Broadwind, Inc. · NASDAQ:BWEN
Broadwind — Broadwind Energy — Q3 2019 Earnings Presentation
19 slides from Broadwind's earnings presentation, Oct 29, 2019
Slide 1: Q3 2019 Earnings Call
Q3 2019 Earnings Call October 29, 2019
Slide 2: Industry Data and Forward-Looking Statements Disclaimer
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 c on ducted by third parties, independent industry associations or general publications and other publicly
Slide 3: Q3 2019 Highlights
Q3 2019 Highlights ▪ Q3 orders total $ 77M - strong tower demand and record quarterly orders for other heavy fabrications ▪ Backlog rises to $175 million at September 30 th ▪ Q3 2019 revenue of $46.1 million up 47% from prior year ▪ Q3 2019 net loss per share of $. 06, all operating segments profita
Slide 4: Orders and Backlog
Orders and Backlog ($ Millions) Orders ▪ Tower orders up sharply in Q3, customer diversification progress on track ▪ Increased strategic focus on heavy fabrications for mining, construction, other ▪ Gearing orders down YoY due to 2018 spike from O&G customers, lead times shrinking ▪ Process Systems:
Slide 5: Industry and Customer Diversification
Industry and Customer Diversification 5 YTD Orders Customer and Product Expansion (in millions) T12M Revenue by Industry (in millions) O&G Aftermarket Wind Industrial Steel $40M target O&G Mining Industrial Steel Construction Wind Wind
Slide 6: Diversification of BWEN Customer Base
Diversification of BWEN Customer Base 6 Non - SGRE Tower OEM #1 2016 FY Orders - $165M Tower OEM #1 2019 Sept YTD Orders - $205M *Tower OEM #1 orders based on PO’s received during the period
Slide 7: Market Outlook – US Wind
Market Outlook – US Wind 7 ▪ ‘20 - 22 forecast installations increased by ~ 25% to 33 GW ▪ Strong interest for 80% PTC lifting ’21 demand ▪ State - level Renewable Energy Portfolio standards and Corporate/Industrial buyers driving expected installations increase Corporate and Industrial Demand Sourc
Slide 8: Overview of Other Markets
Overview of Other Markets 8 Mining Oil and Gas Steel Other Industrial • Strong demand from both gearing and heavy fab customers; expanding content with key customers • Gearing: fracking surge has subsided • Process Systems: Gas turbine volumes recovering • Capital spending slowing due to recent mark
Slide 9: Current Focus
Current Focus 9 ▪ Complete systems investments to support broader, more complex sales mix ▪ Managing through supply chain and labor challenges to protect production slots and support near record Tower segment revenue in ‘20 - ’21 ▪ Careful management of economically sensitive Gearing segment – boost
Slide 10: Towers and Heavy Fabrications
Towers and Heavy Fabrications Q3 18 Q3 19 YTD 18 YTD 19 Orders ($M) $4.6 $65.6 $24.3 $174.4 Sections Sold (#) 132 243 476 632 Revenue ($M) 18.8 33.8 62.6 91.1 Operating Inc/(Loss) ($M) (0.9) 0.7 (2.4) 0.8 - % of Sales (4.8)% 2.1% (3.8)% .9% EBITDA* ($M) 0.7 1.8 2.4 4.4 - % of Sales 3.7% 5.4% 3.8% 4.
Slide 11: Gearing
Gearing Q3 Results ▪ Orders down due to surge in O&G orders in 2018, diversification efforts partially offsetting ▪ Improved mix and pricing offsetting revenue decline ▪ End market diversification improved YoY ▪ EBITDA $1.1M – sustained operational improvement * Reconciliation to non - GAAP measure
Slide 12: Process Systems
Process Systems * Reconciliation to non - GAAP measure included in Appendix Q3 Results ▪ Higher orders YoY due to new gas turbine content for an international customer ▪ Revenue up $1.6M YoY, reflecting increased order activity ▪ Targeted price increases, labor management boosting margins in 2019 Pr
Slide 13: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q3 Comparison: ▪ YoY Sales increases driven predominantly by recovery in tower demand ▪ Margin pressure due to global competition for towers ▪ Gross profit up YoY due to improved productivity and plant utilization, mix and pricing also driving ▪ All operating segm
Slide 14: Operating Working Capital (OWC)
Operating Working Capital (OWC) ▪ ~$17M decrease in operating working capital due to increased Tower deposits and consumption of pre - buy steel ▪ OWC as a % of sales expected to be sub 10% in Q4 ▪ Cash conversion cycle reduction on track * Operating Working Capital = Trade A/R + Inventories – Trade
Slide 15: Balance Sheet and Capital Expenditures
Balance Sheet and Capital Expenditures Capital Expenditures (in Millions) ▪ Cash applied to balance on credit line ▪ Working Capital improvement: Working down pre - buy steel + Deposit increase ▪ $35M credit line had $19M of additional availability at quarter - end, up $11M sequentially ▪ 2020 capit
Slide 16: Q3 Summary and Guidance
Q3 Summary and Guidance ▪ Q3 2019: Exceeded Revenue and EBITDA ▪ Q4 2019: Tower volume improving, but margin and supply chain pressures remain - Revenue >$50M and EBITDA ~$1.5 - 2M 16
Slide 17: Appendix: Adjusted EBITDA Reconciliation
Appendix 17 Consolidated 2019 2018 2019 2018 Loss from Continuing Operations…………………………...…………. (898)$ (750)$ (2,959)$ (11,644)$ Interest Expense…………………….……………………………………. 609 372 1,919 1,022 Income Tax Provision/(Benefit)…………………...…………………… 28 13 62 (20) Depreciation and Amortization…………………………………………………
Slide 18: Appendix: Process Systems and Corporate Reconciliation
Appendix 18 Process Systems 2019 2018 2019 2018 Net Income/(Loss)……………………...……………………………. 134$ (2,340)$ (140)$ (6,185)$ Interest Expense……………………………………………………. 1 1 2 1 Income Tax Provision/(Benefit)…………………...…………………… 3 1,553 17 (498) Depreciation and Amortization……………………………………. 123 385 367 1,160 Share-
Slide 19: Broadwind Energy company description and website
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications . www.BWEN.com 19