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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  March 5, 2024

_______________________________

BROADWIND, INC.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware 001-34278 88-0409160
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)

3240 South Central Avenue

Cicero, Illinois 60804

(Address of Principal Executive Offices) (Zip Code)

(708) 780-4800

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.001 par value BWEN The NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

On March 5, 2024, Broadwind, Inc. (the “Company”) issued a press release announcing its financial results as of and for the year ended December 31, 2023.  The press release is incorporated herein by reference and is attached hereto as Exhibit 99.1.

The information contained in, or incorporated into, this Item 2.02 of this Current Report on Form 8-K (this “Report”), including Exhibit 99.1, is furnished under Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act regardless of any general incorporation language in such filings.

Please refer to Exhibit 99.1 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto.

Item 7.01. Regulation FD Disclosure.

An Investor Presentation dated March 5, 2024, is incorporated herein by reference and attached hereto as Exhibit 99.2.

The information contained in, or incorporated into, this Item 7.01 of this Report, including Exhibit 99.2 attached hereto, is furnished under Item 7.01 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act regardless of any general incorporation language in such filings.

This Report shall not be deemed an admission as to the materiality of any information in this Report that is being disclosed pursuant to Regulation FD.

Please refer to Exhibit 99.2 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number   Description
     
99.1   Press Release dated March 5, 2024    
99.2   Investor Presentation dated March 5, 2024
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

  BROADWIND, INC.
     
   
Date: March 5, 2024 By:  /s/ Eric B. Blashford        
    Eric B. Blashford
    President and Chief Executive Officer
(Principal Executive Officer)
   

 

EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling

EXHIBIT 99.1

Broadwind Announces Fourth Quarter and Full-Year 2023 Results

CICERO, Ill., March 05, 2024 (GLOBE NEWSWIRE) -- Broadwind (Nasdaq: BWEN, or the “Company”), a diversified precision manufacturer of specialized components and solutions serving global markets, today announced results for the fourth quarter and full-year 2023.

FOURTH QUARTER 2023 RESULTS
(As compared to the fourth quarter 2022)

  • Total revenue of $46.6 million, +16.3% y/y
  • Total gross profit of $7.0 million, +$4.5 million y/y
  • Net income of $1.1 million, or $0.05 per diluted share
  • Total non-GAAP adjusted EBITDA of $4.4 million, +$4.3 million y/y
  • Total tower sections sold +37.5% y/y to 132 sections
  • Ratio of net debt to trailing twelve-month non-GAAP adjusted EBITDA of 0.8x as of December 31, 2023

FULL-YEAR 2023 RESULTS
(As compared to the full-year 2022)

  • Total revenue of $203.5 million, +15.1% y/y
  • Total gross profit of $32.5 million, +203.5% y/y
  • Net income of $7.6 million, or $0.36 per diluted share
  • Total non-GAAP adjusted EBITDA of $21.5 million, +$19.0 million y/y

For the three months ended December 31, 2023, Broadwind reported total revenue of $46.6 million, an increase of 16.3% when compared to the prior year period. The Company reported net income of $1.1 million, or $0.05 per diluted share in the fourth quarter 2023, compared to a net loss ($2.9) million, or ($0.14) per basic share, in the fourth quarter 2022. The Company reported adjusted EBITDA, a non-GAAP measure, of $4.4 million in the fourth quarter 2023, compared to $0.2 million in the prior-year period. For a reconciliation of GAAP to non-GAAP metrics, please see the appendix of this release.

Fourth quarter results benefited from a combination of broad-based demand growth within both the Heavy Fabrications and Industrial Solutions segments, continued price discipline, and operational rigor, culminating in improved operating leverage and profitability, when compared to the year-ago period. Fourth quarter results reflect the positive impact of increased tower utilization and benefits derived from advanced manufacturing production credits associated with the Inflation Reduction Act (“IRA”). Total gross margin increased more than 870 basis points on a year-over-year basis to 15.1%, while non-GAAP adjusted EBITDA margin increased more than 900 basis points to 9.5% in the fourth quarter 2023.

Fourth quarter orders increased 27% on a sequential basis, as compared to the third quarter 2023, but declined as compared to the near-record order levels achieved in the prior-year period that was attributable to a large tower order with a global wind turbine manufacturer. Total backlog was $183.1 million as of December 31, 2023, as compared to $297.2 million in the year-ago period.

As of December 31, 2023, Broadwind had total cash on hand and availability under the Company’s credit facility of $22.8 million, down from $40.1 million at the end of the fourth quarter 2022.

