8-K
BROADWIND, INC. (BWEN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-K
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 10, 2021
_______________________________
BROADWIND, INC.
(Exact name of registrant as specified in its charter)
_______________________________
| Delaware | 001-34278 | 88-0409160 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
3240 South Central Avenue
Cicero, Illinois 60804
(Address of Principal Executive Offices) (Zip Code)
(708) 780-4800
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
_______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.001 par value | BWEN | The NASDAQ Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 10, 2021, Broadwind, Inc. (the “Company”) issued a press release announcing its financial results as of and for the quarter ended September 30, 2021. The press release is incorporated herein by reference and is attached hereto as Exhibit 99.1.
The information contained in, or incorporated into, this Item 2.02 of this Current Report on Form 8-K (this “Report”), including Exhibit 99.1, is furnished under Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act regardless of any general incorporation language in such filings.
Please refer to Exhibit 99.1 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto.
Item 7.01. Regulation FD Disclosure. An Investor Presentation dated November 10, 2021 is incorporated herein by reference and attached hereto as Exhibit 99.2.
The information contained in, or incorporated into, this Item 7.01 of this Report, including Exhibit 99.2 attached hereto, is furnished under Item 7.01 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act regardless of any general incorporation language in such filings.
This Report shall not be deemed an admission as to the materiality of any information in this Report that is being disclosed pursuant to Regulation FD.
Please refer to Exhibit 99.2 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| EXHIBIT NUMBER | DESCRIPTION |
|---|---|
| 99.1 | Press Release dated November 10, 2021 |
| 99.2 | Investor Presentation dated November 10, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BROADWIND, INC. | ||
|---|---|---|
| Date: November 10, 2021 | By: | /s/ Eric B. Blashford |
| Eric B. Blashford | ||
| President, Chief Executive Officer<br>(Principal Executive Officer) |
EXHIBIT INDEX
| EXHIBIT NUMBER | DESCRIPTION |
|---|---|
| 99.1 | Press Release dated November 10, 2021 |
| 99.2 | Investor Presentation dated November 10, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
EdgarFiling EXHIBIT 99.1
Broadwind Announces Third Quarter 2021 Results
CICERO, Ill., Nov. 10, 2021 (GLOBE NEWSWIRE) -- Broadwind (NASDAQ: BWEN), a diversified precision manufacturer of specialized components and solutions serving global markets, today announced results for the third quarter 2021.
THIRD QUARTER 2021 RESULTS (As compared to the third quarter 2020)
- Total revenue of $40.4 million, down 26% year-over-year
- Total net loss of ($2.1) million, or ($0.11) per basic share
- Total non-GAAP adjusted EBITDA of $0.4 million
- Total cash and excess availability of $21.1 million
- Net leverage at 0.5x TTM non-GAAP adjusted EBITDA
For the three months ended September 30, 2021, Broadwind reported total revenue of $40.4 million, compared to $54.6 million in the prior-year period. The Company reported a net loss of ($2.1) million, or ($0.11) per basic share in the third quarter, compared to a net loss of ($1.0) million, or ($0.06) per basic share, in the prior-year period.
The Company reported adjusted EBITDA, a non-GAAP measure, of $0.4 million in the third quarter, compared to $1.3 million in the prior-year period. All three reporting segments generated positive adjusted EBITDA in the third quarter 2021.
Third quarter results were impacted by a 37% year-over-year decline in wind tower sections sold, as wind farm developers postponed investments ahead of a potential, multi-year extension of the Production Tax Credit (PTC). The timing of new domestic wind farm developments was further impacted by raw material cost inflation, particularly with respect to higher commodity steel prices, which increased materially on a year-over-year basis.
To date, Broadwind has sold approximately 30% of its full-year 2022 optimal tower production capacity. Broadwind expects to receive additional orders for 2022 production capacity over the coming months.
STRATEGY UPDATE
During the third quarter, the Company continued to advance a multi-year strategy to capitalize on favorable policy trends within the domestic wind energy market; further diversify consolidated revenues into complementary end-markets through both organic and inorganic investments; and maintain a disciplined capital structure positioned to support long-term growth.
Leverage precision manufacturing expertise across diverse end-markets. During the third quarter, the Company achieved year-over-year order growth across most non-wind end-markets served. Total non-wind orders increased $13.9 million in the third quarter to $24.5 million, as compared to the prior-year period. The Company continues to actively pursue new business development opportunities that align with its energy transition focus.
Pursue complementary, inorganic expansion within energy transition markets. Broadwind continues to actively evaluate bolt-on acquisitions that seek to leverage the Company’s existing manufacturing expertise and exposure to clean tech markets. The Company will continue to consider opportunities for accretive acquisitions of assets or businesses with high revenue and/or cost synergies, complementary product lines and a well-established, diverse customer base that further supports Broadwind’s long-term revenue diversification strategy as an energy transition company.
Disciplined capital management. The Company believes it has sufficient liquidity for the next twelve months to support ongoing operations, together with potential growth investments. Total cash and availability under its credit facility was $21.1 million as of September 30, 2021, compared to $21.8 million as of September 30, 2020. As of September 30, 2021, the ratio of net debt to trailing twelve-month non-GAAP adjusted EBITDA was .5x.
