Highlights:
Broadwind Energy, Inc. (NASDAQ: BWEN) reported sales of $31.4
million in Q3 2018, up 6% compared to $29.6 million in Q3 2017. The
increase in sales was due primarily to continued strong gearing
shipments and increased heavy fabrications, partly offset by lower
Process Systems revenue.
The Company reported a net loss of $.8 million, or $.05 per
share, in Q3 2018, compared to a loss of $2.2 million, or $.15 per
share, in Q3 2017. The current year quarter results included a $2.2
million gain from the New Market Tax Credit loan which was
extinguished as expected during the quarter.
Non-GAAP adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization, share-based payments, restructuring
costs and impairment expense) totaled $.2 million in Q3 2018,
compared to $.9 million in Q3 2017 (please refer to the
reconciliation of GAAP measures to non-GAAP measures at the end of
this release).
Broadwind CEO Stephanie Kushner stated, “Our Gearing segment was
profitable in the third quarter, marking a significant milestone
for the company. This reflects an improved flow of materials,
higher productivity and higher plant utilization. Orders continued
to be strong across all market segments. With an 8-month backlog,
we are positioned well in this segment for 2019.”
Our towers business continues to experience the adverse effects
of steel tariffs and increasing competition from imported towers.
As indicated in our pre-announcement earlier in the quarter, we
have reduced our production rate in response to a short-term gap in
steel deliveries, which we believe will continue to be a challenge
in the fourth quarter. Early 2019 is lining up to be much stronger,
with a more normal cadence of tower production. Production of other
heavy fabrications, particularly for mining and construction,
continues to grow and is partially offsetting the current weakness
in our towers business.”
Kushner concluded, “Due to low tower shipments, our fourth
quarter earnings outlook is for revenues in the $25-26 million
range, and an EBITDA loss of approximately $1-2 million. 2019 is
lining up to be much stronger, with Q1 revenues approaching $40
million and the business generating positive EBITDA. We
expect to report further progress throughout 2019, as our Towers
business enters a stronger market.”
For the nine months ended September 30, 2018, revenue totaled
$98.2 million, compared to $129.0 million for the nine months ended
September 30, 2017. The 24% decrease was due primarily to $41.1
million lower sales in the Towers and Heavy Fabrications segment as
a result of a 40% decrease in tower sections sold and a lower
average sales price, partially offset by increased volume of heavy
fabrications due primarily to the recovery in mining and other
industrial markets. Gearing segment revenues increased $10.0
million resulting from the recovery primarily in demand from oil
and gas customers and growth in volumes of custom gearboxes.
Net loss for the nine months ended September 30, 2018 totaled
$11.7 million, a significant decrease from net income of $3.3
million, for the nine months ended September 30, 2017. The
comparison reflects weaker tower sales plus a number of one-time
items, including a goodwill impairment charge of $5.0 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.
The current year results also benefited from the $2.2 million
impact of the extinguishment of the New Markets Tax Credit loan
discussed above.
The Company reported non-GAAP adjusted EBITDA of $.7 million for
the nine months ended September 30, 2018 compared to $6.7 million
for the nine months ended September 30, 2017. The decrease was due
primarily to the low capacity utilization in our tower plants,
partly 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 $19.7 million of net new orders in Q3 2018,
up 12% from $17.7 million in Q3 2017. Gearing orders totaled $11.5
million in Q3 2018, up from $10.6 million in Q3 2017 due primarily
to timing of replacement gearing orders from a wind customer.
Towers and Heavy Fabrications orders totaled $3.8 million in Q3
2018, up from $1.8 million in Q3 2017 due primarily to higher
demand from mining and other industrial customers. Process Systems
orders totaled $4.4 million in Q3 2018 compared to $5.3 million in
Q3 2017 due to lower customer demand for natural gas turbine
content.
At September 30, 2018, total backlog was $106.5 million,
compared to $117.7 million at June 30, 2018.
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 $17.3
million in Q3 2018, compared to $16.0 million in Q3 2017. The
increase was due to a 5% increase in tower sections sold and higher
heavy fabrications revenue due primarily to strong demand from
mining and other industrial customers, partly offset by a lower
average sales price on the towers sold.
