BWEN - Earnings call transcript Q4 2024

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Operator

Greetings and welcome to Broadwind's Fourth Quarter and Full Year 2024 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Tom Ciccone. Thank you.

begin. may You

Thomas Ciccone

the welcome the Year and today Broadwind Quarter fourth a Tom Fourth our Financial results. and Good We quarter opened Officer. Results to today Conference Full issued Ciccone, I'm and XXXX Eric release call Vice Call. and President CEO, Chief before morning press Blashford; the company's market Leading is our the detailing

forward-looking conference statements, the commentary like by and that responses call to may on questions company's would are include I nature, management's today's which, of their uncertain remind to outside you and control.

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

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

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

With over that, Eric. call to the turn I'll

Eric Blashford

Tom, us a Broadwind and joining environment, EBITDA revenue demand and full million today. strong $XXX $XX.X million, in welcome and and of commercial culminating transitional execution delivered to operational adjusted In year respectively. during Thanks, XXXX, those

and together which our many pause fourth of strong included stable continue to across gas million, actions resulted experience quarter, demand performance, demand million While activity and we wind markets adjusted and order of a in with revenue and fourth EBITDA in new cost quarter respectively. recent oil near-term improved $XX towers for gearing diverse the and a $X.X during

all the with growth XXXX $XX order from increasing quarter rates orders nearly moving fourth of demand Order mixed, the while conditions our end fourth increased materially broad-based, million. markets. across our during period higher Importantly, quarter was to XX% were

increasing from our market. in our the Gearing Orders pressure year-over-year the the industrial which demand and industrial hydroelectric gas orders increased used and Industrial by the markets. due our increased natural to reduction order from first repower in doubled steel for Solutions sizable gas our market. saw for segment turbine continued demand XX% year-over-year, includes demand from adapters our Fabrications strong led wind strength systems; Heavy continued global business nearly within to turbines; sector, Orders

activity commercial see businesses, a in from mix elevated all expand continue meaningful level, higher-margin the are nearly the markets. Fabrications and we that notably turbine pleased oil gearing gas the Heavy see also the where At generating markets. Quoting opportunities over most we're the strong seeing aeroderivative in to We're bookings but within we're quote made new last in for year and certifications to the interest and some the Interestingly, verticals. from market remains Industrial first X power in our in investments beginning quality aerospace Solutions our segments, and to time adjacent activity product generation years.

we XXXX, for our the and X.X, XXXX. quality seek to for recent as ITAR industry, runs. Operationally, in our will such we to demand to the for we which ordered production CMMC reduce in certifications, earned ASXXXX fabrication our to capitalize registrations cybersecurity our prudently improve requirement continues capabilities, invest larger-scale by a achieve customers Gearing on security upgraded costs and equipment invest improve manufacturing facilities includes in and in by key equipment technology XXXX defense towers followed profitability. orders which in process We've continue as growth, the

evident million XXXX into continue significant savings, we actions cost XXXX, Beginning in align to which will cost in to results undertook structure our the a first quarter actions of with is our equated to These $X current XXXX. demand the in environment. about and annualized

in actions XXXX. position conditions improve, demand to operating believe these leverage begin to improved we As Broadwind realize

prior QX to oil activity gas quarter our was within due behind revenue markets. year and the and reduced wind primarily

Our levels as across multiple manufacturing see we power relatively markets, capabilities our most industrials. precision for demand generation remained stable and non-wind activity notably in

was was gas reduction in ago, and gas oil offset turbine mining in million, year-over-year tower XX% certain QX was strength due or and mostly and sales of Solutions to down $XX from broad-based down the aftermarket Within year-over-year, by Gearing natural the Reducing Industrial timing primarily a equipment. decline PRS a XX% year partially slightly to market. aftermarket markets, into our due the softness offset Heavy revenue due partially production natural Pressure in million, $X.X mining steel segment, million, wind. gas shipments, to of the $X.X by Fabrications increased revenue Systems, shipments and revenue

the strong summary, to profitability. be business divisions respond of we while all demand to continues as maintaining in quickly fluctuations performance operating In