MANAGEMENT COMMENTARY
“Our third quarter results reflect a near-term pause in wind tower demand, offset by an acceleration in customer activity across our energy and industrial end-markets,” stated Eric Blashford, President and CEO of Broadwind. “As widely anticipated, developers have slowed investment in new wind capacity ahead of a proposed PTC extension. This dynamic, coupled with higher raw materials costs and well-documented global supply chain disruptions, have pushed current-year tower demand into 2022. Looking ahead, we anticipate a positive inflection in onshore tower demand beginning in late 2022 and into 2023, driven by incremental growth in onshore capacity additions.”
“Our Gearing segment delivered improved third quarter results, with revenue rising to its highest level in nearly two years,” continued Blashford. “Economic activity has accelerated meaningfully across many of our non-wind markets, as customers seek to capitalize on pent-up demand. Gearing segment orders more than tripled on a year-over-year basis in the third quarter, while backlog increased 75% on a year-over-year basis. Industrial fabrications product line orders reached near record levels in the third quarter, supported by further revenue diversification across key end markets.”
“Looking ahead, we remain focused on growing within energy transition markets that leverage our technical expertise and proven in-house manufacturing capabilities,” continued Blashford. “On an organic basis, this focus had led us to further penetrate underserved, higher-value end-markets well-suited to our unique value proposition, such as the CNG (compressed natural gas) virtual pipeline and large material handling equipment. On an inorganic basis, our focus remains on pursuing margin accretive opportunities that will bolster our presence within clean tech and renewables markets. As before, we will remain disciplined in our approach toward capital deployment, while seeking to maximize shareholder value.”
“For the fourth quarter 2021, we currently anticipate adjusted EBITDA loss in a range of ($1.0) to ($1.5) million, subject to market conditions,” noted Blashford. “We are excited by the prospects for growth as we look ahead toward 2022, supported by a recovery in our core onshore wind markets, together with sustained momentum across our non-wind verticals.”
ORDERS AND BACKLOG
Total orders increased 8% year-over-year to $42.6 million in the third quarter 2021, as Gearing segment order growth more than offset a year-over-year decline in Heavy Fabrications and Industrial Solutions orders. Gearing orders increased by 258% on a year-over-year basis as a result of increased demand across all non-wind end-markets, while Heavy Fabrications and Industrial Solutions orders declined by 15% and 9%, respectively, as compared to the prior-year period.
Total backlog declined 21% year-over-year to $76.5 million in the third quarter. As of September 30, 2021, Heavy Fabrications’ orders represented approximately 60% of the Company’s total backlog.
SEGMENT RESULTS
Heavy Fabrications Segment Broadwind provides large, complex and precision fabrications to customers in a broad range of industrial markets. Key products include wind towers and industrial fabrications, including mining and material handling components and other frames/structures.
Heavy Fabrications segment sales declined by $14.8 million to $28.7 million in the third quarter 2021, as compared to the prior year period. This decrease is primarily due to a 37% decline in tower sections sold. The decline in tower section sales was attributable to lower demand, primarily a result of a shift in the timing of customer projects. The segment reported an operating loss of ($0.4) million, versus operating income of $2.0 million in the prior-year period. Segment non-GAAP adjusted EBITDA was $1.0 million in the third quarter 2021, a decline of $2.0 million versus the third quarter 2020.
Gearing Segment Broadwind provides custom gearboxes, loose gearing and heat treat services to a broad set of customers in diverse markets, including oil & gas production, surface and underground mining, wind energy, steel, material handling and other infrastructure markets.
Gearing segment sales increased by $0.4 million to $7.6 million in the third quarter 2021, as compared to the year-ago period, primarily due to increased demand within the oil and gas and mining markets. The segment reported an operating loss of ($0.2) million in the third quarter 2021, compared to an operating loss of ($1.0) million in the prior-year period. The segment reported non-GAAP adjusted EBITDA of $0.5 million in the third quarter 2021, an increase of $1.0 million versus the third quarter 2020.
Industrial Solutions Segment Broadwind provides supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market as well as other clean technology markets.
Industrial Solutions segment sales increased $0.1 million to $4.2 million in the third quarter 2021, as compared to the year-ago period, primarily driven by higher demand within the natural gas turbine market. The segment reported an operating loss of ($0.1) million in the third quarter 2021 a decrease of $0.2 compared to the prior-year period. The segment reported $0.04 million of non-GAAP adjusted EBITDA in the third quarter 2021, a decline of $0.2 million versus the third quarter 2020.
THIRD QUARTER 2021 CONFERENCE CALL
Broadwind will issue third quarter 2021 results before the market opens on November 10, 2021. A conference call will be held that same day at 11:00 A.M. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session.
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:
| Domestic Live: | 1-877-407-9716 |
|---|---|
| International Live: | 1-201-493-6779 |
To listen to a replay of the teleconference, which will be available through November 17, 2021:
| Domestic Replay: | 1-844-512-2921 |
|---|---|
| International Replay: | 1-412-317-6671 |
| Conference ID: | 13723646 |
ABOUT BROADWIND
Broadwind (NASDAQ: BWEN) is a precision manufacturer of structures, equipment and components for clean tech and other specialized applications. With facilities throughout the U.S., our talented team is committed to helping customers maximize performance of their investments—quicker, easier and smarter. Find out more at www.bwen.com
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 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, 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. Forward looking statements include any statement that does not directly relate to a current or historical fact. 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.
Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following, many of which are, and will be, amplified by the COVID-19 pandemic, including as a result of emerging variants: (i) the impact of global health concerns, including the impact of the current COVID-19 pandemic on the economies and financial markets and the demand for our products; (ii) 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 and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into the United States; (iii) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units; (iv) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary, in light of the COVID-19 pandemic; (v) our ability to continue to grow our business organically and through acquisitions, and the impairment thereto by the impact of the COVID-19 pandemic; (vi) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows; (vii) information technology failures, network disruptions, cybersecurity attacks or breaches in data security, including with respect to any remote work arrangements implemented in response to the COVID-19 pandemic; (viii) the sufficiency of our liquidity and alternate sources of funding, if necessary; (ix) our ability to realize revenue from customer orders and backlog; (x) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow; (xi) the economy, including its stability in light of the COVID-19 pandemic, and the potential impact it may have on our business, including our customers; (xii) the state of the wind energy market and other energy and industrial markets generally and the impact of competition and economic volatility in those markets; (xiii) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (xiv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers; (xv) the effects of the change of administrations in the U.S. federal government; (xvi) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions; (xvii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended; (xviii) our ability to utilize various relief options enabled by the CARES Act; (xix) the limited trading market for our securities and the volatility of market price for our securities; and (xx) the impact of future sales of our common stock or securities convertible into our common stock on our stock price. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements including, but not limited to, those set forth under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020. We are under no duty to update any of these statements. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results.
BROADWIND, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
| December 31, | |||||
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| ASSETS | |||||
| CURRENT ASSETS: | |||||
| Cash | 2,335 | $ | 3,372 | ||
| Accounts receivable, net | 16,131 | 15,337 | |||
| Employee retention credit receivable | 503 | - | |||
| Contract assets | 1,491 | 2,253 | |||
| Inventories, net | 24,876 | 26,724 | |||
| Prepaid expenses and other current assets | 2,220 | 2,909 | |||
| Total current assets | 47,556 | 50,595 | |||
| LONG-TERM ASSETS: | |||||
| Property and equipment, net | 44,239 | 45,195 | |||
| Operating lease right-of-use assets | 18,462 | 19,321 | |||
| Intangible assets, net | 3,636 | 4,186 | |||
| Other assets | 585 | 385 | |||
| TOTAL ASSETS | 114,478 | $ | 119,682 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| CURRENT LIABILITIES: | |||||
| Line of credit and other notes payable | 5,445 | $ | 1,406 | ||
| Current portion of finance lease obligations | 1,886 | 1,427 | |||
| Current portion of operating lease obligations | 1,732 | 1,832 | |||
| Accounts payable | 13,773 | 18,180 | |||
| Accrued liabilities | 4,040 | 6,307 | |||
| Customer deposits | 7,680 | 18,819 | |||
| Total current liabilities | 34,556 | 47,971 | |||
| LONG-TERM LIABILITIES: | |||||
| Long-term debt, net of current maturities | 228 | 9,381 | |||
| Long-term finance lease obligations, net of current portion | 2,762 | 1,996 | |||
| Long-term operating lease obligations, net of current portion | 18,863 | 19,569 | |||
| Other | 917 | 104 | |||
| Total long-term liabilities | 22,770 | 31,050 | |||
| 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; 19,753,256 | |||||
| and 17,211,498 shares issued as of September 30, 2021 and | |||||
| December 31, 2020, respectively | 20 | 17 | |||
| Treasury stock, at cost, 273,937 shares as of September 30, 2021 and December 31, 2020, | |||||
| respectively | (1,842 | ) | (1,842 | ) | |
| Additional paid-in capital | 394,300 | 384,749 | |||
| Accumulated deficit | (335,326 | ) | (342,263 | ) | |
| Total stockholders' equity | 57,152 | 40,661 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 114,478 | $ | 119,682 |
All values are in US Dollars.
