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federal, state and local regulations, including, among others, regulations relating to hydraulic fracturing and greenhouse gas emissions.

Our customers may be significantly affected by disruptions and volatility in the economy and in the wind energy market.

        Market disruptions and regular market volatility, including the recent material decline in oil prices, may have adverse impacts onadversely impact our customers' ability to pay amounts payabledue to us and could cause related increases in our working capital or borrowing needs. In addition, our customers have in the past attempted and may attempt in the future to renegotiate the terms of contracts or reduce the size of orders with us as a result of disruptions and volatility in the markets. We cannot predict with any degree of certainty the amount of our backlog that we will ultimately ship to our customers.

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        Market disruptions and regular market volatility may also result in an increased likelihood of our customers asserting warranty or remediation claims in connection with our products or services that they would not ordinarily assert in a more stable economic environment. In the event of such a claim, we may incur costs if we decide to compensate the affected customer or to engage in litigation against the affected customer regarding the claim. We maintain product liability insurance, but there can be no guarantee that such insurance will be available or adequate to protect against such claims. A successful claim against us could result inhave a material adverse effect on our business.

We may have difficulty obtaining additional financing when needed or on acceptable terms, and there can be no assurances that our operations will generate cash flows in an amount sufficient to enable us to pay our indebtedness.

        We rely on banks and capital markets as a source of liquidity for capital requirements not satisfied by cash flows from operations or asset sales. We have experienced operating losses for each of the years during which we have operated, and we anticipate that we will incur additional outlays in the near term in connection with our contemplated restructuring efforts. We expect to fund our facility restructuring efforts in part by using proceeds from the sale of surplus assets. We may be unable to complete these sales on a timely basis, and our committed sources of liquidity may be inadequate to satisfy our operational and restructuring needs. There can be no assurances that our recent restructuring efforts will be successful in improving our profitability. If we are not able to access capital at competitive rates, the ability to implement our business plans may be adversely affected. In the absence of access to capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations at times when the prices for such assets or operations are depressed. In such event, we may not be able to consummate those dispositions. Furthermore, the proceeds of any such dispositions may not be adequate to meet our debt service obligations when due.

        Additionally, our ability to make scheduled payments on our existing or future debt obligations and fund operations will depend on our future financial and operating performance. There can be no assurances that our operations will generate sufficient cash flows to enable us to pay our remaining indebtedness or to fund our other liquidity needs. If we cannot make scheduled payments on our debt, we will be in default and, as a result, among other things, our debt holders could declare all outstanding principal and interest to be due and payable which could force us to liquidate certain assets or alter our business operations or debt obligations. Moreover, if we are unable to obtain additional capital or if our current sources of financing including customer advances, are reduced or unavailable, we will likely be required to delay, reduce the scope of, or eliminate our plans for restructuring and expansion and this could affect our overall operations. In addition, raising capital in the equity capital markets could result in limitations on our ability to use our net operating loss carryforwards.

Our plans for growth and diversification may not be successful, and could result in poor financial performance.

        We have made a strategic decision to diversify our business further into oil and gas, mining and other industries, particularly within our gearing and specialty weldments businesses. While we have historically participated in these lines of business, there is no assurance that we will be able to grow our presence in these businessesmarkets at a rate sufficient to compensate for a potentially weaker wind energy market. Moreover, our participation in these markets may require additional investments in personnel,

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equipment and operational infrastructure. If we are unable to further penetrate these markets, our plans to diversify our operations may not be successful and our anticipated future growth may be adversely affected.

        We may also grow our existing business through increased production levels at existing facilities. Such growth will require coordinated efforts across the Company and continued enhancements to our current operating infrastructure, including management and operations personnel, systems, equipment

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and property. Moreover, if our efforts do not adequately predict the demand of our customers and our potential customers, our future earnings may be adversely affected.

We face competition from industry participants who may have greater resources than we do.

        Our businesses are subject to risks associated with competition from new or existing industry participants who may have more resources and better access to capital. Many of our competitors and potential competitors may have substantially greater financial, customer support, technical and marketing resources, larger customer bases, longer operating histories, greater name recognition and more established relationships in the industry than we do. Among other things, these industry participants compete with us based upon price, quality, location and available capacity. We cannot be sure that we will have the resources or expertise to compete successfully in the future. Some of our competitors may also be able to provide customers with additional benefits at lower overall costs to increase market share. We cannot be sure that we will be able to match cost reductions by our competitors or that we will be able to succeed in the face of current or future competition. In addition, we may face competition from our customers as they seek to be more vertically integrated and offer full service packages. Some of our customers are also performing more services themselves.

If our projections regarding the future market demand for our products and services are inaccurate, our operating results and our overall business may be adversely affected.

        We have previously made significant capital investments in anticipation of rapid growth in the U.S. wind energy market. However, the growth in the U.S. wind energy market has not kept pace with the expectations we had when some of these capital investments were made, and there can be no assurance that the U.S. wind energy market will grow and develop in a manner consistent with our expectations, or that we will be able to fill our idle capacity through the further diversification of our operations. Our internal manufacturing and service capabilities have required significant up-front fixed costs. If market demand for our products and services does not increase at the pace we have anticipated and align with our manufacturing capacity, we may be unable to offset these costs and to achieve economies of scale, and our operating results may continue to be adversely affected as a result of high fixed costs, reduced margins and underutilization of capacity. In light of these considerations, we may be forced to temporarily idle existing capacity or sell to third parties manufacturing capacity that we cannot utilize in the near term, in addition to the steps that we have already taken to adjust our capacity more closely to demand. Alternatively, if we experience rapid demand for our products and services in excess of our estimates, or we have reducedreduce our manufacturing capacity, our installed capital equipment and existing workforce may be insufficient to support higher production volumes, which could adversely affect our customer relationships and overall reputation. In addition, we may not be able to expand our workforce and operations in a timely manner, procure adequate resources or locate suitable third-party suppliers to respond effectively to changes in demand for our existing products and services or to the demand for new products and services requested by our customers, and our business could be adversely affected. Our ability to meet such excess customer demand could also depend on our ability to raise additional capital and effectively scale our manufacturing operations.