MANAGEMENT COMMENTARY

“Broadwind delivered strong full-year results highlighted by record margin realization, net income and adjusted EBITDA,” stated Eric Blashford, President and CEO of Broadwind. “While 2023 was a transitional period for domestic onshore wind development, we continued to drive organic sales growth within our core industrials, mining and energy markets through a combination of new contract wins, together with increased customer demand for our proprietary Pressure Reducing System (“PRS”) technology. As we’ve built momentum through our commercial strategy, our team has also continued to drive improved productivity and cost efficiency throughout the organization, consistent with an ongoing focus on sustained operational excellence.”

“During the fourth quarter, our revenue, operating income and profitability all increased meaningfully above prior-year levels, driven by a combination of increased sales of tower sections, together with solid demand across our diverse markets,” continued Blashford. “While orders and backlog declined from near-record levels in the prior year period, order rates increased on a sequential basis across all three reporting segments.”

“Domestic onshore wind development activity is expected to gradually accelerate beginning in the second half of 2024,” noted Blashford. “Even still, a higher interest rate environment and raw materials inflation have impacted project economics for some developers, leading them to temporarily delay or defer the timing of their investments. In the interim, we have aligned our cost structure to reflect a period of lower production volumes at our tower facilities, while repurposing capacity toward non-wind demand across our diverse end markets. We remain highly constructive on the long-term economics of wind, particularly with the decade-long tax credit visibility afforded by the IRA, of which Broadwind remains a key beneficiary.”

“At year-end 2023, we had $22.8 million of available cash and liquidity to support our operations,” continued Blashford. “Looking to 2024, we have eliminated nearly all planned discretionary capital spending as we seek to optimize liquidity during a transitional period. As of December 31, 2023, our net leverage was 0.8x, well within our target range of at or below 2.0x.”

“Today, we introduced financial guidance for the first quarter 2024,” concluded Blashford. “Further to our expectations around the pace of wind-related tower demand, we anticipate our full-year performance will be weighted toward the second half of 2024, given discussions with our customers. As demand conditions accelerate, we remain well-positioned to drive improved operating leverage, while positioning the Company to further capitalize on 45x tax credit provided for within the IRA.”

SEGMENT RESULTS

Heavy Fabrications Segment
Broadwind provides large, complex and precision fabrications, and proprietary industrial processing equipment, to customers in a broad range of industrial markets. Key products include wind towers, compressed natural gas pressure reducing systems and industrial fabrications, including mining and material handling components and other frames/structures.

Heavy Fabrications segment sales increased by 24.4% to $29.5 million in the fourth quarter 2023, as compared to the prior-year period, primarily driven by a 37.5% increase in towers sections sold. The segment reported operating income of $2.6 million in the fourth quarter of 2023, as compared to an operating loss of ($1.0) million in the prior year period. Segment non-GAAP adjusted EBITDA was $3.7 million in the fourth quarter 2023, as compared to $0.3 million in the prior-year period.

Gearing Segment
Broadwind provides custom gearboxes, loose gearing and heat treat services to a broad set of customers in diverse markets, including oil & gas production, surface and underground mining, wind energy, steel, material handling and other infrastructure markets.

Gearing segment sales declined by 5.4% to $11.1 million in the fourth quarter 2023, as compared to the prior year period, as steel and industrial sector sales were offset by lower mining and energy sector activity. The segment reported operating income of $0.7 million in the fourth quarter 2023, compared to operating income of $0.1 million in the prior year period. The segment reported non-GAAP adjusted EBITDA of $1.3 million in the fourth quarter 2023, versus $0.8 million in the fourth quarter 2022.

Industrial Solutions Segment
Broadwind provides supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market as well as other clean technology markets.  

Industrial Solutions segment sales increased 29.4% to $6.0 million in the fourth quarter 2023, as compared to the prior year period, primarily driven by increased demand for new and aftermarket gas turbine content. The segment reported operating income of $0.8 million in the fourth quarter 2023, compared to operating income of $0.5 million in the prior year period. The segment reported non-GAAP adjusted EBITDA of $1.0 million in the fourth quarter 2023, versus $0.7 million in the prior year period.

FINANCIAL GUIDANCE

Today, Broadwind introduced financial guidance for the first quarter 2024. The following financial guidance reflects the Company’s current expectations and beliefs. All guidance is current as of the time provided and is subject to change.

  First Quarter 2024
$ in Millions Low Mid High
       
Total Revenue $34.0 $36.0 $38.0
Adjusted EBITDA $1.0 $1.5 $2.0


FOURTH QUARTER AND FULL-YEAR 2023 RESULTS CONFERENCE CALL

Broadwind will host a conference call today, March 5, 2024 at 12:00 p.m. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session.

