Core Insights - Broadwind reported a net loss of $1.0 million, or $0.04 per diluted share, in Q2 2025, a decline from a net income of $0.5 million, or $0.02 per diluted share, in Q2 2024 [2][8] - Revenue increased by 7.6% year-over-year to $39.2 million, driven by higher sales in the wind and industrial sectors [3][8] - Total orders rose by 14% year-over-year to $21.0 million, with significant demand from power generation and oil & gas customers [4][8] Financial Performance - Adjusted EBITDA for Q2 2025 was $2.1 million, down from $3.6 million in the same period last year, representing 5.3% of total revenue [2][8] - The Heavy Fabrications segment saw a revenue increase of 27.4% to $25.0 million, primarily due to demand for wind tower sections [10][8] - The Gearing segment experienced a revenue decline of 30.3% to $7.3 million, attributed to lower demand from domestic energy markets [12][8] Operational Highlights - The Industrial Solutions segment's revenue increased by 13.9% to $7.4 million, driven by stronger order intake for natural gas turbine content [14][8] - The consolidated backlog decreased by 31.5% year-over-year to $95.3 million as of June 30, 2025 [4] - The company had total cash and availability under its credit facility of $14.9 million at the end of Q2 2025, with a net debt to trailing twelve-month adjusted EBITDA ratio of 3.0x [5][8] Management Commentary - The CEO highlighted progress in diversifying into higher-value precision manufacturing markets and increased demand for wind-related content [6] - The pending sale of the industrial fabrication operations in Manitowoc, Wisconsin, is expected to close in Q3 2025, adding approximately $13 million in cash and reducing costs by an estimated $8 million annually [6][15] - The company anticipates improved profitability as production normalizes throughout the year [6] Segment Results - Heavy Fabrications segment reported operating income of $1.7 million, compared to $1.6 million in the prior year [10][8] - Gearing segment reported an operating loss of $0.8 million, down from an operating income of $0.5 million in the previous year [12][8] - Industrial Solutions segment reported operating income of $0.5 million, slightly down from $0.6 million in the prior year [14][8]

Financial Data and Key Metrics Changes - The company's first quarter consolidated revenues were $36.8 million, a 2% decrease year-over-year, but a nearly 10% increase sequentially due to stronger demand for wind repowering [10] - Adjusted EBITDA margin was 6.4%, primarily affected by low capacity utilization and a lower margin product mix across all segments [10] - First quarter orders totaled $30.5 million, a 5% increase compared to the same period last year [11] Business Line Data and Key Metrics Changes - Heavy Fabrication segment revenue was $25 million, up 15% year-over-year, driven by increased demand for wind tower adapters [8] - Gearing revenue was $6 million, down 28% year-over-year due to softness in the oil and gas gearing market, partially offset by strength in wind and industrial sectors [8] - Industrial Solutions revenue was $5.6 million, down 29% year-over-year, primarily due to timing issues with aftermarket shipments in the natural gas turbine market [9] Market Data and Key Metrics Changes - Orders in the Heavy Fabrication business increased 10% year-over-year, reflecting strong demand for wind repowering adapters [5] - Industrial Solutions segment orders surpassed $10 million, setting a new record, with a backlog of nearly $23 million at the end of the first quarter [14] - Gearing orders were down approximately $2.5 million year-over-year but showed sequential growth, indicating a potential recovery in the market [12] Company Strategy and Development Direction - The company is focusing on expanding its product mix within higher margin adjacent markets and investing in equipment technology to improve process capabilities and profitability [6][7] - There is a strategic shift towards stable recurring project revenue streams across diverse end markets, particularly in power generation and natural gas turbines [18] - The company is also evaluating export opportunities and expanding its service and commercial teams for its Clean Fuels PRS line [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the domestic onshore wind tower activity continuing at its current rate through 2026, supported by sustained demand for repowering adapters [17] - The company anticipates full-year revenue to be in the range of $140 million to $160 million, with adjusted EBITDA between $13 million and $15 million [16] - Management noted that supply chain issues experienced in Q1 are expected to be temporary, with improvements anticipated in subsequent quarters [14] Other Important Information - The company ended the first quarter with approximately $23 million in cash and availability on its credit facility, reflecting a return to normal operating levels [15] - A significant inventory build occurred in Q1 as the company prepared for a new tower run-in and transitioned to a new tower design [15] Q&A Session Summary Question: Can you discuss the heavy fabrications segment and the repowering opportunity? - Management noted strong demand for repowering adapters and expects revenue to increase in the heavy fabrications segment through 2025, particularly in Manitowoc [25][27] Question: How are tariffs affecting your cost structure? - Management indicated that while some components are sourced overseas, the impact of tariffs is minor due to proactive supply chain adjustments [29][30] Question: What is the outlook for the gearing market given the drop in oil prices? - Management acknowledged a lull in oil and gas gearing but noted stronger orders in power generation, indicating potential growth opportunities despite low oil prices [32][33] Question: Is the drop in Industrial Solutions revenue solely due to supply chain issues? - Management confirmed that the revenue drop was primarily due to supply chain delays, which are expected to be resolved [39][40] Question: What are the revenue expectations for the PRS product line in 2026? - Management anticipates that the PRS product line could contribute between $15 million and $20 million, representing about 10% of total revenue [46][48]