THIRD QUARTER 2022 RESULTS
(As compared to the third quarter 2021)
- Total Revenue of
$44.8 million , +11% y/y - Total Net Loss of
($1.8) million , or ($0.09 ) per basic share - Total Non-GAAP Adjusted EBITDA of
$1.9 million , +374% y/y - Total Orders of
$84.5 million , +99% y/y - Total Backlog of
$132.2 million , +73% y/y - Total Cash and excess availability of
$14.8 million
For the three months ended
During the third quarter,
Total orders and backlog increased to multi-quarter highs during the third quarter 2022. Third quarter orders and backlog increased nearly 100% and 73% year-over-year, respectively, supported by balanced order growth across all reporting segments.
Within the Heavy Fabrications segment, third quarter revenue increased by 7% from the prior year quarter, as higher demand for our industrial fabrication products, including pressure reducing systems, offset a year-over-year decline in wind tower sections sold. Within the Heavy Fabrications segment non-GAAP Adjusted EBITDA margin increased 140 basis points year-over-year to 4.7% in the third quarter 2022. While domestic onshore wind installation activity remains below historical levels due to elevated raw materials prices and component availability challenges, order activity began to accelerate during the third quarter, with OEM customers securing tower capacity for the remainder of 2022 and into 2023 following the recent passage of the Inflation Reduction Act of 2022.
Within the Gearing segment, revenue increased by 35% on a year-over-year basis in the third quarter, supported by sustained demand growth across the energy and industrial end-markets. Gearing segment non-GAAP Adjusted EBITDA margin increased 590 basis points year-over-year to 12.0% in the third quarter 2022.
ORDERS AND BACKLOG
Heavy Fabrications segment orders increased 137% year-over-year driven primarily by increased tower demand, while segment backlog increased 72% versus the prior-year period. Gearing Segment orders increased 34% year-over-year driven primarily by broad-based demand growth across all tracked end-markets, including the energy, industrial and mining markets, while segment backlog increased 66% versus the prior-year period. Industrial Solutions segment orders increased 34% year-over-year driven primarily by diverse project activity, while segment backlog increased 104% versus the prior-year period.
As of
MANAGEMENT COMMENTARY
“Demand conditions improved materially during the third quarter, as both orders and backlog increased to multi-quarter highs,” stated
“In 2022, we introduced a series of strategic actions designed to expand our available markets, improve asset optimization, reduce fixed overhead and enhance workforce efficiency,” continued Blashford. “In combination, these actions drove improved operating leverage during the third quarter, as reflected by a sequential and year-over-year improvement in gross profit, operating income and non-GAAP Adjusted EBITDA. I am pleased with the progress we’ve achieved thus far and look forward to building on the positive momentum evident in our business.”
“Entering 2023, quoting and backlog levels remain elevated,” continued Blashford. “Following a pause in wind order activity during the last two years, we’ve begun to see indications of a gradual recovery in tower demand across our OEM customer base. Within our gearing business, domestic energy development remains a tailwind for us, as customers rely on our turnkey solutions to support exploration and production activity within the oilfield. Further, we continue to develop new energy transition technologies, such as our modular natural gas pressure reduction systems, which represent significant, incremental revenue opportunities for our business.
“For the fourth quarter 2022, we currently anticipate our non-GAAP adjusted EBITDA to be in a range of
SEGMENT RESULTS
Heavy Fabrications Segment
Heavy Fabrications segment sales increased by 7% to
Gearing Segment
Gearing segment sales increased by 35% to
Industrial Solutions Segment
Industrial Solutions segment sales declined 5% to
THIRD QUARTER 2022 CONFERENCE CALL
A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of the Company’s corporate website at https://investors.bwen.com/investors. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.
To participate in the live teleconference:
Domestic Live: | 1-877-407-9716 |
International Live: | 1-201-493-6779 |
To listen to a replay of the teleconference, which will be available through
Domestic Replay: | 1-844-512-2921 |
International Replay: | 1-412-317-6671 |
Conference ID: | 13733405 |
ABOUT
NON-GAAP FINANCIAL MEASURES
The Company provides non-GAAP adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, share-based compensation and other stock payments, restructuring costs, impairment charges and other non-cash gains and losses) as supplemental information regarding the Company’s business performance. The Company’s management uses this supplemental information when it internally evaluates its performance, reviews financial trends and makes operating and strategic decisions. The Company believes that this non-GAAP financial measure is useful to investors because it provides investors with a better understanding of the Company’s past financial performance and future results, which allows investors to evaluate the Company’s performance using the same methodology and information as used by the Company’s management. The Company’s definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts.
