BWEN - Earnings call transcript Q2 2020

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Operator

Greetings, and welcome to Broadwind Second Quarter 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Jason Bonfigt, Broadwind's Chief Financial Officer. you. Thank

begin. may You

Jason Bonfigt

We of welcome Leading Broadwind our the I'm company's Blashford; and the release results opened market CEO, quarter conference and today CFO. you which, uncertain on second the Bonfigt, call today's quarter call. call Jason a remind may would company's by and are commentary the to include like morning, press second I our management's before outside the XXXX response statements, their conference and nature, detailing to Eric forward-looking results. issued that Good today control. to is questions

forward-looking differ management's current materially. these expectations may are results actual Although based statements and on beliefs,

Risk quarterly factors SEC. For could please results cause Factors a filings our actual the differ, section annual latest with of discussion of of the and the that to to some refer

our please Eric. historical of the in press find the release note issued our to that, call open I'll questions. non-GAAP turn With financial of remarks, can that At call Additionally, discussed during the line the prepared over reconciliations today. for we will you measures conclusion

Eric Blashford

lean supported and diversification, Thanks, natural turbine to This Jason, by our by on processes COVID-XX to and performed gas our period. management. manufacturing today. wind, quarter, was market steel industrials, business the and during broad-based performance second across during strong capital disciplined core well the pandemic, our macro revenue uncertainty long-term joining Despite growth markets guided us continued welcome focus related end the those

year-over-year plant XXXX. from quarter million, year-over-year XX Revenue $X.X and margin customers $XX.X X. respectively. increased we've markets. in improvements driven XX% gross tower net representing or $XX efficiencies supported to multiple since basis with highest We customers a early utilization income wind of volumes year-over-year generated second by nonwind and with of to levels Wind by Let's million the a more million million in begin $X.XX seen consecutive increased XX% on up demand section operating together XXXX, of and sales approximately and X than $X.X share, Improved operating our the our XXX quarter versus up second profitability. both and Slides year-over-year industry margin points, increase

$X.X quarter second of period. prior increase was EBITDA over million, $X an Our year million the

Our to total XX% backlog by the COVID-XX. which sequentially delayed timing million $XXX customer decreased to due were of orders,

offset Our scheduled delayed the remain and to and ability oil work deliveries I segment us will orders the throughout doubling tower team's supply sequentially. models customers. restrictions customers to in we both the Fabrications new were the strength and challenges have near produce medium the positioning million, half, in an was orders as the $XX orders. COVID-XX-related new expect the wind through this second Heavy increase in second chain in Heavy Fabrication into by of and existing to for quarter sequentially XX% several Orders term. Gearing market were gas challenged $XX encouraged quarter, softness million, evident

QX backlog. the $X.X XXXX, million, year, segment, our serve. of the increase Gearing orders XXXX the we Looking have primarily gas Solutions were in million, our XX%. posting diverse positive production quarter, which market, turbine versus markets in orders we COVID-XX tower of last Orders of the we natural serves XX% the saw continued an Industrial forward prior softness now over XXXX to trend $X.X capacity year XX% the impacted down in about full reflecting

be revenue weakness a gas line $X align our in general by reductions long-term and customer customers' a Most within and both to We're against second fell of of compared year-over-year hold year-over-year increased million, markets. consistent investments. total actions Solutions nearly fabrications credit impacted continuing strong of a diversification revenue an our growth project discretionary spend strategy. taking Fabrications $XX revenue June the our period, structure demand We to our cash timing Gearing orders supported COVID-XX capital strategy. to cost our accounts, diversification. including investments. demand in this execute their and turbine increase with due was had from acceleration the as by line oil currently and revenue our in and capital power customer segment wind and Gearing quarter XX% performance. We're segment in industrial and up XX% $XX.X market. driven million under as on of the of in discussion segment-level was manage natural increased with when tight penetration CapEx. workforce prudently pause controls million of Industrial to million by environment, in of product our year prior by had year-over-year, current to new diversification the ongoing XX% an Heavy demand availability with XX. of continues new cash and Turning we gas revenue $X the We to over supported existing

to Given sheet preserving focused maintain uncertainty, liquidity remain optionality. current balance we continued on market

the financial As chosen time. COVID-XX yet our on the To we end, are at customers, full pandemic this to implications outset I that year the guidance our indicated supply not known. chain at operations have not of full the call, and of reinstate

our results. business customers to to monitor Jason for respond with to closely they to as and that, our work overview opportunities promptly a suppliers financial of continue the situation hand I'll We quarter over second call arise. the and With

Jason Bonfigt

Thank you, Eric.

