Slide 1: Q4 2018 Earnings Call
Q4 2018 Earnings Call February 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: Highlights
Highlights Achieved targeted $40M customer diversification in 2018 Debt reduced 18% in 2018 – credit line expanded and extended post year end 1st profitable year for Gearing Q4 Revenue and EBITDA in line with guidance Tower order book building despite steel tariffs 2019 Outlook confirmed
Slide 4: Orders and Backlog ($ Millions)
Orders and Backlog ($ Millions) Orders Backlog $96M Q4 17 Q4 18 FY FY YTD 2018 2017 2018 Book:Bill Towers & $2.5 $2.4 $34.9 $23.5 .34 Heavy Fabrications Gearing 7.4 8.5 36.9 41.6 1.08 Process 2.4 5.8 15.8 18.1 .99 Systems Total 12.3 16.7 87.6 83.2 .66 Tower orders depressed by steel price spike Pr
Slide 5: Successful Diversification of BWEN Customer Base
Successful Diversification of BWEN Customer Base YTD Orders Mining Mining YTD Orders Oth. Industrial Other Industrial $40M $40M $40Mtarget Targettarget Oil & Gas Diversification of customer base met $40M target for 2018 Oil and gas, mining and other industrial has grown to >$60M annual intake fo
Slide 6: Market Outlook – US Wind (GW)
Market Outlook – US Wind (GW) Development Pipeline - GW Forecast – GW Installations 40 14 35 12 30 10 25 8 GW 20 6 15 4 10 5 2 0 0 Q1 16 Q3 16 Q1 17 Q3 17 Q1 18 Q3 18 '15 '16 '17 '18 '19e '20e '21e '22e Under construction at QE Adv. Development Source: MAKE Global Wind Market Outlook Update – Q1 201
Slide 7: Market Outlook - U.S. Gearing Production ($ millions)
Market Outlook - U.S. Gearing Production ($ millions) US Gear Shipments % 2015- 2018- 4.0% CAGR market 2018 2021 4,000 CAGR CAGR 3,500 Turbines & Power 10% -1.5% -2% 3,000 2,500 Oil & Gas 6% +13% +9% $M 2,000 1,500 Mining & Constuction 6% +3% -1% 1,000 500 Other Industrial 39% +8% flat 0 2015a 2016a
Slide 8: 2019 Priorities
2019 Priorities Continue focus on customer diversification - $60M target Restructure systems to support changing sales mix Continuous improvement to offset margin compression Adjust steel procurement strategy to support strong 2019 production Reduce average cash conversion cycle by ~20% Fe
Slide 9: Towers and Heavy Fabrications
Towers and Heavy Fabrications Q4 Q4 FY FY Q4 Results 2017 2018 2017 2018 Mining and industrial demand continues to Orders ($M) $2.5 $2.4 $34.9 $23.5 be strong, Tower quoting activities Sections Sold (#) 30 64 820 540 increasing Revenue ($M) 4.2 10.7 103.4 68.8 Q4 18 tower sections sold up slight
Slide 10: Gearing
Gearing Q4 Q4 FY FY Q4 Results 2017 2018 2017 2018 Orders up due primarily due to demand Orders ($M) $7.4 $8.5 $36.9 $41.6 from wind and mining customers Revenue ($M) 8.5 10.9 26.0 38.4 Revenue up 28% compared to Q4 17 Operating (Loss)/ (0.1) 1.0 (2.6) .1 EBITDA $1.6M – increased plant Income
Slide 11: Process Systems
Process Systems Q4 Q4 FY FY 2017 2018 2017 2018 Q4 Results Higher sales levels due to other industrial Orders ($M) $2.4 $5.8 $15.8 $18.2 customers partially offset by lower sales Revenue ($M) volume for gas turbine content 5.1 5.6 17.4 18.3 Revenue run rate, although increasing, Operating (.5) (
Slide 12: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q4 17 Q4 18 FY 17 FY 18 Total Sales $17.8 $27.2 $146.8 $125.4 Gross Profit (3.1) (.5) 8.2 3.1 Gross Profit % (17.4%) (1.8%) 5.6% 2.5% Recurring Operating Expense 4.3 4.1 17.7 16.6 One-time items (.7) 7.6 (2.1) 11.5 Total Operating Expenses 3.6 11.7 15.6 28.1 Opera
Slide 13: Operating Working Capital (OWC)
Operating Working Capital (OWC) OWC* Management OWC* Historical Trend – cents/$ sales 12/31/17 9/30/18 12/31/18 $0.20 DSO 70 49 58 $0.15 Inv. Turns 5.0 5.1 4.8 DPO 44 44 39 $0.10 Cash Conv. 48 54 17 (days) $0.05 OWC $M 11.4 18.2 5.0 $- *Operating Working Capital = Trade A/R + $(0.05) Inventories – T
Slide 14: Balance Sheet and Capital Expenditures
Balance Sheet and Capital Expenditures In Millions Capital Expenditures 12/31/2017 9/30/2018 12/31/2018 $8 (in Millions) $7.3 Cash Assets $ 0.1 $ 0.1 $ 1.2 $6.7 $7 Accounts Receivable 13.6 16.7 17.5 $6.2 $6.2 Inventory 19.3 23.5 22.7 $6 Gross PPE 55.7 50.7 49.1 $5 Net Other 23.7 17.0 8.7 Total Asset
Slide 15: Q4 Summary and Guidance
Q4 Summary and Guidance Q4 2018: As guided – Gearing progress offset by rescheduled tower production 2019: Average quarterly revenue >$40M, consistent positive EBITDA Q1 2019: Gears segment continues to perform…rebuilding Towers, but margin pressures remain - Revenue $40M and EBITDA $1-1.5M Fe
Slide 16: Appendix
Appendix Consolidated Three Months Ended December 31, Twelve Months Ended December 31, 2018 2017 2018 2017 Net (Loss) from continuing op erations……………………………. $ (12,358) $ (6,928) $ (24,000) $ (3,184) Interest Exp ense…………………….……………………………………. 475 214 1,494 798 Income Tax (Benefit)/Provision…………………………
Slide 17: Appendix
Appendix Process Systems Three Months Ended December 31, Twelve Months Ended December 31, 2018 2017 2018 2017 Net (Loss)……………………………………………...…………… $ (8,501) $ (390) $ (16,003) $ (2,207) Interest Expense……………………………………………………. 3 1 6 5 Income Tax (Benefit)……………………………………..……… (365) (78) (453) (88) Depreci
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 February 26, 2019 18