Highlights:
Broadwind Energy, Inc. (NASDAQ: BWEN) reported sales of $27.2
million in Q4 2018, up 53% compared to $17.8 million in Q4 2017.
The increase was primarily attributable to $6.5M higher Towers and
Heavy Fabrication sales due to a 113% increase in tower sections
sold following a near shutdown at year-end 2017 when our major
customer rebalanced inventories. In addition to the tower
volume increase, Gearing sales increased 28% to $10.9M, due
primarily to strong demand from oil and gas and mining customers.
The Company reported a net loss of $12.4 million, or $.79 per
share, in Q4 2018, compared to a loss of $7.0 million, or $.46 per
share, in Q4 2017. The current year loss included a $7.6M
non-cash write-down of customer intangibles associated with the Red
Wolf acquisition. Partially offsetting were improved operating
results for Towers and Heavy Fabrications and Gearing.
The Company reported a non-GAAP adjusted EBITDA (earnings before
interest, taxes, depreciation, amortization, share-based payments,
restructuring costs and impairment expense) loss of $1.7 million in
Q4 2018, compared to a loss $4.0 million in Q4 2017 (please refer
to the reconciliation of GAAP measures to non-GAAP measures at the
end of this release). The narrowed loss was due primarily to
improved Towers and Heavy Fabrication and Gearing operating results
as noted above.
Broadwind CEO Stephanie Kushner stated, “Gearing delivered a
second consecutive strong quarter and its first profitable
year. Operational and organizational changes initiated
earlier in 2018 have shifted the trajectory of the business and we
are gaining market share and have a healthy backlog. We expect to
capitalize on strong second half results and deliver solid profit
margins in 2019.
Our tower business is recovering in the strong near-term
domestic wind market, and our capacity utilization is rising.
However, margins remain under pressure from imported towers which
use significantly cheaper Asian steel. Our production of other
heavy fabrications, particularly for mining and construction
products, was up three-fold in 2018, and continues to be a
diversification focus for the business.”
Our Process Systems segment has been challenged by Red Wolf’s
reliance on a single gas turbine customer, but we have had some
initial success with customer diversification and continue to make
this a priority for the business. We expect the segment to
perform much better in 2019.”
Kushner concluded, “Our 2019 outlook is for quarterly revenue at
or above $40 million, and average EBITDA of about $2 million per
quarter. First quarter EBITDA is expected to be $1.0-$1.5
million, impacted by the cost of ramping up tower production. Our
expanded credit line will provide the capital to support our
significant top-line recovery.”
For the full year of 2018, revenue totaled $125.4 million,
compared to $146.8 million in 2017. The 15% decrease was due
primarily to $34.6 million lower sales in the Towers and Heavy
Fabrications segment due primarily to a 34% decrease in tower
volumes, partially offset by increased sales of other heavy
fabrications due to growth in demand from mining and construction
customers. Gearing segment revenues increased $12.4 million
resulting from the growth in demand from oil and gas and mining
customers. Process Systems segment revenue increased modestly
by $.9M, as increased industrial demand offset weaker demand for
natural gas turbine content.
Net loss for 2018 totaled $24.1 million, versus a net loss of
$3.6 million in 2017. The increased loss is attributable to
non-cash impairment charges of $12.6 million in the current year
and the absence of a $5.0 million income tax benefit recorded in
2017 associated with the Red Wolf acquisition, as well as the
reduction in tower sales. The current year results also benefited
from the improved operating results from Gearing and the $2.2
million impact of the New Markets Tax Credit loan forgiveness.
The Company reported non-GAAP adjusted EBITDA loss of $1.0
million for full year 2018 compared to income of $2.8 million in
2017. The decrease was due primarily to the lower capacity
utilization in our tower plants, partially offset by the Gearing
segment recovery (please refer to the reconciliation of GAAP
measures to non-GAAP measures at the end of this release).
