Broadwind Energy Announces Q4 and Full-Year 2013 Results

Broadwind Energy Announces Q4 and Full-Year 2013 Results

Q4 Highlights:

  *Order intake of $201 million; year-end backlog of $311 million is highest
    on record

  *Sales of $56.4 million, up 26% from weak prior-year fourth quarter

  *Gross profit margin (ex. restructuring) of 7.8%, up 600 bp from Q4 2012

  *Adjusted EBITDA increased to $2.8 million, bringing full-year adjusted
    EBITDA to $10.3 million, in line with forecast

  *Cash assets rose to $26.2 million, operating line of credit undrawn, debt
    and capital lease balance dropped to $5.1 million

CICERO, Ill., March 12, 2014 (GLOBE NEWSWIRE) -- Broadwind Energy, Inc.
(Nasdaq:BWEN) reported sales of $56.4 million for the fourth quarter of 2013,
a 26% increase compared to $44.9 million in the fourth quarter of 2012. The
increase reflects the continued strength in the Company's Towers and Weldments
segment, partly offset by weaker results in the Gearing and Services segments.

The Company reported a net loss from continuing operations of $3.7 million or
$.26 per share in the fourth quarter of 2013, compared to a loss of $5.9
million or $.41 per share in the fourth quarter of 2012. The improvement was
due to stronger results in the Towers and Weldments segment, somewhat offset
by weaker results in the other business segments and $1.7 million of higher
restructuring expenses as the Company nears completion on its restructuring
initiatives. The Company reported non-GAAP adjusted EBITDA (earnings before
interest, taxes, depreciation, amortization, share-based payments and
restructuring) of $2.8 million in the fourth quarter of 2013, compared to $.7
million in the fourth quarter of 2012. The progress reflects the 61% increase
in tower volume in the current-year fourth quarter, somewhat offset by weaker
results in the other business segments.

Full-year 2013 sales of $215.7 million exceeded full-year 2012 sales by 2%,
reflecting growth in the Towers and Weldments segment, somewhat offset by
lower volumes in the Gearing and Services segments. For the full-year 2013,
the loss from continuing operations narrowed to $10.4 million from a $17.9
million loss reported in 2012, and the loss per share narrowed to ($.72) from
($1.27) in 2012. The Company reported non-GAAP adjusted EBITDA of $10.3
million in 2013, up sharply from $5.5 million in 2012 due primarily to
improved operating results in the Towers and Weldments segment.

Peter C. Duprey, president and chief executive officer, stated, "Broadwind
completed another solid quarter, finishing the year in-line with our forecast
and markedly stronger than the prior year. Our Towers and Weldments segment
had another record-breaking quarter and continues to drive us toward overall
profitability. We booked $190 million in new tower orders in the quarter. In
this segment, we are sold out for 2014 and over 50% booked for 2015."

"Our full-year results highlighted the significant achievements we made in
2013. Our gross margins excluding restructuring improved by 400 basis points,
our cash position improved by $25 million, we generated over $10 million of
EBITDA which was an 88% improvement over last year, and our backlog is over
$300 million with great visibility into 2015. Additionally, we completed the
sale of our idle tower facility, settled the outstanding shareholder
litigation and resolved the outstanding environmental investigation."

Mr. Duprey concluded, "The record results in our towers business continue to
drive the Company toward profitability, affording us the leeway to turnaround
and grow our other operating segments. With the restructuring behind us, the
strength in our towers backlog and our continuous improvement efforts
resonating within the organization, we are confident that we will generate
positive EPS in 2014."

Orders and Backlog

The Company booked $201 million in net new orders in the fourth quarter, a
record high and nearly triple the prior-year fourth quarter. Towers and
Weldments orders, which vary considerably from quarter-to-quarter, totaled
$193 million, the highest on record for this segment. Fourth-quarter Gearing
orders totaled $5.1 million, a 23% decrease from the prior-year fourth quarter
due to weaker orders from industrial customers. Services orders totaled $2.4
million, down sharply from the prior-year fourth quarter which included a
large drivetrain project with an industrial customer, which was subsequently
cancelled.

At December 31, 2013, total backlog of $311 million was more than double the
prior-year end backlog of $123 million and was the highest backlog in Company
history.

