AMSC's backlog, most of which is expected to be recognized as revenue in the company's fiscal year ending March 31, 2006. AMSC also expects an additional contract modification to be completed by the Office of Naval Research within the next few months, which will increase AMSC's backlog by an additional $7 million to $10 million.

High temperature superconductor motors are small, measuring as little as one-third the weight and one-half the size of copper-based motors of the same power and torque rating. Deployment of such motors means Navy ships could carry more fuel and munitions at any given time, leaving room for additional crew quarters and weapons systems. The motors also have applications in the commercial shipping industry, allowing for more passengers and cargo.

The motors also boat higher fuel efficiency and lower maintenance costs than their copper-based counterparts, according to a company statement.

Other members of the project include Northrop Grumman Marine Systems and Northrop Grumman Ship Systems.

AMSC stock opened the day at $8.98, up 14 cents from Friday's close.