A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the Company’s corporate website at https://investors.bwen.com/investors. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference:

Live Teleconference: 877-407-9716

To listen to a replay of the teleconference, which will be available through March 12, 2024:

Teleconference Replay: 844-512-2921
Conference ID: 13743770

ABOUT BROADWIND

Broadwind (NASDAQ: BWEN) is a precision manufacturer of structures, equipment and components for clean tech and other specialized applications. With facilities throughout the U.S., our talented team is committed to helping customers maximize performance of their investments—quicker, easier and smarter. Find out more at www.bwen.com

NON-GAAP FINANCIAL MEASURES

The Company provides non-GAAP adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, share-based compensation and other stock payments, restructuring costs, impairment charges, proxy contest-related expenses and other non-cash gains and losses) as supplemental information regarding the Company’s business performance. The Company’s management uses this supplemental information when it internally evaluates its performance, reviews financial trends and makes operating and strategic decisions. The Company believes that this non-GAAP financial measure is useful to investors because it provides investors with a better understanding of the Company’s past financial performance and future results, which allows investors to evaluate the Company’s performance using the same methodology and information as used by the Company’s management. The Company's definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts.

FORWARD-LOOKING STATEMENTS

This release contains “forward-looking statements”—that is, statements related to future, not past, events— as defined in Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), that reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. We have tried to identify forward looking statements by using words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “plan” and similar expressions, but these words are not the exclusive means of identifying forward looking statements. Forward-looking statements include any statement that does not directly relate to a current or historical fact. Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following: (i) our expectations and beliefs with respect to our financial guidance as set forth in this release; (ii) the impact of global health concerns on the economies and financial markets and the demand for our products; (iii) state, local and federal regulatory frameworks affecting the industries in which we compete, including the wind energy industry, and the related extension, continuation or renewal of federal tax incentives and grants, including the advanced manufacturing tax credits (which remain subject to further technical guidance and regulations), and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into the United States; (iv) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units; (v) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow; (vi) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary; (vii) our ability to continue to grow our business organically and through acquisitions; (viii) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows; (ix) information technology failures, network disruptions, cybersecurity attacks or breaches in data security; (x) the sufficiency of our liquidity and alternate sources of funding, if necessary; (xi) our ability to realize revenue from customer orders and backlog (including our ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer); (xii) the economy and the potential impact it may have on our business, including our customers; (xiii) the state of the wind energy market and other energy and industrial markets generally, including the availability of tax credits, and the impact of competition and economic volatility in those markets; (xiv) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (xv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers; (xvi) the effects of the change of administrations in the U.S. federal government; (xvii) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions; (xviii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended; (xix) the limited trading market for our securities and the volatility of market price for our securities; (xx) our outstanding indebtedness and its impact on our business activities (including our ability to incur additional debt in the future); and (xxi) the impact of future sales of our common stock or securities convertible into our common stock on our stock price. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements including, but not limited to, those set forth under the caption “Risk Factors” in Part I, Item 1A of our most recently filed Form 10-K and other filings with the Securities and Exchange Commission. We are under no duty to update any of these statements. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results.

 

BROADWIND, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

 
  December 31,   December 31,  
    2023       2022    
ASSETS        
CURRENT ASSETS:        
Cash $ 1,099     $ 12,732    
Accounts receivable, net   19,231       17,018    
AMP credit receivable   7,051       -    
Contract assets   1,460       1,955    
Inventories   37,405       44,262    
Prepaid expenses and other current assets   3,500       3,291    
Total current assets   69,746       79,258    
LONG-TERM ASSETS:        
Property and equipment, net   47,123       45,319    
Operating lease right-of-use assets, net   15,593       16,396    
Intangible assets, net   2,064       2,728    
Other assets   630       839    
TOTAL ASSETS $ 135,156     $ 144,540    
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
CURRENT LIABILITIES:        
Line of credit and current maturities of long-term debt $ 5,903     $ 1,170    
Current portion of finance lease obligations   2,153       2,008    
Current portion of operating lease obligations   1,851       1,882    
Accounts payable   20,728       26,255    
Accrued liabilities   6,477       4,313    
Customer deposits   16,500       34,550    
Total current liabilities   53,612       70,178    
LONG-TERM LIABILITIES:        
Long-term debt, net of current maturities   6,250       7,141    
Long-term finance lease obligations, net of current portion   3,372       4,226    
Long-term operating lease obligations, net of current portion   15,888       16,696    
Other   15       26    
Total long-term liabilities   25,525       28,089    
COMMITMENTS AND CONTINGENCIES        
         
STOCKHOLDERS' EQUITY:        
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding   -       -    
Common stock, $0.001 par value; 30,000,000 shares authorized; 21,840,301 and 21,127,130 shares issued as of December 31, 2023 and December 31, 2022, respectively   22       21    
Treasury stock, at cost, 273,937 shares as of December 31, 2023 and December 31, 2022, respectively   (1,842 )     (1,842 )  
Additional paid-in capital   399,336       397,240    
Accumulated deficit   (341,497 )     (349,146 )  
Total stockholders' equity   56,019       46,273    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 135,156     $ 144,540    
         

 

BROADWIND, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

 
                 