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 $43.4 million in the fourth quarter
of 2013, compared to $25.6 million in the fourth quarter of 2012. The sharp
increase is due to a 61% increase in tower volume as the fourth quarter of
2012 was negatively impacted by the impending expiration of the Production Tax
Credit, which accelerated 2012 tower deliveries into earlier months. Non-GAAP
adjusted EBITDA for the segment totaled $7.4 million in the current year
period, up sharply from $1.2 million in the same period last year. The
significant improvement was the result of higher volumes, improved operating
efficiencies and a less variable and more profitable mix of towers compared to
the fourth quarter of 2012. Towers and Weldments segment operating income for
the fourth quarter of 2013 was $5.8 million (13% of sales), up $6.3 million
from the fourth quarter of 2012 due to the factors described above.

Towers and Weldments sales for 2013 totaled $159.5 million, an 18% increase
over 2012 reported sales. The increase was due primarily to a 28% increase in
tower volumes in the current year as well as a $.6 million increase in
industrial weldment sales compared to the prior year. Non-GAAP adjusted EBITDA
totaled $24.8 million in 2013, up dramatically from $8.3 million in the prior
year. The significant improvement was the result of higher volumes, improved
margins over material costs and better productivity than in the prior year due
to a simplified production mix. Towers and Weldments segment operating income
for 2013 was $19.6 million (12% of sales), up significantly from $2.8 million
in 2012, due to the factors described above.

Gearing

Broadwind Energy engineers, builds and remanufactures precision gears and
gearboxes for oil and gas, mining, steel and wind applications.

Gearing sales totaled $11.6 million in the fourth quarter of 2013, compared to
$14.3 million in the fourth quarter of 2012. The decrease was due primarily to
lower sales to industrial, mining and steel customers, partly offset by higher
sales for replacement wind gearing and oil and gas customers. Non-GAAP
adjusted EBITDA for the fourth quarter of 2013 was a loss of $1.2 million,
compared to non-GAAP adjusted EBITDA of $1.0 million in the prior-year fourth
quarter. The decrease was due to lower volumes and margins and adverse
manufacturing variances in the current-year period. Gearing segment operating
loss for the fourth quarter of 2013 was $5.6 million, compared to an operating
loss of $2.2 million in the prior-year fourth quarter. The deterioration was
due in part to an additional $2.0 million of restructuring expense associated
with the plant consolidation project that is nearly complete as well as the
unfavorable factors described above, partly offset by lower non-cash charges
in the current-year period.

Gearing sales for 2013 totaled $43.2 million, down 22% from $55.7 million in
2012. The decrease was attributable to manufacturing delays associated with
the plant consolidation and the production of a new line of industrial
gearboxes as well as weak demand from mining and oil and gas customers.
Non-GAAP adjusted EBITDA for 2013 was a loss of $3.6 million compared to
non-GAAP adjusted EBITDA of $5.0 million in 2012. The decrease was due in part
to lower volumes and margins as well as a charge of $1.5 million in 2013
related to the resolution of a long-standing environmental investigation.
Gearing segment operating loss for 2013 totaled $17.9 million, compared to an
operating loss of $7.6 million in 2012. The 2013 operating loss included an
additional $3.3 million of restructuring expense associated with the nearly
complete plant consolidation, partly offset by lower non-cash charges, as well
as the unfavorable 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 $2.0 million in the fourth quarter of
2013, compared to $6.1 million in the fourth quarter of 2012. The 67% decrease
was related to lower industrial drivetrain assembly work compared to the
prior-year fourth quarter and depressed field service activity during a period
of extremely low wind turbine installations across the United States. Non-GAAP
adjusted EBITDA loss totaled $1.1 million in the fourth quarter of 2013,
compared to near break-even in the fourth quarter of 2012. The decrease was
due primarily to lower volume and margins and higher inventory charges, partly
offset by lower salary expense and other SG&A cost savings. The Services
operating loss increased in the fourth quarter of 2013 to $1.5 million,
compared to a loss of $.9 million in the fourth quarter of 2012, reflecting
the factors described above, partly offset by lower depreciation and
restructuring expenses.

