Highlights:
Broadwind Energy, Inc. (NASDAQ:BWEN) reported sales of $17.8
million in Q4 2017, compared to $48.2 million in Q4 2016. The
significant decrease was due primarily to weak Towers and Heavy
Fabrications segment revenue, down $38.1 million compared to Q4
2016, as tower customers curtailed purchases beginning in the third
quarter in order to draw down component inventories. The very low
tower revenue was partially offset by $5.1 million of sales from
the Process Systems segment due primarily to the acquisition of Red
Wolf Company, LLC earlier this year, and $2.6 million increased
sales from the Gearing segment due to the strong order intake from
oil and gas customers which began early in 2017.
The Company reported a net loss from continuing operations of
$6.9 million, or $.45 per share, in Q4 2017, compared to a net
income from continuing operations of $.4 million, or $.03 per
share, in Q4 2016. The earnings reversal was largely due to the
significantly weaker results from the Towers and Heavy Fabrications
segment, where tower build was very high in Q4 2016 to meet the
terms of the Production Tax Credit qualification, but was curtailed
in Q4 2017.
The Company reported a non-GAAP adjusted EBITDA (earnings before
interest, taxes, depreciation, amortization, share-based payments
and restructuring costs) loss of $4.0 million in Q4 2017, compared
to EBITDA of $2.5 million in Q4 2016 (please refer to the
reconciliation of GAAP measures to non-GAAP measures at the end of
this release). The decrease was due primarily to the weaker results
from the Towers and Heavy Fabrications segment as noted above.
Broadwind CEO Stephanie Kushner stated, “Despite growth in both
the Gearing and Process Systems segments, 2017 was a challenging
year due to weak second half tower production, while our major
customer rightsized their inventory. In response, we took swift
action to reduce the workforce accordingly, and to reduce factory
overhead and operating expenses. At the same time, we have also
made capital investments to add capabilities in our Manitowoc,
Wisconsin plant to support an expansion and diversification of our
other heavy fabrications business, in alignment with strengthening
mining and infrastructure markets. We are committed to diversifying
our customer base to reduce the volatility in our order and
production pattern.
The medium-term outlook for wind energy remains strong. As
announced previously, 2018 tower production volume is recovering
and we expect a significant improvement in capacity utilization in
our plants as we progress through this year. In response to the
ramp up in production, we have called back or hired a significant
number of employees to support our production needs in 2018.”
Kushner continued, “In our Gearing segment, we booked $37
million in new orders in 2017, a 150% increase from 2016, due to
the rebound in the oil and gas industry and successful penetration
of a number of new accounts. Our current backlog and order intake
support production at a quarterly run rate of $9-10 million in
2018. As previously announced, our fourth quarter revenue fell
short of guidance due mainly to supply chain constraints in the
Gearing segment as the industry rebounds at a very high rate. We
are seeing supply pressures normalize as businesses adjust to the
higher demand levels.”
Our Process Systems segment contributed $17 million in revenue,
due principally to the acquisition of Red Wolf on February 1, 2017.
Although we remain excited about this business, we have experienced
headwinds in the gas turbine manufacturing and service business,
where Red Wolf’s legacy business was concentrated. We continue to
work on penetrating new markets and adding diverse customers.”
Kushner concluded, “Following a disappointing 2017, 2018 is off
to a brighter start. As our tower order book firms and our gearing
and heavy fabrications business accelerates, we expect consolidated
Q1 2018 revenue of $28-30 million, with an EBITDA loss of about $1
million. Our backlog supports a further rise in revenue in Q2 2018
to approximately $40 million and a return to positive EBITDA
generation. We expect to see additional growth in the back half of
the year.”
For FY 2017, revenue totaled $146.8 million, compared to $180.8
million for FY 2016. The 19% decrease was due primarily to a $56.8
million decrease in Tower and Heavy Fabrication segment revenue
partially offset by $17.4 million of sales from the Process Systems
segment primarily due to the acquisition of Red Wolf earlier this
year and $5.4 million of higher sales in the Gearing segment.
The net loss from continuing operations for FY 2017 totaled $3.2
million, or $.21 per share, compared to net income from continuing
operations of $1.3 million, or $.09 per share, for FY 2016. The
decrease was due primarily to a $7.6 million reduction in net
income from the Towers and Heavy Fabrications segment, somewhat
offset by a $5.1 million, or $.34 per share, income tax benefit due
to the partial release of a tax valuation allowance related to the
Red Wolf acquisition earlier in 2017.