  Three Months Ended
December 31,
  Twelve Months Ended
December 31,
 
    2023       2022       2023       2022    
                 
                 
Revenues $ 46,598     $ 40,060     $ 203,477     $ 176,759    
Cost of sales   39,566       37,504       170,969       166,049    
Gross profit   7,032       2,556       32,508       10,710    
                 
OPERATING EXPENSES:                
Selling, general and administrative   4,592       4,483       20,705       16,592    
Intangible amortization   166       175       664       725    
Total operating expenses   4,758       4,658       21,369       17,317    
Operating income (loss)   2,274       (2,102 )     11,139       (6,607 )  
                 
OTHER EXPENSE, net:                
Interest expense, net   (1,030 )     (863 )     (3,201 )     (3,218 )  
Other, net   (11 )     113       (48 )     130    
Total other expense, net   (1,041 )     (750 )     (3,249 )     (3,088 )  
                 
Net income (loss) before provision for income taxes   1,233       (2,852 )     7,890       (9,695 )  
Provision (benefit) for income taxes   162       (1 )     241       35    
NET INCOME (LOSS) $ 1,071     $ (2,851 )   $ 7,649     $ (9,730 )  
                 
                 
NET INCOME (LOSS) PER COMMON SHARE - BASIC:                
Net income (loss) $ 0.05     $ (0.14 )   $ 0.36     $ (0.48 )  
                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC   21,449       20,723       21,189       20,299    
                 
NET INCOME (LOSS) PER COMMON SHARE - DILUTED:                
Net income (loss) $ 0.05     $ (0.14 )   $ 0.36     $ (0.48 )  
                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED   21,633       20,723       21,491       20,299    
                 


BROADWIND, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

     
  Twelve Months Ended December 31,
    2023     2022  
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $ 7,649   $ (9,730 )
     
Adjustments to reconcile net cash (used in) provided by operating activities:  
Depreciation and amortization expense   6,383     6,060  
Deferred income taxes   (10 )   (13 )
Change in fair value of interest rate swap agreements   -     (27 )
Share-based compensation   877     944  
Allowance for doubtful accounts   82     (30 )
Common stock issued under defined contribution 401(k) plan   1,336     1,244  
Loss on disposal of assets   42     3  
Changes in operating assets and liabilities:    
Accounts receivable   (2,295 )   (3,186 )
AMP credit receivable   (7,051 )   -  
Employee retention credit receivable   -     497  
Contract assets   495     (820 )
Inventories   6,857     (10,885 )
Prepaid expenses and other current assets   (210 )   (629 )
Accounts payable   (6,008 )   9,926  
Accrued liabilities   2,782     686  
Customer deposits   (18,050 )   22,468  
Other non-current assets and liabilities   175     135  
Net cash (used in) provided by operating activities   (6,946 )   16,643  
     
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment   (6,405 )   (3,098 )
Proceeds from disposals of property and equipment   21     -  
Net cash used in investing activities   (6,384 )   (3,098 )
     
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from (payments on) from line of credit, net   4,705     (6,368 )
Payments for deferred financing costs   (48 )   (452 )
Proceeds from long-term debt   1,056     8,113  
Payments on long-term debt   (1,872 )   (863 )
Principal payments on finance leases   (1,409 )   (1,776 )
Shares withheld for taxes in connection with issuance of restricted stock   (735 )   (549 )
Proceeds from sale of common stock, net   -     230  
Net cash provided by (used in) financing activities   1,697     (1,665 )
      -  
     
NET (DECREASE) INCREASE IN CASH   (11,633 )   11,880  
CASH beginning of the period   12,732     852  
CASH end of the period $ 1,099   $ 12,732  
     
Supplemental cash flow information:    
Interest paid $ 2,073   $ 1,638  
Income taxes paid $ 17   $ 23  
     
Non-cash investing and financing activities:    
Equipment additions via finance lease $ 719   $ 3,882  
Non-cash purchases of property and equipment $ 482   $ 134  
Settlement of incentive compensation liability with stock $ 619   $ -  
     

 

BROADWIND, INC. AND SUBSIDIARIES
SELECTED SEGMENT FINANCIAL INFORMATION
(IN THOUSANDS)
(UNAUDITED)

 
    Three Months Ended   Twelve Months Ended  
    December 31,   December 31,  
      2023       2022       2023       2022    
ORDERS:              
Heavy Fabrications   $ 9,985     $ 184,075     $ 50,594     $ 294,097    
Gearing     3,603       15,071       24,814       53,597    
Industrial Solutions     6,619       5,685       25,652       20,333    
Total orders   $ 20,207     $ 204,831     $ 101,060     $ 368,027    
                   
