Broadwind, Inc. · NASDAQ:BWEN
Broadwind — Broadwind Energy — Investor Presentation (May 2012)
26 slides from Broadwind's investor presentation, May 2012
Slide 1: Broadwind Energy
Broadwind Energy May 2012 © 2012 Broadwind Energy, Inc. All Rights Reserved.
Slide 2: Industry Data Disclaimer and Forward-Looking Statements
Industry Data Disclaimer and Forward-Looking Statements Broadwind obtained the industry and market data used throughout this presentation from its own research, internal surveys and studies conducted by third parties, independent industry associations or general publications and other publicly avail
Slide 3: Investment Thesis
Investment Thesis Diversifying deep wind energy experience into oil & gas and mining $6 billion market opportunity for gearing across wind, oil & gas, mining industries Benefiting from the resurgence in U.S. manufacturing and the demand — gearing and weldments Executing strategy to deliver s
Slide 4: Broadwind Today
Broadwind Today Towers and Weldments Gearing Services Founded: 2003 Founded: 1924 Founded: 1998 Leading producer of new Leading North American Leading independent >2 MW tower designs with precision gearing system services provider to the U.S. more than 1,000 towers manufacturer for energy wind
Slide 5: 2011 Results vs. Objectives
2011 Results vs. Objectives Objectives Results $54 million of non-wind orders in 2011 Greater Industry Diversity representing 33% of FY orders 2011 Gearing orders 89% industrial $7 million of weldment orders Added 3 new wind customers in 2011, Greater Customer Diversity representing over $80
Slide 6: Q1 2012 Overview
Q1 2012 Overview Revenue up 25% over Q1 2011 - Gearing up 18%, Services up 88% Q1 Revenue Growth Adj. EBITDA up sharply from Q1 prior year $M $60 $54.4 Gearing has turned the corner $50 $43.5 $40 - Orders grew 12% $30 $21.7 - Adj. EBITDA up significantly — margin is halfway to $20 20% industry
Slide 7: Restructuring Update
Restructuring Update ‒ Consolidate two gearing facilities Renegotiated Gearing facility lease Completed erection of cranes Estimated savings of $4.0M per year Moved 20% of the equipment ‒ Reduce corporate office expense Closed European office Started office build-out in Cicero, Ill. Es
Slide 8: 2012-2013 Deliverables
2012-2013 Deliverables Key Drivers of Transformation Gearing - Complete plant consolidation and improve capacity utilization - Winning, and winning back, industrial customers in oil & gas and mining - Continue positive customer experience — on-time delivery, high-quality goods - Expand offering of
Slide 9: 2012 Financial Outlook Update
2012 Financial Outlook Update Industrial & Service New Wind Installations 2010 2011 2012E* 100% Sales-$M 137 186 215-225 90% 80% Gross Margin 1.4% 3.9% 6.0-7.5% 70% 60% Operating Exp.-$M 30.4 27.6 25-26 50% Impairment Exp-$M 40.8 0 0 40% 30% Op Loss-$M (69.2) (20.4) (8) - (10) 20% 10% Adj. EBITDA-$M
Slide 10: Towers and Weldments Financials
Towers and Weldments Financials First Quarter 2012 ($ in Millions) Section volume down 19% from very strong Q1 2011 Q1 2012 2011 43% of Q1 2011 volume was higher- MW-Wind 137 190 margin ―fabrication only‖ towers Revenue-$M 35.2 28.2 Weldment revenue tripled to $1.8M Op Income-$M 1.0 2.4 Adj. E
Slide 11: Towers Addressable Market
Towers Addressable Market Towers – Addressable Market 100% 90% Recent Tower business started in 2003 Additions 80% Built organically with the new 70% entrants to the US market 60% Business tended to build the 50% Customer Base larger towers (multi-MW) with 40% 2003 - 2010 more changeovers than
Slide 12: PTC Impact on Towers
PTC Impact on Towers Actual & Forecasted Wind Installs - MWs PTC scheduled to expire December 2012 Bipartisan support exists for extension But no Congressional action to date Increasing uncertainty impacting industry Broadwind’s actions: Filed U.S. International Trade Commission case which i
Slide 13: Gearing Financials
Gearing Financials First Quarter 2012 ($ in Millions) Industrial gearing sales +73%; Q1 Wind gearing sales -39% 2012 2011 Adj. EBITDA margin improved Revenue-$M 16.0 13.6 10.3 percentage points through Op Income-$M (1.1) (2.4) volume growth, higher-margin Adj. EBITDA-$M 1.8 0.2 revenue mix, incr
Slide 14: Services Financials
Services Financials First Quarter 2012 ($ in Millions) Q1 is seasonally lowest quarter Q1 Revenue nearly doubled — higher 2012 2011 order rate for all product lines Revenue-$M 3.4 1.8 Operating loss includes higher Op Income-$M (1.6) (1.4) depreciation on drivetrain services Adj. EBITDA-$M (0.