Orders and Backlog
The Company booked $16.7 million of net new orders in Q4 2018,
up 36% from $12.3 million in Q4 2017. Gearing orders totaled $8.5
million in Q4 2018, up from $7.4 million in Q4 2017 due primarily
to strong demand from wind and mining customers. Process Systems
orders more than doubled to $5.8 million in Q4 2018 compared to
$2.4 million in Q4 2017 due primarily to higher demand from mining
and other industrial customers. Towers and Heavy Fabrications
orders were essentially flat, at $2.4 million in Q4 2018, compared
to $2.5 million in Q4 2017.
Full year 2018 orders totaled $83.2 million, compared to $87.6
million in 2017. At December 31, 2018, total backlog was $96.5
million, compared to backlog of $138.2 million at December 31,
2017, consistent with entering the final year of a 3-year tower
supply agreement. Future tower orders are expected to be on a
spot basis, reflecting a shift in procurement practices in the
industry.
Segment Results
Towers and Heavy Fabrications
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 $10.7
million in Q4 2018, compared to $4.2 million in Q4 2017 when our
tower production was curtailed as our key customer realigned
inventories. The increase was due primarily to a 113% increase in
tower sections sold and higher heavy fabrications revenue as a
result of strong demand from mining and other industrial
customers.
Towers and Heavy Fabrications segment operating loss narrowed to
$2.8 million in Q4 2018 compared to $4.5 million in Q4 2017. Net
loss for the Towers and Heavy Fabrications segment narrowed to $2.2
million in Q4 2018, compared to $4.2 million in Q4 2017. The
non-GAAP adjusted EBITDA loss in Q4 2018 was $1.3 million compared
to non-GAAP adjusted EBITDA loss of $3.0 million in Q4 2017 due
primarily 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 full year 2018
totaled $68.8 million, down 33% from $103.4 million in 2017, due
primarily to a reduction in tower volumes coupled with a lower
average sales price on the product mix sold. The decreased
tower demand was partially offset by an increase in sales of heavy
fabrications due primarily to strong demand from mining and
construction customers.
The full year operating income decreased from $2.7 million in
2017 to an operating loss of $4.3 million in 2018. The decrease was
primarily attributable to lower capacity utilization, a lower
margin product mix and start-up costs associated with restoring
production levels as we ramped up activity during the first quarter
following a near shutdown in late 2017. For the full year, the net
loss for the Towers and Heavy Fabrications segment totaled $3.3
million compared to net income of $.9 million for 2017.
Non-GAAP adjusted EBITDA totaled $1.4 million in 2018 down from
$7.8 million in 2017 due to the factors described above (please
refer to the reconciliation of GAAP measures to non-GAAP measures
at the end of this release).
Gearing
Broadwind Energy engineers, builds and remanufactures precision
gears and gearboxes for oil and gas, mining, steel, wind and other
specialized applications.
Gearing segment sales totaled $10.9 million in Q4 2018, up 28%
from $8.5 million in Q4 2017. The $2.4 million increase was due
primarily to continued strong sales to oil and gas and mining
customers, attributable to strong market demand and the expansion
of our customer base.
Operating income for Q4 2018 totaled $1.0 million, compared to
an operating loss of $.1 million in Q4 2017. The improvement was
due primarily to improved plant utilization, higher labor
productivity and greater manufacturing efficiencies. Partially
offsetting these factors was the absence of the $.7 million
environmental reserve reversal that occurred in 2017, as well as
increased overhead costs to support higher production levels. Net
income for the Gearing segment totaled $.9 million in Q4 2018,
compared to a net loss of $.1 million in Q4 2017. Non-GAAP adjusted
EBITDA was $1.6 million in Q4 2018 compared to $.6 million in Q4
2017 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).
Gearing segment revenue for full year 2018 totaled $38.4
million, up 48% from $26.0 million for 2017. The increase was due
primarily to the continued strong sales to oil and gas
customers.
The Gearing segment had full year operating income of $.1
million in 2018, a significant improvement compared to a loss of
$2.6 million in 2017. The full year 2018 had break-even net income,
versus a net loss of $2.6 million in 2017. For full year 2018,
non-GAAP adjusted EBITDA was $2.6 million compared to breakeven
non-GAAP adjusted EBITDA in 2017 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).
