Q2 Highlights:
- Sales of $68.4 million, up 29% from Q2 2013 driven by
strength in Towers and Gearing
- Gross profit margin (ex. restructuring) of 13.4%, up
470 bp from Q2 2013
- Adjusted EBITDA of $5.9 million, up 67% from Q2
2013
- EPS of $.12, significantly ahead of Q2
2013
- $34 million tower order announced after quarter
end
Broadwind Energy, Inc. (Nasdaq:BWEN) reported sales of $68.4
million for the second quarter of 2014, a 29% increase compared to
$52.9 million in the second quarter of 2013. The increase reflects
the continued strength in the Company's Towers and Weldments
segment and improved throughput for its Gearing segment.
The Company reported net income from continuing operations of
$1.9 million or $.12 per diluted share in the second quarter of
2014, compared to $.4 million or $.03 per diluted share in the
second quarter of 2013. The $.09 per share improvement was due to
stronger results in the Towers and Weldments segment and
significant improvements in the Gearing segment, partly offset by
the absence of a $3.6 million one-time restructuring gain on the
sale of an idle tower plant during the second quarter of 2013. The
Company reported non-GAAP adjusted EBITDA (earnings before
interest, taxes, depreciation, amortization, share-based payments
and restructuring costs) of $5.9 million in the second quarter of
2014, compared to $3.5 million in the second quarter of 2013. The
significant progress reflects the 39% increase in tower volume in
the second quarter of 2014 and improvements in the Gearing segment,
partly offset by higher Corporate expense related to an $.8 million
reserve for a potential settlement with the SEC for an
investigation initiated in 2010.
Peter C. Duprey, president and chief executive officer, stated,
"We had an outstanding quarter from both a financial and
operational perspective, allowing us to achieve year-to-date
profitability for the first time in Broadwind's history. Our Towers
and Weldments segment results continue to significantly outpace the
prior year, with tower volume up 39% and a 69% improvement in
operating income. Our Gearing segment had a strong quarter, with a
19% improvement in revenue and a reduction in operating loss by
over 50%. With the Gearing plant consolidation nearly behind us, we
are making good progress improving our plant throughput. We booked
over $18 million of Gearing orders during the quarter, the highest
quarterly order rate in over four years, which demonstrates good
progress with our expanded commercial efforts. In the Services
segment, demand for blade repair work increased significantly over
the prior year and we are seeing increased orders and quoting
activity."
Mr. Duprey concluded, "Broadwind hit a major milestone by
achieving year-to-date profitability for the first time in the
company's history. As we near completion of our four-year
restructuring project, and with our focus on continuous
improvement, towers production nearly sold out for 2015 and Gearing
orders and production improving, we have reached an inflection
point. As we continue to generate strong organic growth,
particularly in our towers business, we are seeing the increased
operating leverage the business is capable of generating. With all
that we have accomplished, we remain highly confident about the
road ahead."
Orders and Backlog
The Company booked $23.6 million in net new orders in the second
quarter of 2014, down slightly from $24.9 million the second
quarter of 2013. Towers and Weldments orders, which vary
considerably from quarter to quarter, totaled $.9 million and
consisted of industrial weldment orders. Gearing orders totaled
$18.3 million, up from $4.8 million in the second quarter of 2013,
and represented the highest quarterly order rate in over four
years. Services orders totaled $4.4 million, up from $2.6 million
in the second quarter of 2013, and represented the highest
quarterly order rate since the fourth quarter of 2012.
At June 30, 2014, total backlog was $222.4 million, up 56% from
June 30, 2013.
Subsequent to quarter end, $34 million in new tower orders for
2015 production were announced, not included in the June 30, 2014
backlog figure.
Segment Results
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 Weldments segment sales totaled $52.9 million in the
second quarter of 2014, compared to $39.1 million in the second
quarter of 2013. The significant increase was due to a 39% increase
in tower volume compared to the second quarter of 2013, resulting
from a ramp-up in production to support the strong bookings in
2013. Towers and Weldments operating income for the second quarter
of 2014 was $8.6 million (16% of sales), up 69% from the second
quarter of 2013. The significant improvement was the result of the
higher volume, improved production flow and material sourcing
improvements, and a higher margin mix of towers compared to the
prior-year quarter. Non-GAAP adjusted EBITDA in the second quarter
of 2014 totaled $9.6 million, up from $6.3 million in the second
quarter of 2013 due to these same factors.
Gearing
Broadwind Energy engineers, builds and remanufactures precision
gears and gearboxes for oil and gas, mining, steel and wind
applications.