FORWARD-LOOKING STATEMENTS
This release contains “forward looking statements”—that is, statements related to future, not past, events—as defined in Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. Forward looking statements include any statement that does not directly relate to a current or historical fact. We have tried to identify forward looking statements by using words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “plan” and similar expressions, but these words are not the exclusive means of identifying forward looking statements.
Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following, many of which are, and will be, amplified by the COVID-19 pandemic: (i) the impact of global health concerns, including the impact of the current COVID-19 pandemic on the economies and financial markets and the demand for our products; (ii) state, local and federal regulatory frameworks affecting the industries in which we compete, including the wind energy industry, and the related extension, continuation or renewal of federal tax incentives and grants and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
2022 | 2021 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash | $ | 1,509 | $ | 852 | |||||||
Accounts receivable, net | 16,916 | 13,802 | |||||||||
Employee retention credit receivable | - | 497 | |||||||||
Contract assets | 3,489 | 1,136 | |||||||||
Inventories, net | 33,902 | 33,377 | |||||||||
Prepaid expenses and other current assets | 3,858 | 2,661 | |||||||||
Total current assets | 59,674 | 52,325 | |||||||||
LONG-TERM ASSETS: | |||||||||||
Property and equipment, net | 45,497 | 43,655 | |||||||||
Operating lease right-of-use assets | 16,872 | 18,029 | |||||||||
Intangible assets, net | 2,902 | 3,453 | |||||||||
Other assets | 1,119 | 585 | |||||||||
TOTAL ASSETS | $ | 126,064 | $ | 118,047 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Line of credit and other notes payable | $ | 15,629 | $ | 6,650 | |||||||
Current portion of finance lease obligations | 1,967 | 2,060 | |||||||||
Current portion of operating lease obligations | 1,871 | 1,775 | |||||||||
Accounts payable | 21,436 | 16,462 | |||||||||
Accrued liabilities | 4,897 | 3,654 | |||||||||
Customer deposits | 3,076 | 12,082 | |||||||||
Total current liabilities | 48,876 | 42,683 | |||||||||
LONG-TERM LIABILITIES: | |||||||||||
Long-term debt, net of current maturities | 8,489 | 177 | |||||||||
Long-term finance lease obligations, net of current portion | 2,881 | 2,481 | |||||||||
Long-term operating lease obligations, net of current portion | 17,180 | 18,405 | |||||||||
Other | 24 | 167 | |||||||||
Total long-term liabilities | 28,574 | 21,230 | |||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock, | |||||||||||
or outstanding | - | - | |||||||||
Common stock, | |||||||||||
and 19,859,650 shares issued as of | |||||||||||
21 | 20 | ||||||||||
respectively | (1,842 | ) | (1,842 | ) | |||||||
Additional paid-in capital | 396,730 | 395,372 | |||||||||
Accumulated deficit | (346,295 | ) | (339,416 | ) | |||||||
Total stockholders’ equity | 48,614 | 54,134 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 126,064 | $ | 118,047 | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended | Nine Months Ended | |||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||
Revenues | $ | 44,843 | $ | 40,389 | $ | 136,699 | $ | 119,608 | ||||||||||
Cost of sales | 41,095 | 38,315 | 128,545 | 115,054 | ||||||||||||||
Gross profit | 3,748 | 2,074 | 8,154 | 4,554 | ||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||
Selling, general and administrative | 4,085 | 3,888 | 12,109 | 12,623 | ||||||||||||||
Intangible amortization | 183 | 183 | 550 | 550 | ||||||||||||||
Total operating expenses | 4,268 | 4,071 | 12,659 | 13,173 | ||||||||||||||
Operating loss | (520 | ) | (1,997 | ) | (4,505 | ) | (8,619 | ) | ||||||||||
OTHER (EXPENSE) INCOME, net: | ||||||||||||||||||
Paycheck Protection Program loan forgiveness | - | - | - | 9,151 | ||||||||||||||