Slide 15: Financials
Financials © 2012 Broadwind Energy, Inc. All Rights Reserved. 15
Slide 16: Orders & Backlog
Orders & Backlog Orders ($ in millions) Order Backlog $250 Q1 $230 Traditionally Reported Backlog 2012 2011 % Chg. $210 $190 $ Millions $170 Towers $ 2.4 $ 33.4 -93% $150 $130 Gears 10.8 9.6 12% $110 $90 Services 5.0 2.4 108% $70 Backlog Recast Excluding Deliveries Beyond 6 Months $50 $ 18.1 $ 45.3
Slide 17: Consolidated Financial Results
Consolidated Financial Results Q1 2012 Q1 2011 Q4 2011 Revenue-$M 54.4 43.5 55.1 Gross Profit-$M 2.2 2.6 1.0 -% (ex. Restructuring) 4.8% 5.9% 1.8% Operating Expense-$M 6.2 6.6 6.9 -% (ex. Restructuring) 11.2% 15.1% 12.2% Operating Income-$M (3.9) (4.0) (5.9) Adj. EBITDA-$M 1.4 0.2 (1.0) EPS Continui
Slide 18: Debt vs. TTM Adjusted EBITDA
Debt vs. TTM EBITDA ($ in millions) Debt vs. TTM EBITDA (millions) $45 $5 $40 Debt and Capital Lease Balance $- $35 TTM Adjusted EBITDA $30 $(5) $25 $(10) $20 $15 $(15) $10 $(20) $5 $- $(25) Debt and Capital Lease Balance TTM Adjusted EBITDA © 2012 Broadwind Energy, Inc. All Rights Reserved. 18
Slide 19: Committed to helping customers maximize performance
Broadwind Energy is committed to helping customers maximize performance of their energy and infrastructure investments— quicker, easier and smarter. © 2012 Broadwind Energy, Inc. All Rights Reserved. 19
Slide 20: Appendix
Appendix © 2012 Broadwind Energy, Inc. All Rights Reserved. 20
Slide 21: Towers and Weldments Overview
Towers and Weldments Overview 1,000+ towers manufactured to date Well positioned as turbines trend higher and heavier Among the first U.S. companies to produce 100-meter towers Other weldment applications include mining, rigging, fire apparatus, cranes to 3,500 tons, medical, nuclear and oil
Slide 22: Gearing Overview
Gearing Overview Core competency in tight-tolerance gearing Invested $27 million in sophisticated gear cutting, grinding and hardening equipment in 2008 17 precision form tooth grinders, including one of the largest internal/external form grinders in the U.S. One of a few gear manufacturers
Slide 23: Services Overview
Services Overview Independent wind energy service provider with core expertise in non- routine maintenance - Drivetrains – gearboxes and MW's Installed bearings - Blades – more than 4,000 10,000 repaired 8,000 - Warranty inspections 6,000 Strong relationship with major owners 4,000 and OEMs 2,00
Slide 24: Operating Working Capital
Operating Working Capital Working Capital Cents per Dollar 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 - Q1 2012 $9.0M inventory build appropriate to tower production schedule, primarily related to steel for tower sections scheduled for Q2 2012 Offset by $7.5M increase in payables to suppliers © 201
Slide 25: Liquidity
Liquidity ($ in thousands) 3/31/2012 12/31/2011 Lines of credit, notes 1,586 1,566 payable Long-term debt 5,202 5,433 Liabilities held for sale 4,583 4,833 Capital leases 1,751 1,940 Debt and capital lease 13,122 13,772 Cash and related 11,261 14,216 assets Net debt 1,861 (444) Memo: available line
Slide 26: © 2012 Broadwind Energy, Inc. All Rights Reserved.
© 2012 Broadwind Energy, Inc. All Rights Reserved. 26