REVENUES:              
Heavy Fabrications   $ 29,503     $ 23,720     $ 133,368     $ 117,206    
Gearing     11,061       11,697       45,408       42,588    
Industrial Solutions     6,035       4,663       25,159       17,804    
Corporate and Other     (1 )     (20 )     (458 )     (839 )  
Total revenues   $ 46,598     $ 40,060     $ 203,477     $ 176,759    
                   
OPERATING PROFIT/(LOSS):              
Heavy Fabrications   $ 2,554     $ (1,032 )   $ 15,006     $ (1,044 )  
Gearing     654       116       1,846       43    
Industrial Solutions     848       487       3,160       120    
Corporate and Other     (1,782 )     (1,673 )     (8,873 )     (5,726 )  
Total operating profit (loss)   $ 2,274     $ (2,102 )   $ 11,139     $ (6,607 )  
                   


BROADWIND, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS)
(UNAUDITED)
           
Consolidated Three Months Ended
December 31,
  Twelve Months Ended
December 31,
    2023     2022       2023     2022  
Net Income (Loss) $ 1,072   $ (2,851 )   $ 7,649   $ (9,730 )
Interest Expense   1,031     863       3,201     3,218  
Income Tax Provision (Benefit)   162     (1 )     241     35  
Depreciation and Amortization   1,611     1,478       6,383     6,060  
Share-based Compensation and Other Stock Payments   559     695       2,220     2,861  
Proxy Contest-Related Expenses   1     -       1,780     -  
Adjusted EBITDA (Non-GAAP) $ 4,436   $ 184     $ 21,474   $ 2,444  
               


Heavy Fabrications Segment Three Months Ended
December 31,
  Twelve Months Ended
December 31,
    2023     2022       2023     2022  
Net Income (Loss) $ 1,696   $ (926 )   $ 13,862   $ (1,935 )
Interest Expense   149     338       649     1,585  
Income Tax Provision (Benefit)   711     (330 )     493     (579 )
Depreciation   907     852       3,518     3,446  
Share-based Compensation and Other Stock Payments   224     331       936     1,028  
Adjusted EBITDA (Non-GAAP) $ 3,687   $ 265     $ 19,458   $ 3,545  
               


Gearing Segment Three Months Ended
December 31,
  Twelve Months Ended
December 31,
    2023     2022       2023     2022  
Net Income (Loss) $ 585   $ (5 )   $ 1,553   $ (190 )
Interest Expense   59     117       262     249  
Income Tax Provision   9     4       32     7  
Depreciation and Amortization   555     471       2,270     1,978  
Share-based Compensation and Other Stock Payments   107     192       453     589  
Adjusted EBITDA (Non-GAAP) $ 1,315   $ 779     $ 4,570   $ 2,633  
               


Industrial Solutions Segment Three Months Ended
December 31,
  Twelve Months Ended
December 31,
 
    2023     2022     2023     2022    
Net Income (Loss) $ 625   $ 410   $ 2,504   $ (130 )  
Interest Expense   151     74     512     221    
Income Tax Provision   62     1     96     22    
Depreciation and Amortization   99     98     380     397    
Share-based Compensation and Other Stock Payments   48     112     196     295    
Adjusted EBITDA (Non-GAAP) $ 985   $ 695   $ 3,688   $ 805    
                 


               
Corporate and Other Three Months Ended
December 31,
  Twelve Months Ended
December 31,
    2023       2022       2023       2022  
Net Loss $ (1,834 )   $ (2,330 )   $ (10,270 )   $ (7,475 )
Interest Expense   672       334       1,778       1,163  
Income Tax (Benefit) Provision   (620 )     324       (380 )     585  
Depreciation and Amortization   50       57       215       239  
Share-based Compensation and Other Stock Payments   180       60       635       949  
Proxy Contest-Related Expenses   1       -       1,780       -  
Adjusted EBITDA (Non-GAAP) $ (1,551 )   $ (1,555 )   $ (6,242 )   $ (4,539 )
               

IR CONTACT

Noel Ryan, IRC
BWEN@val-adv.com

EX-99.2 3 exh_992.htm EXHIBIT 99.2 EdgarFiling

EXHIBIT 99.2

 

 


