Slide 1: Investor Teleconference Q3 2012 Results
November 7, 2012 Investor Teleconference Q3 2012 Results © 2012 Broadwind Energy, Inc. All Rights Reserved.
Slide 2: Industry Data Disclaimer and Forward-Looking Statements
Industry Data Disclaimer and Forward-Looking Statements Broadwind obtained the industry and market data used throughout this presentation from its own research, internal surveys and studies conducted by third parties, independent industry associations or general publications and other publicly avail
Slide 3: Q3 2012 Overview
Q3 2012 Overview 3 Highlights Revenue up 15% over Q3 2011 Adjusted EBITDA of $2.4 M up substantially from prior year Q3 driven by margin expansion and cost reductions All segments generated positive adjusted EBITDA Adjusted EBITDA margin improved 7.6 points due to improved productivity What Went Wel
Slide 4: Orders and Backlog
Orders and Backlog Q3 Orders ($ in millions) Q3 2012 2011 % Chg. Towers/Weldments $11.1 $7.0 59% Gearing 8.7 12.0 (28%) Services 5.9 7.4 (20%) Total Orders $25.7 $26.4 (3%) Less steel content adj. ($8.0) Net Orders $17.7 $26.4 Weldments orders of $4.5 M in Q3 — backlog more than doubled to $8.6 M Ge
Slide 5: Business Transformation Initiatives
Business Transformation Initiatives 5 Reducing manufacturing footprint and cost base Diversifying customer and revenue base into other industries Improve financial flexibility Reduce footprint by ~ 600k Sq. Ft. or 40% Target 50/50 mix between wind and industrial Reduce customer concentrations Compan
Slide 6: Reducing Manufacturing Footprint and Cost Base
Reducing Manufacturing Footprint and Cost Base Annual cash flow improvement of $5-6 M with $400 M of revenue capacity 6 Q4 2011: Close European office Close west coast sales office Q2 2012: Reduce lease in Abilene Q4 2012: Consolidate corporate office Close Gary, SD office In Process: Sale of Brando
Slide 7: Diversifying Customer and Revenue Base
Diversifying Customer and Revenue Base Well on the way to a 50/50 industrial / wind mix Towers – Addressable Market 7 Gearing – YTD End Markets Services – Revenue Evolution 9 months ended Sept. 30 ($ M) Initiative Status Impact Diversify Gearing business away from wind to industrial YTD 2012 sales o
Slide 8: Improve Financial Flexibility
Improve Financial Flexibility Low debt level with positive cash flow 8 Initiative Status Impact Debt Reduction Debt reduced and in line with EBITDA Asset rich with little debt Generate consistent positive EBITDA every quarter Q1 $1.4 M EBITDA Q2 $1.1 M EBITDA Q3 $2.4 M EBITDA Facilitates more flexib
Slide 9: Towers and Weldments Supply/Demand Balance Improving
Towers and Weldments Supply/Demand Balance Improving 9 Industry Capacity Reductions ~15% ~30% ~25% ~30% ~ 4 competitors are exiting tower manufacturing Multi-purpose facilities are being repurposed to other industries (railcar and fabrication) China & Vietnam towers imports significantly reduced due
Slide 10: Continuous Improvement
Continuous Improvement 10 Review production processes with a focus on reducing variation (weld rates, cycle times, defect rates) Monthly best practice sharing among business units Developing a standard, data-driven approach to analyze quality, throughput and other key operating metrics Leveraging IT
Slide 11: Towers and Weldments Third Quarter 2012
Towers and Weldments Third Quarter 2012 12 Strategic Focus Section volume rose 7% from Q3 2011 — steps to correct productivity and utilization successful Current year production consists of larger, higher value towers compared to prior year Adjusted EBITDA margin doubled to 8.2% Weldments revenue in
Slide 12: Gearing Third Quarter 2012
Gearing Third Quarter 2012 $1.4 M in shipments deferred to Q4 Revenue entirely outside of new wind Adj. EBITDA margin improved 13 ppt through shift in customer mix and lower operating expenses Plant consolidation progressing — preparing to relocate large machines from Cicero Avenue facility 13 Growt
Slide 13: Services Third Quarter 2012
Services Third Quarter 2012 Revenue up 4% — growth in drivetrain service center business Adj. EBITDA slightly positive — reflects lower fixed overhead and improved expense management Operating loss also includes $230 K legal settlement 14 Shift focus to non-routine drivetrain and blade maintenance s
Slide 14: Operating Working Capital
Operating Working Capital 15 September 30 working capital at peak level — tower material payments ahead of customer receipts Trade receivables at 15 quarter peak; will decline in Q4 Trade payables dropped significantly for steel inventory received earlier in the year Year end working capital expecte
Slide 15: Debt and Liquidity
Debt and Liquidity – $ Thousands 16 $25.1 M net debt balance includes $2.9 M which is either forgivable economic development grants or new markets tax credit financing Expect year-end debt balance to be below $15 M and line of credit (LOC) below $10 M LOC sufficient to support 2013 growth 9/30/2012
Slide 16: 2012 Financial Outlook Update
2012 Financial Outlook Update 17 Q4 2012 Tower revenue lower due to PTC schedule accelerating deliveries into Q3 Q4 revenue estimate ~ $45-47 M Continued positive EBITDA ~ $1 M FY 2010 FY 2011 YTD 2012 Revenue-$M 137.0 186.0 165.8 Gross Profit-$M 1.9 7.2 6.6 -% (ex. Restructuring) 1.4% 3.9% 4.6% Ope
Slide 17: Broadwind Energy is committed to helping customers maximize performance of their energy and infrastructure
18 Broadwind Energy is committed to helping customers maximize performance of their energy and infrastructure investments — quicker, easier and smarter.