Towers and Heavy Fabrications segment operating loss narrowed to
$0.8 million in Q3 2018 compared to $1.5 million in Q3 2017. The
improvement was primarily due to higher production volumes
resulting in better plant utilization and $.2 million reduced
overhead and operating expenses. Net loss for the Towers and Heavy
Fabrications segment narrowed to $.6 million in Q3 2018, compared
to $.9 million in Q3 2017. Non-GAAP Adjusted EBITDA in Q3 2018 was
$.6 million compared to Non-GAAP Adjusted EBITDA loss of $.2
million in Q3 2017 (please refer to the reconciliation of GAAP
measures to non-GAAP measures at the end of this release). The
increase was due primarily to the factors described above.
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 $10.1 million in Q3 2018, compared
to $7.6 million in Q3 2017. The $2.5 million increase was due to
continued strong sales to oil and gas and other industrial
customers.
Operating income for Q3 2018 totaled $.3 million, compared to an
operating loss of $.4 million in Q3 2017. The improvement was due
to increased plant utilization and productivity, partially offset
by higher commission expense related to the sales growth. The net
income for the Gearing segment totaled $.3 million in Q3 2018,
compared to net loss of $.4 million in Q3 2017. Non-GAAP adjusted
EBITDA was $1.0 million in Q3 2018 compared to $.3 million in Q3
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 $4.2 million in Q3 2018 compared
to $6.1 million in Q3 2017 due to lower customer demand for natural
gas turbine content, partially offset by higher sales to other
industrial customers.
The operating loss totaled $.9 million in Q3 2018 compared to
operating income of $.1 million in Q3 2017 primarily due to the
lower sales volume, partially offset by improved utilization of the
Abilene production facility. Net loss totaled $2.5 million in Q3
2018 compared to net income of $4.3 million in Q3 2017 also
reflecting the absence of a $5.1 million income tax benefit related
to the Red Wolf acquisition recorded in Q3 2017. Non-GAAP adjusted
EBITDA loss totaled $.3 million in Q3 2018 down from non-GAAP
adjusted EBITDA of $.6 million in Q3 2017. The decrease was due
primarily to lower sales volumes described above.
Corporate
Corporate and other expenses increased to $1.3 million in Q3
2018 compared to $.1 million in Q3 2017. The increase is due mainly
to absence of the reversal of the Red Wolf earn-out reserve of $1.4
million recorded in the prior year period, partly offset by $.4
million of lower salaries and benefits expense due to reduced
staffing.
Cash and Liquidity
During Q3 2018, operating working capital (accounts receivable
and inventory, net of accounts payable and customer deposits)
increased $3.8 million to $18.1 million due primarily to growth in
inventories to support gearing demand and timing of customer
receipts.
Debt and capital leases totaled $23.2 million at September 30,
2018. The Company’s $25 million line of credit with CIBC Bank USA
had a balance of $18.8 million at September 30, 2018 and $5.8
million of availability. The Company was in compliance with all
bank covenants at September 30, 2018. Following quarter-end,
the Company entered into an amendment to the credit facility which
eliminated the fixed charge and capital spending covenants and
introduced a minimum EBITDA requirement.
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 terms of the credit line.
On July 31, 2018 the Company entered into an At Market Issuance
Sales Agreement (the “ATM Agreement”) with Roth Capital Partners,
LLC. During the three months ended September 30, 2018, the Company
issued 15,112 shares of the Company’s common stock under the ATM
Agreement and the net proceeds (before upfront costs) to the
Company from the sale of the Company’s common stock were
approximately $33 after deducting commissions paid of approximately
$1. As of September 30, 2018, approximately $9,967 remained
available for issuance with respect to the ATM Agreement.
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) our
production, sales, collections, customer deposits and revenues
generated by new customer orders and 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, 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 the business of Red Wolf
Company, LLC 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; and (xiv) 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, 2017 and in subsequent filings, including
the amended and restated risk factors set forth under the caption
‘Risk Factors” in Item 1A of the Quarterly Report on Form 10-Q for
the quarter ended June 30, 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.
