Broadwind Energy, Inc. (NASDAQ:BWEN) Q2 2020 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 11:00 am ET


Broadwind Energy, Inc. (NASDAQ:BWEN) Q2 2020 Earnings Conference Call - Final Transcript


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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. Thank you. You may begin.

Jason Bonfigt

Good morning, and welcome to the Broadwind second quarter 2020 results conference call. Leading the call today is our CEO, Eric Blashford; and I'm Jason Bonfigt, the Company's CFO. We issued a press release before the market opened today detailing our second quarter results. I would like to remind you that management's commentary and response to questions on today's conference call may include forward-looking statements, which, by their nature, are uncertain and outside of the Company's control.

Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest annual and quarterly filings with the SEC. Additionally, please note that you can find reconciliations of historical non-GAAP financial measures discussed during our call in the press release issued today. At the conclusion of our prepared remarks, we will open the line for questions.

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

Eric Blashford

Thanks, Jason, and welcome to those joining us today. Despite continued macro uncertainty related to the COVID-19 pandemic, our business performed well during the second quarter, guided by our long-term focus on end market diversification, lean manufacturing processes and disciplined capital management. This strong performance was supported by broad-based revenue growth across our core wind, industrials, steel and natural gas turbine markets during the period.

Let's begin on Slides 4 and 5. We generated net income of $0.5 million or $0.03 a share, representing a year-over-year increase of $1.5 million and our second consecutive quarter of profitability. Revenue increased 33% year-over-year to $54.9 million, driven by demand from our wind customers together with customers in multiple nonwind markets. Wind industry sales increased by more than $11 million versus the second quarter 2019, with tower section volumes up approximately 60% year-over-year to the highest levels we've seen since early 2017.

Improved plant utilization and operating efficiencies supported year-over-year improvements in both gross margin and operating margin up 40 and 240 basis points, respectively. Our second quarter EBITDA was $2.9 million, an increase of $1 million over the prior-year period. Our total backlog decreased 12% sequentially to $112 million due to the timing of customer orders, which were delayed by COVID-19.

Our oil and gas customers have delayed scheduled deliveries into the second half, and we expect this market will remain challenged in the near to medium term. I was encouraged by the team's ability to work through the COVID-19-related restrictions and supply chain challenges evident throughout the quarter, positioning us to produce several new wind tower models for both