sidoti conference march 31,...

Sidoti Conference

March 31, 2016

© 2016 Broadwind Energy, Inc. All rights reserved. 1

Broadwind’s Product Offerings


Industrial Manufacturer with expertise in heavy weldments, precision gearing

and other energy and infrastructure applications

Tower Production


Design capacity ~500 towers per year; Investing $7M to

reduce bottlenecks and improve capacity

• Leading wind tower

manufacturer in U.S.

•Have produced ~3000 >1MW

towers for all major OEM’s in

U.S.

•Manitowoc, WI plant capacity

~350 towers

•Abilene, TX plant capacity

~150 towers

• Superior safety record

2013 2014 2015

Revenue 159.5$ 184.9$ 170.9$

Op. Inc. 19.6 18.1 4.7

EBITDA 24.8 22.3 9.5


0

100

200

300

400

500

2012 2013 2014 2015

Towers Sold

Tower Production Challenges

• Tower production increasing each year; design capacity ~500 towers

• 2015 production suffered from supply chain issues and production

challenges – back on track in 2016

• Taking action to resolve production variability issue

• Organizational Changes

• Process Changes

• Capital Investments

Wind Market Update

2/26/16 © 2016 Broadwind Energy, Inc. All rights reserved. 5

U.S. Market Outlook, 2015-2021e (GW)

•Longest planning horizon

in industry history

•Eliminates costly

start/stop inefficiencies

•Economics/ potential CPP

become installation

drivers as PTC expires

•Shift toward direct buys

by corporations

5-Year PTC extension adds ~16GW of additional installations into forecast

for 2017-2021

Gearing


• 90+ year history

• Competencies in wind gearing, oil &

gas, mining, steel and other industrial

applications

• Completed 3-year restructuring in 2014:

well positioned for rebound in oil & gas

and mining

• Increasing penetration into wind gearing

market following sale of Services

2013 2014 2015

Revenue 43.2$ 42.3$ 29.6$

Op. Inc. (17.9) (9.4) (8.2)

EBITDA (3.6) (0.9) (2.1)

Consolidated Financial Results

2/26/16 © 2016 Broadwind Energy, Inc. All rights reserved. 7

2015 Results

•Sales down 12%; Towers and Weldments -8%, Gearing -30%

•Gross margin, profit and EPS declines all due primarily to Towers

production challenges and weaker Gearing volumes from oil & gas and

mining customers

•One-time costs associated with difficult contract : $10 million

2013 2014 2015

Revenue-$ Millions 198.5$ 225.8$ 199.2$

Gross Profit-$ Millions 14.6 19.7 7.9

-% (ex. Restructuring) 9.7% 8.7% 4.0%

Operating Expense-$ Millions 23.1 21.2 19.8

-% (ex. Restructuring) 11.1% 9.3% 9.4%

Operating Income(Loss)-$ Millions (8.5) (1.5) (11.9)

Non-GAAP Adj. EBITDA-$ Millions 12.9 11.9 (0.4)

EPS, Continuing Operations (0.41) (0.12) (0.83)

Full Year

Strong Balance Sheet - $ Thousands


2014 2015

Cash + Equiv. 20,164 12,698

Accounts Receivable 17,043 9,784

Inventory 31,144 24,219

PPE 58,529 51,906

Other Assets 19,739 11,301

Total Assets 146,619 109,908

Accounts Payable 17,547 13,822

Customer Deposits 22,397 9,940

Debt + Capital

Leases

3,957 5,846

Other Liabilities 14,388 12,808

Total Liabilities 58,239 42,416

Equity 88,380 67,492

• $10M credit line undrawn at

12/31/15

• $5.8M of debt and capital

leases; $2.6M is New Markets

Tax Credit financing

• Operating Working Capital

sufficient ~7% of sales at

12/31/15

• $200M NOL carry-forward not

on balance sheet

Investment Thesis

•Wind energy demand is growing and planning horizon is best in

history

•BWEN stock depressed due to 2015 production execution misses

in Abilene tower plant

•Fixes in place/underway to support consistent execution

•Strong balance sheet – negative net debt

•Market cap of ~$40 million – significantly less than net book value


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Broadwind Energy is committed to helping

customers maximize performance of their

energy and infrastructure investments—

quicker, easier and smarter.

10© 2016 Broadwind Energy, Inc. All rights reserved.

sidoti conference march 31,...

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