$X.XX with expected, our EBITDA improvements. As second and revenue, million year-over-year share, QX. profitable profit quarter gross delivered We income net consecutive we significant generated or $X.X in of per

strong in million from consolidated driven industrial million, were was $XX.X notwithstanding COVID-XX increased The the challenges. utilization benefited $XX.X fabrication segment, and increase Heavy prior a in quarter up demand. improved tower quarter from year by plant sales Fabrications quarter, which Second our

in below Since launching other plant sales second continue and made into building second content to our primarily revenue. business, end markets, to quarter, demand higher utilization. rate the nonwind COVID-XX. challenges this combination with seeing our in $XXX material we margins in improved quarter, of revenue of we've the X.X%. lower benefit significant together to business. our increased primarily run the Gross and Gearing the points Gearing of as expansion margin progress XX target contribute XX-month nonwind year-over-year wind quarter, that in partially resulting of markets continued the quarter, a on impacted impact to which with Compared expanded basis lower and gross X% the exiting the expenses diversification million trailing multiple consolidated in given year focus cost offset material demand, across $XX margin tower And growth by initiative, Our from our the by prior This leverage operating product segment. operating includes to due coupled due gas markets management, sequentially approached levels the of expansion book improved was million XX%, effective utilization higher of of mix levels Heavy broad-based sales The period. end oil cyclical long-term sold. declined plant I content now a and Operating earlier, current significant to the reflects the are in customer percent higher mentioned Fabrication was and

prior levels. as operating in debt year to declined million managing by $XXX,XXX prudently quarter with EBITDA compared expense the in due of versus On the significant prior period. when increase expenses trailing second period. X% a are Interest a $X.X improvement performance on from we've an year-over-year generated the to We of a XX% million $XXX,XXX increase. quarter, lower of evidenced We the million XX-month generated XX-month the increase EBITDA, year in previous $X basis, a $XX.X revenue

to of Heavy Fabrications Slide X a for Turning our and X segment. discussion

primarily to ramps a increase up support increased demand million, a turbine Second installations. levels higher basis, were expected quarter activity due industry as year-over-year sales $XX.X U.S. to XX% on the

in the shipped in nearly $X has Additionally, less quarter. up traditionally and prior quarter, construction than industrial the mining $X million markets. of business from million This we year served fabrications

as and port sell Wisconsin our to deepwater in beginning industrial material our markets. we leverage However, progressing are efforts other handling Manitowoc, are to into diversification

were million $XX.X of quarter. in $XX.X XXXX. tower of in wind to prior historical abnormally order year compared expectations advance lead OEMs million year surging due capacity in levels orders quarter turbine the installations securing times Second were high to as were Prior well

new quarter, second $XX booked the we approximately of orders. tower million During

capacity. now backlog provides XX% in the immediately customers Our production delayed fabrication purchases visibility Orders to industrial following product full line declined tower CapEx inventory year environment. in of pandemic optimal our as this recessionary and COVID-XX the

sell conversations our by with of to customers production tower We are slots. XXXX our the encouraged status

complex the operated tower quarter, than pass-through with prices unit the which quarter designs. from peak which We However, end, customers, orders increased sections. near and we third tower To utilization more levels we Average quarter we our in quarter the typically material sold tower prior of consecutive were in level fourth selling production various equity sold expect this demand, the during in production to to in driven To lower more COVID-XX XX% by including content, see did quarter. with higher XXX XXXX. compared QX, in quarter, that the challenges. approximately per of year have the delays primarily the sections lower-than-expected is plants XXX a second of permitting benefit tax together associated resulting tower in our impacts, support

prior to million segment $X.X the the $X.X improved Given strong year. operating EBITDA leverage, million from in