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We rely on unionized labor, the loss of which could adversely affect our future success.

        We are dependent on the services of unionized labor and have collective bargaining agreements with certain of our operations workforce at our Cicero, Illinois and Neville Island, Pennsylvania gearingGearing facilities. The loss of the services of these and other personnel, whether through terminations, attrition, labor strike or otherwise, or a material change in our collective bargaining agreements, could have a material adverse impact on us and our future profitability. A collectiveCollective bargaining agreement hasagreements have been ratified by the collective bargaining unitunits in place at our Cicero and Neville Island facilityfacilities and isare expected to expire in February 2018 and October 2017. The collective bargaining agreement with the Cicero union expired in February 2014;

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the parties are currently negotiating a new collective bargaining agreement.2017, respectively. As of December 31, 2013,2014, our collective bargaining units represented approximately 18%15% of our workforce.

We may need to hire additional qualified personnel, including management personnel, and the loss of our key personnel could adversely affect our business.

        Our future success will depend largely on the skills, efforts and motivation of our executive officers and other key personnel. Our success also depends, in large part, upon our ability to attract and retain highly qualified management and key personnel throughout our organization. We face competition in the attraction and retention of personnel who possess the skill sets that we seek. In addition, key personnel may leave the Companyus and subsequently compete against us. The loss of the services of any of our key personnel, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could have a material adverse effect on our business, results of operations or financial condition.

Our ability to comply with regulatory requirements is critical to our future success, and our current level of controls cannot guarantee that we are in compliance with all such requirements.

        As a manufacturer and distributor of wind and other energy industry products we may be or becomeare subject to the requirements of federal, state and local or foreign regulatory authorities. In addition, we are subject to a number of industry standard-setting authorities, such as the American Gear Manufacturers Association and the American Welding Society. Changes in the standards and requirements imposed by such authorities could have a material adverse effect on us. In the event we are unable to meet any such standards when adopted, our business could be adversely affected. We may not be able to obtain all regulatory approvals, licenses and permits that may be required in the future, or any necessary modifications to existing regulatory approvals, licenses and permits, or maintain all required regulatory approvals, licenses and permits. There can be no guarantee that our businesses are in full compliance with such standards and requirements. We continue to develop our internal controls with a goal of providing a greater degree of certainty that our businesses are in compliance with applicable governmental and regulatory requirements, but our current level of internal control may fail to reveal to us material instances of non-compliance with such requirements, and such non-compliance could have a material adverse effect on our business.

Current or future litigation and regulatory actions could have a material adverse impact on us.

        From time to time, we are subject to litigation and other legal and regulatory proceedings relating to our business. We are currently defendants in certain litigation matters and the subject of certain investigations by governmental agencies as further described under in Part I, Item 3 "Legal Proceedings" of this Annual Report. No assurances can be given that the results of these or new matters will be favorable to us. An adverse resolution of lawsuits, investigations or arbitrations could have a material adverse effect on our business, financial condition and results of operations. Defending ourselves in these matters may be time-consuming, expensive and disruptive to normal business operations and may result in significant expense and a diversion of management's time and attention from the operation of our business, which could impede our ability to achieve our business objectives. Additionally, any amount that we may be required to pay to satisfy a judgment or settlement may not be covered by insurance. Under our charter and the indemnification agreements that we have entered into with our officers, directors and certain third parties, we are required to indemnify and advance expenses to them in connection with

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their participation in certain proceedings. There can be no assurance that any of these payments will not be material.

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We could incur substantial costs to comply with environmental, health and safety laws and regulations and to address violations of or liabilities under these requirements.

        Our operations are subject to a variety of environmental, health and safety laws and regulations in the jurisdictions in which we operate and sell products governing, among other things, health, safety, pollution and protection of the environment and natural resources, including the use, handling, transportation and disposal of non-hazardous and hazardous materials and wastes, as well as emissions and discharges into the environment, including discharges to air, surface water, groundwater and soil, product content, performance and packaging. We cannot guarantee that we have been or will at all times be in compliance with such laws and regulations. Changes in existing environmental, health and safety laws and regulations, or their application, could cause us to incur additional or unexpected costs to achieve or maintain compliance. Failure to comply with these laws and regulations, obtain the necessary permits to operate our business, or comply with the terms and conditions of such permits may subject us to a variety of administrative, civil and criminal enforcement measures, including the imposition of civil and criminal sanctions, monetary fines and penalties, remedial obligations, and the issuance of compliance requirements limiting or preventing some or all of our operations. The assertion of claims relating to regulatory compliance, on or off-site contamination, natural resource damage, the discovery of previously unknown environmental liabilities, the imposition of criminal or civil fines or penalties and/or other sanctions, or the obligation to undertake investigation, remediation or monitoring activities could result in potentially significant costs and expenditures to address contamination or resolve claims or liabilities. Such costs and expenditures could have a material adverse effect on our business, financial condition or results of operations. Under certain circumstances, violation of such environmental laws and regulations could result in us being disqualified from eligibility to receive federal government contracts or subcontracts under the federal government's debarment and suspension system.

        We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of currently and formerly owned, leased or operated properties, or properties to which hazardous substances or wastes were sent by current or former operators at our current or former facilities, regardless of whether we directly caused the contamination or violated any law at the time of discharge or disposal. Several of our facilities have a history of industrial operations, and contaminants have been detected at some of our facilities. The presence of contamination from hazardous substances or wastes could interfere with ongoing operations or adversely affect our ability to sell, lease or use our properties as collateral for financing. We also could be held liable under third-party claims for property damage, natural resource damage or personal injury and for penalties and other damages under such environmental laws and regulations, which could materially and adversely affecthave a material adverse effect on our business, financial condition and results of operations. Under certain circumstances, violation of such environmental laws and regulations could result in us being disqualified from eligibility to receive federal government contracts or subcontracts under the federal government's debarment and suspension system.

Limitations on our ability to utilize our net operating losses ("NOLs") may negatively affect our financial results.

