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): May 7, 2021
BROADWIND, INC. (Exact Name of Registrant as Specified in Charter)
| Delaware | 001-34278 | 88-0409160 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 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 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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 May 7, 2021, Broadwind, Inc. (the “Company”) issued a press release announcing its financial results as of and for the quarter ended March 31, 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 May 7, 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 May 7, 2021 |
| 99.2 | Investor Presentation dated May 7, 2021 |
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: May 7, 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 May 7, 2021 |
| 99.2 | Investor Presentation dated May 7, 2021 |
EdgarFiling EXHIBIT 99.1
Broadwind Announces First Quarter 2021 Results
CICERO, Ill., May 07, 2021 (GLOBE NEWSWIRE) -- Broadwind (NASDAQ: BWEN), a diversified precision manufacturer of specialized components and solutions serving global markets, today announced results for the first quarter 2021.
FIRST QUARTER 2021 RESULTS (As compared to the first quarter 2020)
- Wind tower section orders up 103% year-over-year
- Total revenue of $32.7 million, down 33% year-over-year
- Total net loss of ($1.2) million, or ($0.07) per basic share
- Total non-GAAP adjusted EBITDA of $1.2 million, down 66% year-over-year
- Total cash and excess availability of $21.6 million, up 13% year-over-year
For the three months ended March 31, 2021, Broadwind reported total revenue of $32.7 million, a decline of 33% when compared to the prior-year period. The Company reported a net loss of ($1.2) million, or ($0.07) per basic share in the first quarter 2021, compared to net income of $1.0 million, or $0.06 per diluted share, in the first quarter 2020. The Company reported adjusted EBITDA, a non-GAAP measure, of $1.2 million in the first quarter 2021, compared to $3.6 million in the prior-year period.
First quarter results were impacted by a more than one-week outage at the Company’s Abilene, Texas tower facility due to adverse weather conditions during February 2021; a temporary shift in the timing of a large customer order initially slated to be delivered in the first quarter; and continued, pandemic-related supply chain issues. On a combined basis, these factors resulted in an approximately $9 million negative impact to first quarter 2021 revenue. Both Heavy Fabrications and Gearing Segment revenue declined on a year-over-year basis in the first quarter, partially offset by growth in the Industrial Solutions segment.
During the first quarter, the Company was eligible for 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 Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021. For the three months ended March 31, 2021, the Company earned $3.4 million in refundable tax credits, which will be utilized to offset increased payroll costs resulting from pandemic-related disruptions described in this release.
The Company has booked approximately 60% of its full-year 2021 optimal wind tower capacity, including approximately $4 million of new wind tower orders received in April 2021. Currently, both of the Company’s tower production facilities in Texas and Wisconsin are fully operational.
STRATEGY UPDATE
During the first quarter, the Company continued to advance a multi-year strategy to capitalize on favorable secular growth trends within the domestic wind energy market; further diversify consolidated revenues into complementary end-markets; improve operating efficiency and plant utilization; and maintain a disciplined capital structure positioned to support growth.
Capitalize on favorable policy environment. During the next decade, Broadwind anticipates that both new and existing subsidies will be used to drive significant, incremental investments in both onshore and offshore wind installations. In March 2021, the Biden Administration announced its intent to deploy 30 gigawatts (GW) of offshore wind power by 2030, consistent with an ongoing policy seeking to accelerate clean energy transition. Additionally, the Company anticipates an increase of more than 80 GW of U.S. onshore wind energy capacity over the next decade. The Company anticipates sustained corporate and industrial demand for renewable energy, together with a favorable policy backdrop, both representing significant long-term catalysts for secular growth within the renewables sector. As a tower supplier for three of the four largest wind turbine manufacturers operating in the U.S. market, the Company believes it remains well positioned to capitalize on increased demand for wind energy. To that end, wind tower orders increased by more than $7 million in the first quarter 2021, when compared to the prior-year period.
Achieve scale through efficiency. The Company remains focused on operating its production facilities at or near capacity, while reducing costs through improvement initiatives. In addition to securing new tower orders from multiple turbine manufacturers in the first quarter of 2021, new order demand from Gearing and Industrial Fabrication customers increased sequentially, reflecting an early recovery in cyclical end markets.
Diversify sales mix. As a leading precision manufacturer of structures, equipment and components for clean tech and other applications, the Company continues to further diversify its sales mix across a wide range of non-wind markets, including the industrial, mining and natural gas turbine markets. In the first quarter 2021, revenue from customers in non-wind markets represented 37% of total revenue, up from 26% in the prior-year period.
Disciplined capital management. The Company continues to retain sufficient liquidity to support the ongoing operations of its business, together with potential organic and inorganic growth investments. Total cash and availability under the credit facility was $21.6 million as of March 31, 2021, versus $19.0 million as of March 31, 2020. As of March 31, 2021, the ratio of net debt to trailing twelve-month non-GAAP adjusted EBITDA was 1.0X, excluding $9.2 million in loans received under the Paycheck Protection Program.