year-over-year a from but EBITDA designs mix Second down less were achieved benefited basis, tower QX complex material sequentially much tower the a of in on sold, were on the operating healthier leverage lower from QX. quarter margins production content order adapter as the product segment X.X%, and

customer immediate Gearing declined the an $X.X X, in lower to prior in orders and quarter our Gearing Slide prices. in almost $X.X declined to from the pandemic following with oil Orders reduction QX sequentially Turning year million segment. COVID-XX segment million. activity from

was frac further remain rig gas X/XX, weaken. and fleet year-over-year oil to $XX.X markets, Should prices of which commodity on depressed products. would demand million levels, our Our cannibalization continue anticipate U.S.-based of we basis. for equipment, backlog counts flat at a Within frac as reduce existing and

of markets. oil global continue market to focus will medium markets that end, commercial some term, over capacity, excess these similar other remain rationalize the unchanged we gas the and efforts to in expectations As To the cycles, our that could are these production prior although see markets we on level challenged. and our recovery will

in million gas XXXX. $X.X and Second $X.X the to deferred scheduled of prior from second million half quarter sales million to customers the oil as segment nearly purchases year $X of declined

sales result the in business, EBITDA As profile quarter. the operating small of the the of a reduction resulted in a leverage during loss

preserve have to and will including purchases, We labor action and challenging take this while we're deferring cash, and capital environment. margins in to continue rightsizing

customers’ quarter Solutions as XX $X.X was Industrial Solutions orders million, over for gas $X.X Slide for turbine up million orders Segment QX, turbine million continue quarters. orders segment. visibility next a segment XX-month Trailing sequentially to strong the a approximately million, backlog recorded XXXX industry XX% year from see year we roughly of the to revenue gas compared year to Turning $X.X up content. over solid our natural and our the market period. at flat new discussion in for primary prior Industrial to prior was of are share. in offering strength in several a $XX.X recovery the

$X.X $X.X in was EBITDA trailing with is comparable segment quarter efforts. XX-month increased and of effective quarter. as to associated our increased leverage prior a sales gas XX-month period. Segment year the turbine prior double in over higher million from the Second of by driven resulted XX%. percent management The cost $X.X EBITDA content year, volume significant million and EBITDA increase the new mostly a trailing approaching operating has million, sales $XXX,XXX, diversification

XXXX, or a $XX At an sales, timing the XX. of X.X% payments. primarily to June XX, Slide accounts increase, of to due million of million which operating is was higher customer working $XX Turning receivable, sequential function capital

days $XX.X XX reduction. XX normalized As million of declined QX. have million, receivable balance range. in now Accounts spiked $X Inventory our back a in declined early a into sequentially a to this, result DSO and days to more QX balance from

As from XX a days X/XX. XX at QX improved in result, days to DIO

operating levels. and cash the million to cash with the our capital historical $XX the increased to million cash above drawn under sheet. $X the improve liquidity credit to year quarter had decline our $XX expect continues well throughout and rest balance $XX and of sequentially working our million debt. We and to on be inventory turns and of Total to million facility repay generated We

faith, today. call, ensuring the and we continues a the Paycheck million As we highlighted good apply loans in on Protection the which conference our employees quarter We for $X first of economic continued uncertainty, of under our did so by approximately requirements we forth the Program. during believe met received widespread employment set to Treasury period proceeds all for

For reference, on business that can meeting mortgage period. over administration payroll, as XX a the they the small expenses, and loans borrowers rent, forgiven by if obligations can utility such week these funds demonstrate eligible be use interest

As of the proceeds of these July, we used loan expenses. XXX% on eligible

application planning forgiveness that excess audited. are in QX. SBA will Treasury million that to our all to loans our previously and submit in We received be $X PPP The lender borrowers announced U.S. the of

line at this audit However, extent period a X% loans required the a year over To unclear time for at the are loans rate. company to not PPP two is the the the pay forgiven, time. the is interest

overview over markets call out remarks. at conditions PPP QX, declined end ending loans. addition quarter the the Eric some of remarks. for EBITDA turn back my an the XX to leverage in in again our trailing concludes after Our X.Xx That to netting within months I'll concluding

