FOURTH QUARTER 2023 RESULTS
(As compared to the fourth quarter 2022)
- Total revenue of
$46.6 million , +16.3% y/y - Total gross profit of
$7.0 million ,+$4.5 million y/y - Net income of
$1.1 million , or$0.05 per diluted share - Total non-GAAP adjusted EBITDA of
$4.4 million ,+$4.3 million y/y - Total tower sections sold +37.5% y/y to 132 sections
- Ratio of net debt to trailing twelve-month non-GAAP adjusted EBITDA of 0.8x as of
December 31, 2023
FULL-YEAR 2023 RESULTS
(As compared to the full-year 2022)
- Total revenue of
$203.5 million , +15.1% y/y - Total gross profit of
$32.5 million , +203.5% y/y - Net income of
$7.6 million , or$0.36 per diluted share - Total non-GAAP adjusted EBITDA of
$21.5 million ,+$19.0 million y/y
For the three months ended
Fourth quarter results benefited from a combination of broad-based demand growth within both the Heavy Fabrications and Industrial Solutions segments, continued price discipline, and operational rigor, culminating in improved operating leverage and profitability, when compared to the year-ago period. Fourth quarter results reflect the positive impact of increased tower utilization and benefits derived from advanced manufacturing production credits associated with the Inflation Reduction Act (“IRA”). Total gross margin increased more than 870 basis points on a year-over-year basis to 15.1%, while non-GAAP adjusted EBITDA margin increased more than 900 basis points to 9.5% in the fourth quarter 2023.
Fourth quarter orders increased 27% on a sequential basis, as compared to the third quarter 2023, but declined as compared to the near-record order levels achieved in the prior-year period that was attributable to a large tower order with a global wind turbine manufacturer. Total backlog was
As of
MANAGEMENT COMMENTARY
“Broadwind delivered strong full-year results highlighted by record margin realization, net income and adjusted EBITDA,” stated
“During the fourth quarter, our revenue, operating income and profitability all increased meaningfully above prior-year levels, driven by a combination of increased sales of tower sections, together with solid demand across our diverse markets,” continued Blashford. “While orders and backlog declined from near-record levels in the prior year period, order rates increased on a sequential basis across all three reporting segments.”
“Domestic onshore wind development activity is expected to gradually accelerate beginning in the second half of 2024,” noted Blashford. “Even still, a higher interest rate environment and raw materials inflation have impacted project economics for some developers, leading them to temporarily delay or defer the timing of their investments. In the interim, we have aligned our cost structure to reflect a period of lower production volumes at our tower facilities, while repurposing capacity toward non-wind demand across our diverse end markets. We remain highly constructive on the long-term economics of wind, particularly with the decade-long tax credit visibility afforded by the IRA, of which
“At year-end 2023, we had
“Today, we introduced financial guidance for the first quarter 2024,” concluded Blashford. “Further to our expectations around the pace of wind-related tower demand, we anticipate our full-year performance will be weighted toward the second half of 2024, given discussions with our customers. As demand conditions accelerate, we remain well-positioned to drive improved operating leverage, while positioning the Company to further capitalize on 45x tax credit provided for within the IRA.”
SEGMENT RESULTS
Heavy Fabrications Segment
Heavy Fabrications segment sales increased by 24.4% to
Gearing Segment
Gearing segment sales declined by 5.4% to
Industrial Solutions Segment
Industrial Solutions segment sales increased 29.4% to
FINANCIAL GUIDANCE
Today,
First Quarter 2024 | ||||||
$ in Millions | Low | Mid | High | |||
Total Revenue | ||||||
Adjusted EBITDA |
FOURTH QUARTER AND FULL-YEAR 2023 RESULTS CONFERENCE CALL
A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the Company’s corporate website at https://investors.bwen.com/investors. 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:
Live Teleconference: 877-407-9716
To listen to a replay of the teleconference, which will be available through
Teleconference Replay: 844-512-2921
Conference ID: 13743770
ABOUT
NON-GAAP FINANCIAL MEASURES
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, proxy contest-related expenses 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.