BROADWIND ENERGY, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
December
31, |
|
|
|
|
|
|
|
|
2018 |
|
2017 |
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
142 |
|
|
$ |
78 |
|
|
|
|
Accounts
receivable, net of allowance for doubtful accounts of $177 |
|
|
|
|
|
|
|
and
$225 as of September 30, 2018 and December 31, 2017,
respectively |
|
|
16,727 |
|
|
|
13,644 |
|
|
|
|
Inventories, net |
|
|
23,541 |
|
|
|
19,279 |
|
|
|
|
Prepaid
expenses and other current assets |
|
|
1,817 |
|
|
|
1,798 |
|
|
|
|
Current
assets held for sale |
|
|
19 |
|
|
|
580 |
|
|
|
|
|
Total
current assets |
|
|
42,246 |
|
|
|
35,379 |
|
|
|
LONG-TERM ASSETS: |
|
|
|
|
|
|
|
Property
and equipment, net |
|
|
50,711 |
|
|
|
55,693 |
|
|
|
|
Goodwill |
|
|
- |
|
|
|
4,993 |
|
|
|
|
Other
intangible assets, net |
|
|
14,665 |
|
|
|
16,078 |
|
|
|
|
Other
assets |
|
|
412 |
|
|
|
207 |
|
|
|
TOTAL ASSETS |
|
$ |
108,034 |
|
|
$ |
112,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
Line of
credit, NMTC and other notes payable |
|
$ |
19,684 |
|
|
$ |
14,138 |
|
|
|
|
Current
maturities of long-term debt |
|
|
- |
|
|
|
114 |
|
|
|
|
Current
portions of capital lease obligations |
|
|
954 |
|
|
|
762 |
|
|
|
|
Accounts
payable |
|
|
14,424 |
|
|
|
11,756 |
|
|
|
|
Accrued
liabilities |
|
|
4,820 |
|
|
|
4,393 |
|
|
|
|
Customer
deposits |
|
|
7,773 |
|
|
|
9,791 |
|
|
|
|
Current
liabilities held for sale |
|
|
28 |
|
|
|
30 |
|
|
|
|
|
Total
current liabilities |
|
|
47,683 |
|
|
|
40,984 |
|
|
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
|
Long-term
debt, net of current maturities |
|
|
1,760 |
|
|
|
797 |
|
|
|
|
Long-term
capital lease obligations, net of current portions |
|
|
818 |
|
|
|
941 |
|
|
|
|
Other |
|
|
2,268 |
|
|
|
3,557 |
|
|
|
|
|
Total
long-term liabilities |
|
|
4,846 |
|
|
|
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;
15,890,605 |
|
|
|
|
|
|
|
and
15,480,299 shares issued as of September 30, 2018 and |
|
|
|
|
|
|
|
December
31, 2017, respectively |
|
|
16 |
|
|
|
15 |
|
|
|
|
Treasury
stock, at cost, 273,937 shares as of September 30, 2018 and
December 31, 2017, |
|
|
|
|
|
|
|
respectively |
|
(1,842 |
) |
|
|
(1,842 |
) |
|
|
|
Additional
paid-in capital |
|
|
381,175 |
|
|
|
380,005 |
|
|
|
|
Accumulated
deficit |
|
|
(323,844 |
) |
|
|
(312,107 |
) |
|
|
|
|
Total
stockholders' equity |
|
|
55,505 |
|
|
|
66,071 |
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
108,034 |
|
|
$ |
112,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(IN THOUSANDS,
EXCEPT PER SHARE DATA)(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
31,445 |
|
|
$ |
29,595 |
|
|
$ |
98,193 |
|
|
$ |
129,017 |
|
|
Cost of
sales |
|
|
29,802 |
|
|
|
28,581 |
|
|
|
94,228 |
|
|
|
117,757 |
|
|
Restructuring |
|
|
157 |
|
|
|
- |
|
|
|
388 |
|
|
|
- |
|
|
Gross
profit |
|
|
1,486 |
|
|
|
1,014 |
|
|
|
3,577 |
|
|
|
11,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