Eric Blashford

Jason. Thanks,

with has confronted year. challenges historic Our a series this of country been

our wind During the targeted wind us of priorities into we offshore industry the this entrance to widespread into by the onshore unique our value strategic on expansion combined These has proposition opportunities leadership continue earlier where with our volatility, and legacy year. focusing balance, period stay course pursue we an priorities this On position to markets, include continued team nonwind discussed experience win. to and space.

necessary impact U.S. monitoring the implemented appropriate by ensure customers to the to As our the response for our CDC of recommended team. supply virus COVID-XX and we as our protocols the the on well-being are pandemic, closely chain. all operations, We've potential continued of and

shipment are necessary, to Should continued we're defined by Homeland operational. a plan considered of that and the to our all businesses U.S. the business our it needs. meet ensure to facilities prepared of infrastructure and products essential our open Given critical as continuity Department enact production Security, and become customers' of remain

conducted the adequate this of during line have our in support we're all under our period scenarios on business uncertainty businesses. declined COVID-XX and the each it's of are virus facing. to that at outbreak will various since business order Our dealing time, impact difficult with as our We've liquidity rates this availability of economic overall quantify anticipate customers full the while And to credit our end our we current markets provide stress uncertainty.

the of six markets Turning demand conditions to each Slides a XX we for within and serve. review XX end of

the represented competitiveness for on recently U.S. revenue. issued be the and that sector, nation's one of been wind Commission final International affirmative outlook to which and driven favor this extension, forces energy. begin sector manufacturers injured nearly Let's wind imports PTC, sources TTM in as towers various by Furthermore, with July the positive, from desire economic tower the utility-scale industry announced continues wind Trade by the XX% for determination finding coalition, U.S. Korea of XX, Indonesia, of versus has clean Canada, their Vietnam. power the the of other The such the including year

continue environment. forms without both credits. jeopardizing present scheduled conditions more this a given reminder, nearly available projects, delayed – our the next power online be customers support fund projects for be extra in acknowledge sector projects the followed difficult XXXX period, the that and we multiyear as wind gigawatts has important installed to to that other will this an demand In XXXX, expect over year U.S., be next slated a of although to could for gigawatts significant XX and this remain XX early by some federal underlying While Tax some year, year achievements. pandemic. bring to due of strength for in equity products And could government tax financing

Mackenzie. for through years the expected nearly increasing in of Wood in installations for onshore projection forecast now out offshore ahead, the the Wood Mackenzie installations This demand offshore addition XXXX, onshore trust in Looking U.S. to demand. for include improved stable has gain a as XX turbines wind U.S., to to long-term strength adding gigawatts

industrial XXXX of applications, expects of handling customers TTM from to revenue XXXX, neutral. this comes projects strong with wind an material in be to a to industry in sector, and We offshore users similar positive which about Although the are less development. from generated our some for which outlook from ultimate X% the Much moved in XXXX vital have cyclical. sector end has revenue year defense XXXX of and still our

port TTM deepwater the from revenue interest unique we Wisconsin, sector, in X% where segment. lifting Our our draw of boost, demand generation combined capacity, power outlook. paint huge with continue and heavy this to fabrication customer a positive capabilities see came from strong

segment space. we new customer drove and of is about attractive the are revenue, Hydraulic as customer for primary in gaining of customers The gas mining benefit and market expand expenditures. to and TTM our to our continue bridge turbine outlook building, revenue, customers drove create this prices share, oil and sector X% defer base Our report strong we bill, new projects. pullback X% X% in infrastructure would capital of negative less QX, term. demand. to our this causing in Construction from QX. as certainly An this see outlook. this gas oil revenue, comprised has softened significant TTM if waterway in economics neutral would the about the fracturing sector, crude their TTM with seen in Orders road introduced, us recent a and demand the which sector, a in construction which equipment The near support was purchases decline in for

Slide to Turning XX.

capacity. XXXX the In consistent business Our to and in for we're of segment, as base of expanded Fabrications in of our medium-term COVID-XX. sell the spite Heavy tower discussions remains key our Broadwind remain with unchanged initiatives near our strategy challenges customers for the

capabilities and to will profitability. continue maximize and throughput evaluate production We and system to add

