Slide 1: 2014 Earnings Conference Call
2014 Earnings Conference Call February 26, 2015
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 conducted by third parties, independent industry associations or general publications and other publicly avail
Slide 3: 2014 – Continued Steady Improvement, Despite Some Headwinds
2014 – Continued Steady Improvement, Despite Some Headwinds CAGR 15% Full-Year Highlights Tower capacity positioned well for 2015; Gears and Services orders well ahead of PY Completed 3-year, $13.7M restructuring investment Good expense management; SG&A reduced to 9% of sales, down 11 percentage poi
Slide 4: Towers Recovery Update
Towers Recovery UpdateAbilene Production –Avg. Sections Per ProgressWeek Passed customer site qualification milestone10 Improvements in weld and paint quality8 Strengthened supervision via internal transfers to 6 Abilene4 Production yield becoming more predictable2 Still ramping up to target product
Slide 5: Orders and Backlog
Orders and Backlog Orders – $M $78M in Towers & Weldments orders in 2014 vs. PY record high 2014 Gearing orders well ahead of PY . . . oil and gas weakness may delay the timing of some deliveries Services orders up 85% over PY; strong demand for blade repair Order Backlog – $M Strong 2014 ending bac
Slide 6: Wind Market Update
Wind Market Update Industry Update PTC passed late in December, retroactive to 1/1/14 6 GW purchased in last 2 weeks of 2014 ~13GW under construction at 12/31/14 7.6 GW in TX, 2.4 GW in Midwest, 1.2 GW in Plains >3.3GW of PPAs signed in 2014 and merchant hedge market rebounding EPA Clean Power Plan
Slide 7: Gearing - Outlook
Gearing - Outlook Backlog - $20M O&G Delay of ~ $2M of orders into Q3 and Q4 Q1 impact estimated near $3M due to production loss Some offset to market conditions by gaining share Steel Major Cap Ex spending going on in steel segment Increase in both quotes and dollar values Wind Aftermarket business
Slide 8: 2015 Priorities
2015 Priorities Grow top line by 6-8% Achieve profitability Sell 2016 tower capacity Continue to diversify industry and customer base Implement robust new product introduction process 2/26/15 © 2015 Broadwind Energy, Inc. All rights reserved. 8
Slide 9: Key Focus: Margin Improvement
Key Focus: Margin Improvement BWEN Margins % of Sales Gross Margin *Excl restructuring ** Excl 2010 impairment Adj. EBITDA* Operating Margin** Q4 Results Revenue, profit, EPS declines all due to low Abilene tower production and $3M of one-time expenses to address customer issues 2014 Results Revenue
Slide 10: Towers and Weldments
Towers and Weldments Immediate Focus Restore Abilene production to full capacity Consolidate Abilene weldments production into single plant Standardize new product introduction process Q4 2013 Q4 2014 2013 FY 2014 FY Orders ($M) $193.2 $21.1 $361.5 $77.6 Towers Sold (#) 111 101 392 435 Revenue ($M)
Slide 11: Gearing
Gearing Immediate Focus Build backlog to respond to weakening oil and gas market Manage cost structure to reduce break-even point Q4 2013 Q4 2014 2013 FY 2014 FY Orders ($M) $5.1 $6.3 $34.5 $41.9 Revenue ($M) 11.6 10.7 43.2 42.3 Operating Loss ($M) -5.6 -2.4 -17.9 -9.4 -% of Sales -48.2 -22.0 -41.5
Slide 12: Services
Services Q4 2013 Q4 2014 2013 FY 2014 FY Orders ($M) $2.4 $2.3 $8.5 $15.7 Revenue ($M) 2.0 4.6 17.2 15.6 Operating Loss ($M) -1.5 -1.1 -4.7 -4.5 -% of Sales -74.5% -23.9% -27.4% -28.9% Adj. EBITDA ($M) -1.1 -.8 -2.6 -3.1 - % of Sales -55.5% -17.0% -14.9% -19.7% Q4 Results Revenue more than double Q4
Slide 13: Key Focus: Liquidity Management
Key Focus: Liquidity Management 2013 2014 Adj. EBITDA $10,346 $8,877 Op. Working Cap (Inc)/Dec 16,239 -8,505 Other Operating Cash -331 2,129 Operating Cash Flow 26,254 2,501 Capital Expenditures -6,950 -6,504 Asset Sales 13,249 1,065 Debt Incr/(Decr) -7,506 -1,135 Stock Proceeds/(Repurchases) 18 -1,
Slide 14: Balance Sheet
Balance Sheet YE 2012 YE 2013 YE 2014 Cash Assets 846 26,162 20,256 Op Working Capital 21,587 5,348 13,853 Net PPE 78,889 69,077 62,952 Other Assets 21,148 12,577 8,476 (Debt and Cap Leases) -7,121 (5,082) (4,111) (Other Liabilities) -12,001 (12,752) (13,046) Equity 103,348 95,330 88,380 Cash assets
Slide 15: Other Highlights
Other Highlights SEC investigation resolved Successfully passed first SOX 404 audit since filing status reverted to “accelerated” Restructuring project outlays initiated in 2011 are now complete – total investment of $13.7M YE 2014 Net Operating Loss carry-forward estimated at $174M 2/26/15 © 2015 B
Slide 16: Financial Outlook
portsAccelerated tower production where components were more readily available … $5M revenue recognition delayed to Q2-Q3 2/26/15 © 2015 Broadwind Energy, Inc. All rights reserved. 4 Financial Outlook BWEN Margins — % of Sales 15 10 Gross Margin Adj. EBITDA* 5 0 2010 2011 2012 2013 2014 2015 -5 Ope
Slide 17: 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. 2/26/15 © 2015 Broadwind Energy, In