Process Systems
Broadwind 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 revenue totaled $5.6 million in Q4 2018 compared
to $5.1 million in Q4 2017 due to higher sales to other industrial
customers, partially offset by lower customer demand for natural
gas turbine content. The operating loss totaled $8.9 million in Q4
2018 compared to operating loss of $.5 million in Q4 2017 due
primarily to a non-cash impairment of a portion of the intangible
value of Red Wolf’s customer relationship, because the business’s
large gas turbine customer’s demand has declined significantly in a
weaker global market.
Process Systems full year revenue totaled $18.3 million in 2018
compared to $17.4 million in 2017 due primarily to the recovery in
mining and other industrial markets.
Process Systems full year operating loss totaled $16.4 million
in 2018, which includes $12.6 million of impairment charges
resulting from the write-off of intangible assets and $.7 million
of restructuring costs related to the Abilene production facility.
Net loss for full year 2018 totaled $16.0 million compared to net
loss of $2.2 million in 2017 due mainly to the factors described
above. Non-GAAP adjusted EBITDA loss for full year 2018 totaled
$1.4 million compared to $.5 million in 2017 due to the factors
described above (please refer to the reconciliation of GAAP
measures to non-GAAP measures at the end of this release).
Corporate
Corporate and other expenses decreased to $1.5 million in Q4
2018 compared to $1.6 million in Q4 2017 due primarily to lower
compensation costs.
Corporate and other expenses for the full year totaled $4.3
million in 2018, down 17% from $5.2 million in 2017. The reduction
was due primarily to $.8 million lower salaries and benefits
expense, partially offset by the $.3 million reduction in the Red
Wolf earn-out release in 2018 compared to 2017.
Cash and Liquidity
During Q4 2018, operating working capital (accounts receivable
and inventory, net of accounts payable and customer deposits)
improved $13.1 million to $5.0 million due primarily to an increase
in customer deposits in support of higher 2019 tower production
levels.
Debt and capital leases totaled $14.9 million at December 31,
2018. The Company’s $25 million line of credit with CIBC Bank USA
had a balance of $11.0 million at December 31, 2018 and $10.3
million of availability.
On February, 25, 2019, the Company executed an Amended and
Restated Loan and Security Agreement, with CIBC Bank USA and other
lenders, which expanded our credit line to $35 million from $25
million and extended the term of the agreement to February 25,
2022. The agreement includes minimum EBITDA covenants through
September 30, 2019 and introduces a Fixed Charge Coverage Ratio
thereafter.
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 weldments,
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
production, sales, collections, customer deposits and revenues
generated by new customer orders and our ability to realize the
resulting cash flows; (v) the sufficiency of our liquidity and
alternate sources of funding, if necessary; (vi) our ability to
realize revenue from customer orders and backlog; (vii) our ability
to operate our business efficiently, comply with our debt
obligations, manage capital expenditures and costs effectively, and
generate cash flow; (viii) the economy and the potential impact it
may have on our business, including our customers; (ix) 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; (x) the effects of market disruptions and regular
market volatility, including fluctuations in the price of oil, gas
and other commodities; (xi) the effects of the change of
administrations in the U.S. federal government; (xii) our ability
to successfully integrate and operate companies and to identify,
negotiate and execute future acquisitions; and (xiii) the potential
loss of tax benefits if we experience an “ownership change” under
Section 382 of the Internal Revenue Code of 1986, as amended; (xiv)
the limited trading market for our securities and the volatility of
market price for our securities; and (xv) 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 results
to be materially different from the forward-looking statements
including, but not limited to, those set forth under the caption
“Risk Factors” in Item 1A of our Annual Report on Form 10-K for the
year ended December 31, 2018. 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.