Interest expense, net | (1,234 | ) | (269 | ) | (2,355 | ) | (816 | ) | ||||||||||
Other, net | (4 | ) | 185 | 17 | 7,322 | |||||||||||||
Total other (expense) income, net | (1,238 | ) | (84 | ) | (2,338 | ) | 15,657 | |||||||||||
Net (loss) income before provision for income taxes | (1,758 | ) | (2,081 | ) | (6,843 | ) | 7,038 | |||||||||||
Provision for income taxes | 14 | 24 | 36 | 101 | ||||||||||||||
NET (LOSS) INCOME | $ | (1,772 | ) | $ | (2,105 | ) | $ | (6,879 | ) | $ | 6,937 | |||||||
NET (LOSS) INCOME PER COMMON SHARE - BASIC: | ||||||||||||||||||
Net (loss) income | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.34 | ) | $ | 0.38 | |||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC | 20,506 | 19,418 | 20,156 | 18,460 | ||||||||||||||
NET (LOSS) INCOME PER COMMON SHARE - DILUTED: | ||||||||||||||||||
Net (loss) income | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.34 | ) | $ | 0.36 | |||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED | 20,506 | 19,418 | 20,156 | 19,218 | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
Nine Months Ended | ||||||||||
2022 | 2021 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
Net (loss) income | $ | (6,879 | ) | $ | 6,937 | |||||
Adjustments to reconcile net cash used in operating activities: | ||||||||||
Depreciation and amortization expense | 4,581 | 4,758 | ||||||||
Paycheck Protection Program loan forgiveness | - | (9,151 | ) | |||||||
Deferred income taxes | (13 | ) | 19 | |||||||
Change in fair value of interest rate swap agreements | (27 | ) | 18 | |||||||
Stock-based compensation | 760 | 857 | ||||||||
Allowance for doubtful accounts | (18 | ) | (434 | ) | ||||||
Common stock issued under defined contribution 401(k) plan | 915 | 870 | ||||||||
Loss (gain) on disposal of assets | 3 | (33 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (3,096 | ) | (360 | ) | ||||||
Employee retention credit receivable | 497 | (503 | ) | |||||||
Contract assets | (2,353 | ) | 763 | |||||||
Inventories | (525 | ) | 1,848 | |||||||
Prepaid expenses and other current assets | (1,200 | ) | 689 | |||||||
Accounts payable | 4,968 | (4,321 | ) | |||||||
Accrued liabilities | 1,271 | (2,285 | ) | |||||||
Customer deposits | (9,006 | ) | (11,139 | ) | ||||||
Other non-current assets and liabilities | (149 | ) | 644 | |||||||
Net cash used in operating activities | (10,271 | ) | (10,823 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
Purchases of property and equipment | (2,757 | ) | (1,369 | ) | ||||||
Proceeds from disposals of property and equipment | - | 33 | ||||||||
Net cash used in investing activities | (2,757 | ) | (1,336 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
Proceeds from line of credit, net | 7,966 | 4,039 | ||||||||
Payments for deferred financing costs | (470 | ) | - | |||||||
Proceeds from long-term debt | 8,113 | 613 | ||||||||
Payments on long-term debt | (261 | ) | (159 | ) | ||||||
Principal payments on finance leases | (1,347 | ) | (1,197 | ) | ||||||
Shares withheld for taxes in connection with issuance of restricted stock | (546 | ) | (1,503 | ) | ||||||
Proceeds from sale of common stock, net | 230 | 9,329 | ||||||||
Net cash provided by financing activities | 13,685 | 11,122 | ||||||||
- | ||||||||||
NET INCREASE (DECREASE) IN CASH | 657 | (1,037 | ) | |||||||
CASH beginning of the period | 852 | 3,372 | ||||||||
CASH end of the period | $ | 1,509 | $ | 2,335 | ||||||
SELECTED SEGMENT FINANCIAL INFORMATION
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended | Nine Months Ended | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||
ORDERS: | |||||||||||||||||
Heavy Fabrications | $ | 62,873 | $ | 26,539 | $ | 110,022 | $ | 62,096 | |||||||||
Gearing | 15,523 | 11,546 | 38,526 | 29,325 | |||||||||||||
Industrial Solutions | 6,061 | 4,512 | 14,648 | 11,831 | |||||||||||||
Total orders | $ | 84,457 | $ | 42,597 | $ | 163,196 | $ | 103,252 | |||||||||