The net loss from discontinued operations for FY 2017 totaled
$.5 million, or $.03 per share, compared to a net loss from
discontinued operations for FY 2016 of $1.0 million, or $.07 per
share, as activities in the discontinued Services segment have
substantially wound down.
The Company reported non-GAAP adjusted EBITDA of $2.8 million
for FY 2017, compared to non-GAAP adjusted EBITDA of $9.6 million
for FY 2016. The significant decrease was primarily due to the
weaker results in the Towers and Heavy Fabrications segment. The
decrease in non-GAAP adjusted EBITDA was partly offset by a $.6
million improvement in Gearing segment EBITDA and a $2.5 million
reduction in corporate, which reflected lower expenses, and
included the $1.4 million benefit triggered by a partial reversal
of a reserve for the payment of a contingent consideration
associated with the Red Wolf acquisition (please refer to the
reconciliation of GAAP measures to non-GAAP measures at the end of
this release).
Orders and Backlog
The Company booked $12.3 million of net new orders in Q4 2017,
down from $32.3 million booked in Q4 2016. Orders in the Towers and
Heavy Fabrication segment totaled $2.5 million in Q4 2017,
reflecting the weaker demand from our tower customers who were
drawing down component inventories. Gearing segment orders totaled
$7.4 million in Q4 2017, up substantially from Q4 2016 orders of
$2.9 million, due to recovery in the oil and gas industry, and an
expansion of the customer base. Process Systems segment orders
totaled $2.4 million in Q4 2017 due to weak demand from gas turbine
OEM’s.
FY 2017 orders totaled $87.6 million, compared to $275.0 million
in FY 2016, which included a $137 million multi-year tower order
that supports deliveries through 2019.
At December 31, 2017, total backlog was $138.2 million, compared
to a backlog of $188.7 million at December 31, 2016.
Segment Results
Towers and Heavy Fabrications (formerly known as Towers
and Weldments)Broadwind Energy produces fabrications for
wind, oil and gas, mining and other industrial applications,
specializing in the production of wind turbine towers.
Towers and Heavy Fabrications segment sales totaled $4.2 million
in Q4 2017, down 90% from $42.3 million in Q4 2016, due to a
significant reduction in tower volume as a result of a major
customer working down its inventory.
Towers and Heavy Fabrications operating loss in Q4 2017 totaled
$4.5 million compared to operating income of $2.8 million in Q4
2016 due to the lower volume of towers sold in Q4 2017. Towers and
Heavy Fabrications segment net loss in Q4 2017 totaled $4.2 million
compared to net income of $1.8 million in Q4 2016. Non-GAAP
adjusted EBITDA loss totaled $3.0 million in Q4 2017, compared to
Non-GAAP adjusted EBITDA of $3.9 million in Q4 2016 due mainly to
the factors described above (please refer to the reconciliation of
GAAP measures to non-GAAP measures at the end of this release).
Towers and Heavy Fabrications segment sales for FY 2017 totaled
$103.4 million, compared to $160.2 million for FY 2016 due to a 41%
decrease in towers sold beginning mid-year 2017, partially offset
by higher average prices due to a more complex tower design, and
higher material costs which are generally passed through to the
customer.
FY 2017 Towers and Heavy Fabrications segment operating income
totaled $2.7 million, compared to $12.8 million for FY 2016. The
significant decrease in operating income was due to the lower
production volume and corresponding underutilization of plant
capacity, offset by significant cost reduction actions including a
$1.5 million decrease in incentive compensation and staffing
reductions. The Towers and Heavy Fabrications segment net income
for FY 2017 totaled $.9 million compared to FY 2016 net income of
$8.5 million due to the factors described above.
GearingBroadwind Energy engineers, builds and
remanufactures precision gears and gearboxes for oil and gas,
mining, steel and wind applications.
Gearing segment sales totaled $8.5 million in Q4 2017, compared
to $5.9 million in Q4 2016 due primarily to stronger demand from
oil and gas customers.