1 Broadwind | Investor Presentation 2023 Fourth Quarter & Full - Year 2023 Conference Call Presentation March 5, 2024 2 Broadwind | Investor Presentation 2023 SAFE HARBOR STATEMENT This document contains “forward - looking statements” — that is, statements related to future, not past, events — as defined in Section 21 E of the Securities Exchange Act of 1934 , as amended, (the “Exchange Act”), that reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities, as well as assumptions made by, and information currently available to, our management . We have tried to identify forward looking statements by using words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “plan” and similar expressions, but these words are not the exclusive means of identifying forward looking statements . Forward - looking statements include any statement that does not directly relate to a current or historical fact . Our forward - looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following : ( i ) our expectations and beliefs with respect to our financial guidance as set forth in this release ; (ii) the impact of global health concerns on the economies and financial markets and the demand for our products ; (iii) state, local and federal regulatory frameworks affecting the industries in which we compete, including the wind energy industry, and the related extension, continuation or renewal of federal tax incentives and grants, including the advanced manufacturing tax credits (which remain subject to further technical guidance and regulations), and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into the United States ; (iv) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units ; (v) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow ; ( vi) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary ; (vii) our ability to continue to grow our business organically and through acquisitions ; (viii) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows ; ( ix ) information technology failures, network disruptions, cybersecurity attacks or breaches in data security ; (x) the sufficiency of our liquidity and alternate sources of funding, if necessary ; (xi) our ability to realize revenue from customer orders and backlog (including our ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer) ; xii) the economy and the potential impact it may have on our business, including our customers ; (xiii) the state of the wind energy market and other energy and industrial markets generally, including the availability of tax credits, and the impact of competition and economic volatility in those markets ; (xiv) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities ; (xv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers ; (xvi) the effects of the change of administrations in the U . S . federal government ; (xvii) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions ; (xviii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986 , as amended ; (xix) the limited trading market for our securities and the volatility of market price for our securities ; (xx) our outstanding indebtedness and its impact on our business activities (including our ability to incur additional debt in the future) ; and (xxi) the impact of future sales of our common stock or securities convertible into our common stock on our stock price . These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements including, but not limited to, those set forth under the caption “Risk Factors” in Part I, Item 1 A of our most recently filed Form 10 - K and other filings with the Securities and Exchange Commission . We are under no duty to update any of these statements . You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change . Accordingly, forward - looking statements should not be relied upon as a predictor of actual results .

 


4Q23 PERFORMANCE SUMMARY

 


4 Broadwind | Investor Presentation 2023 PERFORMANCE UPDATE Strategic Progress Points As of March 2024 Strong full - year 2023 performance. Record margin realization, net income and Adjusted EBITDA, despite demand pause within core wind markets Improved margin realization. Adjusted EBITDA margins +900 bps y/y to 9.5%, supported by IRA AMP credit tax credit and operational actions Positive sequential order rate momentum . Order rates increased on a sequential basis across all three reporting segments in the fourth quarter Introduced first quarter 2024 financial guidance. Anticipate full - year performance will be weighted to the second half of 2024 Investment Thesis Building a platform for profitable growth Fourth Quarter 2023 Investment Thesis Building a platform for profitable growth Building a profitable precision manufacturing platform to support growing demand for energy transition and renewables - focused specialty fabrications and technologies Passage of IRA fundamentally transforming the margin and profitability profile of our business, with a decade of tax credit support under the legislation Building balanced exposure across both renewables and diverse end - markets , which provides more stability versus wind - only order flows Monetization of earned AMP tax credits expected to bolster liquidity in 2024 Positioned to capitalize on a multi - year investment cycle in wind Targeted commercial expansion, improved operational execution Record Full - Year 2023 Results Executed on - plan in the fourth quarter.

 


Revenue, operating income and net income all increased y/y; tower sections sold +38% y/y 5 Broadwind | Investor Presentation 2023 Year - over - year organic growth in revenue, margin realization and profitability CONSOLIDATED FINANCIAL PERFORMANCE Total Revenue ($MM) Gross Profit ($MM) Adjusted EBITDA ($MM) GAAP Net Income (Loss) ($MM) Solid 4Q23 execution in a dynamic operating environment resulted in y/y improvement in revenue, margin realization and profitability Strong y/y revenue growth from Heavy Fabrications and Industrial Solutions, offset by y/y decline in Gearing Gross margin increased by +870 bps y/y to 15.1%, while Adjusted EBITDA margin increased +900 bps y/y to 9.5% Delivered $3.9 million y/y increase in GAAP Net Income to $1.1 million Entered into agreement to sell approximately $15 million of IRA advanced manufacturing production tax credits, less discounts, transaction fees and related expenses Gross Margin rate +943 bps y/y to 17.8% Adj.

 