With the a call financial that, for Tom to fourth I'll of our turn over performance. discussion quarter

Thomas Ciccone

Thank you, Eric.

quarter million an of for year consolidated compared to production X XX% by as onshore $XX.X Slide Fourth the sector. our pause well industry fourth revenues within a the in the overview as be and prior the represents extended impacted gas This levels wind year prior as decrease our to the slowdown million within Turning quarter. continue to ongoing quarter were the $XX.X versus performance. oil quarter

we quarter lower a reductions level Adjusted orders on we targeted an From the quarter-to-quarter due segments, a offset sequentially It earlier utilization, during to cost experienced the of year. X noted million, within EBITDA partially activity capacity margin to in increased that basis. representing fell took in X.X% be intake year-over-year $XX should highest nearly perspective, this with rebound and order orders all primarily years. consolidated by almost X our

our market. as $XX.X wind reflective million, lower million repowering of prior revenues the projects Turning versus year well and were PRS segment. we million to versus almost power our year strength within prior Fourth down up both $XX.X industrial lower $X a quarter the Fourth Heavy quarter, are as of continue period to sequentially of for Fabrications orders recognize volumes as orders and related discussion shipments. quarter to Slide X

EBITDA EBITDA margin we prior as of the partially the of to $X.X revenue actions During in by quarter, a XXXX. adjusted our levels, decrease able versus was million the were end period. targeted million, our adjusted $X.X offset drop we maintain into capacity of XXXX towards year utilization taken cost decreased the Despite fourth recognized

Turning Gearing versus are up prior sequentially year. orders million $X to of and Slide X. the

addition Although is finishing markets. the we inch. markets. from with millionth continue strategic of legacy oil an are growth these expanded to and we win serve within aerospace machine to new experience bearing as to X of in team investments to fruit in and technology, made in in our gas technology, capable This tolerances is level commercial quality of demand, orders This precision certifications, needed we've softness along and which products aeroderivative markets

QX was reflective lower $X.X of intake segment versus EBITDA levels million, decreases revenue of the recent a decrease order we've year adjusted year prior quarters. million $X.X million Segment quarter. was the experienced $X.X These versus in are the $X.X million, down quarter. prior

it notably QX fourth natural was are the to Turning XXXX. to period. million decreases orders adjusted booking order both into $X well should for order EBITDA XXXX continue versus seen addition gas $X.X revenue record year levels segment activity, small the strength segment. that year and EBITDA QX we've be for But prior in full adjusted revenue million, was totals segment and and noted aforementioned both most both to of continues Industrial segment Solutions $X.X turbine $XX as the as commercial Slide of for gas turbines, new QX in recorded million full the X. quarter. The segment. orders interest experience for record represent strong The the million content, orders $X levels million the totaling year

on Turning credit advanced fourth our from in working $XX to We availability a increased operating strong a major level in million. generation facility from experienced significant in quarter million capital $XX the free and of sequential a QX. capital cash reduction working approximately of Slide payments X. decrease customer. we total operating cash our flow This drove improvement is an resulting ended as The with

Moving XXXX, levels. expect into balances to typical forward deposit more operating to return we

the with financial guidance are Today, year financial XXXX. we introducing Finally, to respect full our for guidance.