FORWARD-LOOKING STATEMENTS
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, (the “Exchange Act”), 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. 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. Forward-looking statements include any statement that does not directly relate to a current or historical fact. Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following: (i) our expectations and beliefs with respect to our financial guidance as set forth in this release; (ii) the impact of global health concerns on the economies and financial markets and the demand for our products; (iii) 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, including the advanced manufacturing tax credits (which remain subject to further technical guidance and regulations), and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA) | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 1,099 | $ | 12,732 | ||||
Accounts receivable, net | 19,231 | 17,018 | ||||||
AMP credit receivable | 7,051 | - | ||||||
Contract assets | 1,460 | 1,955 | ||||||
Inventories | 37,405 | 44,262 | ||||||
Prepaid expenses and other current assets | 3,500 | 3,291 | ||||||
Total current assets | 69,746 | 79,258 | ||||||
LONG-TERM ASSETS: | ||||||||
Property and equipment, net | 47,123 | 45,319 | ||||||
Operating lease right-of-use assets, net | 15,593 | 16,396 | ||||||
Intangible assets, net | 2,064 | 2,728 | ||||||
Other assets | 630 | 839 | ||||||
TOTAL ASSETS | $ | 135,156 | $ | 144,540 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Line of credit and current maturities of long-term debt | $ | 5,903 | $ | 1,170 | ||||
Current portion of finance lease obligations | 2,153 | 2,008 | ||||||
Current portion of operating lease obligations | 1,851 | 1,882 | ||||||
Accounts payable | 20,728 | 26,255 | ||||||
Accrued liabilities | 6,477 | 4,313 | ||||||
Customer deposits | 16,500 | 34,550 | ||||||
Total current liabilities | 53,612 | 70,178 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Long-term debt, net of current maturities | 6,250 | 7,141 | ||||||
Long-term finance lease obligations, net of current portion | 3,372 | 4,226 | ||||||
Long-term operating lease obligations, net of current portion | 15,888 | 16,696 | ||||||
Other | 15 | 26 | ||||||
Total long-term liabilities | 25,525 | 28,089 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY: | ||||||||
Preferred stock, | - | - | ||||||
Common stock, | 22 | 21 | ||||||
(1,842 | ) | (1,842 | ) | |||||
Additional paid-in capital | 399,336 | 397,240 | ||||||
Accumulated deficit | (341,497 | ) | (349,146 | ) | ||||
Total stockholders' equity | 56,019 | 46,273 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 135,156 | $ | 144,540 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues | $ | 46,598 | $ | 40,060 | $ | 203,477 | $ | 176,759 | ||||||||
Cost of sales | 39,566 | 37,504 | 170,969 | 166,049 | ||||||||||||
Gross profit | 7,032 | 2,556 | 32,508 | 10,710 | ||||||||||||
OPERATING EXPENSES: | ||||||||||||||||
Selling, general and administrative | 4,592 | 4,483 | 20,705 | 16,592 | ||||||||||||
Intangible amortization | 166 | 175 | 664 | 725 | ||||||||||||
Total operating expenses | 4,758 | 4,658 | 21,369 | 17,317 | ||||||||||||
Operating income (loss) | 2,274 | (2,102 | ) | 11,139 | (6,607 | ) | ||||||||||
OTHER EXPENSE, net: | ||||||||||||||||
Interest expense, net | (1,030 | ) | (863 | ) | (3,201 | ) | (3,218 | ) | ||||||||
Other, net | (11 | ) | 113 | (48 | ) | 130 | ||||||||||
Total other expense, net | (1,041 | ) | (750 | ) | (3,249 | ) | (3,088 | ) | ||||||||
Net income (loss) before provision for income taxes | 1,233 | (2,852 | ) | 7,890 | (9,695 | ) | ||||||||||
Provision (benefit) for income taxes | 162 | (1 | ) | 241 | 35 | |||||||||||