BWEN INVESTOR CONTACT: Jason Bonfigt,
708.780.4821 jason.bonfigt@bwen.com
BROADWIND ENERGY, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,177 |
|
|
$ |
78 |
|
Accounts receivable, net |
|
|
17,455 |
|
|
|
13,644 |
|
Inventories, net |
|
|
22,670 |
|
|
|
19,279 |
|
Prepaid expenses and other current assets |
|
|
1,776 |
|
|
|
1,798 |
|
Current assets held for sale |
|
|
- |
|
|
|
580 |
|
Total current assets |
|
|
43,078 |
|
|
|
35,379 |
|
LONG-TERM ASSETS: |
|
|
|
|
|
Property and equipment, net |
|
|
49,087 |
|
|
|
55,693 |
|
Goodwill |
|
|
- |
|
|
|
4,993 |
|
Other intangible assets, net |
|
|
6,602 |
|
|
|
16,078 |
|
Other assets |
|
|
398 |
|
|
|
207 |
|
TOTAL ASSETS |
|
$ |
99,165 |
|
|
$ |
112,350 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
Line of credit, NMTC and other notes payable |
|
$ |
11,930 |
|
|
$ |
14,138 |
|
Current maturities of long-term debt |
|
|
- |
|
|
|
114 |
|
Current portions of capital lease obligations |
|
|
967 |
|
|
|
762 |
|
Accounts payable |
|
|
11,618 |
|
|
|
11,756 |
|
Accrued liabilities |
|
|
3,806 |
|
|
|
4,393 |
|
Customer deposits |
|
|
23,507 |
|
|
|
9,791 |
|
Current liabilities held for sale |
|
|
27 |
|
|
|
30 |
|
Total current liabilities |
|
|
51,855 |
|
|
|
40,984 |
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
Long-term debt, net of current maturities |
|
|
1,408 |
|
|
|
797 |
|
Long-term capital lease obligations, net of current
portions |
|
|
571 |
|
|
|
941 |
|
Other |
|
|
1,969 |
|
|
|
3,557 |
|
Total long-term liabilities |
|
|
3,948 |
|
|
|
5,295 |
|
|
|
|
|
|
|
|
|
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;
15,982,622 |
|
|
|
|
and 15,480,299 shares issued as of December 31, 2018
and |
|
|
|
|
December 31, 2017, respectively |
|
|
16 |
|
|
|
15 |
|
Treasury stock, at cost, 273,937 shares as of December 31, 2018
and December 31, 2017, |
|
|
|
|
respectively |
|
|
(1,842 |
) |
|
|
(1,842 |
) |
Additional paid-in capital |
|
|
381,441 |
|
|
|
380,005 |
|
Accumulated deficit |
|
|
(336,253 |
) |
|
|
(312,107 |
) |
Total stockholders' equity |
|
|
43,362 |
|
|
|
66,071 |
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
$ |
99,165 |
|
|
$ |
112,350 |
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(IN THOUSANDS,
EXCEPT PER SHARE DATA) (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
27,187 |
|
|
$ |
17,768 |
|
|
$ |
125,380 |
|
|
$ |
146,785 |
|
|
Cost of
sales |
|
|
27,456 |
|
|
|
20,869 |
|
|
|
121,684 |
|
|
|
138,626 |
|
|
Restructuring |
|
|
243 |
|
|
|
- |
|
|
|
631 |
|
|
|
- |
|
|
Gross
profit |
|
|
(512 |
) |
|
|
(3,101 |
) |
|
|
3,065 |
|
|
|
8,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
Selling,
general and administrative |
|
|
3,605 |
|
|
|
3,117 |
|
|
|
13,625 |
|
|
|
13,828 |
|
|
Impairment
charges |
|
7,592 |
|
|
|
- |
|
|
|
12,585 |
|
|
|
- |
|
|
Intangible
amortization |
|
|
471 |
|
|
|
471 |
|
|
|
1,884 |
|
|
|
1,764 |
|
|
Restructuring |
|
|
1 |
|
|
|
- |
|
|
