Broadwind Announces Second Quarter 2020 Results

Cicero, Illinois, UNITED STATES

CICERO, Ill., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Broadwind (NASDAQ: BWEN), a diversified precision manufacturer of specialized components and solutions serving global markets, today announced results for the second quarter 2020.


  • Total revenue of $54.9 million (+33% y/y)
  • Total gross margin of 9.9% (+40 bps y/y)
  • Total net income of $0.5 million, or $0.03 per basic share
  • Total non-GAAP adjusted EBITDA of $2.9 million (+50% y/y)
  • Total cash and availability of $21.9 million (+$13.8 million y/y)

For the three months ended June 30, 2020, the Company reported total sales of $54.9 million, an increase of 33.4% when compared to the prior-year period.  Broadwind reported net income of $0.5 million, or $0.03 per basic share in the second quarter 2020, compared to a net loss of ($1.0) million, or ($0.06) per basic share, in the second quarter 2019.  The Company reported adjusted EBITDA of $2.9 million in the second quarter 2020, compared to $1.9 million in the prior-year period. 

Significant revenue growth in the Heavy Fabrications and Industrial Solutions segments more than offset a decline in Gearing segment revenue during the second quarter 2020.  Heavy Fabrications segment revenue increased by more than 50% on a year-over-year basis in the second quarter, driven by customer demand to support the expected increase of wind turbine installations and as a result of diversification traction in mining and other industrial markets.  Industrial Solutions segment revenue also increased by 50%, given increased demand for natural gas turbine components, while Gearing segment revenue declined by 25%, as select customers postponed scheduled purchases into future periods given general economic uncertainty resulting from the novel coronavirus (COVID-19). 


During the second quarter, Broadwind continued to execute on a multi-year strategy focused on (1) market expansion across key verticals (2) improved operating efficiency and plant utilization; and (3) disciplined capital management.

  • Diverse market focus.  Revenue derived from customers in the wind, industrials, steel and natural gas turbine markets all increased in the second quarter 2020.  Total wind-related revenues increased 40% year-over-year in the period.  The Company remains a key supplier to the global on-shore wind energy industry and has begun to evaluate new, off-shore wind customer opportunities that leverage its existing expertise.

  • Increased operating efficiency.  As of August 5, 2020, the Company had booked more than 90% of its optimal wind tower production capacity through year-end 2020.  Broadwind sold 320 wind tower sections in the second quarter 2020, versus 201 sections in the prior-year period. 

  • Disciplined capital management.  Total cash and availability under outstanding credit facilities increased $2.9 million sequentially and $13.8 million compared to the prior year second quarter.  As of June 30, 2020, the ratio of net debt to trailing twelve-month adjusted EBITDA was 1.4x, after excluding the $9.1 million in loans received under the Paycheck Protection Program. 


“Despite continued macro uncertainty related to the COVID-19 pandemic, our business performed well during the second quarter, guided by our long-term focus on end-market diversification, lean manufacturing processes and disciplined capital management,” stated Eric Blashford, CEO of Broadwind.  “Total revenue increased by more than 30% when compared to the prior-year period, resulting in our second consecutive quarter of profitability.  This strong performance was supported by broad-based revenue growth across our core wind, industrials, steel and natural gas turbine markets during the period.”

“To-date, we have booked approximately 90% of our optimal wind tower production capacity for the full-year 2020,” continued Blashford.  “We sold 320 wind tower sections during the second quarter, an increase of nearly 60% when compared to the year-ago period.  For the full-year 2020, we anticipate Broadwind will generate year-over-year growth in revenue, net income and adjusted EBITDA,” continued Blashford.  “We expect our financial performance in the second half of 2020 will be largely comparable to what we achieved during the first half of the year, with our internal forecast calling for strong sequential growth between the second and third quarters of 2020.”

“We believe the offshore wind market remains a significant, untapped opportunity for Broadwind,” continued Blashford.  “We are currently evaluating strategic alternatives that have the potential to provide an attractive entry point into offshore wind.  As an established producer of onshore wind towers, the transition to offshore represents a natural progression for our business, one with the potential to drive sustained demand for our expertise.”

“While we are encouraged by the demand drivers for wind energy and our diversification progress, demand within our markets has begun to soften, as customer projects are postponed due to the impact of COVID-19,” continued Blashford.  “Looking ahead, we anticipate this uncertainty will impact our fourth quarter results, with expectations for a recovery during the first half of 2021.”

“We exited the second quarter with cash and liquidity of nearly $22 million, up from $8 million in the prior-year period,” concluded Blashford. 