        We may not be able to utilize all of our net operating losses ("NOL's").NOLs. To the extent available, we will use any NOL carryforwards to reduce the U.S. corporate income tax liability associated with our operations. However, if we do not achieve profitability prior to their expiration, we will not be able to fully utilize our NOL'sNOLs to offset income. For financial statement presentation, all benefits associated with the NOL carryforwards have been reserved.reserved; therefore, this potential asset is not reflected on our balance sheet. Section 382 of the IRC generally imposes an annual limitation on the amount of NOL carryforwards that may be used to offset taxable income when a corporation has undergone certain changes in stock

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ownership. Our ability to utilize NOL carryforwards and built-in losses may be limited, under this section or otherwise, by our issuance of common stock or

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by other changes in stock ownership. Upon completion of our analysis of IRC Section 382, we have determined that aggregate changes in our stock ownership have triggered an annual limitation of NOL carryforwards and built-in losses available for utilization. Although this event limits the amount of pre-ownership change date NOL'sNOLs and built-in losses we can utilize annually, it would not preclude us from fully utilizing our current NOL carryforwards prior to their expiration. To the extent our use of NOL carryforwards and associated built-in losses is significantly limited in the future due to additional changes in stock ownership, our income could be subject to U.S. corporate income tax earlier than it would if we were able to use NOL carryforwards and built-in losses without such annual limitation, which could result in lower profits and the loss of benefits from these attributes. To address these concerns, in February 2013 our Board of Directors (the "Board") approved the adoption of a Section 382 rights plan designed to preserve our NOL carryforwards and other tax benefits; ourbenefits. Our stockholders subsequently ratified the Section 382 rights plan at our 2013 Annual Meeting of Stockholders. There can be no assurances that the Section 382 rights plan will be effective in protecting our NOL carryforwards.

If our estimates for warranty expenses differ materially from actual claims made, or if we are unable to reasonably estimate future warranty expense for our products and services, our business and financial results could be adversely affected.

        We provide warranty terms generally ranging between one and five years to our towers, gearing and services customers depending upon the specific product or service and terms of the customer agreement. We reserve for warranty claims based on industry experience and estimates made by management based upon a percentage of our sales revenues related to such products or services. From time to time, customers have submitted warranty claims to us. However, we have a limited history on which to base our warranty estimates for certain products that we manufacture and services that we provide. Our assumptions could be materially differentdiffer from the actual performance of our products in the future and could exceed the levels against which we have reserved. In some instances our customers have interpreted the scope and coverage of certain of our warranty provisions differently from our interpretation of such provisions. The expenses associated with remediation activities in the wind energy industry can be substantial, and if we are required to pay such costs in connection with a customer's warranty claim we could be subject to additional unplanned cash expenditures. If our estimates prove materially incorrect, or if we are required to cover remediation expenses in addition to our regular warranty coverage, we could be required to incur additional expenses and could face a material unplanned cash expenditure, which could adversely affect our business, financial condition and operating results.results of operations.

We may be unable to keep pace with rapidly changing technology in wind turbine and other industrial component manufacturing.

        The global market for wind turbines, as well as for other industrial components we manufacture, is rapidly evolving technologically. Our component manufacturing equipment and technology may not be suited for future generations of products being developed by wind turbine companies. For example, some wind turbine manufacturers are using wind turbine towers made from concrete instead of steel. Other wind turbine designs have reduced the use of gearing or eliminated the gearbox entirely through the use of direct or compact drive technologies. To maintain a successful business in our field, we must keep pace with technological developments and changing standards of our customers and potential customers and meet their constantly evolving demands. If we fail to adequately respond to the technological changes in our industry, or are not suited to provide components for new types of wind turbines, our business, financial condition and operating results may be adversely affected.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

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ITEM 2.    PROPERTIES

        Our corporate headquarters is located in Cicero, Illinois, a suburb located west of Chicago, Illinois. In addition, the Subsidiaries own or lease operating facilities, which are presented by operating segment as follows:

        We consider our facilities to be in good condition and adequate for our present and future needs.

ITEM 3.    LEGAL PROCEEDINGS

Shareholder Lawsuits

        On February 11, 2011, a putative class action was filed in the United States District Court for the Northern District of Illinois (the "USDC") against us and certain of our current or former officers and directors. The lawsuit was purportedly brought on behalf of purchasers of our common stock between March 17, 2009 and August 9, 2010. A lead plaintiff was appointed and an amended complaint was filed on September 13, 2011. The amended complaint named as additional defendants certain of our current and former directors, certain Tontine entities, and Jeffrey Gendell, a principal of Tontine. The complaint sought to allege that the defendants violated Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, and/or Section 20(a) of the Exchange Act by issuing or causing to be issued a series of allegedly false and/or misleading statements concerning our financial results, operations, and prospects, including with respect to the January 2010 secondary public offering of our common stock (the "Offering"). The plaintiffs alleged that our statements were false and misleading because, among other things, our reported financial results during the class period allegedly violated accounting principles generally accepted in the U.S. ("GAAP") because they failed to reflect the impairment of goodwill and other intangible assets, and we allegedly failed to disclose known trends and other information regarding certain customer relationships at Brad Foote. In support of their claims, the plaintiffs relied in part upon six alleged confidential informants, all of whom were alleged to be former employees of the Company. On November 18, 2011, we filed a motion to dismiss. On April 19, 2012, the USDC granted in part and denied in part our motion. The USDC dismissed all

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claims with prejudice against each of the named current and former officers except for J. Cameron Drecoll and held that the plaintiffs had failed to state a claim for any alleged misstatements made after March 19, 2010. In addition, the USDC dismissed all claims with prejudice against the named Tontine entities and Mr. Gendell. The USDC denied the motion with respect to certain of the claims asserted against us and Mr. Drecoll. We filed our answer and affirmative defenses on May 21, 2012. The plaintiffs' class certification was filed on June 22, 2012, and the parties agreed to a briefing schedule. The parties subsequently participated in a mediation session on August 20, 2012, and reached agreement on a settlement of the matter in the amount of $3,915, payable by our insurance carrier. The USDC granted final approval of the settlement on June 27, 2013.