On March 9, 2021, the Company commenced an equity offering of shares of the Company’s common stock. During the quarter ended March 31, 2021, the Company issued 1,100,000 shares of the Company’s common stock under such equity offering. The net proceeds (before upfront costs) to the Company from the sale of such shares were approximately $6.4 million, after deducting commissions.
MANAGEMENT COMMENTARY
“Although our first quarter results were adversely impacted by a combination of adverse weather conditions, a shift in the timing of a customer order and pandemic-related supply chain constraints, our business recovered during April, supported by new customer orders and improved plant utilization. We are seeing a broad market recovery that will drive growth in our industrial businesses in the second half of this year,” stated Eric Blashford, President and CEO of Broadwind.
“Wind tower orders more than doubled on a year-over-year basis in the first quarter, as original equipment manufacturer (OEM) customers began to fill production slots for the second half of 2021,” continued Blashford. “To date, we have booked approximately 60% of our optimal wind tower production capacity for the full-year 2021. First quarter gearing orders improved sequentially, supported by increased demand within both industrial and energy markets, consistent with our expectations for a gradual recovery in the Gearing segment during 2021.”
“Following the one-year extension of the renewable electricity production tax credit (PTC) announced in late 2020, together with other recent policy actions intended to accelerate private investment in new wind energy installations, expectations around medium-term onshore wind capacity additions continue to improve,” Blashford continued.
“Currently, we anticipate that approximately 35 GW of new onshore wind capacity will be added to the U.S. market by year-end 2023,” continued Blashford. “In the last two years, project developers have installed more wind power capacity than any other energy generating technology, as the levelized, unsubsidized cost of wind energy continues to decline.”
“In March the Biden Administration announced a transformational plan to deploy 30 GW of new offshore wind energy capacity by 2030, including provisions for the construction of new facilities to support the production of wind turbine components, including those produced by Broadwind,” stated Blashford. “We believe this plan and related policy considerations reflect a long-term, bipartisan commitment to achieving a net zero economy, one where our long-term customer OEM relationships, technical expertise and strategic asset base position us to support the ongoing clean energy transition.”
“At the end of the first quarter, we had more than $21 million in total cash and availability under our line of credit to support operations and growth opportunities,” continued Blashford.
“We expect an increase in shipments in the second quarter, particularly within our Heavy Fabrication and Gearing segments. We expect second quarter 2021 revenue to be in a range of $45 to $50 million and adjusted EBITDA to be in a range of $4.5 to $5.0 million, after including approximately 3.0 million of additional ERC benefits,” concluded Blashford.
ORDERS AND BACKLOG
Total orders increased 1% year-over-year to $34 million in the first quarter 2021, given growth in customer demand within the Heavy Fabrications segment, which benefited from increased demand for wind towers in the period. Gearing orders increased on a sequential basis for the second consecutive quarter, with orders increasing by 73% in the first quarter of 2021 when compared to the fourth quarter of 2020. The Industrial Solutions segment reported a 40% year-over-year decline in orders during the first quarter, due to the timing of customer orders.
Total backlog increased 2% in the first quarter to $94.4 million. As of March 31, 2021, Heavy Fabrications’ orders represented approximately 73% 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 $15.6 million to $22.8 million in the first quarter 2021, when compared to the prior year period, due primarily to a 46% decline in total tower sections sold. The decline in tower section sales was attributable to lower demand, a shift in the timing of a customer order, pandemic-related supply chain constraints and a more than one-week, weather related outage at the Company’s Abilene, Texas facility in February 2021. Total operating income declined $5.2 million to ($1.7) million, when compared to the first quarter 2020 driven by the demand effects described above and increased manufacturing inefficiencies linked to lower production levels. Segment non-GAAP adjusted EBITDA declined $2.8 million to $1.8 million, when compared to the prior-year period.
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 declined by $0.9 million to $5.3 million in the first quarter 2021, when compared to the year-ago period, due to lower customer activity in the energy and mining markets. The Company currently anticipates a modest recovery in Gearing demand during the second quarter 2021, as reflected by improved order activity. The Gearing segment reported an operating loss of ($1.0) million in the first quarter 2021, versus an operating loss of ($0.3) million in the prior-year period. Segment non-GAAP adjusted EBITDA was $.3 million, flat, when compared to the prior-year period.
Industrial Solutions Segment Broadwind provides supply chain solutions, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market.
Industrial Solutions segment sales increased by $0.6 million to $4.6 million in the first quarter 2021, when compared to the year-ago period, primarily driven by increased demand within the natural gas turbine market. Total operating income declined $0.2 million to breakeven in the first quarter 2021, when compared to the prior-year period. Segment non-GAAP adjusted EBITDA increased $0.2 million to $0.5 million, when compared to the prior-year period.
