Broadwind Energy (NASDAQ: BWEN) reported Q1 EPS of $0.06, $0.04 better than the analyst estimate of $0.02. Revenue for the quarter came in at $48.6 million versus the consensus estimate of $49.6 million.

1Q20 HIGHLIGHTS

• Total revenue of $48.6 million (+17% y/y)
• Total gross margin of 12.7% (+420 bps y/y)
• Total net income of $1.0 million, or $0.06 per basic share
• Total non-GAAP adjusted EBITDA of $3.6 million (+$1.9 million y/y)
• Total orders of $33.8 million (+41% y/y)
• Total backlog of $127.4 million (+57% y/y)
• Total cash and availability of $19.0 million (+$11.5 million y/y)

MANAGEMENT COMMENTARY

“Our first quarter results reflect significant year-over-year growth in both revenue and margin capture, resulting in a return to profitability in the period,” stated Eric Blashford, CEO of Broadwind. “Due to our ongoing customer diversification efforts, our order book improved materially across each of our reporting segments during the first quarter, while total backlog increased by more than 50% on a year-over-year basis, given increased demand for our wind tower, gearing and industrial fabrication product lines. We are pleased with our growth in industrial fabrication orders, which booked $8.5 million of orders during the quarter. In recent weeks, we announced more than $24 million in new tower contracts, contributing to improved visibility in second half 2020 production.”

“We sold more than 300 wind tower sections in the first quarter, an increase of more than 65% compared to the prior-year period.” continued Blashford. “Improved plant utilization contributed to a significant expansion in segment operating margin the first quarter, when compared to the year-ago period. During March, we entered into a new supply relationship with a large global wind turbine manufacturer. With the addition of this customer, Broadwind expects to supply tower sections to three of the top four global wind tower OEMs in 2020 serving the U.S. market, positioning us as a key participant in the development of clean energy-producing infrastructure. Looking ahead, offshore wind remains an emerging growth opportunity for us, one where our precision manufacturing expertise and deep industry knowledge position us to capitalize on increased global investment in sustainable energy sources.”

“The Gearing Segment reported 74% year-over-year growth in orders during the first quarter, supported by increased demand from the wind, oil & gas and steel markets,” stated Blashford. “Several gearing customers pushed activity initially planned for the first quarter into the second half of 2020, given current oil and gas prices and uncertainty related to COVID-19, resulting in a year-over-year revenue decline in the period. We have taken actions to reduce costs in this business as we align our capabilities with the current demand environment.”

“Despite current strength in our tower order book and existing backlog, there remains significant uncertainty as to how the novel coronavirus may impact customer demand, our supply chain and our ability to maintain production in our plants in the coming months,” continued Blashford. “As a result, we have decided to withdraw our full year 2020 guidance due to the uncertainty in the current environment.”

FULL-YEAR 2020 MANAGEMENT OUTLOOK

• Withdrawing full-year 2020 guidance and assumptions due to potential impact from COVID-19
• Implementing measures to reduce operating expenses and discretionary capital expenditures

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