        Between February 15, 2011 and March 30, 2011, three putative shareholder derivative lawsuits were filed in the USDCUnited States District Court for the Northern District of Illinois (the "USDC") against certain of the our current and former officers and directors, and certain Tontine entities, seeking to challenge alleged breaches of fiduciary duty, waste of corporate assets and unjust enrichment, including in connection with the Offering.January 2010 secondary public offering of our common stock (the "2010 Stock Offering"). One of the lawsuits also alleged that certain directors violated Section 14(a) of the Exchange Act in connection with ourthe Proxy Statement for our 2010 Annual Meeting of Stockholders. Two of the matters pending in the USDC were subsequently consolidated, and on May 15, 2012, the USDC granted the defendants' motion to dismiss the consolidated cases and also entered an order dismissing the third case. On January 17, 2014, we and the plaintiffs from the consolidated derivative lawsuit filed a joint motion to reopen the derivative action and preliminarily approve a derivative settlement. The USDC subsequently reopened the derivative action and granted preliminary approval of the settlement on February 3, 2014. The final approval hearing is scheduled for April 3, 2014. If finally approved by the USDC, the settlement would resolve theresolved outstanding shareholder derivative claims, including those raised in certain shareholder demand letters received by ourthe Board. The terms of the settlement includeincluded the adoption by us of certain corporate governance reforms, along with other remedial measures. The settlement providesprovided for payment by our insurance carrier and/or Broadwind ofus to pay plaintiffs' counsel's attorneys' fees and expenses in the amount of $600, subject to$600. The USDC approval.

        We received a request from the Tontine defendants for indemnification in the derivative suits and the class action lawsuit from Tontine and/or Mr. Gendell pursuant to various agreements related to sharesgranted final approval of our common stock owned by Tontine. We maintain directors and officers liability insurance; however, the costs of indemnification for Mr. Gendell and/or Tontine would not be covered by any Company insurance policy. We subsequently entered into an agreement with Tontine providing, among other things, for the settlement on April 3, 2014.

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SEC Inquiry

        In August 2011, we received a subpoena from the SEC seeking documents and other records related to certain accounting practices at Brad Foote.Foote Gear Works, Inc. ("Brad Foote"). The subpoena was issued in connection withfollowing an informal inquiry that we received from the SEC in November 2010, which likely arose out of a whistleblower complaint that the SEC received related to revenue recognition, cost accounting and intangible and fixed asset valuations at Brad Foote. We have been in regular contact with the SEC, and in its communications the SEC has clarified or supplemented its requests. We have produced documents responsive to such requests and completed the process of responding to the subpoena for documents.SEC's subpoena. Following the issuance of subpoenas for testimony, the SEC has deposed certain of our current and former Brad Footeemployees.

        On May 8, 2014, we, our Chief Financial Officer ("CFO") and Company employees. We cannot currently predicta former Chief Executive Officer and director (the "Former CEO") received "Wells notices" (the "Notices") from the outcomeSEC's Division of this investigation. We do not believe that the resolution of this matter will have a material adverse effect on our consolidated financial position or results of operations. No estimate regarding the loss or range of loss, if any, that may be incurredEnforcement in connection with this matterits ongoing investigation of us. A Wells notice is possible at this time. All pending reimbursement requests from Tontine relatednot a formal allegation or a finding of wrongdoing, but is a preliminary determination by the SEC Enforcement Staff (the "Staff") that the Staff may recommend to the SEC inquiry were resolvedthat a civil enforcement action or administrative proceeding be brought against the recipient. The Notices indicated that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action alleging violations of the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act, the Sarbanes-Oxley Act and certain SEC rules. The Notices to the CFO and the Former CEO related only to an intangible valuation issue relating to events in 2009 and the 2010 Stock Offering, and the Notice to us related to that intangible valuation issue and certain revenue recognition issues relating to events in 2009. Under SEC procedures, a recipient of a Wells notice has an opportunity to respond in the above-referenced settlement.

form of a Wells submission that seeks to persuade the SEC that such an action should not be brought. On June 16, 2014, we submitted to the Staff a Wells submission to explain our views concerning such matters.

Table        On February 5, 2015, the SEC announced a settlement with us, our CFO and the Former CEO in connection with the SEC investigation. Consistent with standard SEC practice, we have neither admitted nor denied the SEC's allegations. Under the terms of Contentsthe settlement, we consented to the entry of a judgment requiring us to pay a civil penalty of $1,000. In addition, (i) our CFO agreed to pay disgorgement and prejudgment interest of $23 (which was reimbursed by us) and a penalty of $50, and (ii) the Former CEO agreed to pay disgorgement and prejudgment interest of $543 (which was reimbursed by us) and a penalty of $75. We cooperated with the SEC over the course of its investigation, and we conducted our own comprehensive review, together with our Board's Audit Committee, in conjunction with the investigation. The USDC granted final approval of the settlement on February 11, 2015.

Environmental Matters

        On February 15, 2011, pursuant to a search warrant, officials from the United States Environmental Protection Agency ("USEPA") entered and conducted a search of the Cicero Avenue Facility in connection with the alleged improper disposal of industrial wastewater to the sewer. Also on or about February 15, 2011, in connection with the same matter, we received a grand jury subpoena requesting testimony and the production of certain documents relating to the Cicero Avenue Facility's past compliance with certain environmental laws and regulations relating to the generation, discharge and disposal of wastewater from certain of its processes between 2004 and the present. On or about February 23, 2011, we received another grand jury subpoena relating to the same investigation, requesting testimony and the production of certain other documents relating to certain of the Cicero Avenue Facility's employees, environmental and manufacturing processes, and disposal practices. On April 5, 2012, we received a letter from the United States Attorney's Office, Northern District of Illinois ("USAO") requesting the production of certain financial records from 2008 to the present. We subsequently completed our response to the subpoenas and to the USAO's request and also voluntarily instituted corrective measures at the Cicero Avenue Facility, including changes to its wastewater

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disposal practices. On September 24, 2013, the USAO commenced a criminal action in the USDC based on this investigation. Subsequently, Brad Foote entered into a plea agreement with the USAO (the "Plea Agreement") with regard to this criminal action, pursuant to which Brad Foote agreed to plead guilty to one count of knowingly violating the Clean Water Act, Title 33, United States Code, Section 1319(c)(2)(A) and pay a $1,500 fine (payable in three installments of $500 within three years of the date of sentencing), subject to the USDC's approval of the Plea Agreement. Brad Foote pled guilty pursuant to the Plea Agreement on November 13, 2013, and the USDC approved the Plea Agreement on February 19, 2014. By correspondence dated April 17, 2014, the USEPA advised that, due to the admitted violation of the Clean Water Act by Brad Foote, the Cicero Avenue Facility was statutorily debarred from receiving federal contracts or benefits if any of the work will be performed at the place where the offense occurred. Subsequently, by correspondence dated November 7, 2014, the USEPA advised that the statutory debarment had been terminated as a result of the corrective actions undertaken by Brad Foote.