FIRST QUARTER 2021 CONFERENCE CALL
Broadwind will host a conference call today, May 7, 2021, 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 Broadwind’s website at www.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:
| Toll Free: | 1-877-407-9716 |
|---|---|
| Toll/International: | 1-201-493-6779 |
To listen to a replay of the teleconference, which will be available through May 14, 2021:
| Toll Free: | 1-844-512-2921 |
|---|---|
| Toll/International: | 1-412-317-6671 |
| Replay Pin Number: | 13718050 |
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: (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 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 | 2,929 | $ | 3,372 | ||
| Accounts receivable, net | 14,326 | 15,337 | |||
| Employee retention credit receivable | 3,372 | - | |||
| Contract assets | 2,522 | 2,253 | |||
| Inventories, net | 40,276 | 26,724 | |||
| Prepaid expenses and other current assets | 2,204 | 2,909 | |||
| Total current assets | 65,629 | 50,595 | |||
| LONG-TERM ASSETS: | |||||
| Property and equipment, net | 44,766 | 45,195 | |||
| Operating lease right-of-use assets | 19,401 | 19,321 | |||
| Intangible assets, net | 4,003 | 4,186 | |||
| Other assets | 422 | 385 | |||
| TOTAL ASSETS | 134,221 | $ | 119,682 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| CURRENT LIABILITIES: | |||||
| Line of credit and other notes payable | 5,076 | $ | 1,406 | ||
| Current portion of finance lease obligations | 1,456 | 1,427 | |||
| Current portion of operating lease obligations | 1,743 | 1,832 | |||
| Accounts payable | 25,836 | 18,180 | |||
| Accrued liabilities | 6,731 | 6,307 | |||
| Customer deposits | 17,055 | 18,819 | |||
| Total current liabilities | 57,897 | 47,971 | |||
| LONG-TERM LIABILITIES: | |||||
| Long-term debt, net of current maturities | 9,380 | 9,381 | |||
| Long-term finance lease obligations, net of current portion | 1,891 | 1,996 | |||
| Long-term operating lease obligations, net of current portion | 19,748 | 19,569 | |||
| Other | 123 | 104 | |||
| Total long-term liabilities | 31,142 | 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; 18,474,170 | |||||
| and 17,211,498 shares issued as of March 31, 2021 and | |||||
| December 31, 2020, respectively | 18 | 17 | |||
| Treasury stock, at cost, 273,937 shares as of March 31, 2021 and December 31, 2020, | |||||
| respectively | (1,842 | ) | (1,842 | ) | |
| Additional paid-in capital | 390,479 | 384,749 | |||
| Accumulated deficit | (343,473 | ) | (342,263 | ) | |
| Total stockholders’ equity | 45,182 | 40,661 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 134,221 | $ | 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 March 31, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Revenues | $ | 32,728 | $ | 48,634 | ||
| Cost of sales | 32,446 | 42,462 | ||||
| Gross profit | 282 | 6,172 | ||||
| OPERATING EXPENSES: | ||||||
| Selling, general and administrative | 4,410 | 4,309 | ||||
| Intangible amortization | 183 | 183 | ||||
| Total operating expenses | 4,593 | 4,492 | ||||
| Operating (loss) income | (4,311 | ) | 1,680 | |||
| OTHER INCOME (EXPENSE), net: | ||||||
| Interest expense, net | (229 | ) | (673 | ) | ||
| Other, net | 3,362 | (1 | ) | |||
| Total other income (expense), net | 3,133 | (674 | ) | |||
| Net (loss) income before provision for income taxes | (1,178 | ) | 1,006 | |||
| Provision for income taxes | 32 | 52 | ||||
| NET (LOSS) INCOME | $ | (1,210 | ) | $ | 954 | |
| NET (LOSS) INCOME PER COMMON SHARE - BASIC: | ||||||
| Net (loss) income | $ | (0.07 | ) | $ | 0.06 | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC | 17,178 | 16,596 | ||||
| NET (LOSS) INCOME PER COMMON SHARE - DILUTED: | ||||||
| Net (loss) income | $ | (0.07 | ) | $ | 0.06 | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED | 17,178 | 16,733 |
BROADWIND, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
| Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net (loss) income | $ | (1,210 | ) | $ | 954 | |
| Adjustments to reconcile net cash used in operating activities: | ||||||
| Depreciation and amortization expense | 1,553 | 1,612 | ||||
| Deferred income taxes | (5 | ) | 22 | |||
| Change in fair value of interest rate swap agreements | 5 | 138 | ||||
| Stock-based compensation | 219 | 308 | ||||
| Allowance for doubtful accounts | (218 | ) | 29 | |||
| Common stock issued under defined contribution 401(k) plan | 258 | - | ||||
| Gain on disposal of assets | (23 | ) | - | |||
| Changes in operating assets and liabilities, net of acquisition: | ||||||
| Accounts receivable | 1,229 | 2,037 | ||||
| Employee retention credit receivable | (3,372 | ) | - | |||
| Contract assets | (269 | ) | - | |||
| Inventories | (13,552 | ) | (8,891 | ) | ||