Gearing segment sales totaled $12.4 million in the second
quarter of 2014, compared to $10.4 million in the second quarter of
2013. The 19% increase was due primarily to improved plant
throughput and a reduction in the past-due backlog. Gearing segment
operating loss was $1.8 million for the second quarter of 2014, a
55% improvement compared to the second quarter of 2013, due to the
increase in production volume, improved productivity and lower
restructuring costs due to the wind-down of consolidation
activities. Non-GAAP adjusted EBITDA for the second quarter of 2014
was $.6 million, compared to a non-GAAP adjusted EBITDA loss of $.1
million in the second quarter of 2013, due to the throughput and
productivity factors described above.
Services
Broadwind Energy specializes in non-routine drivetrain and blade
maintenance services and offers comprehensive field services to the
wind industry.
Revenue from the Services segment was $3.5 million in the second
quarter of 2014, compared to $4.1 million in the second quarter of
2013. The decrease was related to the completion of a large
drivetrain assembly project in the second quarter of 2013, somewhat
offset by higher demand for blade repair work in the second quarter
of 2014. Despite the $.6 million reduction in revenue, Services
operating loss for the second quarter of 2014 was $1.3 million,
essentially flat compared to the second quarter of 2013, due to
lower restructuring and administrative expenses. The non-GAAP
adjusted EBITDA loss, which does not include restructuring,
increased to $1.0 million in the second quarter of 2014, compared
to $.6 million in the second quarter of 2013, due to the factors
described above.
Corporate and Other
Corporate and other expenses totaled $3.3 million in the second
quarter of 2014, compared to $2.3 million in the second quarter of
2013. The increase was due primarily to an $.8 million reserve
related to a potential settlement with the SEC for an investigation
initiated in 2010.
Cash and Liquidity
During the quarter, operating working capital (accounts
receivable and inventory, net of accounts payable and customer
deposits) increased $6.4 million to $26.0 million or 10% of
annualized second-quarter 2014 sales, due to the reduction in
customer deposits as deliveries have been completed, and lower
trade payables balances.
Cash assets totaled $11.6 million at June 30, 2014, a slight
increase of $0.1 million from March 31, 2014. At June 30, 2014, the
Company's $20 million line of credit was undrawn.
About Broadwind Energy, Inc.
Broadwind Energy (Nasdaq:BWEN) applies decades of deep
industrial expertise to innovate integrated solutions for customers
in the energy and infrastructure markets. From gears and gearing
systems for wind, steel, oil and gas and mining applications, to
wind towers, to comprehensive remanufacturing of gearboxes and
blades, to operations and maintenance services and industrial
weldments, we have solutions for the energy needs of the future.
With facilities throughout the U.S., Broadwind Energy's talented
team of over 800 employees is committed to helping customers
maximize performance of their investments – quicker, easier and
smarter. Find out more at www.bwen.com.
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934 that involve risks,
uncertainties and assumptions, such as statements regarding our
future financial condition or results of operations and our
prospects and strategies for future growth. Statements in this
release that are not historical are forward-looking statements.
These statements are based on current expectations, and we
undertake no obligation to update these statements to reflect
events or circumstances occurring after this release. Such
statements are subject to various risks and uncertainties that
could cause actual results to vary materially from those stated.
Such risks and uncertainties include, but are not limited to:
expectations regarding our business, end-markets, relationships
with customers and our ability to diversify our customer base; the
impact of competition and economic volatility on the industries in
which we compete; our ability to realize revenue from customer
orders and backlog; the impact of regulation on our end-markets,
including the wind energy industry in particular; the sufficiency
of our liquidity and working capital; our restructuring plans and
the associated cost savings; our ability to preserve and utilize
our tax net operating loss carry-forwards; and other risks and
uncertainties described in our filings with the Securities and
Exchange Commission, including those contained in Part I, Item 1A
"Risk Factors" of our Annual Reports on Form 10-K.