EBITDA margin rate +904 bps y/y to 13.3% $40.1 $46.6 $176.8 $203.5 4Q22 4Q23 2022 2023 $2.6 $7.0 $10.7 $32.5 4Q22 4Q23 2022 2023 $0.2 $4.4 $2.4 $21.5 4Q22 4Q23 2022 2023 ($2.9) $1.1 ($9.7) $7.7 4Q22 4Q23 2022 2023 6 Broadwind | Investor Presentation 2023 Fourth Quarter 2023 HEAVY FABRICATIONS SEGMENT AMP credits and operational execution support improved margin realization Segment Adjusted EBITDA increased by $3.4 million y/y to $3.7 million , driven by increased tower sales volumes and AMP credit benefit Segment EBITDA margin increased ~ 1100 bps y/y to 12.5% in 4Q23 Sold 132 wind tower sections in 4Q23 +37.5% y/y Segment backlog of $145 million as of 12/31/23, representing more than 12 - months of trailing twelve - month run - rate revenue Segment Revenue ($MM) Segment EBITDA ($MM) Segment Orders ($MM) Segment Backlog at Quarter - End ($MM) $23.7 $29.5 4Q22 4Q23 $0.3 $3.7 4Q22 4Q23 $184.1 $10.0 4Q22 4Q23 $239.5 $145.3 4Q22 4Q23 7 Broadwind | Investor Presentation 2023 Fourth Quarter 2023 GEARING SEGMENT Solid y/y growth in segment Adjusted EBITDA and margin realization Growth in segment Adjusted EBITDA from 6.7% to 11.9%, driven by more profitable mix of product sold and improved operational execution Segment orders and backlog are down y/y, primarily driven by softness in Energy markets Segment Revenue ($MM) Segment EBITDA ($MM) Segment Orders ($MM) Segment Backlog at Quarter - End ($MM) $11.7 $11.1 4Q22 4Q23 $0.8 $1.3 4Q22 4Q23 $15.1 $3.6 4Q22 4Q23 $42.5 $21.7 4Q22 4Q23

 


 


8 Broadwind | Investor Presentation 2023 Fourth Quarter 2023 INDUSTRIAL SOLUTIONS SEGMENT Continue to see demand acceleration within the natural gas turbine market, building on the market recovery evidenced throughout 2022 - 2023 Strong organic revenue growth , supported by strong demand within NGT and energy markets Segment revenue +29% y/y; segment EBITDA +$0.3 million y/y Backlog +6% y/y due to strong YTD orders Orders +16% y/y due to continued strong demand for new gas turbine content Segment Revenue ($MM) Segment EBITDA ($MM) Segment Orders ($MM) Segment Backlog at Quarter - End ($MM) EBITDA margin rate +1146 bps y/y to 15.5% $4.7 $6.0 4Q22 4Q23 $0.7 $1.0 4Q22 4Q23 $5.7 $6.6 4Q22 4Q23 $15.2 $16.1 4Q22 4Q23 9 Broadwind | Investor Presentation 2023 (1) On August 4, 2022, Broadwind entered into a $35.0 million Senior Secured Revolving Credit Facility (the “Credit Facility”), including an optional $10.0 mi ll ion accordion feature, and a $7.6 million Senior Secured Term Loan (the “Term Loan).

 


The Term Loan bears interest at SOFR +2.5%; the Credit Facility bears interest at SOFR +2.0 - 2.5%, subject to the l evel of excess availability on the Credit Facility. Maintaining stable liquidity profile sufficient to support the long - term growth of the business Capital allocation priorities include debt reduction, organic investments in IP; and opportunistic investments in complementary, immediately accretive bolt - on acquisitions $22.8 million of cash and availability under credit facility as of 12/31/23; generated approximately $10 million of positive free cash flow in 4Q23, including $6.5 from monetization from AMP credits Net leverage of 0.8x as of 12/31/23 Cash and LOC Availability at Quarter - End ($MM) Net Debt Outstanding (1) ($MM) Total Inventory ($MM) Fourth Quarter 2023 BALANCE SHEET UPDATE Total Operating Working Capital ($MM) $40.1 $22.8 4Q22 4Q23 $0.5 $19.4 4Q22 4Q23 $44.3 $37.4 4Q22 4Q23 $1.8 $16.6 4Q22 4Q23 10 Broadwind | Investor Presentation 2023 Introducing First Quarter 2024 revenue and Adjusted EBITDA guidance Guidance supported by targeted commercial growth within high - value, growth - oriented fabrications markets, together with a targeted focus on asset optimization and operational discipline Assumes approximately 25% utilization at tower facilities in the first quarter 2024, as if no new tower orders were received Assumes full - year 2024 performance will be weighted toward the second half of the year, given timing of anticipated customer projects Total Revenue Range ($MM) Total Adjusted EBITDA Range ($MM) As of March 5, 2024 FIRST QUARTER 2024 FINANCIAL GUIDANCE $34 $38 Low High $1.0 $2.0 Low High

 


 


APPENDIX

 


12 Broadwind | Investor Presentation 2023 CORPORATE OVERVIEW We support the world’s energy transition as a leading independent producer of wind towers, gearing, custom fabrications, clean fuel processing systems and supply chain solutions Broadwind is a precision manufacturer of technologically advanced, high - value components and solutions for industrial clients. We are one of the leading independent wind tower manufacturers in the United States. Our most significant business serves the US domestic wind energy industry, with primary production facilities that are strategically located to meet our customers’ project needs. We also serve industrial customers in a diversified set of industrial markets including oil & gas, industrial, power generation, mining and construction. This strategic diversification allows us to leverage our manufacturing expertise to improve capacity utilization, expand our customer base and balance our exposure to the volatile demand in the US wind energy industry.