BROADWIND, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Revenues | $ | 40,389 | $ | 54,614 | $ | 119,608 | $ | 158,174 | ||||
| Cost of sales | 38,315 | 50,876 | 115,054 | 142,847 | ||||||||
| Gross profit | 2,074 | 3,738 | 4,554 | 15,327 | ||||||||
| OPERATING EXPENSES: | ||||||||||||
| Selling, general and administrative | 3,888 | 4,030 | 12,623 | 12,537 | ||||||||
| Intangible amortization | 183 | 183 | 550 | 550 | ||||||||
| Total operating expenses | 4,071 | 4,213 | 13,173 | 13,087 | ||||||||
| Operating (loss) income | (1,997 | ) | (475 | ) | (8,619 | ) | 2,240 | |||||
| OTHER INCOME (EXPENSE), net: | ||||||||||||
| Paycheck Protection Program loan forgiveness | - | - | 9,151 | - | ||||||||
| Interest expense, net | (269 | ) | (507 | ) | (816 | ) | (1,654 | ) | ||||
| Other, net | 185 | (1 | ) | 7,322 | (3 | ) | ||||||
| Total other (expense) income, net | (84 | ) | (508 | ) | 15,657 | (1,657 | ) | |||||
| Net (loss) income before provision for income taxes | (2,081 | ) | (983 | ) | 7,038 | 583 | ||||||
| Provision for income taxes | 24 | 20 | 101 | 103 | ||||||||
| NET (LOSS) INCOME | $ | (2,105 | ) | $ | (1,003 | ) | $ | 6,937 | $ | 480 | ||
| NET (LOSS) INCOME PER COMMON SHARE - BASIC: | ||||||||||||
| Net (loss) income | $ | (0.11 | ) | $ | (0.06 | ) | $ | 0.38 | $ | 0.03 | ||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC | 19,418 | 16,866 | 18,460 | 16,741 | ||||||||
| NET (LOSS) INCOME PER COMMON SHARE - DILUTED: | ||||||||||||
| Net (loss) income | $ | (0.11 | ) | $ | (0.06 | ) | $ | 0.36 | $ | 0.03 | ||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED | 19,418 | 16,866 | 19,218 | 17,278 |
BROADWIND, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
| Nine Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2021 | 2020 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income | $ | 6,937 | $ | 480 | |||
| Adjustments to reconcile net cash used in operating activities: | |||||||
| Depreciation and amortization expense | 4,758 | 4,761 | |||||
| Paycheck Protection Program loan forgiveness | (9,151 | ) | - | ||||
| Deferred income taxes | 19 | 12 | |||||
| Change in fair value of interest rate swap agreements | 18 | 161 | |||||
| Stock-based compensation | 857 | 763 | |||||
| Allowance for doubtful accounts | (434 | ) | 47 | ||||
| Common stock issued under defined contribution 401(k) plan | 870 | - | |||||
| Gain on disposal of assets | (33 | ) | - | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (360 | ) | (5,898 | ) | |||
| Employee retention credit receivable | (503 | ) | - | ||||
| Contract assets | 763 | (1,475 | ) | ||||
| Inventories | 1,848 | 6,383 | |||||
| Prepaid expenses and other current assets | 689 | (303 | ) | ||||
| Accounts payable | (4,321 | ) | (3,900 | ) | |||
| Accrued liabilities | (2,285 | ) | 678 | ||||
| Customer deposits | (11,139 | ) | (4,193 | ) | |||
| Other non-current assets and liabilities | 644 | 9 | |||||
| Net cash used in operating activities | (10,823 | ) | (2,475 | ) | - | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Purchases of property and equipment | (1,369 | ) | (1,597 | ) | |||
| Proceeds from disposals of property and equipment | 33 | - | |||||
| Net cash used in investing activities | (1,336 | ) | (1,597 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Proceeds from line of credit | 120,485 | 142,348 | |||||
| Payments on line of credit | (116,446 | ) | (146,216 | ) | |||
| Proceeds from long-term debt | 613 | 9,530 | |||||
| Payments on long-term debt | (159 | ) | (1,003 | ) | |||
| Principal payments on finance leases | (1,197 | ) | (694 | ) | |||
| Shares withheld for taxes in connection with issuance of restricted stock | (1,503 | ) | - | ||||
| Proceeds from sale of common stock, net | 9,329 | 232 | |||||
| Net cash provided by financing activities | 11,122 | 4,197 | |||||
| - | |||||||
| NET (DECREASE) INCREASE IN CASH | (1,037 | ) | 125 | ||||
| CASH beginning of the period | 3,372 | 2,416 | |||||
| CASH end of the period | $ | 2,335 | $ | 2,541 |
BROADWIND, INC. AND SUBSIDIARIES SELECTED SEGMENT FINANCIAL INFORMATION (IN THOUSANDS) (UNAUDITED)
| Three Months Ended | Nine Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||
| ORDERS: | |||||||||||||
| Heavy Fabrications | $ | 26,539 | $ | 31,391 | $ | 62,096 | $ | 78,306 | |||||
| Gearing | 11,546 | 3,225 | 29,325 | 19,376 | |||||||||
| Industrial Solutions | 4,512 | 4,939 | 11,831 | 15,240 | |||||||||
| Total orders | $ | 42,597 | $ | 39,555 | $ | 103,252 | $ | 112,922 | |||||
| REVENUES: | |||||||||||||
| Heavy Fabrications | $ | 28,675 | $ | 43,440 | $ | 87,282 | $ | 125,424 | |||||
| Gearing | 7,562 | 7,125 | 20,315 | 20,273 | |||||||||
| Industrial Solutions | 4,213 | 4,081 | 12,357 | 12,516 | |||||||||
| Corporate and Other | (61 | ) | (32 | ) | (346 | ) | (39 | ) | |||||
| Total revenues | $ | 40,389 | $ | 54,614 | $ | 119,608 | $ | 158,174 | |||||
| OPERATING (LOSS)/PROFIT: | |||||||||||||
| Heavy Fabrications | $ | (445 | ) | $ | 2,020 | $ | (1,873 | ) | $ | 8,760 | |||
| Gearing | (219 | ) | (1,023 | ) | (2,090 | ) | (1,935 | ) | |||||
| Industrial Solutions | (108 | ) | 87 | (169 | ) | 496 | |||||||
| Corporate and Other | (1,225 | ) | (1,559 | ) | (4,487 | ) | (5,081 | ) | |||||
| Total operating profit/(loss) | $ | (1,997 | ) | $ | (475 | ) | $ | (8,619 | ) | $ | 2,240 |
BROADWIND, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (IN THOUSANDS) (UNAUDITED)
| Consolidated | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net (Loss) Income | $ | (2,105 | ) | $ | (1,003 | ) | $ | - | $ | 6,937 | $ | 480 |
| Interest Expense | 269 | 507 | 816 | 1,654 | ||||||||
| Income Tax Provision | 24 | 20 | 101 | 103 | ||||||||