BROADWIND ENERGY, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE
SHEETS |
(IN THOUSANDS) |
|
|
|
|
|
|
|
June 30, |
December 31, |
|
2014 |
2013 |
|
(Unaudited) |
|
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
$ 10,799 |
$ 24,936 |
Short-term investments |
700 |
1,143 |
Restricted cash |
83 |
83 |
Accounts receivable, net of allowance for
doubtful accounts of $111 and $17 as of June 30, 2014 and December
31, 2013, respectively |
24,736 |
18,735 |
Inventories, net |
36,294 |
37,143 |
Prepaid expenses and other current
assets |
1,991 |
2,325 |
Assets held for sale |
2,063 |
1,970 |
Total current assets |
76,666 |
86,335 |
Property and equipment, net |
66,336 |
69,077 |
Intangible assets, net |
5,681 |
5,903 |
Other assets |
2,176 |
2,379 |
TOTAL ASSETS |
$ 150,859 |
$ 163,694 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Current maturities of long-term debt |
$ 157 |
$ 201 |
Current portions of capital lease
obligations |
941 |
933 |
Accounts payable |
20,487 |
27,537 |
Accrued liabilities |
9,838 |
8,115 |
Customer deposits |
14,496 |
22,993 |
Liabilities held for sale |
1,361 |
749 |
Total current liabilities |
47,280 |
60,528 |
|
|
|
LONG-TERM LIABILITIES: |
|
|
Long-term debt, net of current
maturities |
2,610 |
2,755 |
Long-term capital lease obligations, net
of current portions |
725 |
1,193 |
Other |
3,604 |
3,888 |
Total long-term liabilities |
6,939 |
7,836 |
|
|
|
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; 14,760,654 and 14,627,990 shares
issued and outstanding as of June 30, 2014 and December 31,
2013, respectively |
15 |
15 |
Additional paid-in capital |
376,618 |
376,125 |
Accumulated deficit |
(279,993) |
(280,810) |
Total stockholders' equity |
96,640 |
95,330 |
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY |
$ 150,859 |
$ 163,694 |
|
|
BROADWIND ENERGY, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(IN THOUSANDS, EXCEPT PER SHARE
DATA) |
(UNAUDITED) |
|
|
|
|
|
|
Three Months
Ended June 30, |
Six Months Ended
June 30, |
|
2014 |
2013 |
2014 |
2013 |
Revenues |
$ 68,381 |
$ 52,945 |
$ 127,181 |
$ 98,451 |
Cost of sales |
59,231 |
48,338 |
112,669 |
91,219 |
Restructuring |
519 |
1,206 |
788 |
1,661 |
Gross profit |
8,631 |
3,401 |
13,724 |
5,571 |
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
Selling, general and administrative |
5,620 |
5,117 |
11,537 |
10,505 |
Intangible amortization |
111 |
665 |
222 |
1,330 |
Regulatory settlement |
750 |
-- |
750 |
-- |
Restructuring |
49 |
107 |
109 |
708 |
Total operating expenses |
6,530 |
5,889 |
12,618 |
12,543 |
Operating income (loss) |
2,101 |
(2,488) |
1,106 |
(6,972) |
|
|
|
|
|
OTHER (EXPENSE) INCOME,
net: |
|
|
|
|
Interest expense, net |
(184) |
(227) |
(344) |
(618) |
Other, net |
(16) |
180 |
120 |
515 |
Gain on sale of assets and restructuring |
-- |
2,953 |
-- |
2,966 |
Total other (expense) income, net |
(200) |
2,906 |
(224) |
2,863 |
|
|
|
|
|
Net income (loss) from continuing operations
before provision for income taxes |
1,901 |
418 |
882 |
(4,109) |
Provision for income taxes |
41 |
14 |
65 |
36 |
INCOME (LOSS) FROM CONTINUING
OPERATIONS |
1,860 |
404 |
817 |
(4,145) |
LOSS FROM DISCONTINUED OPERATIONS,
NET OF TAX |
-- |
-- |
-- |
(210) |
NET INCOME (LOSS) |
$ 1,860 |
$ 404 |
$ 817 |
$ (4,355) |
|
|
|
|
|
NET INCOME (LOSS) PER COMMON SHARE -
BASIC: |
|
|
|
|
Income (loss) from continuing operations |
$ 0.13 |
$ 0.03 |
$ 0.06 |
$ (0.29) |
Loss from discontinued operations |
-- |
-- |
-- |
(0.01) |
Net income (loss) |
$ 0.13 |
$ 0.03 |
$ 0.06 |
$ (0.30) |
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - Basic |
14,732 |
14,422 |
14,696 |
14,345 |
|
|
|
|
|
NET INCOME (LOSS) PER COMMON SHARE -
DILUTED: |
|
|
|
|
Income (loss) from continuing operations |
$ 0.12 |
$ 0.03 |
$ 0.05 |
$ (0.29) |
Loss from discontinued operations |
-- |
-- |
-- |
(0.01) |
Net income (loss) |
$ 0.12 |
$ 0.03 |
$ 0.05 |
$ (0.30) |
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - Diluted |
15,180 |
14,597 |
15,179 |
14,345 |
|
|
BROADWIND ENERGY, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(IN THOUSANDS) |
(UNAUDITED) |
|
|
|
|
Six Months Ended
June 30, |
|
2014 |