Other

        We are also a party to additional claims and legal proceedings arising in the ordinary course of business. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on our results of operations, financial position or liquidity. It is possible that if one or more of the matters described above were decided against us, the effects could be material to our results of operations in the period in which we would be required to record or adjust the related liability and could also be material to our cash flows in the period in which we would be required to pay such liability.

ITEM 4.    MINE SAFETY DISCLOSURES

        Not Applicable

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PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        Our common stock is traded on the NASDAQ Capital Market ("NASDAQ") under the symbol "BWEN." The following table sets forth the high and low bid prices of our common stock traded on the NASDAQ.

        The closing price for our common stock as of March 6, 2014February 19, 2015 was $10.65.$5.45. As of March 6, 2014,February 19, 2015, there were 5438 holders of record of our common stock.

Dividends

        We have never paid cash dividends on our common stock and have no current plan to do so in the foreseeable future. The declaration and payment of dividends on our common stock are subject to the discretion of our Board and are further limited by our credit agreements and other contractual agreements we may have in place from time to time. The decision of our Board to pay future dividends will depend on general business conditions, the effect of a dividend payment on our financial condition, and other factors our Board may consider relevant. The current policy of our Board is to reinvest cash generated in our operations to promote future growth and to fund potential investments.

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Performance Graph

The following Performance Graph and related information shall not be deemed "soliciting material" or "filed" under the Securities Act of 1933, as amended or the Exchange Act (collectively, the "Acts"), nor shall such information be incorporated by reference by any general statement incorporating by reference this Annual Report into any filing under such Acts, except to the extent that we specifically incorporate it by reference into such filing.

        The following graph compares the cumulative five-year shareholder returns for our common stock as compared with the S&P 500 and the First Trust ISE Global Wind Energy Index Fund for the period

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from April 9,December 31, 2009 (the date our common stock began trading on the NASDAQ) to December 31, 2013.2014. The graph assumes an investment of $100 as of April 9,December 31, 2009 and that dividends were reinvested. We discontinued the comparison to the Clean Edge Global Wind Energy Index as quoted values were unavailable for most of 2013.

Repurchases

        We did not engage in any repurchasesOn October 29, 2014, our Board authorized a program to repurchase up to $10,000 of our outstanding common stock over the following six month period. Our share repurchase program does not obligate us to acquire any specific number of shares. The common stock may be acquired in the open market at prices subject to certain pricing guidelines determined us. We have no obligation to repurchase shares, and we may discontinue purchases at any time that we determine additional purchases are not warranted.

        The following table provides information about our purchases of equity securities that are registered by us pursuant to Section 12 of the Exchange Act during the fourth quarter or for the year ended December 31, 2013.2014:

Unregistered Sales of Equity Securities

        There were no unregistered sales of equity securities for the years ended December 31, 2014, 2013 2012 or 2011.2012.

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Securities Authorized for Issuance Under Equity Compensation Plans

        See Part III, Item 12 "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" of this Annual Report for information as of December 31, 20132014 with respect to shares of our common stock that may be issued under our existing share-based compensation plans.

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ITEM 6.    SELECTED FINANCIAL DATA

        The following selected historical consolidated financial and other data are qualified in their entirety by reference to, and should be read in conjunction with, our consolidated financial statements and the related notes thereto appearing elsewhere herein and Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our selected statement of continuing operations data set forth below for each of the years ended December 31, 2014, 2013, 2012, 2011 2010 and 2009,2010, and the balance sheet data as of December 31, 2014, 2013, 2012, 2011 2010 and 2009,2010, are derived from our consolidated financial statements.

(In thousands, except per share data)

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ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        As used in this Annual Report, the terms "we," "us," "our," "Broadwind," and the "Company" refer to Broadwind Energy, Inc. and its wholly-owned Subsidiaries.

(Dollar amounts are presented in thousands, except per share data and unless otherwise stated)

Business Overview

        Broadwind provides technologically advanced high-value products        We recognized sales of $241,300 in 2014, a 12% increase compared to $215,700 in 2013. The increase reflects growth in our Towers and servicesWeldments segment revenues, partially offset by small declines in our Gearing and Services segment revenues. We reported a net loss of $6,200 or $.42 per share in 2014, compared to energy, mining and infrastructure sector customers, primarilya net loss of $10,500 or $.73 per share in 2013. The $.31 per share improvement was due to improvements in the U.S. Our most significant presence is withinGearing and Services segments' results, partially offset by a decrease in the U.S. wind energy industry, although we have diversified into other industrial markets in order to improve our capacity utilizationTowers and reduce our exposure to uncertainty related to favorable governmental policies currently supportingWeldments segment's results. The 2013 year results include restructuring charges of $6,100 and a regulatory settlement charge of $1,500 associated with the U.S. wind energy industry. WithinUSEPA inquiry, partially offset by a $3,600 gain on the U.S. wind energy industry, we provide products and services to turbine manufacturers, wind farm developers and wind farm operators. Outsidesale of the wind energy market, we provide precision gearing, specialty weldmentsBrandon Facility; the 2014 year results include restructuring charges of $1,500, and servicesa regulatory settlement charge of $1,600 associated with the SEC inquiry.