| Depreciation and Amortization | 1,594 | 1,567 | 4,758 | 4,761 | ||||||||
| Share-based Compensation and Other Stock Payments | 619 | 206 | 1,806 | 768 | ||||||||
| Adjusted EBITDA (Non-GAAP) | 401 | 1,297 | 14,418 | 7,766 | ||||||||
| Heavy Fabrications Segment | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net (Loss) Income | $ | (313 | ) | $ | 1,515 | $ | 6,629 | $ | 6,679 | |||
| Interest Expense | 124 | 83 | 381 | 277 | ||||||||
| Income Tax (Benefit) Provision | (68 | ) | 422 | 2,124 | 1,804 | |||||||
| Depreciation | 967 | 929 | 2,903 | 2,831 | ||||||||
| Share-based Compensation and Other Stock Payments | 248 | 36 | 731 | 140 | ||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 958 | $ | 2,985 | $ | 12,768 | $ | 11,731 | ||||
| Gearing Segment | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net (Loss) Income | $ | (236 | ) | $ | (1,045 | ) | $ | 1,835 | $ | (2,033 | ) | |
| Interest Expense | 13 | 19 | 33 | 89 | ||||||||
| Income Tax Provision | 3 | 2 | 10 | 8 | ||||||||
| Depreciation and Amortization | 464 | 488 | 1,383 | 1,503 | ||||||||
| Share-based Compensation and Other Stock Payments | 213 | 16 | 356 | 56 | ||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 457 | $ | (520 | ) | $ | 3,617 | $ | (377 | ) | ||
| Industrial Solutions Segment | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net (Loss) Income | $ | (130 | ) | $ | 77 | $ | 684 | $ | 433 | |||
| Interest Expense | 11 | 8 | 43 | 18 | ||||||||
| Income Tax Provision | 9 | 2 | 56 | 42 | ||||||||
| Depreciation and Amortization | 104 | 108 | 315 | 318 | ||||||||
| Share-based Compensation and Other Stock Payments | 43 | 14 | 146 | 65 | ||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 37 | $ | 209 | $ | 1,244 | $ | 876 | ||||
| Corporate and Other | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net Loss | $ | (1,426 | ) | $ | (1,550 | ) | $ | (2,211 | ) | $ | (4,599 | ) |
| Interest Expense | 121 | 397 | 359 | 1,270 | ||||||||
| Income Tax Provision (Benefit) | 80 | (406 | ) | (2,089 | ) | (1,751 | ) | |||||
| Depreciation and Amortization | 59 | 42 | 157 | 109 | ||||||||
| Share-based Compensation and Other Stock Payments | 115 | 140 | 573 | 507 | ||||||||
| Adjusted EBITDA (Non-GAAP) | $ | (1,051 | ) | $ | (1,377 | ) | $ | (3,211 | ) | $ | (4,464 | ) |
CORPORATE CONTACT
Noel Ryan, IRC investor@bwen.com
EdgarFiling
Exhibit 99.2
Third Quarter 2021 Results Conference Call Investor Presentation
SAFE - HARBOR STATEMENT 2 | Investor Presentation This release contains “forward looking statements” — that is, statements related to future, not past, events — as defined in Section 21 E of the Securities Exchange Act of 1934 , as amended, 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 . Forward looking statements include any statement that does not directly relate to a current or historical fact . 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 . Our forward - looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following, many of which are, and will be, amplified by the COVID - 19 pandemic : (i) the impact of global health concerns, including the impact of the current COVID - 19 pandemic on the economies and financial markets and the demand for our products ; (ii) 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 and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into the United States ; (iii) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units ; (iv) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary, in light of the COVID - 19 pandemic ; (v) our ability to continue to grow our business organically and through acquisitions, and the impairment thereto by the impact of the COVID - 19 pandemic ; (vi) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows ; (vii) information technology failures, network disruptions, cybersecurity attacks or breaches in data security, including with respect to any remote work arrangements implemented in response to the COVID - 19 pandemic ; (viii) the sufficiency of our liquidity and alternate sources of funding, if necessary ; (ix) our ability to realize revenue from customer orders and backlog ; (x) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow ; (xi) the economy, including its stability in light of the COVID - 19 pandemic, and the potential impact it may have on our business, including our customers ; (xii) the state of the wind energy market and other energy and industrial markets generally and the impact of competition and economic volatility in those markets ; (xiii) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities ; (xiv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers ; (xv) the effects of the change of administrations in the U . S . federal government ; (xvi) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions ; (xvii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986 , as amended ; (xviii) our ability to utilize various relief options enabled by the CARES Act, including our ability to receive forgiveness of the PPP Loans ; (xix) the limited trading market for our securities and the volatility of market price for our securities ; and (xx) the impact of future sales of our common stock or securities convertible into our common stock on our stock price . These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements including, but not limited to, those set forth under the caption “Risk Factors” in Part I, Item 1 A of our Annual Report on Form 10 - K for the year ended December 31 , 2020 . We are under no duty to update any of these statements . You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change . Accordingly, forward - looking statements should not be relied upon as a predictor of actual results .
