Broadwind, Inc. · NASDAQ:BWEN
Broadwind — Liolios 7th Annual Gateway Conference 2018
20 slides from Broadwind's conference presentation, Sep 6, 2018
Slide 1: Liolios 7th Annual Gateway Conference
Liolios 7th Annual Gateway Conference September 5-6, 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: Introduction to Broadwind Energy
Introduction to Broadwind Energy Towers and Heavy Fabrications § Leading US wind tower manufacturer with plants strategically located in Texas and Wisconsin § Current capacity – 550 towers per year § Have produced towers for every major OEM in industry § Heavy Fabrications product line leverages cor
Slide 4: Investment Thesis
Investment Thesis § Medium term US Wind markets fundamentally strong § Tower and Heavy Fabrications segment recovering in 2018 due to improved tower demand and successful customer/product diversification § Broadwind gearing gaining share in strong oil & gas and mining/construction markets—delivering
Slide 5: 2018 Focus
2018 Focus § Order intake recovering following 2017 inventory correction by primary tower customer § Successful ramp up of tower facilities following near shut down in Q4 17 § Customer diversification plans on track § Multi-year 50% operating footprint consolidation nearing completion § Manufacturin
Slide 6: Successful Diversification of BWEN Customer Base
Successful Diversification of BWEN Customer Base Customer Diversification Progress Non-wind Order Trend (T12M) $45,000 $70,000 Min ing/OHV Oil & Gas Other Industrial $40,000 $60,000 $40M target $35,000 $50,000 $30,000 $25,000 $40,000 $20,000 YTD actual $30,000 $15,000 $20,000 $10,000 $10,000 $5,000
Slide 7: Successful Diversification of BWEN Customer Base
Successful Diversification of BWEN Customer Base Non - SGRE Non - SGRE SGRE SGRE *SGRE Orders based on PO’s received during the period § 3-yr tower framework agreement with SGRE signed in Q3 16 for $137M ~ $45M annual baseload with option to double § Acquisition of Red Wolf in 2017 provides entry in
Slide 8: Wind Energy is Becoming More Competitive with Conventional Power Generation
Wind Energy is Becoming More Competitive with Conventional Power Generation Global Onshore Wind Levelized Cost of Forecast – GW Installations Energy Over Time ($/MWh) 14 13.0 13 12 11.0 11 GW 10 9 8.2 8.4 8.0 8 7 6.4 6 2015a 2016a 2017a 2018e 2019e 2020e Source: Lazard Levelized Cost of Energy Analy
Slide 9: Tariff and Trade Uncertainties
Tariff and Trade Uncertainties Tower Supply/Demand Balance Relative Steel Price $/ST * 14 13.0 1100 1000 US 12 11.0 900 10 8.6 8.9 800 8.4 8 7.0 700 8.4 8.4 600 6 4.8 500 China 4 400 2 300 200 0 8 17 17 17 17 18 18 8 2014 2015 2016 2017 2018E 2019E 2020E -1 l-1 1 2 3 4 1 2 ug Ju Q Q Q Q Q Q A Demand
Slide 10: Towers and Heavy Fabrications
Towers and Heavy Fabrications § Have produced >3000 multi-mw towers for all major OEM’s in US: GE, Goldwind, Nordex, Siemens/Gamesa, Vestas § Recent $7M investment improves flow and expands capacity to 550 towers § Engineering experts partner with our customers to improve efficiencies and reduce cos
Slide 11: Towers and Heavy Fabrications
Towers Heavy and Heavy Fabrications Fabrications Overview § Leverage existing footprint and labor at our Tower manufacturing facilities in TX and WI § Strategic investments made in flexible manufacturing cells and a large horizontal milling machine § Strong welding capabilities developed in Tower bu
Slide 12: Broadwind: Geared For Industry
Broadwind: Geared For Industry Sales By Industry 2014-2017 General § Replacement gears and gear Industrial Wind § Replacement Gearing - Wind boxes in steel processing § Gearbox repair - Wind plants § Waste Processing § Paper Industry Mining O&G § Underground and surface mining § On and offshore dril
Slide 13: Cost Management and Continuous Improvement Culture Leading to Operational Turnaround in Gearing
Cost Management and Continuous Improvement Culture Leading to Operational Turnaround in Gearing § Custom precision gear manufacturing with state of the art machinery § Operational turnaround evident – focus on cost management and continuous improvement, plant lay out reconfigured to boost productivi
Slide 14: Process Systems
Process Systems Q2 Q2 1H 1H 2017 2018 2017 2018 Q2 Results § Process Systems includes Abilene-based CNG Orders ($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 15: 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 $66.7 Gross Profit 3.9 (.1) 2.2 10.2 2.1 Gross Profit % 8.9% (.4%) 6.0% 10.3% 3.1% Operating Expense 4.4 4.4 8.0 9.2 12.4 Operating Income/(Loss) (.5) (4.5) (5.7) 1.1 (10.3) % of sales (1.2%) (15.1%
Slide 16: Operating Working Capital (OWC)
Operating Working Capital (OWC) OWC* Management OWC* Historical Trend – cents/$ 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 $- 4 4 5 5 6 6 7 7 8 2 201 4 201 2 201 4 201 2 201 4 201 2 201 4 20
Slide 17: 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 18: 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 19: 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 20: Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech
Broadwind Energy is a precision manufacturer of structures, equipment & components for clean tech and other specialized applications. www.BWEN.com September 2018 20
Broadwind — Liolios 7th Annual Gateway Conference 2018 on 6ix