Services sales for 2013 totaled $17.2 million, compared to $22.1 million for
2012. The 22% decrease was due to depressed field service activity as a result
of an extremely low volume of wind turbine installations across the U.S.,
partly offset by higher industrial drivetrain assembly revenue in the first
half of 2013. Non-GAAP adjusted EBITDA losses totaled $2.6 million in 2013,
compared to $1.4 million in 2012. The deterioration was due primarily to lower
volumes and margins and higher inventory charges, somewhat offset by lower
salary expense and other SG&A cost savings as well as higher industrial
margins in the first half of 2013. Operating loss for 2013 totaled $4.7
million, compared to a loss of $4.2 million in 2012 due to the factors
described above, partly offset by lower non-cash expenses.

Corporate and Other

Corporate and other expenses totaled $2.7 million in the fourth quarter of
2013, compared to $2.0 million in the fourth quarter of 2012. The increase was
due primarily to severance expense, and higher professional fees incurred in
the fourth quarter of 2013.

Corporate and other expenses totaled $10.1 million for 2013 compared to $8.3
million for 2012. The 23% increase was primarily due to increased employee
compensation expense as well as the factors described above.

Company-wide restructuring capital and expense totaled $5.6 million for 2013,
net of the $3.6 million gain on the sale of the idle tower facility in the
second quarter of 2013. The project was 88% complete as of December 31, 2013.

The future income tax benefits associated with the 2013 loss were offset by an
increase in the valuation allowance; therefore the effective federal tax rate
is zero. As of year-end, cumulative federal net operating loss carry-forwards
totaled $167 million.

Cash and Liquidity

During the quarter, operating working capital (accounts receivables and
inventory, net of accounts payable and customer deposits) increased $.3
million to $5.3 million or 2% of annualized fourth-quarter 2013 sales.

Cash assets rose to $26.2 million at December 31, 2013, an increase of $2.1
million from September 30, 2013. At December 31, 2013, 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 nearly 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 includes various forward-looking statements related to future,
not past, events. 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)
(UNAUDITED)

                                                        As of December 31,
                                                        2013       2012
ASSETS                                                             
CURRENT ASSETS:                                                    
Cash and cash equivalents                                $24,936  $516
Short-term investments                                   1,143     --
Restricted cash                                          83        330
Accounts receivable, net                                 18,735    20,039
Inventories, net                                         37,143    21,988
Prepaid expenses and other current assets                2,325     3,836
Assets held for sale                                     1,970     8,042
Total current assets                                     86,335    54,751
LONG-TERM ASSETS:                                                  
Property and equipment, net                              69,077    79,889
Intangible assets, net                                   5,903     7,454
Other assets                                             2,379     816
TOTAL ASSETS                                             $163,694 $142,910
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                               
CURRENT LIABILITIES:                                               
Lines of credit and notes payable                        $--     $955
Current maturities of long-term debt                     201       352
Current portions of capital lease obligations            933       2,217
Accounts payable                                         27,537    16,377
Accrued liabilities                                     8,115     6,012
Customer deposits                                        22,993    4,063
Liabilities held for sale                                749       3,860
Total current liabilities                                60,528    33,836
                                                                  
LONG-TERM LIABILITIES:                                             
Long-term debt, net of current maturities                2,755     2,956
Long-term capital lease obligations, net of current      1,193     641
portions
Other                                                    3,888     2,169
Total long-term liabilities                              7,836     5,766
                                                                  
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; 14,627,990 and 14,197,792 shares issued and  15        14
outstanding as of December 31, 2013 and 2012,
respectively
Additional paid-in capital                               376,125   373,605
Accumulated deficit                                      (280,810) (270,311)
Total stockholders' equity                               95,330    103,308
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $163,694 $142,910


BROADWIND ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

                     Three Months Ended December For the Years Ended December
                      31,                         31,
                     2013          2012          2013           2012
                                                             
                                                             
Revenues              $56,397     $44,908     $215,710     $210,707
Cost of sales         52,012       44,102       198,379       202,257
Restructuring         2,229        576          4,986         1,614
Gross profit          2,156        230          12,345        6,836
                                                             
