Broadwind Energy, Inc. (NASDAQ:BWEN) Q4 2018 Earnings Conference Call Transcript

Feb 26, 2019 • 11:00 am ET

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Broadwind Energy, Inc. (NASDAQ:BWEN) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Broadwind Energy Q4 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.

At this time, I would like to turn the conference over to Jason Bonfigt, Vice President and CFO. Please go ahead, sir.

Executive
Jason Bonfigt

Thank you, Denise. Good morning, and welcome to Broadwind Energy's Fourth Quarter 2018 Earnings Conference Call. With me today are Broadwind President and CEO, Stephanie Kushner; and Broadwind COO and President of Broadwind Towers, Eric Blashford. This morning's earnings news release is available on our website at bwen.com.

Before we begin today, I would like to caution you that this call will include some forward-looking statements regarding our plans and market outlook and also will reference some non-GAAP financial measures. Actual results may differ materially from these forward-looking statements. Please refer to our SEC filings and consider the incorporated risks and uncertainties disclosed there, including our Form 10-K and our Form 8-K in the attachments we filed with the SEC this morning. We assume no obligation to update any forward-looking statements or information.

Having said that, I'll turn the call over to Stephanie Kushner.

Executive
Stephanie K. Kushner

Thank you, Jason. Good morning. In a difficult year, we achieved our targeted $40 million in diverse orders, which helps position us to be a stronger, less concentrated Company. We reduced our net debt by 18% and at year-end have $11 million drawn on our $25 million credit line. And we announced last night that we've expanded our line of credit with CIBC from $25 million to $35 million and extended for another three years. They have been a good partner for us.

The added capacity will support our significant sales recovery in 2019 and also help us with financing a more complicated supply chain due to the ongoing steel tariffs and expansion of our customer base. 2018 proved to be the first profitable year for our Gearing segment. I'm proud of the way the team took control of the business, improving productivity and on-time delivery, while reducing manufacturing variances and adding important new customer diversification. Full year results were depressed by supply chain and equipment difficulties in the first half. However, second half results with sales of $21 million and EBITDA of $2.6 million are more representative of where we now believe we can operate systematically.

Broadwind's fourth quarter revenue of $27 million was up from last year and in line with our guidance. While our tower plants were running at low production levels, our Gearing and Heavy Fabrications performed well. Our EBITDA loss of $1.7 million was similarly in line with guidance and improved from last year when our tower plants were all but shut down. The headwinds introduced by the imposition of steel tariffs last March have boosted US steel plate prices about 50% and the import prices have risen to match.

We are fighting the advantage this gives to foreign