Total orders increased 17% to $39.6 million in the second quarter, versus $33.8 million in the first quarter 2020, supported by increased demand for wind towers.  Heavy Fabrications segment orders declined compared to the prior year quarter, as wind turbine original equipment manufacturers secured production capacity in advance of historical lead times, given expectations for a surge in new wind tower installations during 2020. 

Gearing segment orders declined sequentially mainly due to continued softness in domestic oil and gas production, a market that represented less than 15% of segment orders in the second quarter.  Other markets within the Gearing segment also realized lower new order demand, primarily due to delayed or reduced capital purchases by customers due to the general economic uncertainty resulting from the COVID-19 pandemic.  Industrial Solutions segment orders declined sequentially during the second quarter due to a modest decline in natural gas turbine orders.

Total backlog declined 12% sequentially in the second quarter to $112.1 million, as COVID-19 related delays postponed the timing of customer orders.  As of June 30, 2020, Heavy Fabrications represented approximately 76% of total Company backlog. 


Heavy Fabrications Segment
Broadwind provides large complex and precision fabrications to customers in a broad range of industrial markets.  Key products include wind towers and industrial fabrications, including mining and material handling components and other frames/structures. 

Heavy Fabrications segment sales increased by $14.6 million to $43.6 million in the second quarter, when compared to the prior year period, primarily due to strong demand for wind towers.  Total operating income increased $2.9 million to $3.2 million, when compared to the second quarter 2019.  Segment non-GAAP adjusted EBITDA increased $2.7 million to $4.2 million, when compared to the second quarter 2019.  Second quarter segment performance was primarily driven by growth in customer demand for wind towers.

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

Gearing segment sales declined by $2.3 million to $6.9 million in the second quarter, when compared to the year-ago period, due primarily to lower order intake from oil and gas customers.  The Gearing segment reported an operating loss of ($0.7) million, versus operating income of $0.9 million in the prior-year period. Segment non-GAAP adjusted EBITDA declined $1.6 million to ($0.1) million, when compared to the second quarter 2019.  Second quarter segment performance was driven by lower sales across each major end-market.  This decline was driven by the continuation of the COVID-19 pandemic and lower oil prices, which led customers to temporarily postpone orders and delay approximately $2.0 million of previously scheduled purchases into future periods. 

Industrial Solutions Segment
Broadwind provides supply chain solutions, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market. 

Industrial Solutions segment sales increased by $1.5 million to $4.4 million in the second quarter, when compared to the year-ago period.  Total operating income increased by $0.2 million to $0.2 million in the second quarter, when compared to the prior-year period.  Segment non-GAAP adjusted EBITDA increased $0.2 million to $0.4 million, when compared to the second quarter 2019.  Second quarter segment performance was driven primarily by higher sales associated with new gas turbine content and improved operating efficiencies.


As of June 30, 2020, Broadwind had cash and availability under outstanding credit facilities of $2.1 million and $19.8 million, respectively.  Total cash and liquidity increased by $13.8 million to $21.9 million at June 30, 2020, when compared to June 30, 2019.

Total debt and finance leases were $25.3 million as of June 30, 2020. During the current year quarter, the Company received $9.1M of proceeds from the Paycheck Protection Program (PPP), which was established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  Under the terms of the CARES Act, the PPP loans, accrued interest and fees may be forgiven following a period of twenty-four weeks after PPP loan proceeds are received if they are used for qualifying expenses as defined by the Cares Act, which are subject to certain exclusions based on the number of full time equivalents retained and maintaining at least 75% of the level of compensation during the covered period.  The Company used the PPP loan proceeds to pay for payroll costs and on other eligible expenses, consistent with the terms of the PPP and plans to submit its forgiveness applications to its lender in Q3, 2020.


Broadwind will host a conference call today, August 5, 2020, at 11:00 A.M. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session.  A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of Broadwind’s website at  To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference:
Domestic Live:877-407-9716
International Live:201-493-6779
To listen to a replay of the teleconference, which will be available through August 12, 2020:
Domestic Replay:844-512-2921
International Replay:412-317-6671
Conference ID:13706212


