Broadwind energy, inc. announces fourth quarter and full year results
for 2010
Naperville, ill.--(business wire)--broadwind energy (nasdaq: bwen) reported sales of $47.6 million for the fourth quarter, a 47.9% increase compared to $32.2 million in the fourth quarter of 2009. the sharp increase reflects record-high production levels within the tower segment and continued growth of industrial sales in the gearing segment. the company reported a net loss from continuing operations of $37.3 million or $0.36 per share in the fourth quarter of 2010, including non-cash impairment charges totaling $36.2 million. the impairment charges included a $13.3 million write-down of the investment in the company’s brandon, south dakota manufacturing facility, and a $22.9 million charge associated with intangibles and property and equipment in the services segment. in the fourth quarter of 2009, the company reported a net loss from continuing operations of $91.2 million, or $0.95 per share, which included non-cash impairment charges totaling $82.2 million. versus 2009, the decrease in loss was primarily the result of lower impairment expense taken in the current quarter, the beneficial impact of higher sales and lower selling, general and administrative expenses. the company reported adjusted ebitda (earnings before interest, taxes, depreciation, amortization and stock-based compensation) of $3.7 million during the fourth quarter of 2010 compared to an adjusted ebitda loss of $3.2 million during the fourth quarter of 2009, due principally to the improved tower and gearing segment results, and lower corporate expenses. peter c. duprey, president and chief executive officer, stated, “i am very encouraged by our fourth-quarter performance. despite the uncertain u.s. wind energy market, broadwind ended the year with a strong operational quarter and booked more than $60 million in new orders. we are making progress with our stated objectives of broadening our industrial customer base and improving our capacity utilization. our gearing business is seeing stronger demand in the industrial markets such as mining and oil and gas. our early focus on the multi-megawatt tower manufacturing is paying off with some of the existing and new entrants in the u.s. wind market. our services business had a difficult fourth quarter. however, with the dedication of the drivetrain service center, we are seeing strong interest from customers looking for gearbox remanufacturing services. we recently announced the sale of our logistics business, which will enable us to concentrate on our core operating units. as we move into 2011, we expect to deliver more consistent operating results and will report on progress with our growth strategies as the year continues. with the continued fluctuation of currency markets, we are seeing customers interested in localizing their supply chains for their u.s. sales.” the fourth-quarter loss from discontinued operations totaled $11.3 million, inclusive of both the operating losses at the company’s badger transport business, and the non-cash charge associated with the divestiture, which was completed on march 4, 2011. at december 31, 2010, backlog totaled $226 million, an increase of 8% compared to september 30, 2010 backlog of $210 million. for the full year ended december 31, 2010, the company reported revenue of $136.9 million compared to $184.8 million in the prior year. the reduction in sales was the result of lower production at each business segment, primarily during the first half of 2010, linked to the overall decline in the u.s. wind industry in 2010. according to the american wind energy association, u.s. wind capacity additions totaled 5,115 megawatts (mw) in 2010 approximately half the level of 2009. the company reported a loss from continuing operations for the year of $69.8 million, or $0.66 per share, compared to $107.0 million, or $1.11 per share in 2009. the decreased loss from continuing operations was primarily the result of lower impairment expense taken during the 2010 year and the beneficial impact of a 15% reduction in selling, general and administrative expenses due to cost-containment efforts in the weak environment, partially offset by the impact of lower revenues. the net loss for the year ended december 31, 2010 was $85.2 million, or $0.80 per share, inclusive of a loss of $15.4 million, or $0.14 per share, from discontinued operations. segment results towers broadwind manufactures wind turbine towers, specializing in the large and heavier towers that are designed for 2 megawatt (“mw”) and larger wind turbines. towers segment sales totaled $30.3 million in the fourth quarter of 2010, compared to $17.2 million in the fourth quarter of 2009. adjusted ebitda for the fourth quarter totaled $5.6 million in 2010, compared to $1.3 million in 2009. the increases in both revenues and ebitda were primarily attributable to a 79% increase in tower sections produced compared to the prior year. production of wind towers totaled 284 megawatts (mw) in the quarter and 554 mw year-to-date. towers segment sales for the year ended december 31, 2010 were $76.2 million, compared to $93.3 million in 2009. the decrease was primarily attributed to lower average tower prices reflecting, in part, 20% lower average steel prices and a 3% decline in tower section production, primarily in the first half of the year. adjusted ebitda for the year ended december 31, 2010 was $6.6 million, compared to $6.0 million in 2009. the increase was primarily attributed to the absence of start-up costs incurred in 2009 associated with the abilene facility. gearing broadwind produces precision gearing for the wind industry and gearboxes for mining, oilfield and other industrial customers. gearing segment sales totaled $13.9 million in the fourth quarter of 2010, compared to $9.7 million in 2009. the increase is due primarily to growth in sales to industrial customers. adjusted ebitda for the