BWEN Stock: Broadwind Energy Reports 2008 Third Quarter Results
NAPERVILLE, Ill., Nov. 17 /PRNewswire-FirstCall/ -- Broadwind Energy, Inc.
(OTC Bulletin Board: BWEN wind stock), a leading provider of components, logistics and
services to the wind power and broader energy markets, today reported their
results for the quarter and nine-month periods ended September 30, 2008.
Quarterly revenues were $64.5 million, up from $40.8 million in the second
quarter of fiscal 2008 and up from $3.1 million in the third quarter of 2007.
The Company reported a net loss of $3.4 million, or ($0.04) per diluted
share, in the third quarter of 2008, compared with net income of $683,000, or
$0.01 per diluted share, in the same period in 2007. For the nine-month
period ended September 30, 2008, the Company reported a net loss of $8.9
million, or ($0.10) per diluted share, compared to net income of $1.3 million,
or $0.03 per diluted share, in the first nine months of 2007. Production
ramp-up expenses, integration-related costs from acquisitions, and continued
efforts to build the infrastructure necessary for public company and
regulatory compliance, including Sarbanes-Oxley, contributed to the loss in
the third quarter and year-to-date results.
The Company generated Earnings Before Interest, Taxes, Depreciation,
Amortization and Stock-Based Compensation (EBITDAS) of $3.1 million for the
third quarter 2008 and $10.6 million for the first nine months of 2008. For a
summary of financial results and an explanation and reconciliation of EBITDAS
to net income, please see the table below.
'Our third quarter and nine-month results reflect our continued progress
toward building Broadwind into the premier component and service provider in
the North American wind energy industry,' said Broadwind CEO J. Cameron
Drecoll. 'We have invested significantly in our infrastructure, through both
hiring and training of new employees as well as the expansion of our
state-of-the-art manufacturing capabilities. Looking ahead, we remain focused
on growing operational efficiencies throughout our subsidiaries and leveraging
our broad strengths and diverse, but complementary, product lines to further
increase our market share.'
'Our strategy to integrate the supply chain for wind power now spans from
component manufacturing to transportation, installation and service, giving us
the broadest portfolio and customer base in the wind energy market,' Drecoll
added.
During the third quarter, Broadwind also announced several key additions
to the executive team, and added key management in operating platform
leadership positions. In addition to its top-line growth, on the balance
sheet Broadwind reported an available cash balance of $34.4 million and total
debt outstanding of $36.3 million as of September 30, 2008.
Broadwind also announced it has hired Morgan Stanley & Co. Incorporated to
advise the Company on certain acquisition, growth, and financing
opportunities. Morgan Stanley will also advise the Company on issues related
to the Schedule 13D filing by its largest shareholder, Tontine Partners, L.P.
Tontine recently indicated its intent to explore alternatives for the
disposition of its ownership position in Broadwind in an orderly fashion and
with no intended timeframe. Tontine currently owns 48.7% of the total
outstanding shares of Broadwind common stock.
'As a ground-floor investor in Broadwind, Tontine has provided both
financial support and leadership expertise to our Company,' said Chief
Financial Officer Matt Gadow. 'However, Tontine has expressed their desire to
explore alternatives for the disposition of their ownership stake in Broadwind
in an orderly manner. We view this as an indication of the extraordinary
market dislocation that Tontine has recently experienced. In order to
minimize short-term disruption and to ensure the Company remains well
positioned to achieve its long-term objectives, we have engaged Morgan Stanley
to help us explore and evaluate other strategic opportunities in our drive to
become the leading service and component supplier to the North American wind
energy market.'
Segment Results
Products
Broadwind's Products segment includes the Company's Tower Tech Systems,
R.B.A., Inc., and Brad Foote Gear Works subsidiaries. Tower Tech is a leading
wind tower manufacturer. R.B.A. provides subcontract machining and
fabrication for several industries, including components for cranes used in
wind facility construction. Brad Foote Gear Works manufactures precision
gearing systems for various markets, including wind turbines and oil and gas
exploration.
Broadwind's Products segment posted significant growth from the second
quarter of 2008, fueled by increased sales and increased production of wind
towers and gearing systems. For the current third quarter, net revenues for
the Products segment grew to $51.0 million, compared with $3.1 million in net
revenues reported in the third quarter 2007, reflecting the broader product
and customer base as a result of the October 2007 acquisitions of Brad Foote
Gear Works and R.B.A. The Company also experienced integration and
production ramp-up costs associated with Broadwind's acquisition of R.B.A. and
Brad Foote Gear Works, as well as expansion costs related to the tower plant
expansions. Also of note was the relocation of Brad Foote Gear Works' primary
activities to a second facility in Cicero, Ill., which was completed in the
first quarter of 2008. Broadwind expects, when fully ramped up, the new and
much larger facility will more than double Brad Foote Gear Works' gearing
production capacity.
Service
Broadwind's Service segment was created as a result of the Company's
January 2008 acquisition of Energy Maintenance Service (EMS), one of the
nation's leading service and maintenance providers to the wind power market
with over 240 employees throughout the U.S. The Service segment also includes
Badger Transport, which Broadwind acquired in June 2008, a heavy hauler
specializing in transporting oversized and overweight components and equipment
for the wind energy industry. Third quarter net revenues for the Service
segment were $13.5 million.
Reconciliation of GAAP Net Income to Adjusted EBITDAS (Unaudited)
The Company has provided the following table, which reconciles net income,
as reported, to EBITDAS. The Company utilizes EBITDAS (Earnings Before
Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation) as a
key financial metric and believes it represents the Company's cash generation,
which it can use to make acquisitions, invest in operations and facilities,
return to shareholders, and for other uses. EBITDAS, which is a non-GAAP
financial measure, should not be considered an alternative to, or more
meaningful than, net income prepared on a GAAP basis. Additionally, EBITDAS
as computed by the Company may not be comparable to similar metrics used by
others in the industry.