2013 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
Net income (loss) |
$ 817 |
$ (4,355) |
Loss from discontinued operations |
-- |
210 |
Income (loss) from continuing
operations |
817 |
(4,145) |
|
|
|
Adjustments to reconcile net cash
used in operating activities: |
|
|
Depreciation and amortization
expense |
6,264 |
8,033 |
Impairment charges |
-- |
288 |
Stock-based compensation |
330 |
972 |
Allowance for doubtful accounts |
94 |
(174) |
Common stock issued under defined
contribution 401(k) plan |
163 |
337 |
Loss (gain) on disposal of assets |
5 |
(3,657) |
Changes in operating assets and
liabilities: |
|
|
Accounts receivable |
(6,094) |
(638) |
Inventories |
849 |
(13,606) |
Prepaid expenses and other current
assets |
443 |
535 |
Accounts payable |
(6,317) |
11,174 |
Accrued liabilities |
1,723 |
431 |
Customer deposits |
(8,496) |
14,073 |
Other non-current assets and
liabilities |
(327) |
153 |
Net cash (used) provided by operating
activities |
(10,546) |
13,776 |
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
Purchases of available for sale
securities |
(2,563) |
(606) |
Sales of available for sale
securities |
1,051 |
-- |
Maturities of available for sale
securities |
1,955 |
-- |
Purchases of property and equipment |
(4,542) |
(2,729) |
Proceeds from disposals of property and
equipment |
1,045 |
12,453 |
Net cash (used) provided by investing
activities |
(3,054) |
9,118 |
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
Payments on lines of credit and notes
payable |
(43) |
(80,209) |
Proceeds from lines of credit and notes
payable |
-- |
75,208 |
Principal payments on capital leases |
(494) |
(1,148) |
Net cash used in financing activities |
(537) |
(6,149) |
|
|
|
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS |
(14,137) |
16,745 |
CASH AND CASH EQUIVALENTS, beginning
of the period |
24,936 |
516 |
CASH AND CASH EQUIVALENTS, end of the
period |
$ 10,799 |
$ 17,261 |
|
|
|
Supplemental cash flow
information: |
|
|
Interest paid |
$ 212 |
$ 559 |
Income taxes paid |
$ 2 |
$ 13 |
Non-cash investing and financing
activities: |
|
|
Issuance of restricted stock grants |
$ 186 |
$ 727 |
Common stock issued under defined
contribution 401(k) plan |
$ 163 |
$ 337 |
|
|
BROADWIND ENERGY, INC. AND
SUBSIDIARIES |
SELECTED SEGMENT FINANCIAL
INFORMATION |
(IN THOUSANDS) |
|
|
|
|
|
|
Three Months
Ended June 30, |
Six Months Ended
June 30, |
|
2014 |
2013 |
2014 |
2013 |
REVENUES: |
(unaudited) |
(unaudited) |
Towers and Weldments |
$ 52,891 |
$ 39,089 |
$ 101,185 |
$ 68,960 |
Gearing |
12,424 |
10,445 |
21,198 |
21,164 |
Services |
3,482 |
4,065 |
5,920 |
11,549 |
Corporate and Other |
(416) |
(654) |
(1,122) |
(3,223) |
Total revenues |
$ 68,381 |
$ 52,945 |
$ 127,181 |
$ 98,450 |
|
|
|
|
|
OPERATING (LOSS)
PROFIT: |
|
|
|
|
Towers and Weldments |
$ 8,561 |
$ 5,063 |
$ 14,172 |
$ 7,217 |
Gearing |
(1,800) |
(3,975) |
(4,765) |
(6,953) |
Services |
(1,319) |
(1,262) |
(2,658) |
(1,962) |
Corporate and Other |
(3,341) |
(2,314) |
(5,643) |
(5,274) |
Total operating profit/(loss) |
$ 2,101 |
$ (2,488) |
$ 1,106 |
$ (6,972) |
BROADWIND ENERGY, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (IN THOUSANDS)
The Company reports its financial results in accordance with
U.S. generally accepted accounting principles (GAAP). However, the
Company's management believes that certain non-GAAP financial
measures may provide users of this financial information with
meaningful comparisons between current results and results in prior
operating periods. Management believes that these non-GAAP
financial measures can provide additional meaningful reflection of
underlying trends of the business because they provide a comparison
of historical information that excludes certain infrequently
occurring or non-operational items that impact the overall
comparability. See the table below for supplemental financial data
and corresponding reconciliations to GAAP financial measures for
the three months ended June 30, 2014 and 2013. Non-GAAP financial
measures should be viewed in addition to, and not as an alternative
for, the Company's reported results prepared in accordance with
GAAP.