Gearing segment operating loss totaled $.1 million in Q4 2017,
compared to an operating loss of $.2 million in Q4 2016. The slight
improvement was due to the impact of the increase in volume and a
$.7 million reduction in the environmental reserve due to
completion of a remediation project. Partly offsetting were the
impact of supply chain disruptions which led to plant
underutilization and production inefficiencies. Net loss for the
Gearing segment narrowed to $.1 million compared to $.2 million in
Q4 2016. Non-GAAP adjusted EBITDA for Q4 2017 totaled $.6 million,
compared to $.5 million for Q4 2016, due to the factors described
above (please refer to the reconciliation of GAAP measures to
non-GAAP measures at the end of this release).
For FY 2017, Gearing segment sales totaled $26.0 million
compared to $20.6 million in FY 2016. The improvement was primarily
due to the strong order intake during FY 2017 related to the
recovering oil and gas market.
FY 2017 Gearing segment operating loss narrowed to $2.6 million
compared to FY 2016 operating loss of $3.2 million. The improvement
was due primarily to the $1.9 million impact of increased sales
volume, and a $.7 million reduction in the environmental reserve
due to the completion of a remediation project. Partly offsetting
were higher maintenance and tooling expenses associated with
supporting the volume increases and higher commission expense.
Gearing segment net loss for FY 2017 totaled $2.6 million compared
to FY 2016 operating loss of $3.2 million. The Gearing segment
reported break-even results for FY 2017 non-GAAP adjusted EBITDA,
compared to non-GAAP adjusted EBITDA loss of $.6 million in FY 2016
due to the factors described above (please refer to the
reconciliation of GAAP measures to non-GAAP measures at the end of
this release).
Process SystemsBroadwind Energy designs and
manufactures custom, modular systems for compression, filtration
and other specialized process applications for the global market.
On February 1, 2017, the Company acquired Red Wolf which has been
combined with the Abilene-based compressed natural gas (“CNG”) and
fabrication business, previously reported as a part of Towers and
Heavy Fabrications, to form the Process Systems segment.
Process Systems segment sales in Q4 2017 totaled $5.1 million.
Q4 2017 net loss totaled $.4 million. A $.4 million of reserve was
taken as a result of the decision to exit the CNG unit fabrication
business. The Process Systems segment reported breakeven results
for Non-GAAP adjusted EBITDA in Q4 2017 (please refer to the
reconciliation of GAAP measures to non-GAAP measures at the end of
this release).
FY 2017 sales for the Process Systems segment totaled $17.4
million and FY 2017 net loss totaled $2.2 million. The Process
Systems segment reported a Non-GAAP adjusted EBITDA loss of $.5
million for FY 2017, due principally to losses in the legacy CNG
business (please refer to the reconciliation of GAAP measures to
non-GAAP measures at the end of this release).
Corporate
Corporate and other expenses totaled $1.6 million in Q4 2017,
compared to $2.0 million in Q4 2016, mainly due to lower incentive
compensation expense.
FY 2017 Corporate and other expenses totaled $5.2 million
compared to $7.6 million in FY 2016. The $2.4 million reduction
included a $1.4 million gain resulting from the expectation that
the contingent consideration payment associated with the Red Wolf
acquisition will not be paid for the first year of ownership, and
reflected a $.9 million reduction in incentive compensation
expense.
Cash and Liquidity
During Q4 2017, operating working capital (accounts receivable
and inventory, net of accounts payable and customer deposits)
decreased to $11.4 million due to the timing of customer
receipts.
Capital expenditures, net of disposals, in Q4 2017 totaled $.7
million. FY 2017 capital investments totaled $6.7 million,
primarily for upgrades to tower manufacturing capabilities and to
expand the Abilene tower facility.
Debt and capital leases totaled $16.8 million at December 31,
2017, including the $2.6 million New Markets Tax Credit loan, which
is expected to be substantially forgiven when it matures in 2018.
The Company’s $25 million line of credit with Canadian Imperial
Bank of Commerce had a balance of $11.5 million at December 31,
2017 and $11.8 million of availability.
The Company was not in compliance with the fixed charge coverage
ratio covenant of its credit facility as of December 31, 2017. On
January 29, 2018, the Company and Canadian Imperial Bank of
Commerce executed the third amendment to the loan agreement waiving
compliance with this covenant and amending it going forward. The
third amendment included a minimum EBITDA covenant and a capital
expenditure covenant through June 30, 2018.