|
37 |
|
|
|
- |
|
|
|
Total
operating expenses |
|
|
11,669 |
|
|
|
3,588 |
|
|
|
28,131 |
|
|
|
15,592 |
|
|
Operating
loss |
|
|
(12,181 |
) |
|
|
(6,689 |
) |
|
|
(25,066 |
) |
|
|
(7,433 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
(EXPENSE) INCOME, net: |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
(474 |
) |
|
|
(214 |
) |
|
|
(1,496 |
) |
|
|
(798 |
) |
|
Other,
net |
|
|
112 |
|
|
|
(14 |
) |
|
|
2,355 |
|
|
|
3 |
|
|
|
Total other
(expense) income, net |
|
|
(362 |
) |
|
|
(228 |
) |
|
|
859 |
|
|
|
(795 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
before provision (benefit) for income taxes |
|
|
(12,543 |
) |
|
|
(6,917 |
) |
|
|
(24,207 |
) |
|
|
(8,228 |
) |
|
(Benefit)
provision for income taxes |
|
|
(185 |
) |
|
|
11 |
|
|
|
(205 |
) |
|
|
(5,045 |
) |
|
LOSS
FROM CONTINUING OPERATIONS |
|
|
(12,358 |
) |
|
|
(6,928 |
) |
|
|
(24,002 |
) |
|
|
(3,183 |
) |
|
LOSS FROM DISCONTINUED OPERATIONS |
|
|
(51 |
) |
|
|
(53 |
) |
|
|
(144 |
) |
|
|
(458 |
) |
|
NET
LOSS |
|
$ |
(12,409 |
) |
|
$ |
(6,981 |
) |
|
$ |
(24,146 |
) |
|
$ |
(3,641 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER COMMON SHARE - BASIC: |
|
|
|
|
|
|
|
|
|
Loss from
continuing operations |
|
$ |
(0.79 |
) |
|
$ |
(0.46 |
) |
|
$ |
(1.55 |
) |
|
$ |
(0.21 |
) |
|
Loss from
discontinued operations |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
Net loss |
|
$ |
(0.79 |
) |
|
$ |
(0.46 |
) |
|
$ |
(1.56 |
) |
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
BASIC |
|
|
15,652 |
|
|
|
15,171 |
|
|
|
15,469 |
|
|
|
15,053 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER COMMON SHARE - DILUTED: |
|
|
|
|
|
|
|
|
|
Loss from
continuing operations |
|
$ |
(0.79 |
) |
|
$ |
(0.46 |
) |
|
$ |
(1.55 |
) |
|
$ |
(0.21 |
) |
|
Loss from
discontinued operations |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
Net loss |
|
$ |
(0.79 |
) |
|
$ |
(0.46 |
) |
|
$ |
(1.56 |
) |
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
DILUTED |
|
|
15,652 |
|
|
|
15,171 |
|
|
|
15,469 |
|
|
|
15,053 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN
THOUSANDS)(UNAUDITED)
|
|
|
|
|
Year Ended December 31, |
|
|
|
|
|
|
2018 |
|
|
2017 |
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net
loss |
|
$ |
(24,146 |
) |
$ |
(3,641 |
) |
|
Loss from
discontinued operations |
|
|
(144 |
) |
|
(458 |
) |
|
Loss from
continuing operations |
|
|
(24,002 |
) |
|
(3,183 |
) |
|
|
|
|
|
|
|
Adjustments to reconcile net cash provided by (used in)
operating activities: |
|
|
|
|
|
Depreciation
and amortization expense |
|
|
9,183 |
|
|
8,999 |
|
|
|
Impairment
charges |
|
|
12,585 |
|
|
80 |
|
|
|
Deferred
income taxes |
|
|
(307 |
) |
|
(5,045 |
) |
|
|
Remeasurement
of contingent consideration |
|
|
(1,140 |
) |
|
(1,394 |
) |
|
|
Stock-based
compensation |
|
|
803 |
|
|
813 |
|
|
|
Extinguishment
of New Markets Tax Credit obligation |
|
|
(2,249 |
) |
|
- |
|
|
|
Allowance for