Coast, multiyear growing particularly demand announcement the that in recent see given region. reflecting East for on of the to the continue offshore We projects around offshore, progress

efforts and in customers the leverage chain support gearbox accelerating our our continue in built engineering newest repair serve plants. better Gearing to will intend In the end our supply our We our focused as and remain our in on other diversification North teams. Southeast. teams to leveraging we facility service And flows ensure investments we in opportunities. lastly, and sales towards to segment, tower and business we engineering improvement throughput evolving well better good market will customer made to grow and actions continuous the the Further, market experienced Carolina our in smooth as process leverage quality by

cost accordance toward will components, Industrial as serve. the demand. gas our with in that our expand we recent we to customer market size don't Solutions an actions required the we turbines aftermarket core and continue focus eye Lastly, to In our on turbines continue business of our smaller presently expanding new product line in segment, space with we base

leverage the all and market overall Broadwind's identify serve will opportunities, manufacturing business development our leverage especially power combined those We divisions. engineering to resources which new and of of

diversified As thesis, industrial manufacturer applications. our clean are we investment for serving and precision tech

leverage achieved material of we provide in PTC which sixth wind Fabrications for for findings in market, industrial a Our extension power trade year the to TTM your nearly we the the large renewables of of period as potential process We're capabilities excited interest, wind, the applications. million even for call position the a and renewable the for $XX case With navigates session. which through segment. turn have diversification plan our to We're the wind. handling, executing business manufacturing is heritage also other handling our catalyst in such year, serve, real multiyear Heavy growth and of grow as that outside our precise markets tech, in to other moderator look updates revenues energy, and I'll this growth about very but and as a you heavy core generation benefit our said, clean we in of other a grow is over and markets Q&A favorable our our uncertainty. The specifically requires opportunity wind, components. to for the forward Thank and through providing

Operator

comes Please we’ll session. this the proceed Instructions] line with Our of from question. Stine first At Eric question conducting with your be Craig-Hallum. time, a [Operator question-and-answer

Eric Stine

Jason. and Eric Hi,

Eric Blashford

Hey, Eric.

Jason Bonfigt

morning. Good

Eric Stine

morning. Good

the mentioned the wondering to you're should parties with you if for? for So next the able market. share, at steps in having, it's release, maybe whether you're those strategic kind we offshore and details any there, depth of alternatives many just anything potentially look discussions of And provide you discussions you're how looking having could

Eric Blashford

we in We're discussions having parties. having on facility. Coast discussions Well, our are potentially multiple producing that Manitowoc East the producing with include also and

Eric Stine

And opportunities, kind would mean, said, and it. the are you've these Got XXXX they of I some XXXX. there's maybe I because mix that a such you pushing mean, XXXX, part assume there some But got a I and and are some announcement of off urgency. it's would there's those gigawatts and there's – seem then, substantial such also urgency little bit to it as OEMs. like on

Eric Blashford

I there's to that and to Yes, There's right still, And XXXX some bit, already due forecasted shifting are but be projected gigawatts and – those of in X.X are right. mentioned, about X.X gigawatts X.X there's X.X Mac. gigawatts a There's to the – it's installed as that XX I XXXX. be contracted, installed by Wood mentioned XXXX. between

far finalize bring a our still online. plans up plenty to that factory XX to as time have months really, we If act. we of assume be should there's if to we in might as to So take going timing, QX, greenfield

Eric Stine

it. Got

Okay.

Jason Bonfigt

we're to announcements more Just add, activities gigawatt or project coming. for seeing

make economics meets certainly sure for the encouraging. that this going that that's And company. assessing just make it need certain we if So and that to to of market the we're keep investment hurdles

we're So we optimistic that the to to year. towards and early assess of next or that about talk I can think year going the end that continue

Eric Stine

Right.

you to-date. that And think help helped for the that's market? tuned then expected. some to mean, and it that outcome pricing I supply was the something it it's overall and supply forward? of terms to to your margins I out? think know the the going know in this stay certainly Or margins recent maybe the impacts makes the will I I do you And – mean ITC where market? that. Okay. How how is I the All playing positive. right. a is backlog you do that in in And just that case, something on your see then mean, in we'll that backlog potentially continue things extent, tight

