Slide 1: Q2 2018 Earnings Call
Q2 2018 Earnings Call July 31, 2018
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 ▪ $37M revenue and $2.1M EBITDA – BWEN recovery in line with guidance ▪ Core wind, oil and gas and mining markets remain strong – gas turbine demand weak ▪ Tariffs and trade politics remain a headwind ▪ Customer diversification efforts on track ▪ Liquidity stable, with $10M available on c
Slide 4: Orders and Backlog
Orders and Backlog ($ Millions) Orders Backlog 1H 1H YTD 2018 350 Millions 2017 2018 Book:Bill 300 250 Towers & Heavy $30.6 $17.3 .42 Fabrications 200 150 Gearing 19.0 21.5 1.2 100 Process Systems 8.1 7.9 .93 50 Total 57.7 46.7 .70 - Q2 1 2 Q2 1 3 Q2 1 4 Q2 1 5 Q2 1 6 Q2 1 7 Q2 1 8 ▪ Tower orders im
Slide 5: Successful Diversification of BWEN Customer Base
Successful Diversification of BWEN Customer Base Customer Diversification Progress Non-Wind Order Trend (T12M) $45,000 $80,000 Mining/OHV Oil & Gas Industrial $40,000 $70,000 $40M target $35,000 $60,000 $30,000 $50,000 $25,000 $40,000 $20,000 YTD actual $30,000 $15,000 $10,000 $20,000 $5,000 $10,000
Slide 6: Market Outlook – US Wind (GW)
Market Outlook – US Wind (GW) 40 Development Pipeline - GW 14 Forecast – GW Installations 35 12 30 10 25 8 20 6 15 10 4 5 2 0 0 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 2015a 2016a 2017a 2018e 2019e 2020e 2021e Under construction at QE Adv. Development Source: AWEA Q2 2018 Market
Slide 7: Tariff and Trade Uncertainties
Tariff and Trade Uncertainties 2017 Steel Imports by Source Relative Steel Price $/ST * Country (Dept Commerce) 1100 NAFTA (Canada 1000 Other US + Mexico) 900 800 700 China China 600 Japan 500 400 Turkey W. Europe 300 200 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 18-Jul Russia Source: Platts Brazil/S.Kore
Slide 8: 2018 Priorities
2018 Priorities ▪ Customer diversification ▪ Manufacturing footprint reduction ▪ Restructure systems to support changing sales mix ▪ CI to offset margin compression ▪ Manage through steel escalation risk July 31, 2018 8
Slide 9: Towers and Heavy Fabrications
Towers and Heavy Fabrications Q2 Q2 1H 1H Q2 Results 2017 2018 2017 2018 ▪ Tower orders up from PY; tariffs are Orders ($M) $1.5 $9.5 $30.6 $17.3 delaying orders and encouraging increased Sections Sold (#) 264 201 664 344 imports Revenue ($M) 34.3 24.0 83.2 40.8 ▪ Q2 18 tower sections sold down 24%
Slide 10: Gearing
Gearing Q2 Q2 1H 1H Q2 Results 2017 2018 2017 2018 ▪ As expected, orders intake slowed after a Orders ($M) $11.6 $6.1 $19.0 $21.5 very strong Q1 to yield a 1H 2018 yoy Revenue ($M) 6.1 8.6 9.9 17.4 improvement of 13% with increases in the mining sector augmenting continued Operating (Loss)/ (.6) (.7
Slide 11: Process Systems
Process Systems Q2 Q2 1H 1H 2017 2018 2017 2018 Q2 Results ▪ Process Systems includes Abilene-based CNG Orders ($M) $4.4 $3.0 $8.1 $7.9 and fabrications, and Red Wolf as of Feb 1, Revenue ($M) 2017 3.0 4.1 6.3 8.5 ▪ Operating loss worse due mainly to $5.0M Operating (Loss) (1.1) (5.8) (1.9) (6.7) go
Slide 12: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q2 17 Q1 18 Q2 18 1H 17 1H 18 Total Sales $43.4 $30.0 $36.8 $99.4 $66.7 Gross Profit 3.9 (.1) 2.2 10.2 2.1 Gross Profit % 8.9% (.4%) 6.0% 10.3% 3.1% Operating Expense 4.4 4.4 8.0 9.2 12.4 Operating Income/(Loss) (.5) (4.5) (5.7) 1.1 (10.3) % of sales (1.2%) (15.1%
Slide 13: Operating Working Capital (OWC)
Operating Working Capital (OWC) OWC* Management OWC* Historical Trend – cents/$ sales $0.20 12/31/17 3/31/18 6/30/18 DSO 70 48 44 $0.15 Inv. Turns 5.0 5.4 6.7 $0.10 DPO 44 42 41 Cash Conv. 48 44 36 $0.05 (days) OWC $M 11.4 14.3 14.3 $- *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 (net) 12/31/2017 3/31/2018 6/30/2018 4.5% Cash Assets $ 0.1 $ - $ 0.1 % of sales 3.4% $6.6 Accounts Receivable 13.6 15.9 17.9 $6.2 Inventory 19.3 22.3 20.7 PPE 55.7 53.7 52.3 Other 23.7 23.3 17.7 1.5-2.5% Total Assets 112.4 11
Slide 15: Appendix
Appendix Consolidated Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net (Loss)/Income from continuing operations……………………………. $ (6,083) $ (688) $ (10,894) $ 5,794 Interest Expense………………………………………………. 352 217 650 356 Income Tax Provision/(Benefit)……………………………… (6) (16) (33) (
Slide 16: Appendix
Appendix Process Systems Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net Income/(Loss)………………………………………………… $ (3,977) $ (5,070) $ (4,621) $ (5,769) Interest Expense……………………………………………………. 1 1 2 3 Income Tax Provision/(Benefit)…………………………………… (1,797) 3,966 (2,050) 3,841 Depre
Slide 17: Broadwind Energy is a precision manufacturer
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications. www.BWEN.com July 31, 2018 17