Cash assets (cash and short-term investments) remained near zero
as expected because the Company’s cash and receipts are
automatically applied to the outstanding credit line balance
consistent with the loan documents.
About Broadwind Energy, Inc.Broadwind Energy,
Inc. (NASDAQ:BWEN) is a precision manufacturer of structures,
equipment and components for clean tech and other specialized
applications. From gears and gearing systems for wind, oil and gas
and mining applications, to wind towers and industrial heavy
fabrications, we have solutions for the clean tech, energy and
infrastructure needs of the future. With facilities throughout the
U.S., Broadwind Energy's talented team is committed to helping
customers maximize performance of their investments—quicker, easier
and smarter. Find out more at www.bwen.com
Forward-Looking StatementsThis 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, 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. Forward looking statements
include any statement that does not directly relate to a current or
historical fact. 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.
Our forward-looking statements may include or relate to our
beliefs, expectations, plans and/or assumptions with respect to the
following: (i) 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 and state renewable portfolio
standards; (ii) 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; (iii) our ability to continue
to grow our business organically and through acquisitions; (iv) the
sufficiency of our liquidity and alternate sources of funding, if
necessary; (v) our ability to realize revenue from customer orders
and backlog; (vi) our ability to operate our business efficiently,
manage capital expenditures and costs effectively, and generate
cash flow; (vii) the economy and the potential impact it may have
on our business, including our customers; (viii) the state of the
wind energy market and other energy and industrial markets
generally and the impact of competition and economic volatility in
those markets; (ix) the effects of market disruptions and regular
market volatility, including fluctuations in the price of oil, gas
and other commodities; (x) the effects of the recent change of
administrations in the U.S. federal government; (xi) our ability to
successfully integrate and operate the business of Red Wolf
Company, LLC and to identify, negotiate and execute future
acquisitions; (xii) the potential loss of tax benefits if we
experience an “ownership change” under Section 382 of the Internal
Revenue Code of 1986, as amended; and (xiii) 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. 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.
|
BROADWIND ENERGY, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(IN THOUSANDS) |
|
|
|
|
|
|
As of December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
ASSETS |
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
78 |
|
|
$ |
18,699 |
|
|
Short-term investments |
|
|
- |
|
|
|
3,171 |
|
|
Restricted cash |
|
|
- |
|
|
|
39 |
|
|
Accounts
receivable, net |
|
|
13,644 |
|
|
|
11,865 |
|
|
Inventories, net |
|
|
19,279 |
|
|
|
21,159 |
|
|
Prepaid
expenses and other current assets |
|
|
1,798 |
|
|
|
2,449 |
|
|
Current
assets held for sale |
|
|
580 |
|
|
|
808 |
|
|
Total
current assets |
|
|
35,379 |
|
|
|
58,190 |
|
|
LONG-TERM
ASSETS: |
|
|
|
|
|
Property
and equipment, net |
|
