Slide 1: Q2 2014 Investor Call Presentation
Broadwind Energy, Inc. Q2 2014 Investor Call Presentation July 31, 2014 © 2014 Broadwind Energy, Inc. All Rights Reserved.
Slide 2: Industry Disclaimer and Forward-Looking Statements
Industry Disclaimer and Forward-Looking Statements Broadwind obtained the industry and market data used throughout this presentation from our own research, internal surveys and studies conducted by third parties, independent industry associations or general publications and other publicly available
Slide 3: Q2 2014 Overview
Q2 2014 Overview End Market Environments Wind – continued consistent demand for wind towers in 2015-16 Oil & Gas – strong demand for gearing and fabrications Steel – strong demand for gearing Mining – demand remains flat for gearing and fabrications Q2 2014 Highlights Generated $.12 EPS Margins impr
Slide 4: Orders and Backlog
Orders and Backlog 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 4 Orders – $M $34M in tower orders announced after Q2 Gearing order rate highest in over 4 years; nice mix of wind and industrial Services orders up 69% over prior year and highest since Q4 2012; quoting activity up Orde
Slide 5: Wind Market
Wind Market Large electricity users (Google, Microsoft) seeking wind power Yield Co’s coming to marketlower cost of capital EPA carbon regulations cleaner technologies become more valuable Below the 5 year average of natural gas inventories Turbine manufacturers continue to focus on lowering LCOE –
Slide 6: Gearing Fundamentals
Gearing Fundamentals 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 6 Market Trend Highlights Wind + Replacement Gearing O&G + Strong Market Drivers Steel + Increase in Capex Spend Mining - Little Growth Productivity Inventory Turns Notable Improvements Reduced past due backlog by >70%
Slide 7: Consolidated Financial Results
Consolidated Financial Results 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 7 Q2 2014 Comments Sales up 29% from Q2 2013 – Towers and Weldments + 39%, Gearing +19% Gross margin (ex. restructuring) + 470 bp from Q2 2013 – higher volumes and improved productivity in Towers and Gearing
Slide 8: Towers and Weldments Second Quarter 2014 Highlights
Towers and Weldments 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 8 Second Quarter 2014 Highlights Tower volume increased 39% compared to Q2 2013 Short-term reduction in industrial weldment revenue from large mining customer Q2 2014 productivity increase from higher volume, process i
Slide 9: Gearing Second Quarter 2014 Highlights
Gearing 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 9 Revenue up 19% due to improved plant throughput and reduction in past-due backlog EBITDA up due to improved throughput and the benefits of the plant consolidation Operating loss reduced by 55% due to increased volume, improved pr
Slide 10: Services Second Quarter 2014 Highlights
Services 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 10 Second Quarter 2014 Highlights Industry recovering – quoting activity up; highest quarterly order rate since Q4 2012 Revenue down 14% from Q2 2013 – lower industrial drivetrain assembly work, partly offset by higher demand for
Slide 11: Operating Working Capital
Operating Working Capital 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 11 6/30/14 operating working capital increased $6.4M from 3/31/14 to $26.0M Operating working capital was 10% of annualized Q2 2014 sales Operating working capital expected to decline by year end as customer depos
Slide 12: Debt and Liquidity
Debt and Liquidity 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 12 Net debt negative Debt and capital leases less than $5M More than half of outstanding debt is low or 0% interest rates from New Markets Tax Credit and other grant financing $20M credit line remained undrawn at 6/30/14
Slide 13: 2014 Financial Outlook
2014 Financial Outlook 7/31/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 13 2014 EPS Walk Q1 and Q4 are typically the weakest quarters 2014 growth mainly from Towers revenue, but increasing contribution from Gearing Q3 results expected to be lower than Q2 due to tower model conversions Re
Slide 14: Click to edit Master title style Click to edit Master text styles Second level
Click to edit Master title style Click to edit Master text styles Second level Third level Fourth level Fifth level Broadwind Energy is committed to helping customers maximize performance of their energy and infrastructure investments— quicker, easier and smarter. 14 © 2014 Broadwind Energy, Inc. Al