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


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


This release contains “forward looking statements”—that is, statements related to future, not past, events—as defined in Section 21E of the Securities Exchange Act of 1934, as amended, 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, many of which are, and will be, amplified by the COVID-19 pandemic: (i) the impact of global health concerns, including the impact of the current COVID-19 pandemic on the economies and financial markets and the demand for our products; (ii) 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 as well as new or continuing tariffs on steel or other products imported into the United States; (iii) 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; (iv) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary, in light of the COVID-19 pandemic; (v) our ability to continue to grow our business organically and through acquisitions, and the impairment thereto by the impact of the COVID-19 pandemic; (vi) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows; (vii) information technology failures, network disruptions, cybersecurity attacks or breaches in data security, including with respect to any remote work arrangements implemented in response to the COVID-19 pandemic; (viii) the sufficiency of our liquidity and alternate sources of funding, if necessary; (ix) our ability to realize revenue from customer orders and backlog; (x) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow; (xi) the economy, including its stability in light of the COVID-19 pandemic, and the potential impact it may have on our business, including our customers; (xii) 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; (xiii) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (xiv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers; (xv) the effects of the change of administrations in the U.S. federal government; (xvi) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions; (xvii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended; (xviii) our ability to utilize various relief options enabled by the CARES Act, including our ability to receive forgiveness of the PPP Loans; (xix) the limited trading market for our securities and the volatility of market price for our securities; and (xx) the impact of future sales of our common stock or securities convertible into our common stock on our stock price. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements including, but not limited to, those set forth under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by our Current Report on Form 8-K filed April 17, 2020 . We are under no duty to update any of these statements. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results.

An attachment accompanying this release can be found at:


  June 30,  December 31,
   2020   2019 
Cash $2,119  $2,416 
Accounts receivable, net  26,119   18,310 
Inventories, net  37,611   31,863 
Prepaid expenses and other current assets  1,739   2,124 
Total current assets  67,588   54,713 
Property and equipment, net  46,382   46,940 
Operating lease right-of-use assets  19,490   15,980 
Intangible assets, net  4,553   4,919 
Other assets  439   314 
TOTAL ASSETS $138,452  $122,866 
Line of credit and other notes payable $13,046  $12,917 
Current portion of finance lease obligations  1,032   546 
Current portion of operating lease obligations  1,582   1,326 
Accounts payable  21,901   21,876 
Accrued liabilities  5,096   4,911 
Customer deposits  21,716   22,717 
Total current liabilities  64,373   64,293 
Long-term debt, net of current maturities  9,500   505 
Long-term finance lease obligations, net of current portion  1,769   673 
Long-term operating lease obligations, net of current portion  19,931   16,591 
Other  80   44 
Total long-term liabilities  31,280   17,813 
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; 17,113,616 and 16,830,930 shares issued as of June 30, 2020 and December 31, 2019, respectively  17   17 
Treasury stock, at cost, 273,937 shares as of June 30, 2020 and December 31, 2019, respectively  (1,842)  (1,842)
Additional paid-in capital  383,917   383,361 
Accumulated deficit  (339,293)  (340,776)
Total stockholders' equity  42,799   40,760 


  Three Months Ended June 30, Six Months Ended June 30,
   2020   2019   2020   2019 
Revenues $54,926  $41,169  $103,560  $82,829 
Cost of sales  49,509   37,277   91,971   75,388 
Restructuring  -   -   -   12 
Gross profit  5,417   3,892   11,589   7,429 
Selling, general and administrative  4,198   3,895   8,507   7,723 
Intangible amortization  184   203   367   406 
Total operating expenses  4,382   4,098   8,874   8,129 
Operating income (loss)  1,035   (206)  2,715   (700)
OTHER EXPENSE, net:        
Interest expense, net  (474)  (773)  (1,147)  (1,309)
Other, net  (1)  (16)  (3)  (17)
Total other expense, net  (475)  (789)  (1,150)  (1,326)
Net income (loss) before provision for income taxes  560   (995)  1,565   (2,026)
Provision for income taxes  31   23   83   34 
NET INCOME (LOSS) $529  $(1,018) $1,482  $(2,060)
Net income (loss) $0.03  $(0.06) $0.09  $(0.13)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC  16,761   16,046   16,678   15,917 
Net income (loss) $0.03  $(0.06) $0.09  $(0.13)