| Prepaid expenses and other current assets | 699 | (476 | ) | |||
| Accounts payable | 7,591 | 3,545 | ||||
| Accrued liabilities | 419 | (657 | ) | |||
| Customer deposits | (1,764 | ) | 305 | |||
| Other non-current assets and liabilities | 3 | 49 | ||||
| Net cash used in operating activities | (8,437 | ) | (1,025 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Purchases of property and equipment | (612 | ) | (670 | ) | ||
| Proceeds from disposals of property and equipment | 23 | - | ||||
| Net cash used in investing activities | (589 | ) | (670 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Proceeds from line of credit | 5,673 | 51,552 | ||||
| Payments on line of credit | (2,450 | ) | (49,070 | ) | ||
| Proceeds from long-term debt | 595 | - | ||||
| Payments on long-term debt | (150 | ) | (242 | ) | ||
| Principal payments on finance leases | (339 | ) | (218 | ) | ||
| Shares withheld for taxes in connection with issuance of restricted stock | (847 | ) | - | |||
| Proceeds from sale of common stock, net | 6,101 | - | ||||
| Net cash provided by financing activities | 8,583 | 2,022 | ||||
| NET (DECREASE) INCREASE IN CASH | (443 | ) | 327 | |||
| CASH beginning of the period | 3,372 | 2,416 | ||||
| CASH end of the period | $ | 2,929 | $ | 2,743 |
BROADWIND, INC. AND SUBSIDIARIES SELECTED SEGMENT FINANCIAL INFORMATION (IN THOUSANDS) (UNAUDITED)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| March 31, | ||||||
| 2021 | 2020 | |||||
| ORDERS: | ||||||
| Heavy Fabrications | $ | 20,797 | $ | 15,514 | ||
| Gearing | 9,921 | 12,421 | ||||
| Industrial Solutions | 3,496 | 5,874 | ||||
| Total orders | $ | 34,214 | $ | 33,809 | ||
| REVENUES: | ||||||
| Heavy Fabrications | $ | 22,777 | $ | 38,368 | ||
| Gearing | 5,349 | 6,227 | ||||
| Industrial Solutions | 4,604 | 4,039 | ||||
| Corporate and Other | (2 | ) | - | |||
| Total revenues | $ | 32,728 | $ | 48,634 | ||
| OPERATING (LOSS)/PROFIT: | ||||||
| Heavy Fabrications | $ | (1,700 | ) | $ | 3,541 | |
| Gearing | (989 | ) | (261 | ) | ||
| Industrial Solutions | (14 | ) | 192 | |||
| Corporate and Other | (1,608 | ) | (1,792 | ) | ||
| Total operating profit/(loss) | $ | (4,311 | ) | $ | 1,680 |
BROADWIND, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (IN THOUSANDS) (UNAUDITED)
| Consolidated | Three Months Ended March 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Net (Loss) Income | $ | (1,210 | ) | $ | 953 | |
| Interest Expense | 230 | 673 | ||||
| Income Tax Provision | 32 | 52 | ||||
| Depreciation and Amortization | 1,552 | 1,612 | ||||
| Share-based Compensation and Other Stock Payments | 613 | 315 | ||||
| Adjusted EBITDA (Non-GAAP) | 1,217 | 3,605 | ||||
| Heavy Fabrications Segment | Three Months Ended March 31, | |||||
| --- | --- | --- | --- | --- | --- | |
| 2021 | 2020 | |||||
| Net (Loss) Income | $ | 921 | $ | 2,698 | ||
| Interest Expense | 100 | 105 | ||||
| Income Tax (Benefit) Provision | (402 | ) | 738 | |||
| Depreciation | 944 | 964 | ||||
| Share-based Compensation and Other Stock Payments | 222 | 42 | ||||
| Adjusted EBITDA (Non-GAAP) | $ | 1,785 | $ | 4,547 | ||
| Gearing Segment | Three Months Ended March 31, | |||||
| --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | |||||
| Net Loss | $ | (283 | ) | $ | (314 | ) |
| Interest Expense | 13 | 50 | ||||
| Income Tax Provision | 3 | 4 | ||||
| Depreciation and Amortization | 458 | 512 | ||||
| Share-based Compensation and Other Stock Payments | 80 | 15 | ||||
| Adjusted EBITDA (Non-GAAP) | $ | 271 | $ | 267 | ||
| Industrial Solutions Segment | Three Months Ended March 31, | |||||
| --- | --- | --- | --- | --- | ||
| 2021 | 2020 | |||||
| Net (Loss)/Income | $ | 178 | $ | 159 | ||
| Interest Expense | 14 | 1 | ||||
| Income Tax Provision | 17 | 31 | ||||
| Depreciation and Amortization | 106 | 104 | ||||
| Share-based Compensation and Other Stock Payments | 147 | 19 | ||||
| Adjusted EBITDA (Non-GAAP) | $ | 462 | $ | 314 | ||
| Corporate and Other | Three Months Ended March 31, | |||||
| --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | |||||
| Net Income (Loss) | $ | (2,026 | ) | $ | (1,590 | ) |
| Interest Expense | 103 | 517 | ||||
| Income Tax Provision/(Benefit) | 414 | (721 | ) | |||
| Depreciation and Amortization | 44 | 32 | ||||
| Share-based Compensation and Other Stock Payments | 164 | 239 | ||||
| Adjusted EBITDA (Non-GAAP) | $ | (1,301 | ) | $ | (1,523 | ) |
CORPORATE CONTACT
Jason Bonfigt Investor@BWEN.com
EdgarFiling
Exhibit 99.2