PERFORMANCE OVERVIEW
4 | Investor Presentation EXECUTIVE SUMMARY Market update, recent results and outlook Market Update As of November 2021 3Q21 Results Performance Overview Management Outlook As of November 2021 Material price inflation a near - term headwind Commodity price inflation for raw materials used in wind turbine construction, including steel, have led some developers to postpone current - year projects 3Q21 challenged by tower project delays Impacted by a year - over - year decline in wind tower sections sold; developers attempting to time launch of new projects around proposed PTC extension; cost inflation and permitting delaying existing projects Heavy Fabrications segment update Total wind towers sections sold declined by 37% on a y/y basis due to above - referenced issues Gearing segment update Generated substantial year - over - year growth in revenue, adj. EBITDA, orders and backlog, supported by increased demand primarily from energy customers Industrial Solutions segment update Revenue impacted by recovery in natural gas turbine order activity (1) U.S. Department of the Treasury – General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals - https:/ /home.treasury.gov/system/files/131/General - Explanations - FY2022.pdf Wind tower plant utilization As of November 2021, has received orders for approximately 30% of 2022 production 4Q21 financial guidance Anticipate 4Q21 adjusted EBITDA loss of ($1.0) to ($1.5) million Policy environment remains in focus Biden Administration is proposing a multi - year PTC for wind and certain other qualified facilities that begin construction after 2021 (1) Capital deployment focus Continue to actively evaluate bolt - on acquisitions and joint venture partnerships that seek to leverage the Company’s existing manufacturing expertise and exposure to clean tech markets. Logistics & permitting challenges Pent - up demand for new wind installations delayed by supply chain tightness and well - documented offshore permitting delays Onshore installation outlook remains stable Currently anticipate stable installation activity of ~10 GW annually thru 2026; anticipate an acceleration in new installation activity in latter half of decade; LT fundamentals intact Remain opportunistic on offshore opportunities Continue to pursue partnership opportunities with turbine OEMs to capitalize on offshore build out; new offshore installations to ramp beginning in 2023 Stable balance sheet and liquidity metrics Total cash and availability was $21.1 million as of September 30, 2021; Ratio of net debt to trailing twelve - month non - GAAP adjusted EBITDA was 0.5x
CONSOLIDATED FINANCIAL DATA Third quarter results impacted by near - term pause in wind tower demand 5 | Investor Presentation Total Revenue (1) ($MM) Gross Profit (1) ($MM) Adjusted EBITDA (1) ($MM) Earnings (Loss) Per Diluted Share (1) ($) • Total revenue declined 26% y/y to $40.4 million • Revenue growth in Gearing and Industrial Solutions more than offset by y/y decline in tower demand • PTC extension, supply chain challenges and permitting delays have impacted near - term pace of new wind installations • Anticipate a stabilization in new wind installation in 2022 and 2023 (1) For TTM3Q21, results include $9.2 million benefit related to loan forgiveness under the Paycheck Protection Program (PPP), to ge ther with a $7.0 million related to the Employee Retention Tax Credit (ERC), as outlined under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and further modified under the Taxpayer Cert ain ty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021. $54.6 $40.4 $207.4 $159.9 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $3.7 $2.1 $19.3 $7.2 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $1.3 $0.4 $9.5 $14.6 3Q20 3Q21 TTM 3Q20 TTM 3Q21 ($0.06) ($0.11) ($0.07) $0.23 3Q20 3Q21 TTM 3Q20 TTM 3Q21
HEAVY FABRICATIONS SEGMENT Near - term wind tower demand impacted by customer project delays 6 | Investor Presentation Segment Revenue ($MM) Segment Adjusted EBITDA ($MM) Segment Orders ($MM) Quarter - End Segment Backlog ($MM) • Revenue declined 34% y/y to $28.7 million due to lower near - term demand for wind towers • Fluid policy environment, higher raw materials costs, supply chain disruptions and higher freight costs leading developers to delay project timing • Segment orders declined 15% y/y to $26.5 million; backlog down 37% y/y to $46.1 million • Segment non - GAAP adjusted EBITDA declined $2.0 million compared to the prior - year period quarter $31.4 $26.5 $83.6 $89.6 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $73.4 $48.2 $46.1 3Q20 2Q21 3Q21 $43.4 $28.7 $163.0 $117.1 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $3.0 $1.0 $14.1 $15.5 3Q20 3Q21 TTM 3Q20 TTM 3Q21
