Slide 1: Q1 2018 Earnings Call
Q1 2018 Earnings Call May 4, 2018
Slide 2: Industry Data and Forward-Looking Statements
Industry Data and Forward-Looking Statements Disclaimer ▪ 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 ava
Slide 3: Q1 2018 Highlights
Q1 2018 Highlights ▪ Order intake recovering ▪ Successful ramp up of tower facilities following near shut down in Q4 17 ▪ Q1 18 revenue of $30 million up 69% sequentially as tower production recovers ▪ Customer diversification efforts on track ▪ Initiated restructuring plan following exit of CNG bus
Slide 4: Orders and Backlog ($ Millions)
Orders and Backlog ($ Millions) Orders Backlog Q1 Q1 YTD 2018 350 Millions 2017 2018 Book:Bill 300 250 Towers & Heavy 29.1 7.8 .47 Fabrications 200 150 Gearing 7.3 15.4 1.75 100 Process Systems 3.6 4.9 1.13 50 Total 40.0 28.1 .94 - Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 ▪ Initial tower order foll
Slide 5: US Wind Market Update
US Wind Market Update Development Pipeline - GW Forecast – GW Installations 40 14 35 13 12.9 30 12 25 10.9 11 GW GW 20 10 15 9 8.2 8.4 8.0 10 8 5 7 6.4 0 6 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 2015a 2016a 2017a 2018e 2019e 2020e Under construction at QE Adv. Development Source: AWEA
Slide 6: Tariff and Trade Uncertainties
Tariff and Trade Uncertainties Wind Turbine Materials Cost Breakdown Relative Steel Price $/ST * 1000 900 US 800 700 600 500 China 400 300 200 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 18-Apr Source: Platts ▪ Steel accounts for nearly half of material content of a wind turbine ▪ Fluctuating US vs Chinese steel
Slide 7: Demand for U.S. gearing remains healthy
Demand for U.S. gearing remains healthy US Gear Production % 2014- 2017- 4,000 9.0% CAGR market 2017 2019 3,500 CAGR CAGR 3,000 Turbines & Power 10% -6% +5% 2,500 Oil & Gas 6% -13% +22% $M 2,000 1,500 Mining & Const 7% -6% +7% 1,000 500 Other Industrial 38% +1.5% +1% 0 2015a 2016a 2017a 2018e 2019e
Slide 8: Global Gas Turbine Market
Global Gas Turbine Market Global Gas Turbine Sales (Utility and IPP Class > 10MW) 400 70 350 60 300 # of Units > 10MW 50 Capacity (GW) 250 40 200 30 150 20 100 50 10 0 0 2014 2015 2016 2017 # of Units > 10MW GW Source: McCoy Power Reports ▪ Low power pricing environment has strained both new unit an
Slide 9: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q1 17 Q4 17 Q1 18 Total Sales $56.1 $17.8 $30.0 Gross Profit 6.4 (3.1) (.1) Gross Profit % 11.4% (17.5%) (.4%) Operating Expense 4.8 3.6 4.4 Operating Income/(Loss) 1.6 (6.7) (4.5) % of sales 2.9% (37.6%) (15.1%) Adj. EBITDA 3.9 (4.0) (1.6) % of sales 7.0% (22.2%)
Slide 10: Towers and Heavy Fabrications
Towers and Heavy Fabrications Q1 Q4 Q1 Q1 Results 2017 2017 2018 ▪ Initial tower order received after very weak Orders ($M) $29.1 $2.5 $7.8 2017, continued demand for mining Sections Sold (#) 400 9 143 fabrications Revenue ($M) 48.9 4.2 16.8 ▪ Q1 18 sections sold significantly below Operating Inc/(L
Slide 11: Gearing
Gearing Q1 Q4 Q1 2017 2017 2018 Q1 Results ▪ Orders continue to be strong primarily from Orders ($M) $7.3 $7.4 $15.4 oil & gas customers Revenue ($M) 3.9 8.5 8.8 ▪ Revenue more than double Q1 17 ▪ Generated small positive EBITDA during Operating (Loss)/ (1.5) (.1) (.6) Income ($M) Q1 18 EBITDA* ($M)
Slide 12: Process Systems
Process Systems Q1 Q4 Q1 2017 2017 2018 Q1 Results ▪ Process Systems includes Abilene-based CNG Orders ($M) $3.6 $2.4 $4.9 and fabrications, and Red Wolf as of Feb 1, Revenue ($M) 2017 3.3 5.1 4.4 ▪ Operating loss worse due to low productivity Operating (.8) (.5) (.9) ▪ Initiated restructuring plan
Slide 13: Operating Working Capital (OWC)
Operating Working Capital (OWC) OWC* Management OWC* Historical Trend – cents/$ sales 12/31/17 3/31/18 $0.20 DSO 70 48 $0.15 Inv. Turns 5.0 5.4 DPO 44 42 $0.10 Cash Conv. 48 44 $0.05 (days) OWC $M 11.4 14.3 $- $(0.05) *Operating Working Capital = Trade A/R + Inventories – Trade Payables – Customer D
Slide 14: Balance Sheet and Capital Expenditures
Balance Sheet and Capital Expenditures (In Millions) Capital Expenditures (net) 3/31/2017 12/31/2017 3/31/2018 Cash Assets $ 0.3 $ 0.1 $ - 4.5% % of sales 3.4% Accounts Receivable 23.7 13.6 15.9 $6.6 $6.2 Inventory 25.8 19.3 22.3 PPE 56.0 55.7 53.7 Other 25.9 23.7 23.3 1.5-2.5% Total Assets 131.7 11
Slide 15: 2018 Priorities
2018 Priorities ▪ Customer diversification ▪ Manufacturing footprint reduction ▪ Restructure systems to support changing sales mix ▪ CI to offset margin compression ▪ Manage through steel escalation risk May 4, 2018 © 2018 Broadwind Energy, Inc. All rights reserved. 15
Slide 16: Appendix
Appendix Consolidated Three Months Ended March 31, 2018 2017 Net (Loss)/Income from continuing operations……………………………. $ (4,811) $ 6,482 Interest Expense………………………………………………. 298 139 Income Tax Provision/(Benefit)……………………………… (27) (5,018) Depreciation and Amortization……………………………………………………………… 2,357 2,10
Slide 17: Appendix
Appendix Process Systems Three Months Ended March 31, 2018 2017 Net Income/(Loss)……………………………………….. $ (644) $ (699) Interest Expense………………………………………….. 1 1 Income Tax Provision/(Benefit)…………………………. (253) (125) Depreciation and Amortization…………………………… 451 334 Share-based Compensation and Other Stock Pa
Slide 18: Broadwind Energy is a precision manufacturer for clean tech
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications. www.BWEN.com May 4, 2018 © 2018 Broadwind Energy, Inc. All rights reserved. 18