First 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 May 2021 1Q21 Results Performance Overview 2Q21 Outlook Performance Overview Improved U.S. Offshore Wind Forecast 32 GW of new capacity expected by 2031; 2024 through 2030, new offshore capacity averages 4.5 GW/year Favorable Wind Policy Outlook Proposed Biden tax plan would advance clean energy production through a 10 - year extension of the PTC and ITC – potentially transformational for industry (1) C&I Demand Gradually Improving Increased gearing and industrial fabrication order activity within cyclical end - markets supports expectations for a gradual, post - pandemic recovery Upgraded U.S. Onshore Wind Outlook Dec - 20 extension of the Production Tax Credit (PTC) in the US strengthens near - term expectations of 35 GW of new capacity from 2021 to 2023 Total Revenue (33%) y/y to $32.7 million 1Q21 results impacted by a more than one - week , weather related outage at TX tower facility; shift in timing of customer order now scheduled for 2Q21; continued pandemic - related supply chain issues and presence of unfairly priced imports Heavy Fabrications Segment Update Total wind towers sections sold declined more than 45% on a y/y basis due to above - referenced issues; tower orders increased more than 100% y/y; tower capacity ~60% booked for full - year 2021 Gearing Segment Update Beginning to see early indications of improved demand activity; orders highest since 1Q20; backlog approaching pre - pandemic levels; financial performance improving Industrial Solutions Segment Update 1Q21 revenue improved on a y/y basis, supported by increased demand within the natural gas turbine market (1) U.S. Department of the Treasury. The Made In America Tax Plan. April 2021 Improved Outlook for 2Q21 Anticipate a reacceleration in customer activity, supported by both wind and non - wind customer shipments Anticipate Q/Q Revenue Growth 2Q21 total revenue expected to be in a range of $45 million to $50 million Anticipate Q/Q Adj. EBITDA Growth 2Q21 total Adjusted EBITDA expected to be $4.5 million to $5.0 million, including ~$3.0 million in ERC cash benefits Equity ATM Program Near Completion Received $ 6.4 million in cash proceeds, net of commissions, on $10.0 million authorization Employee Retention Credit (ERC ) Benefit Received $3.4 million in credits during 1Q21
PERFORMANCE BRIDGE Revenue declined nearly $16 million y/y in 1Q21; Anticipate strong q/q improvement into 2Q21 5 | Investor Presentation 1Q20 vs. 1Q21 Revenue Bridge ($ MM) 1Q20 vs. 1Q21 Adjusted EBITDA Bridge ($ MM) $32.7 $3.6
CONSOLIDATED FINANCIAL DATA Challenging first quarter due to non - recurring factors, but TTM revenue trend remains stable 6 | Investor Presentation Total Revenue ($MM) Gross Profit ($MM) Adjusted EBITDA ($MM) Earnings (Loss) Per Share ($) • TTM revenue remains stable, despite challenging 1Q21, where revenue declined 33% y/y • 1Q21 and TTM 1Q21 Adj. EBITDA benefited from a $3.4 million employee retention tax credit used to offset pandemic - related challenges • Anticipate sequential improvement in Adjusted EBITDA, given increased customer quoting and bidding activity Revenue declined (1.4%) y/y $48.6 $32.7 $185.2 $182.6 1Q20 1Q21 TTM 1Q20 TTM 1Q21 Revenue declined (33%) y/y $6.2 $0.3 $18.0 $12.1 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $3.6 $1.2 $9.1 $5.6 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $0.06 ($0.07) ($0.15) ($0.22) 1Q20 1Q21 TTM 1Q20 TTM 1Q21
HEAVY FABRICATIONS SEGMENT TX and WI wind tower facilities fully operational; tower capacity ~60% booked for the full - year 2021 7 | Investor Presentation Segment Revenue ($MM) Segment Adjusted EBITDA ($MM) Segment Orders ($MM) Quarter - End Segment Backlog ($MM) • Revenue declined $15.6 million y/y, related to one - time, non - recurring headwinds and lower demand • Wind tower orders +103% y/y in 1Q21 to $14.1 million; segment orders +34% y/y to $20.8 million • Customers securing 2021 production slots – received orders from two wind turbine OEMs in 1Q21 • Industrial Fabrications had its strongest quarter since pandemic began $38.4 $22.8 $138.8 $139.6 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $15.5 $20.8 $182.7 $111.1 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $97.4 $71.2 $69.3 1Q20 4Q20 1Q21 Orders increased 34% y/y $4.5 $1.8 $10.2 $11.7 1Q20 1Q21 TTM 1Q20 TTM 1Q21
HEAVY FABRICATIONS SEGMENT TX weather, timing of customer order and supply chain impact pushed ~75 sections out of 1Q21 8 | Investor Presentation Total Wind Tower Sections Sold (Number of Sections) (1) Heavy Fabrications Adjusted EBITDA Margin (% of Sales) • Customer diversification driving growth in plant utilization • Approximately 75 tower sections pushed beyond 1Q21 due to non - recurring factors • EBITDA margin expansion evidenced in recent years driven by higher plant utilization and industrial fabrications investments (1) Our production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated near the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers (1650 tower sections), sufficient to support turbines generating more than 1,100 M W o f power. 0% 10% 20% 30% 40% 50% 60% 70% 80% - 200 400 600 800 1,000 1,200 1,400 2017 2018 2019 2020 TTM 1Q21 Wind Tower Sections Sold Tower Plant Capacity Utilization 7.5% 1.5% 5.2% 9.3% 8.4% 2017 2018 2019 2020 TTM 1Q21