|
55,693 |
|
|
|
54,606 |
|
|
Goodwill |
|
4,993 |
|
|
|
- |
|
|
Other
intangible assets, net |
|
|
16,078 |
|
|
|
4,572 |
|
|
Other
assets |
|
|
207 |
|
|
|
294 |
|
|
TOTAL
ASSETS |
|
$ |
112,350 |
|
|
$ |
117,662 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
Line of
credit, NMTC and other notes payable |
|
$ |
14,138 |
|
|
$ |
- |
|
|
Current
maturities of long-term debt |
|
|
114 |
|
|
|
- |
|
|
Current
portions of capital lease obligations |
|
|
762 |
|
|
|
465 |
|
|
Accounts
payable |
|
|
11,756 |
|
|
|
15,852 |
|
|
Accrued
liabilities |
|
|
4,393 |
|
|
|
8,430 |
|
|
Customer
deposits |
|
|
9,791 |
|
|
|
18,011 |
|
|
Current
liabilities held for sale |
|
|
30 |
|
|
|
493 |
|
|
Total
current liabilities |
|
|
40,984 |
|
|
|
43,251 |
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES: |
|
|
|
|
|
Long-term
debt, net of current maturities |
|
|
797 |
|
|
|
2,600 |
|
|
Long-term
capital lease obligations, net of current portions |
|
|
941 |
|
|
|
1,038 |
|
|
Other |
|
|
3,557 |
|
|
|
2,190 |
|
|
Total
long-term liabilities |
|
|
5,295 |
|
|
|
5,828 |
|
|
|
|
|
|
|
|
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; 15,480,299
and 15,175,767 shares issued as of December 31, 2017 and 2016,
respectively |
|
|
15 |
|
|
|
15 |
|
|
Treasury
stock, at cost, 273,937 shares at December 31, 2017 and 2016 |
|
|
(1,842 |
) |
|
|
(1,842 |
) |
|
Additional paid-in capital |
|
|
380,005 |
|
|
|
378,876 |
|
|
Accumulated deficit |
|
|
(312,107 |
) |
|
|
(308,466 |
) |
|
Total
stockholders' equity |
|
|
66,071 |
|
|
|
68,583 |
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
112,350 |
|
|
$ |
117,662 |
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(IN THOUSANDS, EXCEPT PER SHARE DATA) |
(UNAUDITED) |
|
|
|
Three Months Ended December 31, |
|
For the Year Ended December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
17,768 |
|
|
$ |
48,151 |
|
|
$ |
146,785 |
|
|
$ |
180,840 |
|
|
Cost of sales |
|
|
20,869 |
|
|
|
43,447 |
|
|
|
138,626 |
|
|
|
162,701 |
|
|
Gross (loss)profit |
|
|
(3,101 |
) |
|
|
4,704 |
|
|
|
8,159 |
|
|
|
18,139 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
Selling, general and
administrative |
|
|
3,117 |
|
|
|
4,001 |
|
|
|
13,828 |
|
|
|
15,786 |
|
|
Intangible
amortization |
|
|
471 |
|
|
|
111 |
|
|
|
1,764 |
|
|
|
444 |
|
|
Total
operating expenses |
|
|
3,588 |
|
|
|
4,112 |
|
|
|
15,592 |
|
|
|
16,230 |
|
|
Operating (loss)
income |
|
|
(6,689 |
) |
|
|
592 |
|
|
|
(7,433 |
) |
|
|
1,909 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE)
INCOME, net: |
|
|
|
|
|
|
|
|
|
Interest expense,
net |
|
|
(214 |
) |
|
|
(194 |
) |
|
|
(798 |
) |
|
|
(625 |
) |
|
Other, net |
|
|
(14 |
) |
|
|
22 |
|
|
|
3 |
|
|
|
49 |
|
|
Total
other expense, net |
|
|
(228 |
) |
|
|
(172 |
) |
|
|
(795 |
) |
|
|
(576 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
before benefit for income taxes |
|
|
(6,917 |
) |
|
|
420 |
|
|
|
(8,228 |
) |
|
|
1,333 |
|
|
Benefit for income
taxes |
|
|
11 |
|
|
|
14 |
|
|
|
(5,045 |
) |
|
|
(2 |
) |
|
(LOSS) INCOME
FROM CONTINUING OPERATIONS |
|
|
(6,928 |
) |
|
|
406 |
|
|
|
(3,183 |
) |
|
|
1,335 |
|
|
LOSS FROM DISCONTINUED OPERATIONS |
|
|
(53 |
) |
|
|
(108 |
) |
|
|
(458 |
) |
|
|
(1,016 |
) |
|
NET (LOSS)
INCOME |
|
$ |
(6,981 |
) |
|
$ |
298 |
|
|
$ |
(3,641 |
) |
|
$ |
319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME PER COMMON SHARE - BASIC: |