NET INCOME (LOSS) | $ | 1,071 | $ | (2,851 | ) | $ | 7,649 | $ | (9,730 | ) | ||||||
NET INCOME (LOSS) PER COMMON SHARE - BASIC: | ||||||||||||||||
Net income (loss) | $ | 0.05 | $ | (0.14 | ) | $ | 0.36 | $ | (0.48 | ) | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC | 21,449 | 20,723 | 21,189 | 20,299 | ||||||||||||
NET INCOME (LOSS) PER COMMON SHARE - DILUTED: | ||||||||||||||||
Net income (loss) | $ | 0.05 | $ | (0.14 | ) | $ | 0.36 | $ | (0.48 | ) | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED | 21,633 | 20,723 | 21,491 | 20,299 | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED) | ||||||
Twelve Months Ended | ||||||
2023 | 2022 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income (loss) | $ | 7,649 | $ | (9,730 | ) | |
Adjustments to reconcile net cash (used in) provided by operating activities: | ||||||
Depreciation and amortization expense | 6,383 | 6,060 | ||||
Deferred income taxes | (10 | ) | (13 | ) | ||
Change in fair value of interest rate swap agreements | - | (27 | ) | |||
Share-based compensation | 877 | 944 | ||||
Allowance for doubtful accounts | 82 | (30 | ) | |||
Common stock issued under defined contribution 401(k) plan | 1,336 | 1,244 | ||||
Loss on disposal of assets | 42 | 3 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (2,295 | ) | (3,186 | ) | ||
AMP credit receivable | (7,051 | ) | - | |||
Employee retention credit receivable | - | 497 | ||||
Contract assets | 495 | (820 | ) | |||
Inventories | 6,857 | (10,885 | ) | |||
Prepaid expenses and other current assets | (210 | ) | (629 | ) | ||
Accounts payable | (6,008 | ) | 9,926 | |||
Accrued liabilities | 2,782 | 686 | ||||
Customer deposits | (18,050 | ) | 22,468 | |||
Other non-current assets and liabilities | 175 | 135 | ||||
Net cash (used in) provided by operating activities | (6,946 | ) | 16,643 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Purchases of property and equipment | (6,405 | ) | (3,098 | ) | ||
Proceeds from disposals of property and equipment | 21 | - | ||||
Net cash used in investing activities | (6,384 | ) | (3,098 | ) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Proceeds from (payments on) from line of credit, net | 4,705 | (6,368 | ) | |||
Payments for deferred financing costs | (48 | ) | (452 | ) | ||
Proceeds from long-term debt | 1,056 | 8,113 | ||||
Payments on long-term debt | (1,872 | ) | (863 | ) | ||
Principal payments on finance leases | (1,409 | ) | (1,776 | ) | ||
Shares withheld for taxes in connection with issuance of restricted stock | (735 | ) | (549 | ) | ||
Proceeds from sale of common stock, net | - | 230 | ||||
Net cash provided by (used in) financing activities | 1,697 | (1,665 | ) | |||
- | ||||||
NET (DECREASE) INCREASE IN CASH | (11,633 | ) | 11,880 | |||
CASH beginning of the period | 12,732 | 852 | ||||
CASH end of the period | $ | 1,099 | $ | 12,732 | ||
Supplemental cash flow information: | ||||||
Interest paid | $ | 2,073 | $ | 1,638 | ||
Income taxes paid | $ | 17 | $ | 23 | ||
Non-cash investing and financing activities: | ||||||
Equipment additions via finance lease | $ | 719 | $ | 3,882 | ||
Non-cash purchases of property and equipment | $ | 482 | $ | 134 | ||
Settlement of incentive compensation liability with stock | $ | 619 | $ | - | ||
SELECTED SEGMENT FINANCIAL INFORMATION (IN THOUSANDS) (UNAUDITED) | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
ORDERS: | |||||||||||||||||
Heavy Fabrications | $ | 9,985 | $ | 184,075 | $ | 50,594 | $ | 294,097 | |||||||||
Gearing | 3,603 | 15,071 | 24,814 | 53,597 | |||||||||||||
Industrial Solutions | 6,619 | 5,685 | 25,652 | 20,333 | |||||||||||||
Total orders | $ | 20,207 | $ | 204,831 | $ | 101,060 | $ | 368,027 | |||||||||
REVENUES: | |||||||||||||||||
Heavy Fabrications | $ | 29,503 | $ | 23,720 | $ | 133,368 | $ | 117,206 | |||||||||