|
|
|
Consolidated |
Three Months
Ended June 30, |
Six Months Ended
June 30, |
|
2014 |
2013 |
2014 |
2013 |
|
(unaudited) |
(unaudited) |
|
|
|
|
|
Operating income( loss) |
$ 2,101 |
$ (2,488) |
$ 1,106 |
$ (6,972) |
Depreciation and amortization |
3,150 |
3,842 |
6,264 |
7,648 |
Restructuring |
568 |
1,313 |
897 |
2,369 |
Other (loss) income |
(16) |
180 |
120 |
515 |
Share-based compensation and other stock
payments |
107 |
702 |
330 |
1,325 |
Total Adjusted EBITDA (Non-GAAP) |
$ 5,910 |
$ 3,549 |
$ 8,717 |
$ 4,885 |
|
|
|
|
|
Towers and Weldments
Segment |
Three Months
Ended June 30, |
Six Months Ended
June 30, |
|
2014 |
2013 |
2014 |
2013 |
|
(unaudited) |
(unaudited) |
|
|
|
Operating income |
$ 8,561 |
$ 5,063 |
$ 14,172 |
$ 7,217 |
Depreciation |
1,006 |
949 |
1,991 |
1,900 |
Restructuring expense |
8 |
38 |
26 |
115 |
Other income (loss) |
(19) |
115 |
(17) |
273 |
Share-based compensation and other stock
payments |
1 |
117 |
45 |
246 |
Total Adjusted EBITDA (Non-GAAP) |
$ 9,557 |
$ 6,282 |
$ 16,217 |
$ 9,751 |
|
|
|
|
|
|
Three Months
Ended June 30, |
Six Months Ended
June 30, |
Gearing Segment |
2014 |
2013 |
2014 |
2013 |
|
(unaudited) |
(unaudited) |
Operating loss |
$ (1,800) |
$ (3,975) |
$ (4,765) |
$ (6,953) |
Depreciation and amortization |
1,805 |
2,745 |
3,606 |
5,455 |
Restructuring expense |
560 |
952 |
871 |
1,174 |
Other income (loss) |
1 |
|
3 |
(14) |
Share-based compensation and other stock
payments |
72 |
131 |
131 |
211 |
Total Adjusted EBITDA (Non-GAAP) |
$ 638 |
$ (147) |
$ (154) |
$ (127) |
|
|
|
Services Segment |
Three Months
Ended June 30, |
Six Months Ended
June 30, |
|
2014 |
2013 |
2014 |
2013 |
|
(unaudited) |
(unaudited) |
Operating loss |
$ (1,319) |
$ (1,262) |
$ (2,658) |
$ (1,962) |
Depreciation |
306 |
342 |
619 |
655 |
Restructuring expense |
|
114 |
|
234 |
Other income (loss) |
2 |
65 |
134 |
256 |
Share-based compensation and other stock
payments |
2 |
128 |
17 |
168 |
Total Adjusted EBITDA (Non-GAAP) |
$ (1,009) |
$ (613) |
$ (1,888) |
$ (649) |
|
|
|
Corporate and Other |
Three Months
Ended June 30, |
Six Months Ended
June 30, |
|
2014 |
2013 |
2014 |
2013 |
|
(unaudited) |
(unaudited) |
Operating loss |
$ (3,341) |
$ (2,314) |
$ (5,643) |
$ (5,274) |
Depreciation |
33 |
12 |
48 |
23 |
Restructuring expense |
|
3 |
|
461 |
Share-based compensation and other stock
payments |
32 |
326 |
137 |
700 |
Total Adjusted EBITDA (Non-GAAP) |
$ (3,276) |
$ (1,973) |
$ (5,458) |
$ (4,090) |
CONTACT: BWEN INVESTOR CONTACT:
Joni Konstantelos
708.780.4819
joni.konstantelos@bwen.com
LHA CONTACT:
Jody Burfening/Carolyn Capaccio
212.838.3777
ccapaccio@lhai.com
Broadwind (NASDAQ:BWEN)
Historical Stock Chart
From Apr 2024 to May 2024
Broadwind (NASDAQ:BWEN)
Historical Stock Chart
From May 2023 to May 2024