Broadwind, Inc.

Greetings. Welcome to the Broadwind first quarter 2021 results conference call. At this time, all participants are in a listen only mode. Question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jason Bonfit. Thank you. You may begin.

Good morning, and welcome to the Broadwind first quarter 2021 results conference call. Leading the call today is our CEO, Eric Blashford, and I'm Jason Bonfit, the company's CFO. We issued a press release before the market opened today detailing our first quarter 2021 results. I would like to remind you that management's commentary and responses 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 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 correlated filings with the SEC. Additionally, Please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call today in our press release issued this morning. At the conclusion of our prepared remarks, we will open the line for questions. With that, I'll turn the call over to Eric.

Thank you, Jason, and welcome to those joining us today. After reporting strong four-year results for 2020, which included significant growth in total revenue margin capture, free cash flow, and adjusted EBITDA, our first quarter results were impacted by a number of near-term headwinds, including pandemic-related supply chain challenges, a week-long weather-related outage at our Texas facility in February, and the shift in the timing of a tower customer order from the first to the second quarter. Despite these challenges, our business began to stabilize in April, as supply chain challenges have begun to subside, resulting in improved utilization rates at our production facilities. Additionally, the presence of unfairly priced imports continues to negatively impact our business. Nevertheless, we are forecasting a sequential growth in both revenue and adjusted EBITDA in the second quarter of 2021 when compared to the first quarter. Demand fundamentals in our core wind energy markets continue to strengthen, During the past decade, cost competitiveness of wind improved materially versus other forms of energy, with the unsubsidized levelized cost of wind energy having declined 70% since 2009. In addition to this major cost reduction, policymakers have set forth incentives to drive increased third-party investment in wind technologies, setting the stage for greater investments in renewable energy. In December 2020, Congress approved an additional year of the PTC at the 60% subsidy level, together with a new 30% ITC for offshore wind, creating the potential for increased tower demand over the medium term. Longer term, we view the recent decision by the Biden administration to reenter the Paris Climate Accords, the increasing potential for a new infrastructure spending bill, together with the reintroduction of the Green Act, as favorable catalysts for the sector. Given the success of the anti-dumping and countervailing duty investigations in the summer of 2020 and the continuing efforts to ensure an even playing field in the U.S., we believe domestic wind tower manufacturers are uniquely positioned to benefit from these favorable market dynamics. As we have done throughout the pandemic, we continue to produce and ship products that meet and often exceed our customers' exacting fabrication requirements. Order rates in our non-win markets improved dramatically in Q1 as our customers returned to a more normalized cadence of activity following a prolonged period of disruption. Our tower orders doubled in the first quarter of 2021 versus the prior year period as several customers secured 2021 production capacity. The strengthening of quoting activity we began to see toward the end of 2020 continues, and we anticipated gradual recovery in the first half 2021 order flow. The full impact of the pandemic on our business and end markets remains difficult to quantify, but we anticipate that current cash and availability on our credit facility will continue to provide adequate liquidity to support our business during this transitional period. Within our heavy fabrication segment, we experienced a 46% year-over-year decline in power sections sold in the first quarter due to the reasons just mentioned. As we've discussed on previous calls, orders in the tower's business tend to vary from quarter to quarter. However, first quarter orders were well above the prior year first quarter, even as our backlog decreased. At this time, our optimal tower capacity is about 60% booked for 2021, and we are in continuing discussions with our OEM customers to satisfy their tower customer demand for the remainder of the year. Within gearing, Pandemic-related delays in customer order activity in the second half of last year resulted in lower segment revenue during the first quarter. However, we are beginning to see early indications of improved demand activity with backlog nearing pre-pandemic levels. Revenue for our industrial solution segment increased on a year-over-year basis as demand improved within the natural gas turbine market. As I referenced earlier, our first quarter results were impacted by a series of non-recurring events that we believe are largely behind us. I'm proud of the way our team responded to these issues as they focused on keeping our plants running and our people safe as we successfully met our customer commitments. With that, I'll turn the call back over to Jason for a discussion of our first quarter financial performance.