Eric Blashford

the of reminder, ITC a participated the this imports production utilization, were Canada, the U.S. Department subject subject tower and the Indonesia, towers is a for of estimate about import Korea production going the U.S., one-third We determined stable that unfair of and Commerce is really countries, into as and Vietnam. Just for manufacturers the of from country the in us. forward smooth they industry. which practice The U.S. U.S. best that trade result and capacity all the important

I bottom manufacturers that line, the field, playing world and going on field with though, think U.S. that our compete can the anyone a absolutely and level the level is tower playing to forward. is Broadwind in keep aim

Eric Stine

it. Got

me. last Okay. for one Maybe

looking some talked on other And had – call, last wind guess the you've that's targeting. been Siemens you in whether two was tower at about it customers potentially you last Gamesa something you're from still I or your were that know I potential – the Just near term. orders,

forward mean do on And term? somewhat you're in near I – do that that – XXXX. right here the that? you you going that now on of at for fill thoughts or XX% expect Just functional the your I remainder of you think will maybe capacity that status know

Eric Blashford

for six between typical Well, months. lead and are as goes, four XXXX times anywhere as towers far Eric,

remaining So that to a But with it'd know we number now XXXX, sell capacity for fill all in the are and we be capacity. certainly, challenge to you for a regarding discussions that them of active for XXXX. us OEMs,

to XXXX. fill through So we're be capacity optimistic that able we'll that

Jason Bonfigt

announcing to begin QX those We'd in orders QX. into expect and

So activity commercial more in months. here happening we'd see coming the

Eric Blashford

Yes.

keep time, I that in it's six four think market. to that, lead is which So mind our month typical in important to

Eric Stine

tight to yes, just Yes. it I thoughts. your knew was but be thought get I'd going

I it. appreciate Thanks. So

Eric Blashford

Sure. Thank you.

Operator

proceed question. comes line H.C. Amit Please Wainwright. Our the Dayal next question of your with with from

Amit Dayal

morning, Good Eric; Hi, you. Thank Jason.

Eric Blashford

Good morning.

Amit Dayal

just Is me the XXXX booked capacity softness you there anticipating lower of fourth of for because potential So second something you the else help this? the could behind activity for tower quarter. quarter? at Or the order reconcile through are the XX% – year end is in with in the this

Jason Bonfigt

Yes.

so well. capacity – we so weakening – just was some and we near in optimal fill out think the COVID expected But some quarter was – see hoping we're expecting the book what delays for to of was market. – orders we We throughout were as I did operated that think various year. and didn't there QX I our production the rest that the QX the for the

So I think in there expect a in in will rebound of we'd utilization QX downturn be somewhat of plant little a bit a XXXX. to – that

Amit Dayal

decision looking up on market. or of catch guess, investment an from there that didn't that over go, perspective catalyst of no then wind, diligence of call before offshore that of you making last the be I The you of already your the And are it. I Understood. is you some of the go, I'm waiting sort sort at something addressed sort this this the bringing if entering And I you've part commentary, Eric. are apologize the there's you on? hump? doing If any What challenges for get would – if

Eric Blashford

Yes.

think I for make investment the appropriate orders to years. would was over we justified sure to OEM – that from certainly various our contracts multi have from the or customers have –

demand. if good We sure of support plan. are that catalyst, asking East, a which we a we'd satisfy XXX,XXX have that plant have to part can to XXX,XXX orders But make the foot square that secured you're for think contemplating a in customers or our

Jason Bonfigt

projects and should are that that production that new plans. closely offshore be to think – I what for we're then the for contracted watching will made And to because a drive being and tower catalyst going very secured be decisions announced are that

Amit Dayal

backlog And sort it. order your with Got has and… mostly pushed just and of Understood. everything respect get canceled activity, your that anything in did was Or to out been backlog?

Eric Blashford

and it's calls I've because is is markets question. I not it’s the great truly a that some Yes, in. customer believe of the a with on this demand participate and just a in uncertainty Yes, general demand deferral This we heard our a drop-off a calls is that dynamic COVID dynamic. of

answer haven't the any is more deferrals. cancellations. It's we no, So – it's

Jason Bonfigt

And constraints from supply didn't – contracts. our we although – against customers some we really quarter, there's the haven't still are seen we delivering tower throughout off-take – been chain our has

in think seeing are we gearing that more and purchases I deferral into you're half. second and where a have gas deferring business the of oil customers the

Amit Dayal

a from Okay. And high at just modeling level a perspective.

third a in So a we probably the the little sequential fourth maybe in then and improvements bit quarter? decline quarter are looking of at

Jason Bonfigt

yes. Sequentially,

Amit Dayal

Okay, Yes, perfect. much. Thank all have you I guys. so that’s

Eric Blashford

Thank you.

