Slide 1: Q3 2017 Earnings Call
Q3 2017 Earnings Call October 31, 2017
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 studies conducted by third parties, independent industry associations or general publications and other publicly ava
Slide 3: Highlights
Highlights ▪ Q3 revenue of $30 million due to Tower weakness, offset by growth in other segments ▪ Oil and gas markets remain strong; mining demand accelerating ▪ Gearing segment results improved but fall short of expectation ▪ Process Systems is accretive in quarter, although short of earn-out targ
Slide 4: Orders and Backlog
Orders and Backlog Orders – $M Backlog – $M Q3 Q3 YTD YTD YTD 2016 2017 2016 2017 2017 Book: 350 Bill 300 Towers & $25.3 $1.8 $231.4 $32.3 .33 250 Weldments Millions 200 Gearing 2.2 10.6 11.3 29.5 1.69 150 100 Process n/a 5.3 n/a 13.4 1.05 50 Systems - Total 27.5 17.6 242.7 57.6 .45 Q1 Q3 Q1 Q3 Q1 Q
Slide 5: US Wind Market Update
US Wind Market Update 35 Development Pipeline - GW Evolving Forecast – GW Installations 13 30 12 25 11 20 10 15 9 10 8 5 7 0 6 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 2015a 2016a 2017e 2018e 2019e 2020e Under construction at QE Adv. Development Q4 2016 FC Q2 2017 FC Q3 2017 FC Source: AWEA Q3 2017
Slide 6: US Gearing Production Increasing
US Gearing Production Increasing US Gear Production US Gear Demand 2014- 2017- 4,000 5.1% CAGR by Market 2016 2019 3,500 CAGR CAGR 3,000 Turbines/Power -11.5% 9.5% 2,500 Oil & Gas -24.7% 17.4% $M 2,000 1,500 Mining -19.8% 7.8% 1,000 500 Other Industrial -7.5% 5.3% 0 2015a 2016a 2017e 2018e 2019e 202
Slide 7: Global Gas Turbine Market
Global Gas Turbine Market 500 Global Gas Turbine Orders 80 450 First Half Memo: 2016 (Utility and IPP segment) 70 400 2016 2017 Full Year 60 350 Units 132 100 259 Capacity (GW) 300 50 # of Units 250 40 GW 24 17 42 200 30 150 20 100 50 10 0 0 2012 2013 2014 2015 2016 # of Units GW Sources: McCoy Powe
Slide 8: BWEN Consolidated Financial Results
BWEN Consolidated Financial Results Q3 16 Q3 17 YTD 16 YTD 17 Total Sales $42.6 $29.6 $132.7 $129.0 Gross Profit 5.3 1.0 13.4 11.3 Gross Profit % 12.5% 3.4% 10.1% 8.7% Operating Expense 4.0 2.8 12.1 12.0 Operating Income/(Loss) 1.4 -1.8 1.3 -0.7 % of sales 3.2% -6.2% 1.0% -0.5% Adj. EBITDA 3.3 0.9 7
Slide 9: Towers and Weldments
Towers and Weldments Q3 Q3 YTD YTD Q3 Results 2016 2017 2016 2017 Orders ($M) $25.3 $1.8 $231.4 $32.3 ▪ Tower orders remain weak – emerging demand for welded fabrications for mining Towers Sold (#) 113 42 339 263 Revenue ($M) ▪ Q3 17 tower count down to 42 as 38.0 16.0 117.9 99.2 customers work down
Slide 10: Gearing
Gearing Q3 Q3 YTD YTD Q3 Results 2016 2017 2016 2017 ▪ Orders continue to be strong primarily from oil Orders ($M) 2.2 10.6 11.3 29.5 & gas customers ▪ Revenue up 65% in Q3 and 18% YTD Revenue ($M) 4.6 7.6 14.8 17.5 ▪ Plant layout reconfigured to boost productivity Operating Loss ($M) -0.7 -0.4 -3.1
Slide 11: Process Systems
Process Systems Q3 Q3 YTD YTD 2016 2017 2016 2017 Q3 Results ▪ Process Systems includes Abilene-based CNG, Orders ($M) n/a 5.3 n/a 13.4 and Red Wolf as of Feb 1, 2017 Revenue ($M) n/a 6.1 n/a 12.3 ▪ Q3 orders up sequentially due to increased weldment orders Operating n/a 0.1 n/a -1.8 Profit/(Loss) (
Slide 12: Operating Working Capital (OWC)
Operating Working Capital (OWC) OWC* Management OWC* Historical Trend – cents/$ sales $0.20 12/31/16 3/31/17 6/30/17 9/30/17 DSO 22 39 45 29 $0.15 Inv. Turns 8.2 7.7 7.4 7.7 DPO 33 36 34 21 $0.10 Cash 0 28 50 48 Conv. (days) $0.05 OWC $M -0.8 16.3 23.0 15.5 $- *Operating Working Capital = Trade A/R
Slide 13: Balance Sheet and Capital Expenditures
Balance Sheet and Capital Expenditures Capital Expenditures (In Millions) 12/31/2016 6/30/2017 9/30/2017 % of sales 0.8% 3.4% 4.6% Cash Assets $ 21.9 $ 0.2 $ 0.0 $6.2 $6.0 Accounts Receivable 11.9 21.5 9.3 Inventory 21.2 21.3 15.4 PPE 54.6 57.4 56.5 Other 8.1 24.6 24.1 Total Assets 117.7 125.0 105.3
Slide 14: 2017 Guidance and Priorities
2017 Guidance and Priorities ▪ Q4 guidance: ~$20M revenue, EBITDA ($2-3M) ▪ Revenue normalizes beginning Q1 2018 ▪ Q1: ~$30M ▪ Q2: >$40M ▪ Continued focus on diversification of tower customers and growth of other welded fabrications ▪ Gearing – achieve consistent profitability at $9-10M quarterly re
Slide 15: Appendix
Appendix Consolidated Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net Income/(Loss) from continuing operations……………………………. $ (2,049) $ 1,245 $ 3,745 $ 929 Interest Expense…………………………………. 228 125 584 431 Income Tax Provision/(Benefit)……………………………… (22) 0 (5,056)
Slide 16: Broadwind Energy is a precision manufacturer of structures, equipment & components
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications. www.BWEN.com October 31, 2017 © 2017 Broadwind Energy, Inc. All rights reserved. 16