HEAVY FABRICATIONS SEGMENT Wind tower sections sold declined 37% y/y, due in part to rising raw material costs 7 | Investor Presentation Total Wind Tower Sections Sold (Number of Sections) (1) Escalation in Raw Materials Costs (Price of Steel Per Ton) (2) • Expect tower facilities to be operating at approximately 50% utilization in 4Q21, given current bookings • Lower tower sales was a result of a shift in the timing of customer projects • Steel costs have increased materially in the last 12 months; we have no direct commodity price risk • Project economics impacted by higher costs, leading developers to pause some projects (1) Our production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated near the primary U.S. domestic wi nd energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers (1650 tower sections), sufficient to support turbines generating more than 1,100 M W o f power. (2) Source: Factset. US MW Dom HRC Steel Near Term Price Per Ton (NYMEX) 0% 10% 20% 30% 40% 50% 60% 70% 80% - 200 400 600 800 1,000 1,200 1,400 2017 2018 2019 2020 TTM 3Q21 Wind Tower Sections Sold Tower Plant Capacity Utilization $0 $500 $1,000 $1,500 $2,000 $2,500 10/16 10/17 10/18 10/19 10/20 10/21
GEARING SEGMENT Y/Y growth in revenue, adj. EBITDA, orders and backlog supported by non - wind end - markets 8 | Investor Presentation Segment Revenue ($MM) Segment Adjusted EBITDA ($MM) Segment Orders ($MM) Quarter - End Segment Backlog ($MM) • Revenue increased 6% y/y in 3Q21; customer activity continues to accelerate within the energy sector, given recent commodity price escalation • Orders increased nearly 260% y/y to $11.5 million; Backlog improved 75% y/y • Segment non - GAAP adjusted EBITDA was $0.5 million, versus ($0.5) million in the prior - year period. • Well - positioned to capitalize on cyclical recovery within industrial manufacturing; key beneficiary of legislative support for multi - year infrastructure investments $7.1 $7.6 $27.9 $25.2 3Q20 3Q21 TTM 3Q20 TTM 3Q21 ($0.5) $0.5 $0.7 $2.1 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $3.2 $11.5 $26.3 $35.1 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $13.5 $19.6 $23.6 3Q20 2Q21 3Q21
INDUSTRIAL SOLUTIONS SEGMENT Benefited from a recovery in natural gas turbine customer demand 9 | Investor Presentation Segment Revenue ($MM) Segment Adjusted EBITDA ($MM) Segment Orders ($MM) Quarter - End Segment Backlog ($MM) • Revenue increased 3% y/y driven by improved demand for gas turbine components • Orders declined 9% y/y due to a change in the timing of customer order buying patterns • 10 th consecutive quarter of positive EBITDA $4.1 $4.2 $16.6 $18.1 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $0.2 $0.04 $1.0 $1.7 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $4.9 $4.5 $19.5 $14.5 3Q20 3Q21 TTM 3Q20 TTM 3Q21 $10.3 $6.6 $6.9 3Q20 2Q21 3Q21
BALANCE SHEET UPDATE $21 million of cash and availability to support growth as of 9/30/21 10 | Investor Presentation Quarter - End Total Cash and Availability on Credit Facility ($MM) Quarter - End Operating Working Capital as a % of Sales (1) (1) Operating working capital divided by T3M annualized sales 3% 3% 5% 9% 6% 3% 9% 9% 12% 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 $19.2 $19.0 $19.0 $21.9 $21.8 $24.1 $21.6 $23.7 $21.1 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21
U.S. WIND POWER INSTALLATION FORECAST Biden Administration considering multi - year extension of the Production Tax Credit 11 | Investor Presentation (1) Source: Wood MacKenzie 3Q21 Wind Sector Outlook; wind values include new build and repowering U.S. Onshore Wind Capacity Installations (Annual On - Shore GW Installed) (1) • IRS’ decision to extend the Continuity Safe Harbor in July - 21 allows developers six years to complete projects - and still receive the PTC – for projects commenced between 2016 - 2019 remains a LT catalyst for new wind installations • Develo pers postponing projects to assess near - term policy developments; delays also related to raw material cost increases and supply chain challenges, which have impacted NT project economics • Domestic offshore wind installations expected to exceed 32 GW between 2023 and 2030 • 14 GW of offshore projects are already contracted or expected to be approved, up from 9 GW in 2020; most states on track to reach mandates • Biden Administration taking steps to accelerate permitting of offshore wind developments U.S. Offshore Wind Capacity Installations (Annual Off - Shore GW Installed) (1) 13.7 9.8 9.5 8.7 9.2 9.3 11.2 11.9 11.7 11.4 2021 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2Q21 Forecast 3Q21 Forecast 0.7 1.8 4.5 4.4 5.9 4.9 5.4 4.8 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2Q21 Forecast 3Q21 Forecast