Selling,
general and administrative |
|
|
3,627 |
|
|
|
2,374 |
|
|
|
10,020 |
|
|
|
10,711 |
|
|
Impairment
charges |
|
|
- |
|
|
|
- |
|
|
|
4,993 |
|
|
|
- |
|
|
Intangible
amortization |
|
|
471 |
|
|
|
471 |
|
|
|
1,413 |
|
|
|
1,293 |
|
|
Restructuring |
|
|
- |
|
|
|
- |
|
|
|
36 |
|
|
|
- |
|
|
|
Total
operating expenses |
|
|
4,098 |
|
|
|
2,845 |
|
|
|
16,462 |
|
|
|
12,004 |
|
|
Operating
(loss) |
|
|
(2,612 |
) |
|
|
(1,831 |
) |
|
|
(12,885 |
) |
|
|
(744 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE) INCOME, net: |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
(372 |
) |
|
|
(228 |
) |
|
|
(1,022 |
) |
|
|
(584 |
) |
|
Other,
net |
|
|
2,247 |
|
|
|
(12 |
) |
|
|
2,243 |
|
|
|
17 |
|
|
|
Total other
income (expense), net |
|
|
1,875 |
|
|
|
(240 |
) |
|
|
1,221 |
|
|
|
(567 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
before provision for income taxes |
|
|
(737 |
) |
|
|
(2,071 |
) |
|
|
(11,664 |
) |
|
|
(1,311 |
) |
|
Provision
(benefit) for income taxes |
|
|
13 |
|
|
|
(22 |
) |
|
|
(20 |
) |
|
|
(5,056 |
) |
|
(LOSS) INCOME FROM CONTINUING OPERATIONS |
|
|
(750 |
) |
|
|
(2,049 |
) |
|
|
(11,644 |
) |
|
|
3,745 |
|
|
LOSS FROM DISCONTINUED
OPERATIONS |
|
|
(33 |
) |
|
|
(158 |
) |
|
|
(93 |
) |
|
|
(405 |
) |
|
NET
(LOSS) INCOME |
|
$ |
(783 |
) |
|
$ |
(2,207 |
) |
|
$ |
(11,737 |
) |
|
$ |
3,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
(LOSS) INCOME PER COMMON SHARE - BASIC: |
|
|
|
|
|
|
|
|
|
(Loss)
income from continuing operations |
|
$ |
(0.05 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.76 |
) |
|
$ |
0.25 |
|
|
Loss from
discontinued operations |
|
|
(0.00 |
) |
|
|
(0.01 |
) |
|
|
(0.00 |
) |
|
|
(0.03 |
) |
|
Net (loss)
income |
|
$ |
(0.05 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.76 |
) |
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
BASIC |
|
|
15,541 |
|
|
|
15,095 |
|
|
|
15,390 |
|
|
|
15,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
(LOSS) INCOME PER COMMON SHARE - DILUTED: |
|
|
|
|
|
|
|
|
|
(Loss)
income from continuing operations |
|
$ |
(0.05 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.76 |
) |
|
$ |
0.24 |
|
|
Loss from
discontinued operations |
|
|
(0.00 |
) |
|
|
(0.01 |
) |
|
|
(0.00 |
) |
|
|
(0.02 |
) |
|
Net (loss)
income |
|
$ |
(0.05 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.76 |
) |
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
DILUTED |
|
|
15,541 |
|
|
|
15,095 |
|
|
|
15,390 |
|
|
|
15,345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(IN
THOUSANDS)(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
|
2018 |
2017 |
|
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
Net (loss)
income |
|
$ |
(11,737 |
) |
$ |
3,340 |
|
|
|
Loss from
discontinued operations |
|
|
(93 |
) |
|
(405 |
) |
|
|
(Loss)
income from continuing operations |
|
|
(11,644 |
) |
|
3,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net cash used in operating