$XXX $XX to and to the current we the full adjusted range million expectations our to million. of in to million revenue $XXX EBITDA beliefs, million Given year in range be and be $XX of anticipate

continue over to my call concludes turn That Eric will back remarks. the I discussion. our to

Eric Blashford

Tom. Thanks,

upgrade with benefit the we're seeing for announced manufacturers. to the as believe existing Fabrications thoughts our from continue are wind manufacture, new legacy adapters will at wind enter segment. the present rate its we believe XXXX. onshore repowering beginning by XXXX, domestic place, continued customers to the likely our most antidumping the required Now We turbines. Heavy that that we with measures allow through some encouraged tariffs market combined domestic demand in to We tower recently, provide We're tower continue me activity in as sustained the momentum which wind the OEM will

diverse hydroelectric verticals. capacity end the and support continue revenue large seeing to stable We transformers notable recurring grid. especially generation mining project supporting nation's for production markets across recent required with as occurring wins space, to infrastructure, from towards electrical reallocate activity products the in streams the such the quote power increasing We're the

remote family our performance as meet appreciate production projects. model model is seeing and trials this the capability low-flow favorable such Broadwind monitoring customer so the backup and the unit's This attractive solution footprint, point, it PRS and We're in PRSes, Customers line strong systems supply operation, to customer model or are We're excited and/or third unit. newest in product specifications, making about increasing plan the the interest field now with primary our applications, launch of of the industrial compact in Clean this for results anticipated ideal power of subsidy L-XX, integrity family is demand. in price the far. Fuels

segment, pleased in a toward our large we center customer aggregate power, new and few. other such as gearing activity compressors, name execute seeing material in processing machine various to data strategy primary precision traditional or aeroderivative products. increasing used high-speed gas the turbines we're move backup In Gearing We're our to markets, of beyond to that level continue

addition content gearing such and shaft more products. as impellers these Our foils, our for and includes blades in to fan air markets traditional products

We to tariffs accelerate customer domestic to provide customers in recently alternative a expect legacy well suppliers. we've XXXX that the announced and are seen the competitive positioned and quick, will reshoring efforts high-quality with their

Industrial XXXX. Additionally, experienced location as and Solutions, the address treat continued quarter additional customers. increasing to furnaces Pittsburgh strong turbine X through additional industry heat at and external gas In organization our that and demand treat scheduling enter in for year the remains the flexibility our we this we've online the momentum upgraded heat fourth provide brought

and Our to management are respond key their and backlogs and gas strong to quoting project response. customers increasing for and are reporting adding activity strong resources remains in high, which production services demand customer Accordingly, are seeing we're turbine in procurement capacity quality, equipment demand.

the for electrical turbine As a Solutions driven combined-cycle supply chain which Industrial provides natural growth to of data worldwide, business least custom manufacturing gas fabrications, our demand other load. is sources centers part, and by attributable, panel growing solutions, increased at reminder, in control and market

this result, we record year a surpassing in achieved record orders again year, set the last As XXXX. previous

quarter I'm execution strong pleased demonstrate to our with from on summary, our In strong team as we continue operational priorities. the performance this strategic

reliable to structure for during a quality, win customers work us, Our Fabrications expansion. talent while continue and vital key gearing gas and Gearing for reduced wind our like the Heavy activities and new transitional to improvement and retaining product continuing period quick onshore response cost businesses. in domestic and We've oil deliveries on and demand particularly process our

safe keeping We're people and committed productive. our to

recordable well our we X time on in team XXXX, safety and incidents. the yielded in average, rate Our a member focus had incident reduction below lost has industry XX%

plants, X U.S.-based. have XXX% We

we're on administration. pro the by capitalize afforded policy domestic So afforded the by to opportunities backdrop any current prepared manufacturing

base manufacturing serving components infrastructure in build capitalize improved firm year over for to positions years renewable optimistic the and will both policies with new we growth order of of precision that proprietary core rebuilding ahead. demand the tariffs steady, as our and impacts coming and power foundation infrastructure. of the necessary the growth, potential of support for within other profitable the markets, optimization we're markets encouraged the non-wind on which energy by are country's our policy unknown, While We're the pace products changes generation, high-quality improved a us key

I'll the back session. Q&A call that, With moderator turn over to the the for

Operator

Instructions] question Craig-Hallum. Our [Operator comes Eric first from Stine with

