Broadwind, Inc. · NASDAQ:BWEN
Broadwind — Broadwind Energy — Q2 2019 Earnings Presentation
17 slides from Broadwind's earnings presentation, Aug 2, 2019
Slide 1: Q2 2019 Earnings Call
Q2 2019 Earnings Call August 2, 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 st udies conducted by third parties, independent industry associations or general publications and other publicly
Slide 3: Q2 2019 Highlights
Q2 2019 Highlights ▪ Q2 orders total $105M -- customers securing towers to support strong 2020 turbine installations ▪ Backlog rises to $145 million at June 30 ▪ Q2 ‘19 revenue of $41.2 million up 12 %, all segments higher ▪ Continued strong Gearing performance -- $9 million revenue and 10% operatin
Slide 4: Orders and Backlog
Orders and Backlog ($ Millions) Orders ▪ Tower orders up dramatically in Q2, customer diversification progress on track ▪ Increased strategic focus on heavy fabrications for mining, construction, other ▪ Gearing orders down YoY due to 1H 2018 spike from O&G customers, lead times shrinking ▪ Process
Slide 5: Diversification of BWEN Customer Base
Diversification of BWEN Customer Base 5 1. Reduce reliance on wind tower demand 2. Leverage core competencies and process capabilities 3. Grow existing customer relationships 4. Expand within existing/new end markets and products $40M target YTD Orders $40M target $40M Target Strategic Focus: Custom
Slide 6: Markets Overview
Markets Overview 6 Wind Mining Oil and Gas Steel Other Industrial • Medium - term decline curve is less steep • Strong demand from both gearing and heavy fab customers; adding products • Gearing: short - term pause • Process Systems: Gas turbines recovering • Capital spending slowing due to recent m
Slide 7: 2019 Priorities
2019 Priorities 7 ▪ Customer diversification - $60M target ▪ Systems investments to support changing sales mix ▪ Continuous improvement to offset margin compression ▪ Adjust steel procurement strategy to support strong 2019 - 2020 production ▪ Reduce average cash conversion cycle by ~20%
Slide 8: Towers and Heavy Fabrications
Towers and Heavy Fabrications Q2 18 Q2 19 YTD 18 YTD 19 Orders ($M) $9.9 $96.3 $19.7 $108.8 Sections Sold (#) 201 201 344 389 Revenue ($M) 25.6 29.0 43.7 57.3 Operating Inc/(Loss) ($M) .5 .3 (1.6) .1 - % of Sales 2.1% 1.1% (3.6)% .2% EBITDA* ($M) 2.2 1.5 1.7 2.5 - % of Sales 8.4% 5.2% 3.8% 4.4% Q2 R
Slide 9: Gearing Q2 Results
Gearing Q2 Results ▪ Orders down due to surge in O&G orders in 2018, diversification efforts partially offsetting ▪ Revenue up 8 % compared to Q2 ‘18, reflecting improved throughput ▪ End market diversification improved YoY ▪ EBITDA $1.5M – sustained operational improvement Priorities ▪ Continue div
Slide 10: Process Systems
Process Systems * Reconciliation to non - GAAP measure included in Appendix Q2 Results ▪ Higher orders YoY due to new gas turbine content for an international customer ▪ Revenue up $.3M YoY, reflecting increased order activity ▪ Targeted price adjustments beginning to impact margins in ‘19 Prioritie
Slide 11: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q2 Comparison: ▪ S ales across each segment up YoY due to an increase in steel prices, more complex tower designs and customer/end market diversification ▪ Gross profit up YoY due to improved productivity and plant utilization ▪ Recurring Operating expenses declin
Slide 12: Operating Working Capital (OWC)
Operating Working Capital (OWC) ▪ $4.6M increase in operating working capital due to rise in tower production levels ▪ Recent order announcements and the corresponding deposits will improve OWC in 2H ▪ Cash conversion cycle reduction on track * Operating Working Capital = Trade A/R + Inventories – T
Slide 13: Balance Sheet and Capital Expenditures
Balance Sheet and Capital Expenditures Capital Expenditures (in Millions) ▪ Cash applied to balance on credit line ▪ $35M credit line had $8.0M of additional availability at quarter - end ▪ Other Assets/Liabilities increase since 12/31/18 as a result of the adoption of new lease accounting standard
Slide 14: Q3 Summary and Guidance
Q3 Summary and Guidance ▪ Q2 2019: As guided ▪ Q3 2019: Tower volume improving, but margin pressures remain - Revenue >$45M and EBITDA ~$ 1.4 - 1.8M ▪ 2019: Average quarterly revenue >$40M, FY EBITDA ~$8M assuming supply chain responds 14
Slide 15: Appendix: Adjusted EBITDA Reconciliation
Appendix 15 Consolidated 2019 2018 2019 2018 Loss from Continuing Operations…………………………...…………. (1,019)$ (6,083)$ (2,061)$ (10,894)$ Interest Expense…………………….……………………………………. 774 352 1,309 650 Income Tax Provision/(Benefit)…………………...…………………… 22 (6) 34 (33) Depreciation and Amortization…………………………………………
Slide 16: Appendix: Process Systems Reconciliation
Appendix 16 Process Systems 2019 2018 2019 2018 Net Income/(Loss)……………………...……………………………. 4$ (3,794)$ (274)$ (3,844)$ Interest Expense……………………………………………………. - - 1 - Income Tax Provision/(Benefit)…………………...…………………… 23 (1,797) 14 (2,050) Depreciation and Amortization……………………………………. 122 386 244 773 Share
Slide 17: Broadwind Energy precision manufacturer
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications . www.BWEN.com 17