  Six Months Ended June 30,
   2020  2019 
Net income (loss) $1,482 $(2,060)
Adjustments to reconcile net cash used in operating activities:   
Depreciation and amortization expense  3,194  3,390 
Deferred income taxes  21  (5)
Change in fair value of interest rate swap agreements  157  26 
Stock-based compensation  556  510 
Allowance for doubtful accounts  34  (12)
Common stock issued under defined contribution 401(k) plan  -  392 
Gain on disposal of assets  -  (1)
Changes in operating assets and liabilities, net of acquisition:   
Accounts receivable  (7,843) (2,806)
Inventories  (5,748) (13,088)
Prepaid expenses and other current assets  385  16 
Accounts payable  520  3,306 
Accrued liabilities  28  540 
Customer deposits  (1,001) (4,946)
Other non-current assets and liabilities  (23) 127 
Net cash used in operating activities  (8,238) (14,611)
Purchases of property and equipment  (929) (1,183)
Proceeds from disposals of property and equipment  -  1 
Net cash used in investing activities  (929) (1,182)
Proceeds from line of credit  93,358  91,007 
Payments on line of credit  (92,768) (75,370)
Proceeds from long-term debt  9,530  - 
Payments on long-term debt  (822) (462)
Principal payments on finance leases  (428) (485)
Net cash provided by financing activities  8,870  14,690 
NET DECREASE IN CASH  (297) (1,103)
CASH beginning of the period  2,416  1,177 
CASH end of the period $2,119 $74 


  Three Months Ended Six Months Ended
  June 30, June 30,
   2020   2019   2020   2019 
Heavy Fabrications $31,401  $96,328  $46,916  $108,839 
Gearing  3,731   5,572   16,151   12,707 
Industrial Solutions  4,426   2,712   10,300   7,072 
Total orders $39,558  $104,612  $73,367  $128,618 
Heavy Fabrications $43,614  $28,970  $81,983  $57,264 
Gearing  6,922   9,266   13,149   19,293 
Industrial Solutions  4,397   2,933   8,435   6,272 
Corporate and Other  (7)  -   (7)  - 
Total revenues $54,926  $41,169  $103,560  $82,829 
Heavy Fabrications $3,199  $318  $6,740  $96 
Gearing  (651)  913   (912)  2,300 
Industrial Solutions  217   28   410   (256)
Corporate and Other  (1,730)  (1,465)  (3,523)  (2,840)
Total operating profit/(loss) $1,035  $(206) $2,715  $(700)


Consolidated Three Months Ended June 30, Six Months Ended June 30,
   2020   2019   2020   2019 
Net Income/(Loss) $529  $(1,018) $1,482  $(2,060)
Interest Expense  474   773   1,147   1,309 
Income Tax Provision  31   23   83   34 
Depreciation and Amortization  1,581   1,628   3,194   3,390 
Share-based Compensation and Other Stock Payments  248   493   562   929 
Restructuring Costs  -   -   -   12 
Adjusted EBITDA (Non-GAAP)  2,863   1,899   6,468   3,614 

Heavy Fabrications Segment Three Months Ended June 30, Six Months Ended June 30,
   2020   2019   2020   2019 
Net Income/(Loss) $2,467  $186  $5,165  $(49)
Interest Expense  89   63   194   129 
Income Tax Provision/(Benefit)  643   54   1,381   1 
Depreciation  939   978   1,903   2,073 
Share-based Compensation and Other Stock Payments  60   214   102   379 
Restructuring Expense  -   -   -   12 
Adjusted EBITDA (Non-GAAP) $4,198  $1,495  $8,745  $2,545 

Gearing Segment Three Months Ended June 30, Six Months Ended June 30,
   2020   2019   2020   2019 
Net (Loss)/Income $(674) $796  $(988) $2,096 
Interest Expense  20   113   70   195 
Income Tax Provision  2   4   6   9 
Depreciation and Amortization  503   483   1,015   965 
Share-based Compensation and Other Stock Payments  25   102   40   194 
Adjusted EBITDA (Non-GAAP)$(124) $1,498  $143  $3,459 

Industrial Solutions Segment Three Months Ended June 30, Six Months Ended June 30,
   2020   2019   2020   2019 
Net Income/(Loss) $197  $4  $356  $(274)
Interest Expense  10   -   10   1 
Income Tax Provision/(Benefit)  9   23   40   14 
Depreciation and Amortization  106   122   210   244 
Share-based Compensation and Other Stock Payments  31   13   50   26 
Adjusted EBITDA (Non-GAAP) $353  $162  $666  $11 

Corporate and Other Three Months Ended June 30, Six Months Ended June 30,
   2020   2019   2020   2019 
Loss from continuing operations $(1,461) $(2,004) $(3,051) $(3,833)
Interest Expense  355   597   873   984 
Income Tax (Benefit)/Provision  (623)  (58)  (1,344)  10 
Depreciation and Amortization  33   45   66   108 
Share-based Compensation and Other Stock Payments  132   164   370   330 
Adjusted EBITDA (Non-GAAP) $(1,564) $(1,256) $(3,086) $(2,401)


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BWEN 2Q20 Conference Call Deck (Final)