        We booked $135,100 in net new orders in 2014, down from $404,400 in 2013. Towers and Weldments orders vary considerably from year to a broad range of industrial customersyear and have been significantly impacted by government policies and shifts in supplier capacity; orders for oil and gas, mining, steel and other industrial applications.

        In 2013, 80% of our sales were linkedthis segment totaled $77,600 in 2014 as compared to the wind energy industry, predominantly for towers used for new wind turbines, but also to service the installed base of wind turbines. The market for new U.S. wind energy installations is affected by a number of factors, including: (i) economic growth and the associated demand for new electricity generation; (ii) the cost of competing energy sources, primarily natural gas; (iii) federal and state-level wind energy development incentives; (iv) available transmission infrastructure and the proliferation of smart grid technology; and (v) improvements$361,500 in wind energy cost competitiveness resulting2013. 2014 Services orders totaled $15,700, up significantly from the maturationprior-year's orders of technologies and services within the wind energy industry. The highest impact development incentive has been the federal PTC for new wind turbines placed into service. Legislation supporting this incentive has been intermittent, which has caused volatility$8,500. Gearing orders totaled $42,900, up from $36,400 in the demand for new wind projects. For example, after the industry achieved record new installations totaling 13,131 MW in 2012, the level of wind turbine installations in 2013 dropped sharply to 1,084 MW, a reduction of more than 90%. This decrease2013. At December 31, 2014, total backlog was largely due to the temporary expiration of the PTC at the end of 2012, anticipation of which broadly curtailed wind farm development across the U.S, beginning in mid-2012. Although the PTC was reinstated at the beginning of 2013, the lack of advanced stage projects in the development pipeline at that time resulted in only a minimal level of installations completed during 2013. In response to the reinstatement of the PTC, there has been a resurgence of development activity, and new installations are expected to rise significantly beginning in 2014.

        Our sales of wind towers and services are broadly correlated to the demand for new wind turbines. However, demand for our products also reflects the level of competition in our respective markets, as well as other macro-economic factors. During 2013, despite the sharp drop in wind turbine installations, our tower demand was strong because several competitors had exited the business, and we have penetrated large customers representing a significant portion of the market which we did not previously serve. By contrast, demand for our service offerings dropped sharply in 2013 as customers insourced a larger share of their service activities in a year of low installation activity.

        Outside of wind energy, we serve a number of other industrial markets, including oil and gas, mining, and steel production. Although sales to these customers currently represent only about 20% of our revenue, our strategic objective is to grow in these markets, with a target of deriving a greater share of our revenue outside of new wind installations. Our products sold into these markets include

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gearboxes (both new and rebuilt), loose gearing, and large industrial weldments. The following table details the percentage of our revenue generated in each sector for the past two years:

        During 2011, we conducted a review of our business strategies and product plans given the outlook for the economy at large, the forecast for the industries we serve and our own business environment. As a result, we have been executing a restructuring plan to rationalize our facility capacity and our management structure, and to consolidate and increase the efficiencies of our operations.$202,400.

        In 2011, we concluded that our manufacturing footprint and fixed cost base were too large and expensive for our medium-termmedium term needs. We are executingexecuted a plan to reduce our facility footprint by approximately 40% through the sale and/or closure of facilities comprising a total of approximately 600,000 square feet. In April 2013, we completedOf the sale of the Brandon Facility, generating a gain on sale of $3,585 and approximately $8,000 in net proceeds after closing costs and the repayment of the mortgage on the Brandon Facility. To date, we have closed or reduced our leased presence at six facilities and achieved a reduction of approximately 400,000 square feet. The most significant remaining reduction relates to the anticipated closure and disposition of the Cicero Avenue Facility. The use of the Cicero Avenue Facility in our production was significantly curtailed at the end of 2013 and we recorded a related $1,732 impairment, primarily in cost of sales in the fourth quarter of 2013. We believe the remaining locations will be sufficient to support our Towers and Weldments, Gearing, Services and general corporate and administrative activities while allowing for growth for the next several years.

        Including costs incurred to date, we expect that a total of approximately $13,200 of net costs will be incurred to implement this restructuring initiative. To date, we have incurred approximately $11,500, or 88% of the total expected restructuring costs. Of the$13,700 total restructuring costs incurred, a total of approximately $4,800 consists ofare non-cash charges.

        During 2012, we establishedWe meet our short-term liquidity needs through our available cash balances and the use of a three-year $20,000 revolvingsecured credit agreementfacility with AloStar Bank of Commerce ("AloStar"), which was established on August 23, 2012 (the "Credit Facility"). In connection with this agreement, AloStar advanced funds against our borrowing base, which consistsWe intend to negotiate a new facility in anticipation of approximately 85%the expiration of eligible receivables and approximately 50% of eligible inventory. Proceedsthe Credit Facility on August 23, 2015. During 2014, the Credit Facility was used from time to time, although the transaction were usedoperating cash generated by the business was generally sufficient to repay certain outstanding indebtedness. Under this new recapitalized borrowing structure, borrowings are continuous andallow us to meet all cash receipts are automatically appliedobligations. At December 31, 2014, cash, cash equivalents and short-term investments totaled $20,300 and we had the ability to the outstanding borrowed balance. As a result of this structure, we anticipate that cash balances will remain at a minimum at all times when there are amounts outstandingborrow up to $14,450 under the credit line.

        In the third quarterCredit Facility. There were no Credit Facility borrowings outstanding as of 2013, we resolved a long-standing environmental matter related to our Gearing segment and recorded a $1,500 charge for a regulatory settlement associated with the Plea Agreement. Refer to Item 3 "Legal Proceedings" for further discussion of this matter.December 31, 2014.

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RESULTS OF OPERATIONS

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

        The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the year ended December 31, 2014 compared to the year ended December 31, 2013.

Consolidated

        Revenues increased by $25,558, from $215,710 for the year ended December 31, 2013, to $241,268 for the year ended December 31, 2014. We experienced a significant increase in Towers and Weldments revenue, partially offset by small decreases in Gearing and Services revenue. Towers and Weldments segment revenues increased 16% due to increased customer demand. Tower units sold increased by 11% in 2014 and average selling price rose as we produced larger towers for more powerful turbines. Weldments revenue for large industrial customers decreased $3,291 as compared to the prior year due to weakness in the mining industry. Despite higher orders, Gearing revenue decreased 2% due to production delays as we completed our plant consolidation and inventory reduction Continuous Improvement projects. Services revenue decreased 10% due to the absence of a large industrial project that was completed in early 2013, partially offset by growth in blades revenue in 2014.