REVENUES: | |||||||||||||||||
Heavy Fabrications | $ | 30,640 | $ | 28,675 | $ | 93,486 | $ | 87,282 | |||||||||
Gearing | 10,190 | 7,562 | 30,890 | 20,315 | |||||||||||||
Industrial Solutions | 4,020 | 4,213 | 13,142 | 12,357 | |||||||||||||
Corporate and Other | (7 | ) | (61 | ) | (819 | ) | (346 | ) | |||||||||
Total revenues | $ | 44,843 | $ | 40,389 | $ | 136,699 | $ | 119,608 | |||||||||
OPERATING PROFIT/(LOSS): | |||||||||||||||||
Heavy Fabrications | $ | 372 | $ | (445 | ) | $ | (11 | ) | $ | (1,873 | ) | ||||||
Gearing | 624 | (219 | ) | (73 | ) | (2,090 | ) | ||||||||||
Industrial Solutions | (191 | ) | (108 | ) | (368 | ) | (169 | ) | |||||||||
Corporate and Other | (1,325 | ) | (1,225 | ) | (4,053 | ) | (4,487 | ) | |||||||||
Total operating loss | $ | (520 | ) | $ | (1,997 | ) | $ | (4,505 | ) | $ | (8,619 | ) | |||||
Note- Be sure to delete hidden rows or they may show up in your press release (more relevant for Part 2 as the CF was all messed up last time) | |||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(IN THOUSANDS)
(UNAUDITED)
Consolidated | Three Months Ended | Nine Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net (Loss) Income | $ | (1,772 | ) | $ | (2,105 | ) | $ | (6,879 | ) | $ | 6,937 | |||||
Interest Expense | 1,234 | 269 | 2,355 | 816 | ||||||||||||
Income Tax Provision | 14 | 24 | 36 | 101 | ||||||||||||
Depreciation and Amortization | 1,486 | 1,594 | 4,581 | 4,758 | ||||||||||||
Share-based Compensation and Other Stock Payments | 935 | 619 | 2,166 | 1,806 | ||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 1,897 | $ | 401 | $ | 2,259 | $ | 14,418 | ||||||||
Heavy Fabrications Segment | Three Months Ended | Nine Months Ended | |||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net (Loss) Income | $ | (231 | ) | $ | (313 | ) | $ | (1,009 | ) | $ | 6,629 | ||||
Interest Expense | 651 | 124 | 1,246 | 381 | |||||||||||
Income Tax (Benefit) Provision | (48 | ) | (68 | ) | (249 | ) | 2,124 | ||||||||
Depreciation | 852 | 967 | 2,594 | 2,903 | |||||||||||
Share-based Compensation and Other Stock Payments | 226 | 248 | 697 | 731 | |||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 1,450 | $ | 958 | $ | 3,279 | $ | 12,768 | |||||||
Gearing Segment | Three Months Ended | Nine Months Ended | ||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||
Net Income (Loss) | $ | 581 | $ | (236 | ) | $ | (185 | ) | $ | 1,835 | ||||
Interest Expense | 41 | 13 | 131 | 33 | ||||||||||
Income Tax Provision | 1 | 3 | 4 | 10 | ||||||||||
Depreciation and Amortization | 477 | 464 | 1,507 | 1,383 | ||||||||||
Share-based Compensation and Other Stock Payments | 119 | 213 | 397 | 356 | ||||||||||
Adjusted EBITDA (Non-GAAP) | $ | 1,219 | $ | 457 | $ | 1,854 | $ | 3,617 | ||||||
Industrial Solutions Segment | Three Months Ended | Nine Months Ended | |||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net (Loss) Income | $ | (283 | ) | $ | (130 | ) | $ | (540 | ) | $ | 684 | ||||
Interest Expense | 81 | 11 | 147 | 43 | |||||||||||
Income Tax Provision | 9 | 9 | 20 | 56 | |||||||||||
Depreciation and Amortization | 97 | 104 | 299 | 315 | |||||||||||
Share-based Compensation and Other Stock Payments | 48 | 43 | 182 | 146 | |||||||||||
Adjusted EBITDA (Non-GAAP) | $ | (48 | ) | $ | 37 | $ | 108 | $ | 1,244 | ||||||
Corporate and Other | Three Months Ended | Nine Months Ended | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net Loss | $ | (1,839 | ) | $ | (1,426 | ) | $ | (5,145 | ) | $ | (2,211 | ) | ||||
Interest Expense | 461 | 121 | 831 | 359 | ||||||||||||
Income Tax Provision (Benefit) | 52 | 80 | 261 | (2,089 | ) | |||||||||||
Depreciation and Amortization | 60 | 59 | 181 | 157 | ||||||||||||
Share-based Compensation and Other Stock Payments | 542 | 115 | 890 | 573 | ||||||||||||
Adjusted EBITDA (Non-GAAP) | $ | (724 | ) | $ | (1,051 | ) | $ | (2,982 | ) | $ | (3,211 | ) | ||||
CORPORATE CONTACTNoel Ryan , IRC investor@bwen.com
Source:
2022 GlobeNewswire, Inc., source