Slide 1: Q1 2019 Earnings Call
Q1 2019 Earnings Call April 26, 2019
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 2019 Highlights
Q1 2019 Highlights Q1 Revenues up 39% YoY. All segments up YoY and in-line with guidance Strong Gearing Performance, $1.4M of operating income, 20% EBITDA margin Adj. EBITDA at $1.7M, up $3.3M YoY Tower order book building despite steel tariffs – trade case adding duties to Chinese and Vietn
Slide 4: Orders and Backlog ($ Millions)
Orders and Backlog ($ Millions) Orders Backlog $81M Q1 18 Q1 19 YTD 2019 Book:Bill Towers & $9.8 $12.5 .44 Heavy Fabrications Gearing 15.4 7.1 .71 Process 3.0 4.4 1.31 Systems Total 28.1 24.0 .58 Tower orders impacted by steel price spike, Process activity levels improving Systems Increased stra
Slide 5: Diversification of BWEN Customer Base
Diversification of BWEN Customer Base T12M Revenue by Industry Strategic Focus: (in M’s) Customer and Product Expansion 1. Reduce reliance on wind YTD Orders tower demand Steel $40M 2. Leverage core competencies $40M $40Mtarget Target target Construction and process capabilities Industrial 3. Grow e
Slide 6: Market Outlook – US Wind
Market Outlook – US Wind GW Installations Non-utility wind power purchases 14 Forecast 12 10 8 6 4 2 0 '15 '16 '17 '18 '19e '20e '21e '22e Source: MAKE Global Wind Market Outlook Update – Q1 2019 Forecast Source: AWEA 2018 installations: >3,100 turbines, concentrated in Midwest, Plains states and
Slide 7: Other Customers/Markets
Other Customers/Markets • Strong demand from both gearing Mining and heavy fab customers; adding products • Gearing: short-term pause but 2H Oil and Gas looks stronger • Process Systems: Gas turbines recovering Steel • Strong capital spending Other Industrial • Expanding customer base for gearing Ap
Slide 8: 2019 Priorities
2019 Priorities Continue focus on customer diversification - $60M order target Systems investments to support changing sales mix Continuous improvement to offset margin compression Adjust steel procurement strategy to support strong 2019 production Reduce average cash conversion cycle by ~
Slide 9: Towers and Heavy Fabrications
Towers and Heavy Fabrications Q1 Q1 Q1 Results 2018 2019 Mining and industrial demand continues to Orders ($M) $9.8 $12.5 be strong, Tower quoting activities Sections Sold (#) 143 188 increasing Revenue ($M) 18.2 28.3 Q1 ‘19 tower sections sold up sequentially Operating Inc/(Loss) (2.1) (.2) and
Slide 10: Gearing
Gearing Q1 Q1 Q1 Results 2018 2019 Orders down due to surge in O&G orders Orders ($M) $15.4 $7.1 in 2018, diversification efforts partially Revenue ($M) 8.8 10.0 offsetting Revenue up 14% compared to Q1 ‘18, Operating (Loss)/ (0.6) 1.4 Income ($M) reflecting improved throughput End market dive
Slide 11: Process Systems
Process Systems Q1 Q1 Q1 Results 2018 2019 Higher orders due to new gas turbine content Orders ($M) $3.0 $4.4 for an international customer Revenue ($M) 3.0 3.3 Revenue up $.3M YoY, reflecting increased Operating (.3) (.3) order activity income/(Loss) ($M) EBITDA* ($M) .1 (.2) Targeted price a
Slide 12: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q1 18 Q1 19 Total Sales $30.0 $41.7 Gross Profit (.1) 3.5 Gross Profit % (.4%) 8.5% Total Operating Expenses 4.4 4.0 Operating (Loss) (4.5) (.5) % of sales (15.1%) (1.2%) Adj. EBITDA (1.6) 1.7 % of sales (5.3%) 4.1% EPS, Continuing (.32) (.07) $M except as noted o
Slide 13: Operating Working Capital (OWC)
Operating Working Capital (OWC) OWC* Management OWC* Historical Trend – cents/$ sales 12/31/18 3/31/19 $0.20 DSO 59 49 $0.15 Inv. Turns 4.9 4.6 DPO 38 48 $0.10 Cash Conv. 16 41 (days) $0.05 OWC $M 5.0 17.6 $- *Operating Working Capital = Trade A/R + $(0.05) Inventories – Trade Payables – Customer De
Slide 14: Balance Sheet and Capital Expenditures
Balance Sheet and Capital Expenditures In Millions Capital Expenditures 12/31/18 3/31/19 (in Millions) Cash Assets $1.2 $0.0 $8.0 Accounts Receivable 17.5 22.5 $7.0 Inventory 22.7 32.9 Unfinanced PPE 49.1 48.5 $6.0 Financed Other 8.7 25.7 $5.0 Total Assets 99.2 129.6 $4.0 Accounts Payable 11.6 20.1
Slide 15: Q2 Summary and Guidance
Q2 Summary and Guidance Q1 2019: As guided 2019: Average quarterly revenue >$40M, FY EBITDA ~$8M Q2 2019: Gears segment continues to perform…rebuilding Towers, but margin pressures remain - Revenue >$40M and EBITDA ~$1.3-1.8M 15
Slide 16: Appendix
Appendix Process S ystems Three Months Ended March 31, 2019 2018 Net Loss………...……………..…...…………………………….$ (278) $ (51) Interest Expense……………………………………………………. 1 - Income Tax (Benefit)……………………………………..……… (9) (253) Depreciation and Amortization……………………………………. 122 387 Share-based Compensation and Other Sto
Slide 17: Broadwind Energy is a precision manufacturer of structures, equipment & components
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications. www.BWEN.com 17