Gearing | 11,061 | 11,697 | 45,408 | 42,588 | |||||||||||||
Industrial Solutions | 6,035 | 4,663 | 25,159 | 17,804 | |||||||||||||
Corporate and Other | (1 | ) | (20 | ) | (458 | ) | (839 | ) | |||||||||
Total revenues | $ | 46,598 | $ | 40,060 | $ | 203,477 | $ | 176,759 | |||||||||
OPERATING PROFIT/(LOSS): | |||||||||||||||||
Heavy Fabrications | $ | 2,554 | $ | (1,032 | ) | $ | 15,006 | $ | (1,044 | ) | |||||||
Gearing | 654 | 116 | 1,846 | 43 | |||||||||||||
Industrial Solutions | 848 | 487 | 3,160 | 120 | |||||||||||||
Corporate and Other | (1,782 | ) | (1,673 | ) | (8,873 | ) | (5,726 | ) | |||||||||
Total operating profit (loss) | $ | 2,274 | $ | (2,102 | ) | $ | 11,139 | $ | (6,607 | ) | |||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (IN THOUSANDS) (UNAUDITED) | |||||||||||||
Consolidated | Three Months Ended | Twelve Months Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Net Income (Loss) | $ | 1,072 | $ | (2,851 | ) | $ | 7,649 | $ | (9,730 | ) | |||
Interest Expense | 1,031 | 863 | 3,201 | 3,218 | |||||||||
Income Tax Provision (Benefit) | 162 | (1 | ) | 241 | 35 | ||||||||
Depreciation and Amortization | 1,611 | 1,478 | 6,383 | 6,060 | |||||||||
Share-based Compensation and Other Stock Payments | 559 | 695 | 2,220 | 2,861 | |||||||||
Proxy Contest-Related Expenses | 1 | - | 1,780 | - | |||||||||
Adjusted EBITDA (Non-GAAP) | $ | 4,436 | $ | 184 | $ | 21,474 | $ | 2,444 | |||||
Heavy Fabrications Segment | Three Months Ended | Twelve Months Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Net Income (Loss) | $ | 1,696 | $ | (926 | ) | $ | 13,862 | $ | (1,935 | ) | |||
Interest Expense | 149 | 338 | 649 | 1,585 | |||||||||
Income Tax Provision (Benefit) | 711 | (330 | ) | 493 | (579 | ) | |||||||
Depreciation | 907 | 852 | 3,518 | 3,446 | |||||||||
Share-based Compensation and Other Stock Payments | 224 | 331 | 936 | 1,028 | |||||||||
Adjusted EBITDA (Non-GAAP) | $ | 3,687 | $ | 265 | $ | 19,458 | $ | 3,545 | |||||
Gearing Segment | Three Months Ended | Twelve Months Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Net Income (Loss) | $ | 585 | $ | (5 | ) | $ | 1,553 | $ | (190 | ) | |||
Interest Expense | 59 | 117 | 262 | 249 | |||||||||
Income Tax Provision | 9 | 4 | 32 | 7 | |||||||||
Depreciation and Amortization | 555 | 471 | 2,270 | 1,978 | |||||||||
Share-based Compensation and Other Stock Payments | 107 | 192 | 453 | 589 | |||||||||
Adjusted EBITDA (Non-GAAP) | $ | 1,315 | $ | 779 | $ | 4,570 | $ | 2,633 | |||||
Industrial Solutions Segment | Three Months Ended | Twelve Months Ended | |||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||
Net Income (Loss) | $ | 625 | $ | 410 | $ | 2,504 | $ | (130 | ) | ||||
Interest Expense | 151 | 74 | 512 | 221 | |||||||||
Income Tax Provision | 62 | 1 | 96 | 22 | |||||||||
Depreciation and Amortization | 99 | 98 | 380 | 397 | |||||||||
Share-based Compensation and Other Stock Payments | 48 | 112 | 196 | 295 | |||||||||
Adjusted EBITDA (Non-GAAP) | $ | 985 | $ | 695 | $ | 3,688 | $ | 805 | |||||
Corporate and Other | Three Months Ended | Twelve Months Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net Loss | $ | (1,834 | ) | $ | (2,330 | ) | $ | (10,270 | ) | $ | (7,475 | ) | |||
Interest Expense | 672 | 334 | 1,778 | 1,163 | |||||||||||
Income Tax (Benefit) Provision | (620 | ) | 324 | (380 | ) | 585 | |||||||||
Depreciation and Amortization | 50 | 57 | 215 | 239 | |||||||||||
Share-based Compensation and Other Stock Payments | 180 | 60 | 635 | 949 | |||||||||||
Proxy Contest-Related Expenses | 1 | - | 1,780 | - | |||||||||||
Adjusted EBITDA (Non-GAAP) | $ | (1,551 | ) | $ | (1,555 | ) | $ | (6,242 | ) | $ | (4,539 | ) | |||
IR CONTACTNoel Ryan , IRC BWEN@val-adv.com
Source:
2024 GlobeNewswire, Inc., source