Eric Stine

on just confirm. all, So to of just first wind,

to improvement But know talking expect situation expecting through I guess, to this and the you you 'XX. 'XX. in your be of confirm, believe, wind through release, you So said just some were I meaning 'XX, kind softness I about in

number would can be of And the ago? got quarters just that you a first. GE you're the contract that of remind doing me So visibility then for received work the under second, you you've

Eric Blashford

Certainly, conversations muted. 'XX 'XX and same had as indications I as about just can and some but Sure. the be on from based see Yes, expect customers 'XX, we whatnot. industry with I'd be demand peers we're getting optimistic the beyond I've to

XXXX, say, the Eric. we We through we're year I and September that, Regarding -- the whole through build visibility beyond the through would have, through we have have towers firm know really going XXXX. visibility exactly to indications

Eric Stine

Got it.

on some and visibility remainder from Okay. I of Maybe visibility about when the with And we about QX the rest should that, across year the your some then think but something backlog also, linearity helpful just just the of then wind, maybe how guidance think of business. range, in I and you given think sticking gave you would that? know the the XXXX, but

Eric Blashford

except year, of 'XX. going that some think Well, we to be stable to wind to pull-in we're recognize thought relatively have revenue end the in able did full the I we is QX going 'XX Sure. at be through

that benefited detriment QX Not things moved really to some the the somewhat 'XX around. it 'XX. QX but year, of So actually hurting

would regarding We -- I Solutions. but the because the So pull-ins. by lowest the Industrial way, the pull-ins, I towers, only QX Gearing be had say increasing the would through year. to Eric, it's not quarter the say going and probably year, is ratably of of in in also in pace

QX, have. based ratable increases. little bit And backlog a like said, So strong the softer -- I I'd we it say for QX through a but on then made year a of the

Thomas Ciccone

we of year thing a by lower will we throughout -- levels up as be in to be within some I year, the some Yes. think the had just impacted little quarters earlier year. I ramping is QX intake Eric, addition as will add in only kind start Gearing that to the our lower a adversely the would order production segment

Eric Stine

cited sounds that helpful. And -- on And activity. strong very sticking mean, QX. quoting out XXXX. And lastly, throughout to I obviously, the call. like you that maybe I on QX you order strength very thoughts see in Okay. on it terms book-to-bill order had like continue sounds you with quoting you in is -- activity maybe played certainly, It That just then front, think what of see your

Eric Blashford

first the up that it's divisions. ASME nice certifications we markets. in forth set I've Yes. calls, have capability, what of that see the so we ITAR, non-wind the X. It's we've Frankly, we exciting. to won, said quality know Div -- We've -- done I our Then process on multiple the previous built the CMMC, we the in ASXXXX,

now, So which place we all those have customers want. in

sales And then we've we so customers. improved can reach these our force

and that power we're the excited longer, even then little but So it's in some activity and is following win we them activity itself what strong X, that nice manifests quoting bit to in the winning, about like see don't and all, a We order especially markets in of really that, medical. now strategic X gen, that. bit aerospace, are a aeroderivatives, little takes

Thomas Ciccone

Yes.

our backlog, book-to-bill, In within know, we're announcing off book-to-bill. as new book-to-bill a start a we the greater fab, X. orders terms orders, -- heavy in announcing greater X closer or expect than we new in Industrial LTA But and counting probably that Eric, Gearing orders won't strong of until terms -- not than be that we're you with we Solutions, because of I can X; think working segment, to within

Operator

question Next Wainwright. with comes Dayal from H.C. Amit

Amit Dayal

setup press is of Eric, low, order just release, help terms what -- now? has from improved. Can means activity in right you're understand activity but that understand trying us your you to saying have you the project

Eric Blashford

wind, forms right wind we're talking Well, project now. muted is if activity talking we're in of about about --

But communications muted. would and visibility. sure backlog. We for it orders somewhat new that I'm I'm make for be question. correct wind, strong to We've have you're good asking? Is question want got the the not customer a -- answering