GEARING SEGMENT Order activity accelerating, supported by increased energy and industrial market demand 9 | Investor Presentation Segment Revenue ($MM) Segment Adjusted EBITDA ($MM) Segment Orders ($MM) Quarter - End Segment Backlog ($MM) • 1Q21 Gearing orders equaled combined segment orders in the entire second half of 2020 • Revenue impacted by lower order intake throughout 2020 due to the pandemic • Customer activity is accelerating, particularly within energy and industrial sectors, given commodity price escalation • Financial performance improving as volumes recover and commercial environment strengthens • Book - to - bill near 2.0x, driving a $ 4.7 million sequential improvement in backlog $6.2 $5.3 $31.1 $24.3 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $12.4 $9.9 $30.8 $22.6 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $20.5 $14.4 $19.1 1Q20 4Q20 1Q21 $0.3 $0.3 $3.9 ($1.9) 1Q20 1Q21 TTM 1Q20 TTM 1Q21
INDUSTRIAL SOLUTIONS SEGMENT 14% y/y revenue improvement driven by gas turbine market demand 10 | Investor Presentation Segment Revenue ($MM) Segment Adjusted EBITDA ($MM) Segment Orders ($MM) Quarter - End Segment Backlog ($MM) • Revenue increased 14% y/y driven by increased demand for gas turbine components • Orders declined y/y due to a change in the timing of customer order buying patterns • Expanded share with a major global customer related to an international gas turbine project $4.0 $4.6 $15.4 $18.9 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $5.9 $3.5 $17.9 $15.5 1Q20 1Q21 TTM 1Q20 TTM 1Q21 $9.5 $7.2 $6.0 1Q20 4Q20 1Q21 $0.3 $0.5 $0.9 $1.5 1Q20 1Q21 TTM 1Q20 TTM 1Q21
BALANCE SHEET UPDATE More than $21 million of cash and availability to support growth as of 3/31/21 11 | Investor Presentation Quarter - End Total Cash and Availability on Credit Facility ($MM) Quarter - End Operating Working Capital as a % of Sales (1) (1) Operating working capital divided by T3M annualized sales $7.6 $8.1 $19.2 $19.0 $19.0 $21.9 $21.8 $24.1 $21.6 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 11% 13% 3% 3% 5% 9% 6% 3% 9% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21
U.S. WIND POWER INSTALLATION FORECAST Reduced cost of wind, clean energy policy agenda likely to improve outlook 12 | Investor Presentation (1) Source: Wood MacKenzie April 2021 Wind Sector Outlook; wind values include new build and repowering U.S. Onshore Wind Capacity Installations (Annual On - Shore GW Installed) (1) • PTC set to expire in 2021, and historically an extension of the PTC has led to significantly increased installations vs. market forecast • U.S. House of Representatives is currently evaluating a bill – The GREEN Act – that would preserve the PTC at the current phaseout level of 60% through the end of 2026 • Introduction of new offshore ITC in December 2020 • Offshore market is key to meeting state policies on the eastern seaboard and transition from fossil fuel generation U.S. Offshore Wind Capacity Installations (Annual Off - Shore GW Installed) (1) 11.0 17.6 15.3 11.6 7.6 7.6 8.1 2019 2020 2021e 2022e 2023e 2024e 2025e 0.4 2.9 4.3 5.6 4.8 4.6 4.7 2023e 2024e 2025e 2026e 2027e 2028e 2029e
CUSTOMER DIVERSIFICATION INITIATIVE Balanced revenue mix supports long - term growth and profitability 13 | 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 • During the last four years, we have increased non - wind revenue by more than 300% to more than $60 million annually • Pandemic - related headwinds impacted more cyclical, non - wind end - markets in 2020, however, we anticipate a gradual recovery in 2021 Fastest Growing Non - Wind Sectors Since 2016 (Absolute Growth in Revenue) Industrial Mining Power Generation 92% 72% 50% 66% 69% 67% 8% 28% 50% 34% 31% 33% 2016 2017 2018 2019 2020 TTM 1Q21 Wind Revenue Non-Wind Revenue
APPENDIX