activities: |
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
6,990 |
|
|
6,571 |
|
|
|
|
|
|
Impairment
charges |
|
|
4,993 |
|
|
- |
|
|
|
|
|
|
Deferred
income taxes |
|
|
(45 |
) |
|
(5,056 |
) |
|
|
|
|
|
Remeasurement of contingent consideration |
|
(1,140 |
) |
|
(1,394 |
) |
|
|
|
|
|
Stock-based
compensation |
|
|
685 |
|
|
651 |
|
|
|
|
|
|
Extinguishment of New Markets Tax Credit obligation |
|
(2,249 |
) |
|
- |
|
|
|
|
|
|
Allowance
for doubtful accounts |
|
|
(48 |
) |
|
13 |
|
|
|
|
|
|
Common
stock issued under defined contribution 401(k) plan |
|
|
537 |
|
|
175 |
|
|
|
|
|
|
Gain on
disposal of assets |
|
|
(23 |
) |
|
(12 |
) |
|
|
|
|
|
Changes in
operating assets and liabilities, net of acquisition: |
|
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
|
(3,035 |
) |
|
5,281 |
|
|
|
|
|
|
|
Inventories |
|
|
|
(3,814 |
) |
|
10,928 |
|
|
|
|
|
|
|
Prepaid expenses and
other current assets |
|
|
|
(19 |
) |
|
377 |
|
|
|
|
|
|
|
Accounts payable |
|
|
|
3,576 |
|
|
(9,284 |
) |
|
|
|
|
|
|
Accrued
liabilities |
|
|
|
1,567 |
|
|
(2,643 |
) |
|
|
|
|
|
|
Customer deposits |
|
|
|
(2,018 |
) |
|
(15,934 |
) |
|
|
|
|
|
|
Other non-current
assets and liabilities |
|
|
|
(1,546 |
) |
|
(45 |
) |
|
Net cash
used in operating activities of continued operations |
|
|
(7,233 |
) |
|
(6,627 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
(2,018 |
) |
|
(5,972 |
) |
|
|
Proceeds
from disposals of property and equipment |
|
|
583 |
|
|
5 |
|
|
Net cash
used in investing activities of continued operations |
|
|
(1,435 |
) |
|
(19,245 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
Proceeds
from line of credit |
|
|
103,406 |
|
|
130,470 |
|
|
|
Payments on
line of credit |
|
(95,493 |
) |
|
(122,700 |
) |
|
|
Proceeds
from long-term debt |
|
2,060 |
|
|
- |
|
|
|
Payments on
long-term debt |
|
|
(536 |
) |
|
- |
|
|
|
Principal
payments on capital leases |
|
|
(581 |
) |
|
(557 |
) |
|
|
Proceeds
from sale of common stock, net |
|
(52 |
) |
|
- |
|
|
Net cash
provided by financing activities of continued operations |
|
|
8,804 |
|
|
7,213 |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
DISCONTINUED OPERATIONS: |
|
|
|
|
|
Operating
cash flows |
|
|
(72 |
) |
|
(40 |
) |
|
Net cash
used in discontinued operations |
|
|
(72 |
) |
|
(40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Add: Cash
balance of discontinued operations, beginning of period |
|
|
- |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED
CASH |
|
|
64 |
|
|
(18,697 |
) |
|
CASH AND CASH EQUIVALENTS beginning of the
period |
|
|
78 |
|
|
18,738 |
|
|
CASH AND CASH EQUIVALENTS end of the period |
|
$ |
142 |
|
$ |
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
Interest
paid |
|
$ |
822 |
|
$ |
413 |
|
|
|
Income
taxes paid |
|
$ |
94 |
|
$ |
52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash activities: |
|
|
|
|
|