Amit Dayal

I'm those reconcile just to X Yes. trying things.

you a the or how right? they're project impacting other on more how balancing about of from to activity see provided, more talking out you activity just the backlog -- perspective, guess, side, is that So customer are basically. each order and the are X what So sort trying I you the these is guidance on are

Eric Blashford

about Sure. then And positive That's the that orders expect. active about. and When -- we bookings, in orders orders we about the that positive future, future book-to-bill the we're prospective about talking talk project, talking which would have. we're we whole that talking we're be

I think that's the answer question. to your

got on upgrade to have most we've towers, good I but are nice adapters our press wind XXXX in used release, Again, mentioned visibility backlog, just also wind which on legacy and not that backlog through the only turbines. production we the of

that's down wind. So for the so run line, capacity same we're doing those And utilization good both.

But QX entering a soft Solutions actually and now a strong have outside we in Industrial QX strong Because pretty say, a XXXX. of Brad backlog I before, are and orders with wind, and and in we the orders we're would QX, are in Foote the fab building backlog we rest industrial growing those of it, mentioned backlog quite in that Gearing. did

Amit Dayal

Understood. No, helpful. that's

Is we and already sort you the tariffs talked that You about developments what could some in provided? I sort an perspective? should plays the the other a can, eye a bit that year of you as much guess, some mean negatives there impact little tariffs. that could as I on out guidance reflected, this. But from would as positives be keep of the be

Eric Blashford

our Well, and all we're very through customers we've of kind our before. this suppliers. been transparent And with

all, example, products lot it. Wind, you of We a quote, an So first pass-through. we may -- as as understand of pass-through. our some with is are how to remember, deal of

steel heavy plate -- the increases be and part, passed would whatnot. automatically would we anything get any with most So for through,

to order. that, But outside we of quote

sure any providing our pass that suppliers. inflationary getting and get we're we we suppliers actually life how make quote the prudent Again, then time And be our from sure to of forward to the to increases we're margins. that that we're customers So the to are we're lead have we react we from quotes in to current. them we times need quote, the make very can limiting our going we're maintain to possible transparent, so quotes

Amit Dayal

Okay.

least so news seen process So has this the until a order too in disruption you of far, -- from tariff-related at flow? much that activity -- haven't

Eric Blashford

an a haven't seen offshore let's to prices the know we We say, onshoring, are And -- other this to really come than little No. used supplier. customers supplier. a might make and got for offshore want back inquiries higher that from But we a quote be from bit fab the we that refreshed from gearing. onshore foreign anything than sure we've or get industrial

are So out. of that kind looking our customers activity,

And activity increasing as result. our as Q our I'd is is activity our so result increasing -- -- say order a booking a

Amit Dayal

helpful. That's

Just last for me. one

mentioned bit product? sort And hydroelectric Is order? steady Or a it become You could little of like offering. this revenues? of new this a stream onetime-type is a this

Eric Blashford

-- these capability, of are we being Well, we that is, robust. precise yes, to refurbished, think because that as dams and And There's a that you very things inside are hydroelectric what as cylindrical capable to need heavy have large is we're of dams refurbished. this actually be this build fabrication repaired. are type replaced, lot know, very

are to Our us this. customers coming for

dams are -- for existing. it think is I are So repeating. these that these -- It's are

whatnot, stream, this as all as do significant needs revenue but X infrastructure repeating digits. to does, a the would or So and to be in not nearly towers the see repeating, upgraded, we like frankly, be country be it

Amit Dayal

mean it of aspect with the helps I capacity the story. Understood. utilization

Eric Blashford

it's cylindrical do definitely the as the essentially lines down because helps same because things. towers big It run

Operator

with Clare Justin from MKM. comes ROTH question next Our

Justin Clare

might on helpful. like What would little corporate to sounds us that mid-single-digit It just wanted the So growth segments faster then Which if you're side, could the segments. a the bit average? And give XXXX little bit anticipating slower little might be you be but could on the for Gearing touch wondering the more for if slower? growth just might that guidance. XXXX. just be It to granularity, grow a implies a speak than revenue you