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        Gross profit increased by $5,145, from $12,345 for the year ended December 31, 2013, to $17,490 for the year ended December 31, 2014. The increase in gross profit was primarily attributable to $3,706 in lower restructuring charges and $634 in lower plant depreciation charges. Improved contribution margins on increased sales volume were largely offset by higher costs of production due to inefficiencies in our Abilene, Texas tower facility, as well as higher customer accommodation charges and warranty costs. As a result, our gross margin increased from 5.7% for the year ended December 31, 2013, to 7.3% for the year ended December 31, 2014.

        Selling, general and administrative ("SG&A") expenses decreased by $233, from $21,414 for the year ended December 31, 2013, to $21,181 for the year ended December 31, 2014. The small decrease was attributable to lower legal expenses, offset by higher professional services fees. SG&A expenses as a percentage of sales decreased from 9.9% in the prior year to 8.8% in the current year, reflecting volume leverage.

        Intangible amortization expense decreased from $1,552 for the year ended December 31, 2013, to $444 for the year ended December 31, 2014 due to the previous year's acceleration of amortization related to a portion of our customer relationship intangible asset that became fully amortized during the second quarter of 2013. We also recorded a $1,566 regulatory settlement charge related to settlement of the SEC inquiry in 2014, as compared to a $1,500 regulatory settlement charge associated with settlement of the USEPA inquiry in 2013. See Item 3 Legal Proceedings.

        Net loss improved from $10,499 for the year ended December 31, 2013, to $6,168 for the year ended December 31, 2014, as a result of the factors described above.

Towers and Weldments Segment

        The following table summarizes the Towers and Weldments segment operating results for the years ended December 31, 2014 and 2013:

        Towers and Weldments segment revenues increased by $25,426, from $159,478 for the year ended December 31, 2013, to $184,904 for the year ended December 31, 2014. Towers revenues increased $28,717 as we increased our plant capacity utilization in response to strong customer demand, but weldments revenues decreased $3,291. Towers and Weldments segment revenues increased 16%, while towers units sold increased by 11% in 2014 and average selling price rose as we produced larger towers for more powerful turbines. Towers revenue was reduced by $1,596 in 2014 due to customer accommodation charges.

        Towers and Weldments segment operating income decreased by $1,485, from $19,550 for the year ended December 31, 2013, to $18,065 for the year ended December 31, 2014. The decrease in operating income resulted from production inefficiencies and increased professional fees, largely offset by increased contribution margin from higher revenues. We experienced costs related to production inefficiencies in our Abilene, Texas facility, as we added additional shifts to increase production and as we introduced a new tower design. Production issues in this facility were the primary cause of $4,087 in increased indirect labor and overhead costs including increased maintenance expenses; we also experienced an increase in customer accommodation charges of $1,596 and warranty of $395 as compared to the prior year. Early in 2014, we experienced $681 in one-time professional expenses

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related to resolution of the previously disclosed 2013 accounting and internal control matter. Operating margin decreased from 12.3% during the year ended December 31, 2013, to 9.8% during the year ended December 31, 2014.

Gearing Segment

        The following table summarizes the Gearing segment operating results for the years ended December 31, 2014 and 2013:

        Gearing segment revenues decreased by $897, from $43,150 for the year ended December 31, 2013, to $42,253 for the year ended December 31, 2014. The 2% decrease in total revenues was due to production delays attributable to our plant consolidation and inventory reduction projects, and the transition to increased volumes of complex gearbox production. Sales decreases to wind, mining and other industrial customers were largely offset by a $10,409 increase in sales to oil & gas customers in 2014 as compared to 2013.

        Gearing segment operating loss improved by $8,493, from $17,916 for the year ended December 31, 2013, to $9,423 for the year ended December 31, 2014. The decrease in operating loss was due to $3,737 lower restructuring expenses, $1,825 lower non-cash charges, $716 in increased contribution margin on improved sales mix, $621 lower indirect labor costs, and the absence of the $1,500 environmental regulatory settlement charge recorded in 2013. As a result of the factors described above, operating margin improved from (41.5%) for the year ended December 31, 2013, to (22.3%) for the year ended December 31, 2014.

Services Segment

        The following table summarizes the Services segment operating results for the years ended December 31, 2014 and 2013:

        Services segment revenues decreased by $1,683, from $17,243 for the year ended December 31, 2013, to $15,560 for the year ended December 31, 2014. The 10% decrease in revenue was due to the absence of a large industrial project that was completed in early 2013, partially offset by stronger demand for turbine blade repairs in 2014.

        Services segment operating loss improved by $228, from $4,721 for the year ended December 31, 2013, to $4,493 for the year ended December 31, 2014. The improvement reflects lower revenues offset by improved contribution margins, and lower restructuring expenses. Operating margins deteriorated slightly on lower sales from (27.4%) for the year ended December 31, 2013, to (28.9%) for the year ended December 31, 2014.

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Corporate and Other

        Corporate and Other expenses decreased by $40, from $10,123 for the year ended December 31, 2013, to $10,083 for the year ended December 31, 2014. The decrease in expense was attributable to lower legal, restructuring, and employee and other expenses, offset by a $1,566 provision to settle the SEC inquiry in 2014 as compared to 2013.

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012

        The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the year ended December 31, 2013 compared to the year ended December 31, 2012.

Consolidated

        Revenues increased by $5,003, from $210,707 for the year ended December 31, 2012, to $215,710 for the year ended December 31, 2013. The increase in revenues was primarily attributable to an 18%, or $24,257, increase in our Towers and Weldments segment revenue due to increased volumes, partially offset by declines in other segments. We experienced a revenue decline of 22%, or $12,510, in our Gearing segment due to production delays and decreased industrial demand, as compared to the prior

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year. In our Services segment, we experienced ana 22% decrease in revenue in the current year2014 compared to the prior year,2013, due to sharp declines in construction activity, partially offset by a large industrial project performed by ourthe Abilene Texas drivetrain service center facility (the "Gearbox Facility")Gearbox Facility in the first half of 2013.