Issuance of
restricted stock grants |
|
$ |
685 |
|
$ |
651 |
|
|
|
Equipment
additions via capital lease |
|
$ |
- |
|
$ |
1,582 |
|
|
|
Contingent
consideration related to business acquisition |
$ |
- |
|
$ |
2,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Red
Wolf acquisition: |
|
|
|
|
|
Assets
acquired |
|
$ |
- |
|
|
26,491 |
|
|
|
Liabilities
assumed |
$ |
- |
|
|
7,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
BROADWIND ENERGY, INC. AND SUBSIDIARIESSELECTED
SEGMENT FINANCIAL INFORMATION(IN THOUSANDS)(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
ORDERS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Towers and Heavy
Fabrications |
|
$ |
3,767 |
|
|
$ |
1,764 |
|
|
$ |
21,080 |
|
|
$ |
32,331 |
|
|
|
Gearing |
|
|
11,530 |
|
|
|
10,566 |
|
|
|
33,044 |
|
|
|
29,530 |
|
|
|
Process Systems |
|
|
4,420 |
|
|
|
5,345 |
|
|
|
12,390 |
|
|
|
13,404 |
|
|
|
Total
orders |
|
$ |
19,717 |
|
|
$ |
17,675 |
|
|
$ |
66,514 |
|
|
$ |
75,265 |
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Towers and Heavy
Fabrications |
|
$ |
17,331 |
|
|
$ |
15,971 |
|
|
$ |
58,139 |
|
|
$ |
99,194 |
|
|
|
Gearing |
|
|
10,056 |
|
|
|
7,570 |
|
|
|
27,494 |
|
|
|
17,511 |
|
|
|
Process Systems |
|
|
4,155 |
|
|
|
6,054 |
|
|
|
12,680 |
|
|
|
12,312 |
|
|
|
Corporate and
Other |
|
|
(97 |
) |
|
|
- |
|
|
|
(120 |
) |
|
|
- |
|
|
|
Total
revenues |
|
$ |
31,445 |
|
|
$ |
29,595 |
|
|
$ |
98,193 |
|
|
$ |
129,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT/(LOSS): |
|
|
|
|
|
|
|
|
Towers and Heavy
Fabrications |
|
$ |
(755 |
) |
|
$ |
(1,473 |
) |
|
$ |
(1,535 |
) |
|
$ |
7,177 |
|
|
|
Gearing |
|
|
346 |
|
|
|
(396 |
) |
|
|
(941 |
) |
|
|
(2,562 |
) |
|
|
Process Systems |
|
|
(917 |
) |
|
|
115 |
|
|
|
(7,581 |
) |
|
|
(1,805 |
) |
|
|
Corporate and
Other |
|
|
(1,286 |
) |
|
|
(77 |
) |
|
|
(2,828 |
) |
|
|
(3,554 |
) |
|
|
Total operating
(loss)/profit |
|
$ |
(2,612 |
) |
|
$ |
(1,831 |
) |
|
$ |
(12,885 |
) |
|
$ |
(744 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
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 September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net
(Loss)/Income from continuing operations |
|
$ |
(750 |
) |
|
$ |
(2,049 |
) |
|
$ |
(11,644 |
) |
|
$ |
3,745 |
|
Interest
Expense |
|
|
372 |
|
|
|
228 |
|
|
|
1,022 |
|
|
|
584 |
|
Income Tax
Provision/(Benefit) |
|
|
13 |
|
|
|
(22 |
) |
|
|
(20 |
) |
|
|
(5,056 |
) |
Depreciation and Amortization |
|
|
2,284 |
|
|
|
2,267 |
|
|
|
6,990 |
|
|
|
6,571 |
|
Share-based
Compensation and Other Stock Payments |
|
|
370 |
|
|
|
439 |
|
|
|
1,214 |
|
|
|
900 |
|
Restructuring Costs |
|
|
157 |
|
|
|
- |
|
|
|
424 |
|
|
|
- |
|
Impairment
Charges |
|
|
- |
|
|
|
- |
|
|
|
4,993 |
|
|
|
- |
|
NMTC
Extinguishment Gain |
|
|
(2,249 |
) |
|
|
- |
|
|
|
(2,249 |
) |
|
|
- |
|
|
|
Adjusted EBITDA
(Non-GAAP) |
|
|
$ |
197 |
|
|
$ |
863 |
|
|
$ |
730 |
|
|
$ |