Eric Blashford

we've no I seen the would sign size, is just a Solutions, same and thing, I based couple as of would slowing Industrial gas which of natural of And turbine over say growth the as really that's years last across the world. down. reminder, shows the that aeroderivative different far on pace -- turbine, say

demand increases electricity products increases. as so for increases, our products and demand those for the the And demand

there, So expect I'd growth say through I'd pace 'XX. of would continue

driven because is kind Towers a Gearing, start prospectively by lack a starting expect the gas. had but going and grow forward that do as to that or going to in flat, from orders ratably of -- of of we had the and QX slower indicated. bit we primarily orders be I reasonably. we oil of QX

really -- divisions. the we're So going guiding to growth that come from those is to other you're that seeing

Justin Clare

XXXX, guys at Okay. margin look EBITDA Got X.X% it. XXXX. you the to it's what midpoint, And then implied at when in I similar experienced the adjusted that's for

So improvement just like it sounds anticipating in utilization. wondering, you're

lift that X.X% that So is there margin in a to to the above potential speak just there. opportunity XXXX? Maybe

Thomas Ciccone

That's Sure. correct.

the midpoint, ended close definitely we higher our -- range, guided our at if to capacity. So utilize an with capacity we pretty of where it's I as opportunity at our there's better there -- we end end plant XXXX. up our And think

I an say that So definitely opportunity. would that's

Eric Blashford

some with a we PPAPs. requirements little There's markets, these are some color utilization tend start to and for that markets. new to it. of bit of But required benefit But quality add as they customers slower a pursue Justin, the will new that, capacity lot to

come tend initial especially they lower quantities. with So margins, smaller to with the

increased with part margin more of runs, But which reason first run that then us bit the margins. the passed, expectation you a get so to your going that we tend the is little use to And less machines pressure passed on would quantities longer or setups. runs, the it's that can improve your shorter on customers we And PPAPs, then give PPAP those. are built have that's come our once larger in

Justin Clare

Got it. Got it.

-- by executive point, wondering the maybe at that guessing, pausing any but discussions wondering order are any impact customers, there into then we through as seeing potential the administration just XXXX in in into be this you're XXXX. place the if order you your could if speak seeing? effect I'm new activity Are Okay. to impact I'm had put of get permitting thinking not Maybe And Understood. on end on just with projects? Like an wind delays? toward that's customers here, was there. that potentially

Eric Blashford

Justin, beliefs comments the might say, we that and of I'd root XXXX. really the be that same the that's Yes. as have XXXX the about

a which so reminder, wind blocked are are X% as leaves kind now, lands, on off state Just about of XX% right projects federal of on those or private land.

So or activity most on onshore of the state is wind lands. private activity -- wind is on

Now still for to protection, they permits, wildlife certain environmental and EPA FAA whatnot. a -- there extent, require permits and for

that So the muted, could XXXX slowdown be a thinking to down slow by might be is projects, the the extent government, meaning same the that, permitting which to slowed federal why for XXXX. potential as that has we're

Justin Clare

it. Got

All sense. Go ahead. Makes Okay. right.

Eric Blashford

Yes. if know, -- there's you could Customers developers, as uncertainty, cause to pause. it them

that backdrop are happen. there's always really but yet, could seen customers it they that that saying Justin, hadn't So

Operator

end the the session. back comments. the question-and-answer to like for Eric reached turn have over We now call to closing of I'd Blashford

Eric Blashford

Thanks, I report Thank appreciate you. at earnings your about end excited our of look We're Broadwind, coming to forward happening we at what's QX really to and attention. Yes. everyone. then. you the to

Operator

This concludes today's conference.

we your your at may disconnect you participation. and time, thank You lines this for

Broadwind (BWEN) 5 Mar 252024 Q4 Earnings call transcript