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        Gross profit increased by $5,509, from $6,836 for the year ended December 31, 2012, to $12,345 for the year ended December 31, 2013. The increase in gross profit was attributable to increased Towers and Weldments volumes and margins on the current mix of towers, partially offset by lower margins and lower volumes in Gearing and Services for the period ended December 31, 2013 as compared to the period ended December 31, 2012. As a result, our gross margin increased from 3.2% for the year ended December 31, 2012, to 5.7% for the year ended December 31, 2013. Gross profit margin excluding restructuring charges increased to 8.0% in the current year ended December 31, 2013, from 4.0% in the prior year.year ended December 31, 2012.

        Selling, general and administrative ("SG&A")&A expenses decreased by $220, from $21,634 for the year ended December 31, 2012, to $21,414 for the year ended December 31, 2013. The small decrease was the result of a variety of items including lower facility cost of $362, temporary labor costs of $147 and legal expenses of $279, partially offset by higher professional fees of $507, insurance expenses of $241 and director fees of $108. SG&A expenses as a percentage of sales decreased slightly from 10.3% in the prior year ended December 31, 2012 to 9.9% in the current year.year ended December 31, 2013.

        Intangible amortization expense decreased from $1,759 for the year ended December 31, 2012, to $1,552 for the year ended December 31, 2013 due to the previous acceleration of amortization related to a portion of our customer relationship intangible asset that became fully amortized during the second quarter of 2013. We also recorded a $1,500 charge for a regulatory settlement associated with the Plea Agreement.Gearing segment environmental inquiry. See Item 3, "Legal Proceedings."

        Net loss improved from $17,907 for the year ended December 31, 2012, to $10,499 for the year ended December 31, 2013, as a result of the factors described above and a $3,585 gain on the sale of the Brandon Facility.

Towers and Weldments Segment

        The following table summarizes the Towers and Weldments segment operating results for the years ended December 31, 2013 and 2012:

        Towers and Weldments segment revenues increased by $24,257, from $135,221 for the year ended December 31, 2012, to $159,478 for the year ended December 31, 2013. Towers and Weldments segment revenues increased due to a $23,469 increase in towers revenues, and a $788 increase in weldments revenues. Towers and Weldments segment revenues increased 18%, while tower sections sold increased by 5% in the current year periodended December 31, 2013 largely because we produced a larger number of smaller sections in the prior year period.ended December 31, 2012. Weldments revenue for large industrial customers increased 7% in the year ended December 31, 2013 as compared to the prior year period.ended December 31, 2012. We have continued our strategic focus on diversifying our end-markets; however, expansion of the weldments business has slowed recently due to a downturn in the mining industry.

        Towers and Weldments segment operating income increased by $16,784, from $2,766 for the year ended December 31, 2012, to $19,550 for the year ended December 31, 2013. The increase in operating income was attributable to increased volumes and margins on the current mix of towers in the year ended

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December 31, 2013 which includesincluded less variability in tower designs than in the prior year period, the reduction of production inefficiencies experienced in the prior year period and the expansion of weldments revenue. Operating margin

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increased from 2.0% during the year ended December 31, 2012, to 12.3% during the year ended December 31, 2013.

Gearing Segment

        The following table summarizes the Gearing segment operating results for the years ended December 31, 2013 and 2012:

        Gearing segment revenues decreased by $12,510, from $55,660 for the year ended December 31, 2012, to $43,150 for the year ended December 31, 2013. The 22% decrease in total revenues was due to production delays attributable to our plant consolidation and the transition to increased volumes of complex gearbox production, and decreased mining and natural gas related sales due to a decline in industrial demand, as compared to the prior year.

        Gearing segment operating loss increased by $10,290, from $7,626 for the year ended December 31, 2012, to $17,916 for the year ended December 31, 2013. The increase in operating loss was due to lower sales and production volumes, an unfavorable product mix, $3,295 of increased restructuring expenses, and a $1,500 regulatory settlement associated with the Plea Agreement,environmental inquiry, partially offset by $1,497 of lower depreciation and amortization, and $498 in lower employee compensation expense.expenses. As a result of the factors described above, operating margin deteriorated from (13.7%) for the year ended December 31, 2012, to (41.5%) for the year ended December 31, 2013.

Services Segment

        The following table summarizes the Services segment operating results for the years ended December 31, 2013 and 2012:

        Services segment revenues decreased by $4,863, from $22,106 for the year ended December 31, 2012, to $17,243 for the year ended December 31, 2013. The 22% decrease in revenue was primarily the result of greatly decreased construction activity, partially offset by a large industrial project performed in the first half of 2013 at the Abilene Gearbox Facility. The low level of wind farm construction and installations in 2013 negatively affected our Services segment revenue, both directly and indirectly, as wind farm operators have performed non-routine maintenance projects themselves.

        Services segment operating loss deteriorated by $536, from $4,185 for the year ended December 31, 2012, to $4,721 for the year ended December 31, 2013. The decline reflects lower volumes and margins, and higher inventory charges, offset by lower operating expenses due to a reduction in headcount in response to the downturn in activity experienced, and also offset by higher margins in the first half of the year due to the large industrial project. Operating margin deteriorated

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due to the large industrial project that was completed in early 2013. Operating margin deteriorated from (18.9%) for the year ended December 31, 2012, to (27.4%) for the year ended December 31, 2013.

Corporate and Other

        Corporate and Other expenses increased by $1,871, from $8,252 for the year ended December 31, 2012, to $10,123 for the year ended December 31, 2013. The increase in expenseexpenses was primarily attributable to increased employee compensation costs, of $504, increased professional fees of $537 and increased restructuring expense of $413.

Year Ended December 31, 2012 Compared to Year Ended December 31, 2011

        The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the year ended December 31, 2012 compared to the year ended December 31, 2011.