6,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Towers and Heavy Fabrications Segment |
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net (Loss)/Income |
|
$ |
(591 |
) |
|
$ |
(901 |
) |
|
$ |
(1,078 |
) |
|
$ |
5,127 |
|
Interest
Expense/(Benefit) |
|
|
48 |
|
|
|
28 |
|
|
|
128 |
|
|
|
63 |
|
Income Tax
(Benefit)/Provision |
|
|
(214 |
) |
|
|
(600 |
) |
|
|
(587 |
) |
|
|
2,003 |
|
Depreciation and
Amortization |
|
|
1,237 |
|
|
|
1,121 |
|
|
|
3,773 |
|
|
|
3,283 |
|
Share-based
Compensation and Other Stock Payments |
|
|
152 |
|
|
|
197 |
|
|
|
465 |
|
|
|
312 |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
632 |
|
|
$ |
(155 |
) |
|
$ |
2,701 |
|
|
$ |
10,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gearing
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net Income/(Loss) |
|
$ |
344 |
|
$ |
(393 |
) |
|
$ |
(949 |
) |
|
$ |
(2,568 |
) |
Interest Expense |
|
|
2 |
|
|
3 |
|
|
|
7 |
|
|
|
9 |
|
Income Tax
Provision/(Benefit) |
|
|
- |
|
|
(7 |
) |
|
|
0 |
|
|
|
(2 |
) |
Depreciation and
Amortization |
|
|
566 |
|
|
610 |
|
|
|
1,742 |
|
|
|
1,847 |
|
Share-based
Compensation and Other Stock Payments |
|
|
77 |
|
|
72 |
|
|
|
220 |
|
|
|
113 |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
989 |
|
$ |
285 |
|
|
$ |
1,020 |
|
|
$ |
(601 |
) |
|
|
|
|
|
|
|
|
|
Process Systems |
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net Income/(Loss) |
|
$ |
(2,471 |
) |
|
$ |
4,321 |
|
|
$ |
(7,092 |
) |
|
$ |
(1,449 |
) |
Interest Expense |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
4 |
|
Income Tax
Provision/(Benefit) |
|
|
1,552 |
|
|
|
(4,219 |
) |
|
|
(498 |
) |
|
|
(378 |
) |
Depreciation and
Amortization |
|
|
429 |
|
|
|
477 |
|
|
|
1,304 |
|
|
|
1,278 |
|
Share-based
Compensation and Other Stock Payments |
|
|
18 |
|
|
|
18 |
|
|
|
70 |
|
|
|
34 |
|
Restructuring
Expense |
|
|
157 |
|
|
|
- |
|
|
|
424 |
|
|
|
- |
|
Impairment Expense |
|
|
- |
|
|
|
- |
|
|
|
4,993 |
|
|
|
- |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(314 |
) |
|
$ |
598 |
|
|
$ |
(797 |
) |
|
$ |
(511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Other |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net (Loss)/Income |
|
$ |
1,968 |
|
|
$ |
(5,076 |
) |
|
$ |
(2,525 |
) |
|
$ |
2,635 |
|
Interest Expense |
|
|
321 |
|
|
|
196 |
|
|
|
885 |
|
|
|
508 |
|
Income Tax
Provision/(Benefit) |
|
|
(1,325 |
) |
|
|
4,804 |
|
|
|
1,065 |
|
|
|
(6,679 |
) |
Depreciation and
Amortization |
|
|
52 |
|
|
|
59 |
|
|
|
171 |
|
|
|
163 |
|
Share-based
Compensation and Other Stock Payments |
|
|
123 |
|
|
|
152 |
|
|
|
459 |
|
|
|
441 |
|
NMTC Extinguishment
Gain |
|
|
(2,249 |
) |
|
|
- |
|
|
|
(2,249 |
) |
|
|
- |
|
Adjusted EBITDA
(Non-GAAP) |
|
$ |
(1,110 |
) |
|
$ |
135 |
|
|
$ |
(2,194 |
) |
|
$ |
(2,932 |
) |
|
|
|
|
|
|
|
|
|
BWEN INVESTOR CONTACT: Joni Konstantelos, 708.780.4819 joni.konstantelos@bwen.com
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