EXHIBIT A Revenues and Operating Income (Loss) Consolidated and by Segment 15 | Investor Presentation 2021 2020 Revenues…………………………………………………………………………………………………….. 32,728$ 48,634$ Cost of sales………………………………………………………………………………………………………. 32,446 42,462 Gross profit……………………………………………………………………………………………. 282 6,172 OPERATING EXPENSES: Selling, general and administrative…………………………………………………………………...………. 4,410 4,309 Intangible amortization……………………………………………………………………………………..… 183 183 Total operating expenses………………………………………………………………………………. 4,593 4,492 Operating (loss) income……………………………………………………………………………………………… (4,311) 1,680 OTHER INCOME (EXPENSE), net: Interest expense, net………………………………………………………………………………………. (229) (673) Other, net……………………………………………………………………………………………………… 3,362 (1) Total other income (expense), net…………………………………………………………………………………………….3,133 (674) Net (loss) income before provision for income taxes……………………………………………………….. (1,178) 1,006 Provision for income taxes………………………………………………………………………………. 32 52 NET (LOSS) INCOME…………………………………………………………………………………………………(1,210)$ 954$ NET (LOSS) INCOME PER COMMON SHARE - BASIC: Net (loss) income……………………………………………………………………………………………………………………………(0.07)$ 0.06$ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC………………………………………………..17,178 16,596 NET (LOSS) INCOME PER COMMON SHARE - DILUTED: Net (loss) income……………………………………………………………………………………………………………………………(0.07)$ 0.06$ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED……………………………………………….17,178 16,733 Three Months Ended March 31, Three Months Ended 2021 2020 ORDERS: Heavy Fabrications………………………………………………………………20,797$ 15,514$ Gearing………………………………………………………………9,921 12,421 Industrial Solutions………………………………………………………………3,496 5,874 Total orders………………………………...………………34,214$ 33,809$ REVENUES: Heavy Fabrications………………………………………………………………22,777$ 38,368$ Gearing………………………………………………………………5,349 6,227 Industrial Solutions………………………………………………………………4,604 4,039 Corporate and Other……………………………………………………………(2) - Total revenues…………………………………..……………………32,728$ 48,634$ OPERATING (LOSS)/PROFIT: Heavy Fabrications………………………………………………………………(1,700)$ 3,541$ Gearing………………………………………………………………(989) (261) Industrial Solutions………………………………………………………………(14) 192 Corporate and Other……………………………………………………………(1,608) (1,792) Total operating profit/(loss)……………………………………(4,311)$ 1,680$ March 31,
EXHIBIT B GAAP to Non - GAAP Consolidated Adjusted EBITDA Reconciliation 16 | Investor Presentation Consolidated 2021 2020 Net (Loss) Income……………..…………...………………………………………(1,210)$ 953$ Interest Expense…………………….……………………………………. 230 673 Income Tax Provision…………………………….....…………………… 32 52 Depreciation and Amortization………………..……………………………………………………1,552 1,612 Share-based Compensation and Other Stock Payments………………………………………………………………613 315 Adjusted EBITDA (Non-GAAP)…………………………. 1,217 3,605 Three Months Ended March 31, Heavy Fabrications Segment 2021 2020 Net (Loss) Income……………………...…………………………….……. 921$ 2,698$ Interest Expense……………………………..……………………. 100 105 Income Tax (Benefit) Provision……..…………………...…………………… (402) 738 Depreciation……………………………………………………………… 944 964 Share-based Compensation and Other Stock Payments………………………………………………………………222 42 Adjusted EBITDA (Non-GAAP)…………………………….. 1,785$ 4,547$ Three Months Ended March 31, Gearing Segment 2021 2020 Net Loss……………………...……………………...……………. (283)$ (314)$ Interest Expense………………………...……………………………… 13 50 Income Tax Provision…………………...…………………… 3 4 Depreciation and Amortization………………………………………………………………458 512 Share-based Compensation and Other Stock Payments………………………………………………………………80 15 Adjusted EBITDA (Non-GAAP)……………………….. 271$ 267$ Three Months Ended March 31, Industrial Solutions Segment 2021 2020 Net (Loss)/Income……………………...……………………………. 178$ 159$ Interest Expense……………………………………………………. 14 1 Income Tax Provision…………………...…………………… 17 31 Depreciation and Amortization……………………………………. 106 104 Share-based Compensation and Other Stock Payments………… 147 19 Adjusted EBITDA (Non-GAAP)……………………………… 462$ 314$ Three Months Ended March 31, Corporate and Other 2021 2020 Net Income (Loss)………………………..……...……………………………. (2,026)$ (1,590)$ Interest Expense……………….…………………………………… 103 517 Income Tax Provision/(Benefit)……………………..…………… 414 (721) Depreciation and Amortization………………………………………………………………44 32 Share-based Compensation and Other Stock Payments………………………………………………………………164 239 Adjusted EBITDA (Non-GAAP)……………………..……………. (1,301)$ (1,523)$ Three Months Ended March 31,
EXHIBIT C Consolidated Statement of Cash Flows 17 | Investor Presentation 2021 2020 Net (loss) income…...……………………………………………………………………………………………(1,210)$ 954$ Adjustments to reconcile net cash used in operating activities: Depreciation and amortization expense…………………………………………………………………….1,553 1,612 Deferred income taxes………………………………………………………………………………………….(5) 22 Change in fair value of interest rate swap agreements………………………………………………………………….5 138 Stock-based compensation……………………………………………………………………………………..219 308 Allowance for doubtful accounts……………………………………………………………………………….(218) 29 Common stock issued under defined contribution 401(k) plan…………………………………….258 - Gain on disposal of assets……………………………………………………………………………………….(23) - Changes in operating assets and liabilities, net of acquisition: Accounts receivable………………………………………………………………………………………………..1,229 2,037 Employee retention credit receivable………………………………………………………………………………………………..