Slide 1: Investor Teleconference Q2 2012 Results
August 8, 2012 Investor Teleconference Q2 2012 Results © 2012 Broadwind Energy, Inc. All Rights Reserved.
Slide 2: Industry Data Disclaimer and Forward-Looking Statements
Industry Data Disclaimer and Forward-Looking Statements Broadwind obtained the industry and market data used throughout this presentation from its own research, internal surveys and studies conducted by third parties, independent industry associations or general publications and other publicly avail
Slide 3: Q2 2012 Overview
Q2 2012 Overview 3 Highlights Revenue up 43% over Q2 2011 Adjusted EBITDA of $1.1 M, up from Q2 prior year Gearing EBITDA margin over 9% - trending toward 20% target Weldment orders up 170% for 1H 2012 Service orders up 49% over Q2 2011 SGA as a percent of revenue down 8 points vs. 2011 What went we
Slide 4: Orders & Backlog
Orders & Backlog Orders ($ in millions) Order Backlog Tower order flow is light due to scheduled PTC expiration ... have quotes outstanding totaling $80 M for 2013 deliveries Weldments orders of $5.9 M up sequentially – building to $20 M revenue level in 2013 Gearing orders would have been up 13% ex
Slide 5: Business Transformation
Business Transformation 5 The Business Transformation is predicated on 3 initiatives Reducing manufacturing footprint and cost base Diversifying customer and revenue base into other industries Improve financial flexibility Reduce footprint by ~ 600k Sq. Ft or 40% Target 50/50 mix between wind and in
Slide 6: Footprint and Cost Reduction
Footprint and Cost Reduction Annual cash flow improvement of $8.0 M with $400 M of revenue capacity 6 Initiative Status Annual Impact Sell non-core Logistics business Done – Q2 2011 Cash Savings $3.0 M Close European office Done – Q4 2011 10K sq. ft. reduction $500 K savings Consolidate Gearing faci
Slide 7: Industry and Customer Diversification
Industry and Customer Diversification Well on the way to a 50/50 industrial / wind mix Towers – Addressable Market 7 Gearing – 1H End Markets Services – TTM Revenue Evolution Initiative Status Impact Diversify Gearing business away from wind to industrial 1H 2012 sales outside of new wind were 94% v
Slide 8: Tower & Weldments Outlook
Tower & Weldments Outlook 9 Towers 2.1 GW forecast in 2013 mostly Ontario 1.8 GW forecast excl. Brazil which has stringent local content Weldments 2.2 GW forecast in ‘13 State RPS requirements support ~ 3 GW $8.0M of orders through 1st half of 2012 Significant quoting activity in O&G and mining Leve
Slide 9: Consolidated Financial Results
Consolidated Financial Results 10 Q2 2012 sales up 43% over Q2 2011 — Gearing, Services, steel content in towers Gross margin impacted 8 p.p. by Towers product mix; Gearing and Services improved Continued stringent operating expense management – from 18% to 10% of sales Q2 2012 operating income incl
Slide 10: Towers and Weldments Second Quarter 2012
Towers and Weldments Second Quarter 2012 11 Strategic Focus Section volume down 4% from Q2 2011-productivity and utilization suffered from inefficiency challenges of four different tower models – have taken steps to correct 50% of Q2 2011 volume was higher-margin “fabrication only” towers – reduced
Slide 11: Gearing Second Quarter 2012
Gearing Second Quarter 2012 Revenue outside of new wind was 98% of Q2 sales Adj. EBITDA margin improved 12.5 p.p. through volume growth, higher-margin revenue mix, increased productivity, and lower operating expenses Operating loss includes $.4 M restructuring expense 12 Growth in non-wind markets D
Slide 12: Services Second Quarter 2012
Services Second Quarter 2012 Revenue up 141% — strength in blade maintenance, technical services, drivetrain services Operating loss includes higher depreciation on drivetrain services investment Adj. EBITDA moving toward breakeven 13 Shift focus to non-routine drivetrain and blade maintenance servi
Slide 13: Operating Working Capital
Operating Working Capital 14 Q2 2012 $6.4 M inventory build reflects slower Q2 tower production and the carrying of steel for heavy production schedule related to tower sections now scheduled for Q3-Q4 2012 delivery Customer deposits decreased $5.9 M, largely offset by $9.2 M increase in payables
Slide 14: Liquidity
Liquidity 15 $14.0 M debt balance includes $2.9 M which are either forgivable economic development grants or new markets tax credit financing 1st half 2012 debt and capital lease payments totaled $2.6 M Column1 6/30/2012 3/31/2012 Lines of credit, notes payable 926 1,586 Long-term debt 1,925 2,262 L
Slide 15: 2012 Financial Outlook Update
2012 Financial Outlook Update 16 Q3 2012 Strong outlook, especially Towers, Services Revenue approaching $60 M EBITDA up from 1H 2012 run-rate Q4 2012 Tower volume uncertainty Gearing orders, profitability strengthening Services strong installation demand Continued positive EBITDA FY 2010 FY 2011 1H
Slide 16: Broadwind Energy is committed to helping customers maximize performance of their energy and infrastructure
17 Broadwind Energy is committed to helping customers maximize performance of their energy and infrastructure investments— quicker, easier and smarter.