(Source: Business Wire)
Broadwind Energy (NASDAQ:BWEN) reported a third-quarter net loss of $4.9
million or $.05 per basic and diluted share on revenue of $59.5 million.
This compares with a loss of $0.08 per share on revenue of $63.7 million
in the third quarter of 2008. The revenue decline is primarily the
result of lower shipments of wind turbine gearing systems. Partly
offsetting were increased sales of wind turbine structural towers, due
to a capacity expansion during the first quarter of 2009.
The reduction in the net loss reflected lower operating expenses in the
2009 quarter. Both the Products and Services segments reported reduced
operating losses versus the prior year period.
The Company generated EBITDA (earnings before interest, taxes,
depreciation, amortization and stock-based compensation) of $3.0 million
for the third-quarter 2009 compared to -$0.2 million in the third
quarter of 2008. (For a summary of financial results and an explanation
and reconciliation of EBITDA to net loss, please see the table below.)
Net cash provided by operating activities totaled $2.9 million, compared
with net cash used in operating activities of $5.8 million in the third
quarter of 2008. The improvement was primarily the result of a decrease
in inventory balances and higher collections of accounts receivable.
Revenue for the nine months ended September 30, 2009 totaled $164.9
million, up 18 percent from $139.7 million in the prior year to date
period. The increase reflects the impact of the wind turbine structural
tower capacity expansion and the full-year impact of 2008 acquisitions
in the Services segment, partly offset by reduced wind turbine gearing
shipments. The nine month 2009 net loss totaled $17.5 million or $.18
per basic and diluted share, versus $12.9 million or $.15 per share in
the first nine months of 2008. The higher loss reflected the additional
depreciation and overhead expense associated with capacity expansions
initiated in 2008 prior to the slowdown in the wind energy market,
underabsorption of overhead in our gearing facilities due to reductions
in orders from large wind energy customers in response to the industry
contraction, and manufacturing inefficiencies experienced earlier in the
year at the time of commissioning of the new wind turbine structural
tower plant in Abilene, TX. Partly offsetting was the favorable effect
of a one-time $5 million gain associated with the settlement of a
post-closing escrow relating to a previous acquisition.
For the nine months of 2009, the Company generated EBITDA of $6.1
million, down slightly from $7.3 million in the prior year, due to the
higher operating loss.
"Since late 2008, we have been significantly impacted by a slowdown in
our industry caused by reduced capital availability to fund new wind
farm developments," said Broadwind CEO J. Cameron Drecoll. "We have
reacted accordingly, focusing on managing our expenses, improving our
operations and preserving our liquidity. We are seeing early signs that
capital is again flowing into wind energy project developments, and are
well-positioned to take advantage of a recovery in 2010 and beyond."
Segment Results
Products
Broadwind's Products segment includes precision gearing systems and
structural towers for wind turbines, and gears, fabrications and
weldments for industrial customers.
Revenue from the Products segment was $47.9 million in the third quarter
of 2009, compared with $51.0 million in third-quarter of 2008. The
decrease in revenues was primarily the result of a reduced demand for
wind turbine gearing, partly offset by higher shipments of structural
wind industry towers, with a higher material content. The segment
incurred a $0.7 million operating loss in the third quarter of 2009,
versus a $1.0 million operating loss in the third quarter of 2008.
For the nine-month period, revenue rose from $115.3 million in 2008 to
$130.9 million in 2009 due to the start-up of a new structural wind
tower production facility in Abilene, TX early in 2009, which more than
offset lower demand for wind turbine gearing. The operating loss was
$10.2 million for the nine month of 2009 versus a $2.0 million operating
profit in the prior year. The significant earnings reduction was mainly
due to lower gearing production.
Services
Broadwind's Services segment provides technical service, precision
repair and engineering, and logistics for wind energy customers.
Revenue from the Services segment was $11.8 million in the third quarter
of 2009, compared with $13.5 million in third-quarter 2008. The decrease
was the result of a decline in maintenance and repair contracts
completed during the current quarter and reduced logistics activities
due to the completion of key service contracts earlier in the year.
Operating income was break even in 2009, versus a $0.4 million loss in
the prior year, due principally to reduced operating expenses.
For the nine-month period, revenue rose 37 percent to $34.5 million from
$25.2 million in the prior year. The increase reflects the full-year
effect of acquisitions made during 2008. The segment incurred an $0.8
million operating loss for the first nine months of 2009 versus a $1.1
million loss in the prior year period. The improvement reflected the
revenue growth and lower operating expenses, which were partly offset by
lower gross margins, attributable to an unfavorable sales mix and lower
utilization of the haulage fleet.
Other
At September 30, 2009 the Company had total debt outstanding of $37.7
million, down from $38.8 million at December 31, 2008.
Reconciliation of GAAP Net Loss to Adjusted EBITDA (Unaudited)
The Company has provided the following table, which reconciles net loss,
as reported, to EBITDA. The Company utilizes EBITDA as a key financial
metric and believes it represents the Company's cash generation, which
it can use to make acquisitions, invest in operations and facilities,
return to shareholders, and for other uses. EBITDA, which is a non-GAAP
financial measure, should not be considered an alternative to, or more
meaningful than, net income prepared on a GAAP basis. Additionally,
EBITDA as computed by the Company may not be comparable to similar
metrics used by others in the industry.
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net loss $ (4,944 ) $ (7,499 ) $ (17,520 ) $ (12,915 )
(Benefit) provision for income taxes (116 ) 1,210 (389 ) 1,410
Interest expense (income), net 732 (90 ) 1,831 1,921
Depreciation and amortization 6,698 5,908 20,131 15,706
Share-based compensation 677 225 2,042 1,128
EBITDA $ 3,047 $ (246 ) $ 6,095 $ 7,250
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About Broadwind Energy, Inc.
Naperville, Illinois-based Broadwind Energy, Inc. (NASDAQ: BWEN) is the
leading independent, horizontally integrated supplier of specialized
products and services focused on the North American wind industry.
Broadwind's products and services include: precision gearing systems and
structural towers for wind turbines; gears, fabrications and weldments
for industrial customers; and technical services, precision repair and
engineering, and logistics for wind energy customers. www.broadwindenergy.com
Forward-Looking Statements”This news release includes
"forward-looking statements" within the meaning of the safe harbor
provisions of the United States Private Securities Litigation Reform Act
of 1995 ” that is, statements related to future, not past, events.
Forward-looking statements are based on current expectations and include
any statement that does not directly relate to a current or historical
fact.