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations |
|
$ |
(0.45 |
) |
|
$ |
0.03 |
|
|
$ |
(0.21 |
) |
|
$ |
0.09 |
|
|
Loss from discontinued
operations |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
(0.07 |
) |
|
Net (loss) income |
|
$ |
(0.46 |
) |
|
$ |
0.02 |
|
|
$ |
(0.24 |
) |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING - BASIC |
|
|
15,171 |
|
|
|
14,876 |
|
|
|
15,053 |
|
|
|
14,843 |
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME PER COMMON SHARE - DILUTED: |
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations |
|
$ |
(0.45 |
) |
|
$ |
0.03 |
|
|
$ |
(0.21 |
) |
|
$ |
0.09 |
|
|
Loss from discontinued
operations |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
(0.07 |
) |
|
Net (loss) income |
|
$ |
(0.46 |
) |
|
$ |
0.02 |
|
|
$ |
(0.24 |
) |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING - DILUTED |
|
|
15,171 |
|
|
|
15,096 |
|
|
|
15,053 |
|
|
|
15,081 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(IN THOUSANDS) |
(UNAUDITED) |
|
|
|
Twelve Months Ended December 31, |
|
|
|
|
2017 |
|
|
2016 |
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
Net
(loss) income |
|
$ |
(3,641 |
) |
$ |
319 |
|
|
Loss from
discontinued operations |
|
|
(458 |
) |
|
(1,016 |
) |
|
(Loss)
income from continuing operations |
|
|
(3,183 |
) |
|
1,335 |
|
|
|
|
|
|
|
Adjustments to
reconcile net cash used in operating activities: |
|
|
|
Depreciation and amortization expense |
|
|
8,999 |
|
|
6,914 |
|
|
Impairment charges |
|
|
80 |
|
|
- |
|
|
Deferred
income taxes |
|
|
(5,045 |
) |
|
- |
|
|
Remeasurement of contingent consideration |
|
|
(1,394 |
) |
|
- |
|
|
Stock-based compensation |
|
|
813 |
|
|
753 |
|
|
Allowance
for doubtful accounts |
|
|
37 |
|
|
61 |
|
|
Common
stock issued under defined contribution 401(k) plan |
|
|
316 |
|
|
- |
|
|
Gain on
disposal of assets |
|
|
(12 |
) |
|
(217 |
) |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
|
884 |
|
|
(2,141 |
) |
|
Inventories |
|
|
7,057 |
|
|
3,060 |
|
|
Prepaid
expenses and other current assets |
|
|
651 |
|
|
(933 |
) |
|
Accounts
payable |
|
|
(5,287 |
) |
|
989 |
|
|
Accrued
liabilities |
|
|
(4,921 |
) |
|
297 |
|
|
Customer
deposits |
|
|
(8,219 |
) |
|
8,057 |
|
|
Other
non-current assets and liabilities |
|
|
(126 |
) |
|
(875 |
) |
|
Net cash (used in)
provided by operating activities of continued operations |
|
|
(9,350 |
) |
|
17,300 |
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
Cash paid
in acquisition |
|
|
(16,449 |
) |
|
- |
|
|
Purchases
of available for sale securities |
|
|
- |
|
|
(19,223 |
) |
|
Sales of
available for sale securities |
|
|
2,221 |
|
|
13,061 |
|
|
Maturities of available for sale securities |
|
|
950 |
|
|
9,170 |
|
|
Purchases
of property and equipment |
|
|
(6,688 |
) |
|
(6,624 |
) |
|
Proceeds
from disposals of property and equipment |
|
|
72 |
|
|
452 |
|
|
Net cash used in
investing activities of continued operations |
|
|
(19,894 |
) |
|
(3,164 |
) |
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
Net
proceeds from issuance of stock |
|
|
- |
|
|
19 |
|
|
Proceeds
from line of credit |
|
|
158,856 |
|
|
- |
|
|
Payments
on line of credit |
|
|
(148,009 |
) |
|
- |
|
|
Net
proceeds on long-term debt |
|
|
457 |
|
|
(2,799 |
) |
|
Principal
payments on capital leases |
|
|
(644 |
) |
|
(539 |
) |
|
Net cash provided by
(used in) financing activities of continued operations |
|
|