doubtful accounts |
|
|
(35 |
) |
|
37 |
|
|
|
Common stock
issued under defined contribution 401(k) plan |
|
|
685 |
|
|
316 |
|
|
|
Gain on
disposal of assets |
|
|
(116 |
) |
|
(12 |
) |
|
|
Changes in
operating assets and liabilities, net of acquisition: |
|
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(3,776 |
) |
|
884 |
|
|
|
|
Inventories |
|
|
(2,944 |
) |
|
7,057 |
|
|
|
|
Prepaid expenses and
other current assets |
|
|
22 |
|
|
651 |
|
|
|
|
Accounts
payable |
|
|
801 |
|
|
(5,287 |
) |
|
|
|
Accrued
liabilities |
|
|
553 |
|
|
(4,921 |
) |
|
|
|
Customer
deposits |
|
|
13,716 |
|
|
(8,219 |
) |
|
|
|
Other non-current
assets and liabilities |
|
|
(1,734 |
) |
|
(126 |
) |
Net
cash provided by (used in) operating activities of continued
operations |
|
|
2,045 |
|
|
(9,350 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Cash paid
in acquisition |
|
|
- |
|
|
(16,449 |
) |
|
Sales of
available for sale securities . |
|
|
- |
|
|
2,221 |
|
|
Maturities
of available for sale securities . |
|
|
- |
|
|
950 |
|
|
Purchases
of property and equipment . |
|
|
(2,324 |
) |
|
(6,688 |
) |
|
Proceeds
from disposals of property and equipment |
|
|
676 |
|
|
72 |
|
Net cash
used in investing activities of continued operations |
|
|
(1,648 |
) |
|
(19,894 |
) |
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds from
line of credit |
|
|
141,414 |
|
|
158,856 |
|
|
Payments on
line of credit |
|
|
(141,040 |
) |
|
(148,009 |
) |
|
Proceeds from
long-term debt |
|
|
2,060 |
|
|
457 |
|
|
Payments on
long-term debt |
|
|
(761 |
) |
|
- |
|
|
Principal
payments on capital leases |
|
|
(814 |
) |
|
(644 |
) |
|
Proceeds from
sale of common stock, net |
|
|
(52 |
) |
|
- |
|
Net cash
provided by financing activities of continued operations |
|
|
807 |
|
|
10,660 |
|
|
|
|
|
|
|
|
DISCONTINUED OPERATIONS: |
|
|
|
|
Operating
cash flows |
|
|
(105 |
) |
|
(78 |
) |
Net cash
used in discontinued operations |
|
|
(105 |
) |
|
(78 |
) |
|
|
|
|
|
|
|
Add: Cash
balance of discontinued operations, beginning of period |
|
|
- |
|
|
2 |
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH & CASH
EQUIVALENTS |
|
|
1,099 |
|
|
(18,660 |
) |
CASH AND CASH EQUIVALENTS beginning of the
period |
|
|
78 |
|
|
18,738 |
|
CASH AND CASH EQUIVALENTS end of the
period |
|
$ |
1,177 |
|
$ |
78 |
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
Interest
paid . |
|
$ |
1,168 |
|
$ |
585 |
|
|
Income
taxes paid |
|
$ |
116 |
|
$ |
44 |
|
|
|
|
|
|
|
|
Non-cash activities: |
|
|
|
|
Issuance of
restricted stock grants |
|
$ |
803 |
|
$ |
813 |
|
|
Equipment
additions via capital lease |
|
$ |
650 |
|
$ |
844 |
|
|
Non-cash
purchases of property and equipment |
|
$ |
64 |
|
$ |
1,003 |
|
|
Contingent
consideration related to business acquisition |
|
$ |
- |
|
$ |
2,534 |
|
|
|
|
|
|
|
|
Red
Wolf acquisition: |
|
|
|
|
Assets
acquired . |
|
$ |
- |
|
|
26,602 |
|
|
Liabilities
assumed |
|
$ |
- |