Operator

the Our line from with next question Justin Clare proceed of your Capital. with question. Please ROTH comes

Justin Clare

Hi guys. the questions. for taking Thanks

Eric Blashford

Hey, Justin.

Jason Bonfigt

Good morning.

Justin Clare

Good morning.

stable just I Heavy QX, operating X.X% reason bit understand us moved could I Heavy move for on sales little So a to would according better help little just in guess lower if bit I in from, the for Fabrications QX, because think, to potentially was calculations. X.X% up our expected margins you lower the wondering an a to Fab. margins. have in the I improvement were

you So provide can any there. detail additional

Jason Bonfigt

to move are time What materials. does our Sure. to related margins from time

price us costs. and So our from materials instances, and supply to that material would sales in some excluded be customers our

QX for tower bump because a we content from towers get you all those that and material had We we to that QX. that. procured did in – the contracts of QX, see And QX. sometimes So in materials higher

in gross our the a So margin for a bit that of company. drove change quite

Justin Clare

it sales improvement. got like you into then QX, a expecting it. I'm expect that will the sounds And QX. business sequential tower likely in improve Okay, looking

margins? further potential your into step lower So a on expectations should margins see quarter, in what a there? And softer looking we are then with QX

Jason Bonfigt

in be QX on would the thinking of to us QX. for in of XX% we'll the with XX% the year lower XX% the probably on We're That in and closer margins range higher that then the to to XX.X% end to gross company. consolidated range that end that get

Justin Clare

it. Okay, got

Jason Bonfigt

lot Gearing changes think off-take cost the cost We're going I of a structure. on depend some that's rightsizing business. the the in to And of and making

not that we against will can and also on customers important to hit product, that – targets. to gross or those ability deliver margin I our So be that whether for take think

Justin Clare

know was then give update with a customers. it with you follow-on is your relationship progressing. it, just are you orders in tower how customer. to could recently XXXX? added GE? Or Got as okay. an Are discussions shifting GE relates orders that tower you if I GE how And as on wondering us seeing I to

Eric Blashford

Well, and of we're what customers, for there's the is The customers but all certain ongoing between with conversations can't I I would relationship say Broadwind is with strong. producing think I three the conversations share really now. are tower –

Justin Clare

decision At be one offshore this Okay. imagining towards last then greenfield And are Or on what there? be considering a are need you on the this opportunity. the your need later facility, supplying a you you point, timing the would it I'm are Manitowoc you considering little greenfield still facility. a bit And point? would offshore you facility what leaning might make from to facility? then would for than one if at Manitowoc a

Eric Blashford

one would for I'm way probably hedge We point, leaning have at have I say you're a right. say XX-XX right. already or time the would maybe towards greenfield. Am the facility I'd to this more since we I Manitowoc the you're land. Yes, the other?

got larger, port. sure to of towers. the have have We heavier some the the make just was building, handle We equipment upgraded to deepwater

extra XXXX elected shoot or through we get if installed So even six to we Justin, base, probably this to have months maybe Manitowoc. go an more

Justin Clare

All guys. right. it I’ll on. pass Thanks

Eric Blashford

Justin. Thanks, Yes.

Operator

Eric remarks. any session. have We to the Blashford call turn would the for reached to closing of end And question-and-answer like over I back our

Eric Blashford

Thank done We're forward you look so going interest Thank do speaking and your of We're all through appreciate really far. what you, so to really we've we're of to again. Yes. We everybody. much. the your with rest looking to you proud this year. interest. appreciate I forward what

Operator

This concludes today's teleconference.

You may wonderful day. for lines Thank now at disconnect your this time. have a your participation, and you

Broadwind (BWEN) 5 Aug 202020 Q2 Earnings call transcript