10,660 |
|
|
(3,319 |
) |
|
|
|
|
|
|
DISCONTINUED
OPERATIONS: |
|
|
|
|
Operating
cash flows |
|
|
(78 |
) |
|
731 |
|
|
Investing
cash flows |
|
|
- |
|
|
615 |
|
|
Financing
cash flows |
|
|
- |
|
|
58 |
|
|
Net cash (used in)
provided by discontinued operations (1) |
|
|
(78 |
) |
|
1,404 |
|
|
|
|
|
|
|
Add: Cash balance of
discontinued operations, beginning of period |
|
|
2 |
|
|
- |
|
|
Less: Cash balance of
discontinued operations, end of period |
|
|
- |
|
|
2 |
|
|
|
|
|
|
|
NET (DECREASE)
INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH |
|
|
(18,660 |
) |
|
12,219 |
|
|
CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH beginning of the
period |
|
|
18,738 |
|
|
6,519 |
|
|
CASH, CASH
EQUIVALENTS, AND RESTRICTED CASH end of the period |
|
$ |
78 |
|
$ |
18,738 |
|
|
|
|
|
|
|
Supplemental
cash flow information: |
|
|
|
|
Interest
paid |
|
$ |
585 |
|
$ |
494 |
|
|
Income
taxes paid |
|
$ |
44 |
|
$ |
23 |
|
|
|
|
|
|
|
Non-cash
activities: |
|
|
|
|
Issuance
of restricted stock grants |
|
$ |
813 |
|
$ |
753 |
|
|
Equipment
additions via capital lease |
|
$ |
844 |
|
$ |
1,616 |
|
|
Contingent consideration related to business acquisition |
|
$ |
2,534 |
|
$ |
- |
|
|
|
|
|
|
|
Red Wolf
acquisition: |
|
|
|
|
Assets
acquired |
|
$ |
26,602 |
|
|
|
Liabilities assumed |
|
$ |
7,619 |
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND SUBSIDIARIES |
SELECTED SEGMENT FINANCIAL INFORMATION |
(IN THOUSANDS) |
(UNAUDITED) |
|
|
|
Three Months Ended |
|
Twelve Months
Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
ORDERS: |
|
|
|
|
|
Towers
and Heavy Fabrications |
|
$ |
2,543 |
|
|
$ |
29,389 |
|
|
$ |
34,873 |
|
|
$ |
260,790 |
|
|
Gearing |
|
|
7,398 |
|
|
|
2,913 |
|
|
|
36,928 |
|
|
|
14,220 |
|
|
Process
Systems |
|
|
2,358 |
|
|
|
- |
|
|
|
15,761 |
|
|
|
- |
|
|
Total
orders |
|
$ |
12,299 |
|
|
$ |
32,302 |
|
|
$ |
87,562 |
|
|
$ |
275,010 |
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
Towers
and Heavy Fabrications |
|
$ |
4,195 |
|
|
$ |
42,262 |
|
|
$ |
103,389 |
|
|
$ |
160,210 |
|
|
Gearing |
|
|
8,495 |
|
|
|
5,889 |
|
|
|
26,006 |
|
|
|
20,648 |
|
|
Process
Systems |
|
|
5,078 |
|
|
|
- |
|
|
|
17,390 |
|
|
|
- |
|
|
Corporate
and Other |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(18 |
) |
|
Total
revenues |
|
$ |
17,768 |
|
|
$ |
48,151 |
|
|
$ |
146,785 |
|
|
$ |
180,840 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT/(LOSS): |
|
|
|
|
|
Towers
and Heavy Fabrications |
|
$ |
(4,510 |
) |
|
$ |
2,772 |
|
|
$ |
2,667 |
|
|
$ |
12,788 |
|
|
Gearing |
|
|
(70 |
) |
|
|
(162 |
) |
|
|
(2,632 |
) |
|
|
(3,244 |
) |
|
Process
Systems |
|
|
(464 |
) |
|
|
- |
|
|
|
(2,269 |
) |
|
|
- |
|
|
Corporate
and Other |
|
|
(1,645 |
) |
|
|
(2,018 |
) |
|
|
(5,200 |
) |
|
|
(7,635 |
) |
|
Total
operating (loss)/profit |
|
$ |
(6,689 |
) |
|
$ |
592 |
|
|
$ |
(7,434 |
) |
|
$ |
1,909 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure The Company provides
non-GAAP adjusted EBITDA (earnings before interest, income taxes,
depreciation, amortization, share based compensation, and other
stock payments) as supplemental information regarding the Company’s
business performance. The Company’s management uses adjusted EBITDA
when it internally evaluates the performance of the Company’s
business, 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, and it 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.