|
|
7,619 |
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND SUBSIDIARIESSELECTED
SEGMENT FINANCIAL INFORMATION(IN THOUSANDS)(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
ORDERS: |
|
|
|
|
|
|
|
|
Towers and Heavy
Fabrications |
|
$ |
2,431 |
|
|
$ |
2,543 |
|
|
$ |
23,511 |
|
|
$ |
34,873 |
|
|
|
Gearing |
|
|
8,532 |
|
|
|
7,398 |
|
|
|
41,576 |
|
|
|
36,928 |
|
|
|
Process Systems |
|
|
5,763 |
|
|
|
2,358 |
|
|
|
18,154 |
|
|
|
15,761 |
|
|
|
Total
orders |
|
$ |
16,726 |
|
|
$ |
12,299 |
|
|
$ |
83,241 |
|
|
$ |
87,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Towers and Heavy
Fabrications |
|
$ |
10,676 |
|
|
$ |
4,195 |
|
|
$ |
68,815 |
|
|
$ |
103,389 |
|
|
|
Gearing |
|
|
10,882 |
|
|
|
8,495 |
|
|
|
38,376 |
|
|
|
26,006 |
|
|
|
Process Systems |
|
|
5,639 |
|
|
|
5,078 |
|
|
|
18,319 |
|
|
|
17,390 |
|
|
|
Corporate and
Other |
|
|
(10 |
) |
|
|
- |
|
|
|
(130 |
) |
|
|
- |
|
|
|
Total
revenues |
|
$ |
27,187 |
|
|
$ |
17,768 |
|
|
$ |
125,380 |
|
|
$ |
146,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING (LOSS)/PROFIT: |
|
|
|
|
|
|
|
|
Towers and Heavy
Fabrications |
|
$ |
(2,811 |
) |
|
$ |
(4,522 |
) |
|
$ |
(4,346 |
) |
|
$ |
2,667 |
|
|
|
Gearing |
|
|
992 |
|
|
|
(71 |
) |
|
|
51 |
|
|
|
(2,632 |
) |
|
|
Process Systems |
|
|
(8,861 |
) |
|
|
(463 |
) |
|
|
(16,442 |
) |
|
|
(2,269 |
) |
|
|
Corporate and
Other |
|
|
(1,501 |
) |
|
|
(1,633 |
) |
|
|
(4,329 |
) |
|
|
(5,199 |
) |
|
|
Total operating
(loss)/profit |
|
$ |
(12,181 |
) |
|
$ |
(6,689 |
) |
|
$ |
(25,066 |
) |
|
$ |
(7,433 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure The Company provides
non-GAAP adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization, share-based payments, restructuring
costs and impairment expense) 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
SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES (IN
THOUSANDS)(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Net (Loss)
from continuing operations |
|
$ |
(12,358 |
) |
|
$ |
(6,928 |
) |
# |
$ |
(24,000 |
) |
|
$ |
(3,184 |
) |
|
|
Interest
Expense |
|
|
475 |
|
|
|
214 |
|
|
|
1,494 |
|
|
|
798 |
|
|
|
Income Tax
(Benefit)/Provision |
|
|
(184 |
) |
|
|
11 |
|
|
|
(204 |
) |
|
|
(5,045 |
) |
|
|
Depreciation and Amortization |
|
|
2,193 |
|
|
|
2,427 |
|
|
|
9,183 |
|
|
|
8,999 |
|
|
|
Share-based
Compensation and Other Stock Payments |
|
|
290 |
|
|
|
323 |
|
|
|
1,504 |
|
|
|
1,223 |
|
|
|
Restructuring Costs |
|
|
243 |
|
|
|
- |
|
|
|
668 |
|
|
|
- |
|
|
|
Impairment
Charges |
|
|
7,592 |
|
|
|
- |
|
|
|
12,585 |
|
|
|
- |
|
|
|
NMTC
Extinguishment Gain |
|
|
- |
|
|
|
- |
|
|
|
(2,249 |
) |
|
|
- |
|
|
|
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(1,749 |
) |
|
$ |
(3,953 |
) |
|
$ |
(1,019 |
) |
|
$ |
2,791 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Towers and
Heavy Fabrications Segment |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
