Slide 1: Broadwind Energy Q1 2014 Investor Call Presentation
Broadwind Energy, Inc. Q1 2014 Investor Call Presentation April 30, 2014 © 2014 Broadwind Energy, Inc. All Rights Reserved.
Slide 2: Industry Disclaimer and Forward-Looking Statements
Industry Disclaimer and Forward-Looking Statements 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 available
Slide 3: Q1 2014 Highlights
Q1 2014 Highlights Business Highlights Revenue of $58.8M, up 29% from Q1 2013 Gross profit margin* of 9.1%, up 330 bp from Q1 2013 Operating loss reduced to $1.0M, from $4.5M in Q1 2013 EPS loss of $.07, improvement of $.25 per share from Q1 2013 Adj. EBITDA of $2.8M, more than double Q1 2013 4/30/2
Slide 4: Orders and Backlog
Orders and Backlog 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 4 Orders – $M Pause in wind tower orders following surge in 2013; industrial weldment orders of $3.9M, primarily for 1 large customer Gearing orders down due to absence of large wind replacement gearing order in Q1 2013,
Slide 5: U.S. Wind Market Forecast – Long Term Bull Case
U.S. Wind Market Forecast – Long Term Bull Case PTC phase-out Natural gas prices increase to $6-7/MMBtu by 2018 3% reduction in levelized cost of wind energy Wind in RPS compliance increases 10.2 pp Electricity demand CAGR = 1.5%/year 65 GW of coal capacity retired 4 GW of wind capacity installed of
Slide 6: Natural Gas Driven Infrastructure
Natural Gas Driven Infrastructure 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 6 $110B investment by chemical manufacturers and refineries 79 identified projects underway Large infrastructure components with a high % of industrial weldment work Broadwind developing relationships with
Slide 7: Gearing Update
Gearing Update 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 7 What Went Well Improved productivity by 7 pp from year-end Defect rate lower by 2 pp Gear manufacturer M&A activity generating some new opportunities with new customers Inventory reduced $3.0M from prior year Opportunities
Slide 8: Consolidated Financial Results
Consolidated Financial Results 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 8 Q1 2014 Comments Sales up 29% from Q1 2013 – Towers and Weldments up 62% over prior year, partly offset by challenges in Gearing and Services Gross margin (ex. restructuring) up 330 bp from Q1 2013 – improv
Slide 9: Towers and Weldments First Quarter 2014 Highlights
Towers and Weldments 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 9 First Quarter 2014 Highlights Tower volume increased 50% compared to weak Q1 2013 Short-term reduction in industrial weldment revenue from large mining customer Q1 2014 productivity increase from process improvements
Slide 10: Gearing First Quarter 2014 Highlights
Gearing 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 10 First Quarter 2014 Highlights Revenue affected by operational inefficiencies EBITDA down due to lower volumes Operating loss flat despite 18% reduction in revenue; lower non-cash charges and restructuring and focus on expense ma
Slide 11: Services First Quarter 2014 Highlights
Services 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 11 First Quarter 2014 Highlights Industry recovering – quoting activity up; orders up 51% from Q4 2013 Revenue down 67% from Q1 2013 – lower industrial drivetrain assembly work, partly offset by higher demand for blade repair work
Slide 12: Operating Working Capital
Operating Working Capital 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 12 3/31/14 operating working capital increased $14M from 12/31/13 to $19.6M 8% of annualized Q1 2014 sales Similar level of working capital projected throughout 2014; supply chain lengthening and deposits decreasi
Slide 13: Debt and Liquidity
Debt and Liquidity 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 13 Net debt negative Debt and capital leases less than $5M More than half of outstanding debt is low or 0% interest rates from New Markets Tax Credit and other grant financing $20M credit line remained undrawn at 3/31/14
Slide 14: 2014 Financial Outlook
2014 Financial Outlook 4/30/2014 © 2014 Broadwind Energy, Inc. All rights reserved. 14 2014 EPS Walk Q1 and Q4 are typically the weakest quarters 2014 revenue growth mainly from Towers Projecting to cross into profitability in Q2: first time in company history FY 2010 FY 2011 FY 2012 FY 2013 2014 E
Slide 15: 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. 15 © 2014 Broadwind Energy, Inc. Al