CUSTOMER DIVERSIFICATION INITIATIVE Balanced revenue mix supports long - term growth and profitability 12 | Investor Presentation Wind vs. Non - Wind Revenue Concentration (% of Total Revenue) (1) (1) Wind energy figures shown above exclude repair/replacement demand • Wind and renewables remain our core industry focus • Revenue diversification positions us to better optimize our production capabilities during periods of lower wind tower demand • Since 2016, we have increased non - wind revenue by nearly 300% to approximately $60 million annually Fastest Growing Non - Wind Sectors Since 2016 (Absolute Growth in Revenue) Industrial Mining Power Generation 92% 72% 50% 66% 69% 65% 8% 28% 50% 34% 31% 35% 2016 2017 2018 2019 2020 NME 9/30/21 Wind Revenue Non-Wind Revenue
APPENDIX
EXHIBIT A Orders, Revenues & Operating Income (Loss) Consolidated and by Segment 14 | Investor Presentation Three Months Ended Nine Months Ended 2021 2020 2021 2020 ORDERS: Heavy Fabrications………………………………………………………………26,539$ 31,391$ 62,096$ 78,306$ Gearing………………………………………………………………11,546 3,225 29,325 19,376 Industrial Solutions………………………………………………………………4,512 4,939 11,831 15,240 Total orders………………………………...………………42,597$ 39,555$ 103,252$ 112,922$ REVENUES: Heavy Fabrications………………………………………………………………28,675$ 43,440$ 87,282$ 125,424$ Gearing………………………………………………………………7,562 7,125 20,315 20,273 Industrial Solutions………………………………………………………………4,213 4,081 12,357 12,516 Corporate and Other……………………………………………………………(61) (32) (346) (39) Total revenues…………………………………..……………………40,389$ 54,614$ 119,608$ 158,174$ OPERATING (LOSS)/PROFIT: Heavy Fabrications………………………………………………………………(445)$ 2,020$ (1,873)$ 8,760$ Gearing………………………………………………………………(219) (1,023) (2,090) (1,935) Industrial Solutions………………………………………………………………(108) 87 (169) 496 Corporate and Other……………………………………………………………(1,225) (1,559) (4,487) (5,081) Total operating profit/(loss)……………………………………(1,997)$ (475)$ (8,619)$ 2,240$ September 30, September 30,
EXHIBIT B GAAP to Non - GAAP Consolidated Adjusted EBITDA Reconciliation 15 | Investor Presentation 15 | Investor Presentation Consolidated 2021 2020 2021 2020 Net (Loss) Income……………..…………...………………………………………(2,105)$ (1,003)$ 6,937$ 480$ Interest Expense…………………….……………………………………. 269 507 816 1,654 Income Tax Provision…………………………….....…………………… 24 20 101 103 Depreciation and Amortization………………..……………………………………………………1,594 1,567 4,758 4,761 Share-based Compensation and Other Stock Payments………………………………………………………………619 206 1,806 768 Adjusted EBITDA (Non-GAAP)…………………………. 401 1,297 14,418 7,766 Three Months Ended September 30, Nine Months Ended September 30, Heavy Fabrications Segment 2021 2020 2021 2020 Net (Loss) Income……………………...…………………………….……. (313)$ 1,515$ 6,629$ 6,679$ Interest Expense……………………………..……………………. 124 83 381 277 Income Tax (Benefit) Provision……..…………………...…………………… (68) 422 2,124 1,804 Depreciation……………………………………………………………… 967 929 2,903 2,831 Share-based Compensation and Other Stock Payments………………………………………………………………248 36 731 140 Adjusted EBITDA (Non-GAAP)…………………………….. 958$ 2,985$ 12,768$ 11,731$ Three Months Ended September 30, Nine Months Ended September 30, Gearing Segment 2021 2020 2021 2020 Net (Loss) Income……………………...……………………...……………. (236)$ (1,045)$ 1,835$ (2,033)$ Interest Expense………………………...……………………………… 13 19 33 89 Income Tax Provision…………………...…………………… 3 2 10 8 Depreciation and Amortization………………………………………………………………464 488 1,383 1,503 Share-based Compensation and Other Stock Payments………………………………………………………………213 16 356 56 Adjusted EBITDA (Non-GAAP)……………………….. 457$ (520)$ 3,617$ (377)$ Three Months Ended September 30, Nine Months Ended September 30, Industrial Solutions Segment 2021 2020 2021 2020 Net (Loss) Income……………………...……...……………………………. (130)$ 77$ 684$ 433$ Interest Expense……………………………………………………. 11 8 43 18 Income Tax Provision…………………...…………………… 9 2 56 42 Depreciation and Amortization……………………………………. 104 108 315 318 Share-based Compensation and Other Stock Payments………… 43 14 146 65 Adjusted EBITDA (Non-GAAP)……………………………… 37$ 209$ 1,244$ 876$ Three Months Ended September 30, Nine Months Ended September 30, Corporate and Other 2021 2020 2021 2020 Net Loss………………………..……...……………………………. (1,426)$ (1,550)$ (2,211)$ (4,599)$ Interest Expense……………….…………………………………… 121 397 359 1,270 Income Tax Provision (Benefit)…………………..…………… 80 (406) (2,089) (1,751) Depreciation and Amortization………………………………………………………………59 42 157 109 Share-based Compensation and Other Stock Payments………………………………………………………………115 140 573 507 Adjusted EBITDA (Non-GAAP)……………………..……………. (1,051)$ (1,377)$ (3,211)$ (4,464)$ Three Months Ended September 30, Nine Months Ended September 30,
EXHIBIT C Consolidated Statement of Cash Flows 16 | Investor Presentation
EXHIBIT D Consolidated Balance Sheet 17 | Investor Presentation
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