Net (Loss)/Income |
|
$ |
(2,195 |
) |
|
$ |
(4,207 |
) |
|
$ |
(3,273 |
) |
|
$ |
919 |
|
|
Interest Expense |
|
|
66 |
|
|
|
26 |
|
|
|
194 |
|
|
|
89 |
|
|
Income Tax
(Benefit)/Provision |
|
|
(567 |
) |
|
|
(337 |
) |
|
|
(1,154 |
) |
|
|
1,666 |
|
|
Depreciation and
Amortization |
|
|
1,213 |
|
|
|
1,355 |
|
|
|
4,986 |
|
|
|
4,638 |
|
|
Share-based
Compensation and Other Stock Payments |
|
|
139 |
|
|
|
127 |
|
|
|
606 |
|
|
|
440 |
|
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(1,344 |
) |
|
$ |
(3,036 |
) |
|
$ |
1,359 |
|
|
$ |
7,752 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gearing
Segment |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
|
2018 |
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Net Income/(Loss) |
|
$ |
915 |
|
$ |
(70 |
) |
|
$ |
(34 |
) |
|
$ |
(2,638 |
) |
|
|
Interest Expense |
|
|
67 |
|
|
3 |
|
|
|
74 |
|
|
|
12 |
|
|
|
Income Tax
Provision/(Benefit) |
|
|
10 |
|
|
(4 |
) |
|
|
11 |
|
|
|
(6 |
) |
|
|
Depreciation and
Amortization |
|
|
513 |
|
|
583 |
|
|
|
2,255 |
|
|
|
2,430 |
|
|
|
Share-based
Compensation and Other Stock Payments |
|
|
66 |
|
|
64 |
|
|
|
286 |
|
|
|
178 |
|
|
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
1,571 |
|
$ |
576 |
|
|
$ |
2,592 |
|
|
$ |
(24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Process
Systems |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Net (Loss) |
|
$ |
(8,501 |
) |
|
$ |
(390 |
) |
|
$ |
(16,003 |
) |
|
$ |
(2,207 |
) |
|
|
Interest Expense |
|
|
3 |
|
|
|
1 |
|
|
|
6 |
|
|
|
5 |
|
|
|
Income Tax
(Benefit) |
|
|
(365 |
) |
|
|
(78 |
) |
|
|
(453 |
) |
|
|
(88 |
) |
|
|
Depreciation and
Amortization |
|
|
405 |
|
|
|
428 |
|
|
|
1,709 |
|
|
|
1,706 |
|
|
|
Share-based
Compensation and Other Stock Payments |
|
|
20 |
|
|
|
20 |
|
|
|
89 |
|
|
|
53 |
|
|
|
Restructuring
Expense |
|
|
243 |
|
|
|
- |
|
|
|
668 |
|
|
|
- |
|
|
|
Impairment Expense |
|
|
7,592 |
|
|
|
- |
|
|
|
12,585 |
|
|
|
- |
|
|
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(603 |
) |
|
$ |
(19 |
) |
|
$ |
(1,399 |
) |
|
$ |
(531 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Other |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Net(Loss)/Income |
|
$ |
(2,577 |
) |
|
$ |
(2,261 |
) |
|
$ |
(4,690 |
) |
|
$ |
742 |
|
|
|
Interest Expense |
|
|
339 |
|
|
|
184 |
|
|
|
1,220 |
|
|
|
692 |
|
|
|
Income Tax
Provision/(Benefit) |
|
|
738 |
|
|
|
430 |
|
|
|
1,392 |
|
|
|
(6,617 |
) |
|
|
Depreciation and
Amortization |
|
|
62 |
|
|
|
61 |
|
|
|
233 |
|
|
|
225 |
|
|
|
Share-based
Compensation and Other Stock Payments |
|
|
65 |
|
|
|
112 |
|
|
|
523 |
|
|
|
552 |
|
|
|
NMTC Extinguishment
Gain |
|
|
- |
|
|
|
- |
|
|
|
(2,249 |
) |
|
|
- |
|
|
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(1,373 |
) |
|
$ |
(1,474 |
) |
|
$ |
(3,571 |
) |
|
$ |
(4,406 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Broadwind (NASDAQ:BWEN)
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