OPERATING EXPENSES:                                           
Selling, general and  5,693        4,976        21,414        21,634
administrative
Intangible            111          665          1,552         1,759
amortization
Regulatory settlement --          --          1,500         --
Restructuring         302          259          1,089         740
Total operating       6,106        5,900        25,555        24,133
expenses
Operating loss        (3,950)      (5,670)      (13,210)      (17,297)
                                                             
OTHER INCOME                                                  
(EXPENSE), NET:
Interest expense, net (190)        (658)        (985)         (1,711)
Other income, net     489          513          1,000         1,271
Gain (loss) on sale
of assets and         (87)         (58)         2,878         (144)
restructuring
Total other (expense) 212          (203)        2,893         (584)
income, net
                                                             
Net loss from
continuing operations
before (benefit)      (3,738)      (5,873)      (10,317)      (17,881)
provision for income
taxes
(Benefit) provision   8            5            72            26
for income taxes
LOSS FROM CONTINUING  (3,746)      (5,878)      (10,389)      (17,907)
OPERATIONS
LOSS FROM
DISCONTINUED          --          --          (110)         --
OPERATIONS, NET OF
TAX
NET LOSS              $(3,746)    $(5,878)    $(10,499)    $(17,907)
                                                             
NET LOSS PER COMMON
SHARE - BASIC AND                                             
DILUTED:
Loss from continuing  $(0.26)     $(0.41)     $(0.72)      $(1.27)
operations
Loss from
discontinued          --          --          (0.01)        --
operations
Net Loss              $(0.26)     $(0.41)     $(0.73)      $(1.27)
                                                             
WEIGHTED AVERAGE
COMMON SHARES         14,605       14,166       14,457        14,058
OUTSTANDING - Basic
and diluted


BROADWIND ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

                                             For the Years Ended December 31,
                                             2013             2012
                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                         
Net loss                                      $(10,499)      $(17,907)
Loss from discontinued operations             110             --
Loss from continuing operations               (10,389)        (17,907)
                                                             
Adjustments to reconcile net cash used in                     
operating activities:
Depreciation and amortization expense         14,856          16,537
Impairment charges                            2,365           --
Stock-based compensation                      1,821           2,833
(Recovery of) allowance for doubtful accounts (436)           15
Common stock issued under defined             681             523
contribution 401(k) plan
(Gain) loss on disposal of assets             (3,503)         548
Changes in operating assets and liabilities:                  
Accounts receivable                           1,808           5,257
Inventories                                   (15,155)        1,367
Prepaid expenses and other current assets     1,411           519
Accounts payable                              11,671          (1,165)
Accrued liabilities                           2,208           170
Customer deposits                             18,930          (13,256)
Other non-current assets and liabilities      (14)            1,677
Net cash provided by (used in) operating      26,254          (2,882)
activities of continued operations
                                                             
CASH FLOWS FROM INVESTING ACTIVITIES:                         
Proceeds from the sale of logistics business  250             375
and related note receivable
Purchases of available for sale securities    (2,116)         --
Maturities of available for sale securities   973             --
Purchases of property and equipment           (6,950)         (5,738)
Proceeds from disposals of property and       13,249          113
equipment
Decrease (increase) in restricted cash        248             546
Net cash provided by (used in) investing      5,654           (4,704)
activities of continued operations
                                                             
CASH FLOWS FROM FINANCING ACTIVITIES:                         
Net proceeds from issuance of stock           18              --
Payments on lines of credit and notes payable (80,376)        (78,785)
Payments on related party notes payable       --             (2,791)
Proceeds from lines of credit and notes       75,208          77,620
payable
Payments for debt issuance costs              --             (638)
Principal payments on capital leases          (2,338)         (644)
Net cash (used in) provided by financing      (7,488)         (5,238)
activities of continued operations
                                                             
DISCONTINUED OPERATIONS:                                      
Operating cash flows                          --             --
Investing cash flows                          --             --
Financing cash flows                          --             --
Net cash used in discontinued operations      --             --
                                                             
Add: Cash balance of discontinued operations, --             --
beginning of period
                                                             
NET INCREASE (DECREASE) IN CASH AND CASH      24,420          (12,824)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, beginning of the   516             13,340
year
CASH AND CASH EQUIVALENTS, end of the year    $24,936        $516
                                                             