fourth quarter of 2010 was $0.2 million compared to a loss of $2.0 million in the prior year fourth quarter. the improvement reflects the sales increase as well as significantly improved operations, including lower scrap and warranty expense and improved inventory management. gearing segment sales were $48.9 million for the year ended december 31, 2010 compared to $64.5 million in the prior year. the decrease was attributed to a 21% and 29% decline in wind gearing and industrial revenues, particularly in the first half of the year, as a result of reduced or delayed production orders from key customers. adjusted ebitda for the year ended december 31, 2010 was a loss of $4.2 million compared to a loss of $0.7 million in the prior year, due to the decline in revenues during the current year. services broadwind is a leading independent provider of installation support and operations and maintenance services for the wind turbine industry. the company also offers repair and refurbishing of complex wind components, including control systems, gearboxes and blades. revenue from the services segment was $3.5 million in the fourth quarter of 2010, compared with $5.4 million in the fourth quarter of 2009. the decrease in revenues was primarily the result of reduced operations and maintenance services performed for wind farm owners and operators. adjusted ebitda for the fourth quarter was a loss of $0.4 million compared to a loss of $0.1 million in the prior year fourth quarter. the decline was attributed to lower revenues and start-up costs associated with the new drivetrain services center, partially offset by lower selling, general and administrative costs. service segment revenue for the year ended december 31, 2010 was $12.1 million compared to $27.6 million in 2009. the decrease in revenues was primarily attributed to the absence of a large blade program completed in 2009, and lower outsourced project activity overall. adjusted ebitda for the year ended december 31, 2010 was a loss of $3.9 million compared to income of $2.8 million in 2009 due to the reasons listed above. corporate and other fourth quarter corporate and other expenses totaled $2.0 million, down $1.2 million from the prior year due to lower employee compensation expense and decreased professional fees. for the full year, corporate expenses totaled $9.4 million, down 34% from the prior year due to improved expense management and the absence of a 2009 customer dispute settlement. cash and liquidity at year-end, cash and marketable securities on hand totaled $15.3 million and the company’s $10 million credit line was undrawn. outstanding debt totaled $11.2 million and the company was in compliance with all debt covenants. about broadwind energy, inc. broadwind energy (nasdaq: bwen) applies decades of deep industrial expertise to innovate integrated solutions for customers in the energy and infrastructure markets. from gears to wind towers, to comprehensive remanufacturing of gearboxes and blades, to operations and maintenance services, and heavy industries, we have solutions for the energy needs of the future. with facilities throughout the u.s., broadwind energy's talented team of more than 800 employees is committed to helping customers maximize performance of their investments—quicker, easier and smarter. find out more at www.bwen.com. forward-looking statements this news release includes "forward-looking statements" within the meaning of the safe harbor provisions of the united states private securities litigation reform act of 1995 - that is, statements related to future, not past, events. forward-looking statements are based on current expectations and include any statement that does not directly relate to a current or historical fact. in this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "anticipate," "believe," "intend," "expect," "plan," "will" or other similar words. these forward-looking statements involve certain risks and uncertainties that ultimately may not prove to be accurate. actual results and future events could differ materially from those anticipated in such statements. the company's forward looking statements may include or relate to the company's plans to grow its business and its expectations regarding its operations and the business of its customers; the sufficiency of the company's working capital; and the company's expectations regarding the state of the wind energy market generally, as well as the company's expectations relating to the economic downturn and the potential impact on its business and the business of its customers. for further discussion of risks and uncertainties, individuals should refer to the company's sec filings. the company undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this news release. you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. all forward-looking statements are qualified in their entirety by this cautionary statement. total current assets revenues: operating (loss) profit: the company reflects its financial results in accordance with u.s. generally accepted accounting principles (gaap). however, the company’s management believes that certain non-gaap financial measures may provide users of this financial information meaningful comparisons between current results and results in prior operating periods. management believes that these non-gaap financial measures can provide additional meaningful reflection of underlying trends of the business because they provide a comparison of historical information that excludes certain infrequently occurring or non-operational items that impact the overall comparability. see the table below for supplemental financial data and corresponding reconciliations to gaap financial measures for the three months and year ended december 31, 2010 and 2009. non-gaap financial measures should be viewed in addition to, and not as an alternative for, the company’s reported results prepared in accordance with gaap.