(3,372) - Contract assets………………………………………………………………………………………………..(269) - Inventories ……………………………………………………………………………………………………………(13,552) (8,891) Prepaid expenses and other current assets……………………………………………………………..699 (476) Accounts payable ……………………………………………………………………………………………….7,591 3,545 Accrued liabilities………………………………………………………………………………………………419 (657) Customer deposits…………………………………………………………………………………………….(1,764) 305 Other non-current assets and liabilities…………………………………………………………………………………………….3 49 Net cash used in operating activities………………………………………………………………………………………………(8,437) (1,025) Purchases of property and equipment……………………………………………………………………………...…….(612) (670) Proceeds from disposals of property and equipment……………………………………………………………………23 - (589) (670) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from line of credit………………………………………………………………………..5,673 51,552 Payments on line of credit………………………………………………………………………..(2,450) (49,070) Proceeds from long-term debt…………………………………………………………………………595 - Payments on long-term debt…………………………………………………………………………(150) (242) Principal payments on finance leases………………………………………………………………………………..(339) (218) Shares withheld for taxes in connection with issuance of restricted stock………………………………………………………………………………..(847) - Proceeds from sale of common stock, net………………………………………………………………………………..6,101 - 8,583 2,022 - NET (DECREASE) INCREASE IN CASH……………………………………….…………………….(443) 327 CASH beginning of the period……………………………………………………. 3,372 2,416 CASH end of the period………………………………………………………………………..2,929$ 2,743$ Three Months Ended March 31, CASH FLOWS FROM OPERATING ACTIVITIES: CASH FLOWS FROM INVESTING ACTIVITIES: Net cash used in investing activities……………………………………………………………………………………………… Net cash provided by financing activities………………………………………………………………………………………………………………………………
EXHIBIT D Consolidated Balance Sheet 18 | Investor Presentation March 31, December 31, 2021 2020 CURRENT ASSETS: Cash………………………………………………………………………………………………………………………2,929$ 3,372$ Accounts receivable, net………………………………………………………………………………………………………………………14,326 15,337 Employee retention credit receivable………………………………………………………………………………………………………………………3,372 - Contract assets………………………………………………………………………………………………………………………2,522 2,253 Inventories, net………………………………………………………………………………………………………..40,276 26,724 Prepaid expenses and other current assets……………………………………………………………………………2,204 2,909 Total current assets…………………………………………………………………………………………………….65,629 50,595 LONG-TERM ASSETS: Property and equipment, net………………………………………………………………………………….. 44,766 45,195 Operating lease right-of-use assets…………………………………………………………………………………………………………………..19,401 19,321 Intangible assets, net…………………………………………………………………………………………… 4,003 4,186 Other assets………………………………………………………………………………………………………. 422 385 TOTAL ASSETS……………………………………………………………………………………………………….. 134,221$ 119,682$ CURRENT LIABILITIES: Line of credit and other notes payable…………………………………………………………………………………………..5,076$ 1,406$ Current portion of finance lease obligations………………………………………………………………………..1,456 1,427 Current portion of operating lease obligations………………………………………………………………………..1,743 1,832 Accounts payable………………………………………………………………………………………………………….25,836 18,180 Accrued liabilities ………………………………………………………………………………………………………..6,731 6,307 Customer deposits…………………………………………………………………………………………………. 17,055 18,819 Total current liabilities………………………………………………………………………………………………..57,897 47,971 LONG-TERM LIABILITIES: Long-term debt, net of current maturities……………………………………………………………………………….9,380 9,381 Long-term finance lease obligations, net of current portion…………………………………………………. 1,891 1,996 Long-term operating lease obligations, net of current portion………………………………………………….19,748 19,569 Other…………………………………………………………………………………………………………………………123 104 Total long-term liabilities………………………………………………………………………………………….31,142 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, $0.001 par value; 30,000,000 shares authorized; 18,474,170 and 17,211,498 shares issued as of March 31, 2021 and December 31, 2020, respectively………………………………………………………………………………………………………18 17 Treasury stock, at cost, 273,937 shares as of March 31, 2021 and December 31, 2020, respectively……………………………………………………………………………………………………… (1,842) (1,842) Additional paid-in capital………………………………………………………………………………………………….390,479 384,749 Accumulated deficit……………………………………………………………………………………………………………….(343,473) (342,263) Total stockholders' equity……………………………………………………………………………………… 45,182 40,661 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY………………………………………………………….. 134,221$ 119,682$ ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY
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