Supplemental cash flow information:                           
Interest paid                                 $789           $1,503
Income taxes paid                             $22            $26
Non-cash investing and financing activities:                  
Issuance of restricted stock grants           $1,328         $1,815
Equipment addition via capital lease          $1,485         $--


BROADWIND ENERGY, INC. AND SUBSIDIARIES
SELECTED SEGMENT FINANCIAL INFORMATION
(IN THOUSANDS)

                     Three Months Ended December Twelve Months Ended December
                      31,                         31,
                     2013          2012          2013           2012
REVENUES:             (unaudited)                 (unaudited)
Towers and Weldments  $43,433     $25,634     $159,478     $135,221
Gearing               11,597       14,308       43,150        55,660
Services              1,991        6,069        17,244        22,106
Corporate and Other   (624)        (1,103)      (4,162)       (2,280)
Total revenues        $56,397     $44,908     $215,710     $210,707
                                                             
OPERATING (LOSS)                                              
PROFIT:
Towers and Weldments  $5,771      $(540)      $19,550      $2,766
Gearing               (5,588)      (2,236)      (17,915)      (7,626)
Services              (1,483)      (854)        (4,721)       (4,185)
Corporate and Other   (2,650)      (2,040)      (10,124)      (8,252)
Total operating loss  $(3,950)    $(5,670)    $(13,210)    $(17,297)


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 and twelve months ended December 31, 2013 and
2012. 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          Twelve Months Ended
                    December 31,                December 31,
                    2013          2012          2013           2012
                    (unaudited)                 (unaudited)
Operating loss       $(3,950)    $(5,670)    $(13,210)    $(17,297)
Depreciation and     3,136        4,088        13,962        15,678
amortization
Share-based
compensation and     548          886          2,519         3,505
other stock payments
Other income         489          513          1,000         1,271
Restructuring        2,531        835          6,075         2,354
Adjusted EBITDA      $2,754      $652        $10,346      $5,511


Towers and Weldments Segment   Three Months Ended December Twelve Months Ended
                               31,                         December 31,
                              2013          2012          2013       2012
                              (unaudited)                 (unaudited)
                                                         
Operating Profit               $5,771      $(540)      $19,550  $2,766
Depreciation                   1,031        954          3,872     3,676
Share-based compensation and   112          145          464       720
other stock payments
Other Income                   487          463          753       992
Restructuring Expense          11           130          176       130
Total Adjusted EBITDA          $7,412      $1,152      $24,815  $8,284
(Non-GAAP)


                     Three Months Ended December Twelve Months Ended December
                      31,                         31,
Gearing Segment       2013          2012          2013           2012
                     (unaudited)                 (unaudited)
Operating Loss        $(5,588)    $(2,236)    $(17,915)    $(7,626)
Depreciation          1,648        1,893        7,089         8,378
Amortization          111          665          1,552         1,759
Share-based
compensation and      136          147          469           602
other stock payments
Other Income          10           (1)          4             16
(Expense)
Restructuring Expense 2,520        548          5,203         1,910
Total Adjusted EBITDA $(1,163)    $1,016      $(3,598)     $5,039
(Non-GAAP)


Services Segment              Three Months Ended  Twelve Months Ended December
                              December 31,        31,
                             2013       2012     2013           2012
                             (unaudited)         (unaudited)
Operating Loss                $(1,483) $(854) $(4,721)     $(4,185)
Depreciation                  333       563     1,398         1,800
Share-based compensation and  52        65      279           405
other stock payments
Other Income (Expense)        (8)       58      243           267
Restructuring Expense         --       119     234           265
Total Adjusted EBITDA         $(1,106) $(49)  $(2,567)     $(1,448)
(Non-GAAP)


Corporate and Other   Three Months Ended December Twelve Months Ended December
                      31,                         31,
                     2013          2012          2013           2012
                     (unaudited)                 (unaudited)
Operating Loss        $(2,650)    $(2,040)    $(10,124)    $(8,252)
Depreciation          13           13           51            65
Share-based
compensation and      248          529          1,307         1,778
other stock payments
Other Income          --          (7)          --           (4)
(Expense)
Restructuring Expense --          38           462           49
Total Adjusted EBITDA $(2,389)    $(1,467)    $(8,304)     $(6,364)
(Non-GAAP)


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

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