 


13 Broadwind | Investor Presentation 2023 What we do Precision manufacturing within wind sector and other diverse end - markets We provide large complex and precision fabrications to customers in a broad range of industrial markets, as well as proprietary clean fuel processing systems. Key products include wind towers, PRS units and industrial fabrications, which include components for mining, construction, marine, material handling and other applications Heavy Fabrications Segment 66% of 2023 Revenue We provide custom gearing, gearboxes and heat treat services to a broad set of customers in diverse markets, including oil and gas production, surface and underground mining, wind energy, steel, material handling and other infrastructure markets Gearing Segment 22% of 2023 Revenue We provide supply chain solutions, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine and solar power generation markets Industrial Solutions Segment 12% of 2023 Revenue Why we win Unique Value Proposition Proven engineering, product development and technical capabilities Expertise in manufacturing large, complex fabrications, gearing, and proprietary clean fuel processing systems Integrated design, sourcing, fabrication, machining, coating, assembly Stringent testing and quality capabilities Targeted, multi - industry focus Our manufacturing base Established Original Equipment Manufacturer (“OEM”) Relationships Our customer base Established OEM Relationships Manitowoc, WI Tower Manufacturing Industrial Fabrications Facility Abilene, TX Tower Manufacturing Industrial Fabrications Facility Cicero, IL Gear Manufacturing and Gearbox Repair Facility Pittsburgh, PA Gearbox Repair and Heat Treat Facility Sanford, NC Industrial Solutions and Gearbox Repair Facility OUR BUSINESS Building a platform sustained, profitable growth and long - term value creation 14 Broadwind | Investor Presentation 2023 INFLATION REDUCTION ACT IMPACT BENEFIT At full utilization, IRA could provide up to ~$30 million in incremental annual gross profit Broadwind is prepared to leverage the benefits of the IRA to create shareholder value The IRA serves to materially enhance tower production economics The IRA, which passed into law in 2022, provides critical industries, including those supporting the energy transition, with tax credits designed to accelerate a generational shift in the energy production mix from fossil fuels toward renewable energy, including wind.

 


Included within section 45x of the IRA is a provision for a new advanced manufacturing tax credit Theoretical IRA Benefit to Broadwind Quantifying potential impact of the 45x advanced manufacturing credit Theoretical annual gross profit benefit to Broadwind $30 million Annual tower production @ 100% utilization (1) 325 towers Average MW per Tower (2) 3.1 avg.

 


MW per tower Total Watts per MW 1,000,000 Cents Per Watt (3) $0.03 per watt Financial benefit of 45x credit per MW (4) $30,000 Average benefit per tower (5) $93,000 (1) Broadwind has an estimated 1,300 sections of annual optimal tower capacity; assuming each tower is four sections, the Company has the theoretical capacity to produce up to 325 towers (2) Common OEM platforms range from 2.8 to 3.4 MW per tower (3) As defined in the Inflation Reduction Act of 2022, section 45x (B)(2)(A)(0) (4) $0.03 x 1,000,000 watts per MW (5) Assuming average MW per tower of 3.1 15 Broadwind | Investor Presentation 2023 PASSAGE OF IRA SUPPORTS MULTI - YEAR INVESTMENT IN WIND Inflation Reduction Act of 2022 supports multi - decade decarbonization of domestic energy grid Broadwind is uniquely positioned to take advantage of the increased development activity driven by the IRA. Our Board and Management have deep knowledge of the wind market. IRA provides transformative, long - term funding for the entire energy ecosystem, including wind and solar The passage of the IRA extends tax credit availability into the mid - 2030s The wind industry is poised to capitalize on available domestic content tax credits, providing long - term support for multi - year investments in both onshore and offshore wind development We will seek to drive growth in excess of domestic onshore installation activity growth United States Onshore Wind Development Forecast (1) (Total GW Installed Annually, Includes Repowering (2023 - 2032) (1) Wood Mackenzie Power & Renewables – Wind Power Outlook – Updated January 2024 6.7 8.4 14.9 14.5 15.1 15.7 15.1 13.9 13.7 14.2 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2031e 2032e 16 Broadwind | Investor Presentation 2023 APPENDIX Balance Sheet

 


 


17 Broadwind | Investor Presentation 2023 APPENDIX Income Statement 18 Broadwind | Investor Presentation 2023 APPENDIX Statement of Cash Flows

 


 


19 Broadwind | Investor Presentation 2023 APPENDIX GAAP to Non - GAAP Reconciliation 20 Broadwind | Investor Presentation 2023 APPENDIX Segment - Level Data

 


 


21 Broadwind | Investor Presentation 2023 Please contact our investor relations team at: BWEN@val - adv.com IR CONTACT