|
BROADWIND ENERGY, INC. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
(IN THOUSANDS) |
(UNAUDITED) |
|
Consolidated |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
2017 |
|
|
|
2016 |
|
|
Net Income/(Loss) from
continuing operations |
|
$ |
(6,928 |
) |
|
$ |
406 |
|
$ |
(3,183 |
) |
|
$ |
1,335 |
|
|
Interest Expense |
|
|
214 |
|
|
|
194 |
|
|
798 |
|
|
|
625 |
|
|
Income Tax
Provision/(Benefit) |
|
|
11 |
|
|
|
14 |
|
|
(5,045 |
) |
|
|
(2 |
) |
|
Depreciation and
Amortization |
|
|
2,428 |
|
|
|
1,776 |
|
|
8,999 |
|
|
|
6,914 |
|
|
Share-based
Compensation and Other Stock Payments |
|
|
323 |
|
|
|
125 |
|
|
1,223 |
|
|
|
753 |
|
|
Adjusted
EBITDA (Non-GAAP) |
|
$ |
(3,952 |
) |
|
$ |
2,514 |
|
$ |
2,792 |
|
|
$ |
9,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Towers and
Heavy Fabrications Segment |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Net (Loss)/Income |
$ |
(4,207 |
) |
|
$ |
1,772 |
|
$ |
919 |
|
$ |
8,510 |
|
Interest
Expense/(Benefit) |
|
26 |
|
|
|
5 |
|
|
89 |
|
|
26 |
|
Income Tax
(Benefit)/Provision |
|
(337 |
) |
|
|
1,001 |
|
|
1,666 |
|
|
4,286 |
|
Depreciation and
Amortization |
|
1,355 |
|
|
|
1,100 |
|
|
4,638 |
|
|
4,166 |
|
Share-based
Compensation and Other Stock Payments |
|
128 |
|
|
|
11 |
|
|
440 |
|
|
165 |
|
Adjusted
EBITDA (Non-GAAP) |
$ |
(3,035 |
) |
|
$ |
3,889 |
|
$ |
7,752 |
|
$ |
17,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gearing
Segment |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
Net Income/(Loss) |
|
$ |
(70 |
) |
|
$ |
(159 |
) |
|
$ |
(2,638 |
) |
|
$ |
(3,258 |
) |
|
Interest Expense |
|
|
3 |
|
|
|
- |
|
|
|
12 |
|
|
|
9 |
|
|
Income Tax
Provision/(Benefit) |
|
|
(4 |
) |
|
|
(3 |
) |
|
|
(6 |
) |
|
|
4 |
|
|
Depreciation and
Amortization |
|
|
583 |
|
|
|
627 |
|
|
|
2,430 |
|
|
|
2,546 |
|
|
Share-based
Compensation and Other Stock Payments |
|
|
64 |
|
|
|
17 |
|
|
|
178 |
|
|
|
106 |
|
|
Adjusted
EBITDA (Non-GAAP) |
|
$ |
576 |
|
|
$ |
482 |
|
|
$ |
(24 |
) |
|
$ |
(593 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Process
Systems |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net Income/(Loss) |
$ |
(390 |
) |
|
$ |
- |
|
$ |
(2,207 |
) |
|
$ |
- |
|
Interest Expense |
|
1 |
|
|
|
- |
|
|
5 |
|
|
|
- |
|
Income Tax
Provision/(Benefit) |
|
(78 |
) |
|
|
- |
|
|
(88 |
) |
|
|
- |
|
Depreciation and
Amortization |
|
428 |
|
|
|
- |
|
|
1,706 |
|
|
|
- |
|
Share-based
Compensation and Other Stock Payments |
|
20 |
|
|
|
- |
|
|
53 |
|
|
|
- |
|
Adjusted
EBITDA (Non-GAAP) |
$ |
(19 |
) |
|
$ |
- |
|
$ |
(531 |
) |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Other |
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
Net Income/(Loss) |
$ |
(2,651 |
) |
|
$ |
(1,208 |
) |
|
$ |
743 |
|
|
$ |
(3,917 |
) |
|
Interest Expense |
|
184 |
|
|
|
189 |
|
|
|
692 |
|
|
|
590 |
|
|
Income Tax
Provision/(Benefit) |
|
430 |
|
|
|
(984 |
) |
|
|
(6,617 |
) |
|
|
(4,292 |
) |
|
Depreciation and
Amortization |
|
62 |
|
|
|
49 |
|
|
|
225 |
|
|
|
202 |
|
|
Share-based
Compensation and Other Stock Payments |
|
111 |
|
|
|
97 |
|
|
|
552 |
|
|
|
482 |
|
|
Adjusted
EBITDA (Non-GAAP) |
$ |
(1,864 |
) |
|
$ |
(1,857 |
) |
|
$ |
(4,405 |
) |
|
$ |
(6,935 |
) |
|
BWEN INVESTOR CONTACT: Joni Konstantelos, 708.780.4819 joni.konstantelos@bwen.com
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