Slide 1: Q2 2017 Earnings Call
Q2 2017 Earnings Call August 1, 2017
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: Highlights
Highlights Jason Bonfigt named Chief Financial Officer and Treasurer Q2 results consistent with guidance Q2 revenue flat compared to prior year – lower tower sales volumes offset by added Red Wolf sales Tower manufacturing productivity gains and cost efficiencies drive higher segment earning
Slide 4: Orders and Backlog
Orders and Backlog Orders – $M Backlog – $M Q2 Q2 YTD YTD YTD 2016 2017 2016 2017 2017 Book: 350 Bill 300 Towers & 170.6 1.5 206.1 30.6 .37 250 Weldments Millionen 200 Gearing 5.6 11.6 9.1 19.0 1.91 150 100 Process n/a 4.4 n/a 8.1 1.29 Systems 50 Total 176.2 17.6 215.2 57.6 .58 - Q1 12 Q4 12 Q3 13 Q
Slide 5: Wind Market Update
Wind Market Update Development Pipeline Evolving Forecast of GW Wind Installations 13 12 Q2 2017 11 GW 10 Q2 2016 9 8 7 2017e 2018e 2019e 2020e Source: MAKE Global Wind Market Outlook Update Source: AWEA Q2 2017 Market Report 4 year forecast upgraded 6% through 2020 but skewed to later years August
Slide 6: U.S. Gearing Production
U.S. Gearing Production $5,000 $4,500 $4,000 $3,500 ~+6% $3,000 $M $2,500 $2,000 $1,500 $1,000 $500 $0 2012 2013 2014 2015 2016 2017E *Excluding automotive Sources: AGMA & IHS American Gear Manufacturers Association raised their forecast for second consecutive reporting period in April Outlook r
Slide 7: Natural Gas Market Indicators
Natural Gas Market Indicators # of Capacity 2017 Units (GWs) # of CNG 2017 Q1 53 7 Stations Built Q2 Q1 19 YTD 53 7 Q2 18 YTD 37 Source: McCoy Power Reports Source: U.S. Dept. of Energy Red Wolf starting to see recovery in orders for gas turbine aftermarket – expect stronger 2H order intake Decl
Slide 8: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q2 17 sales even with Q1 17; Towers and Weldments - 10%, Gearing +13%, Process Systems added 7% Gross Margin, profit and EBITDA all slightly lower due mainly to Process Systems operating loss EPS loss of $.05 due to addition of amortization expenses associat
Slide 9: Towers and Weldments
Towers and Weldments Q2 Q2 YTD YTD Q2 Results 2016 2017 2016 2017 Orders ($M) 170.6 1.5 206.1 30.6 Orders down significantly – Q2 16 included multi-year framework agreement Towers Sold (#) 108 88 226 221 Towers sold -19% vs. Q2 16 – slowdown in Revenue ($M) 38.0 34.3 80.0 83.2 new orders after P
Slide 10: Gearing
Gearing Q2 Q2 YTD YTD Q2 Results 2016 2017 2016 2017 Orders up significantly – oil & gas and Orders ($M) 5.6 11.6 9.1 19.0 industrial Revenue ($M) 5.4 6.1 10.2 9.9 Revenue up 13% - strong sales to oil & gas customers Operating Loss ($M) (1.2) (0.6) (2.4) (2.2) Operating loss cut in half – incr
Slide 11: Process Systems
Process Systems Q2 Q2 YTD YTD 2016 2017 2016 2017 Q2 Results Process Systems includes Abilene-based CNG, Orders ($M) n/a 4.4 n/a 8.1 and Red Wolf as of Feb 1, 2017 Revenue ($M) n/a 3.0 n/a 6.3 Q2 Orders predominantly Red Wolf $4.1M Revenue reflects $1M customer imposed Operating Loss n/a (1.1)
Slide 12: Operating Working Capital (OWC)
Operating Working Capital (OWC) OWC* Management OWC* Historical Trend – cents/$ 12/31/16 3/31/17 6/30/17 $0.20 sales $0.18 DSO 22 39 45 $0.16 $0.14 Inv. Turns 8.2 7.7 7.4 $0.12 $0.10 $0.08 DPO 33 36 34 $0.06 $0.04 Cash Conv. 0 28 50 $0.02 (days) $- *Operating Working Capital = Trade A/R + Inventorie
Slide 13: Balance Sheet and Capital Expenditures
Balance Sheet and Capital Expenditures Cap Ex- % of Revenue (In Millions) 12/31/2016 3/31/2017 6/30/2017 Abilene Expansion and Cash Assets $ 21.9 $ 0.3 $ 0.2 Coatings Improvements Accounts Receivable 11.9 23.7 21.5 5.8% 5.4% Inventory 21.2 25.8 21.3 PPE 54.6 56.0 57.4 4.8% Other 8.1 25.9 24.6 Total
Slide 14: 2017 Guidance and Priorities
2017 Guidance and Priorities Q3 Guidance: Revenue $30M, EBITDA $1M, EPS ($.15 - .17) Q4 outlook highly uncertain due to changes in tower procurement and engineering practices Second Half Priorities Navigate through the impact of near-term tower inventory correction Progress growth/diversific
Slide 15: Appendix
Appendix Consolidated Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net Income/(Loss) from continuing operations……………………………. $ (688) $ 42 $ 5,794 $ (316) Interest Expense…………………………………. 217 152 356 306 Income Tax Provision/(Benefit)……………………………… (16) (8) (5,034) (16) Deprec
Slide 16: Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications. www.BWEN.com August 1, 2017 16