Broadwind, Inc.

If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Tom Ciccone. Thank you. You may begin.

Good morning, and welcome to the Broadwind First Quarter 2023 Results Conference Call. Leading the call today is our CEO, Eric Blashford, and I'm Tom Ciccone. the company's vice president and chief financial officer. We issued a press release before the market opened today detailing our first quarter 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 quarterly filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in the press release issued today. I would like to inform you that Broadwin filed its definitive proxy statement and related proxy materials with the SEC in connection with the 2023 annual meeting of stockholders. And in connection therewith, its directors and certain of its executive officers are participants in the solicitation of proxies from our stockholders in connection with such annual meeting. Stockholders of Broadwin are strongly encouraged to read such proxy statement and all other related materials filed with the SEC carefully and in their entirety when they become available, as they will contain important information about the 2023 Annual Meeting, including the identity of the participants in the solicitation and their direct or indirect interests by security holdings or otherwise. At this time, we will make no further comment on the nominations made by WM Argyle Fund or any matters or discussions related to WM Argyle Fund or its nominations. At the conclusion of our prepared remarks, we will open the line for questions. With that, I'll turn the call over to Eric.

Thanks, Tom, and welcome to those joining us today. Our first quarter results demonstrate a strong start to the year. As sustained demand across diverse end markets improved margin realization, and consistent operational execution contributed to significant year-over-year growth and profitability. The green shoots first evidenced as we exited last year continued into the first quarter. As indications of interest from OEM customers, together with continued stability across our diverse non-wind markets, have contributed to improved visibility and optimism across our business in 2023, and into 2024. We've recently announced several significant new business wins, including the $175 million in new tower orders, followed by a record $8 million order for our proprietary mobile pressure reduction systems, or PRSs, and related accessories in April. These orders reflect positive business momentum within our legacy wind business, together with significant traction within new higher margin adjacent markets that leverage the unique intellectual property we are developing here at Broadwind. Importantly, this performance reflects meaningful progress on a strategic plan, which emphasizes profitable growth across a broader spectrum of energy transition and clean tech opportunities. As we further expand our product and service capabilities, we expect to drive improved asset utilization and unit economics consistent with our focus on driving improved margin realization through the cycle. We booked $40 million in orders in the first quarter, down about 25% from the prior year quarter as expected, given the pull forward of the large multi-year tower order we received in December 2022. The timing of these tower orders was partially offset by a more than 100% increase in our industrial fabrications orders, which include our proprietary PRS product line. Entering the second quarter, we continue to operate on plan, both at a commercial and an operational level. Commercially, we are staying disciplined on price as we pass along inflationary cost increases to our customers. We are also negotiating improved contract terms and prudently managing our cash and liquidity to ensure adequate working capital availability as we grow. We're also focusing on expanding our product mix within higher margin or profitable adjacent markets, as reflected by our recent PRS product launches. Operationally, we continue to deploy lean operating principles across the organization, including continuous improvement projects across all divisions with an emphasis on improved asset utilization. We've continued to focus increasingly on plant and process automation, positioning us to capture improved manufacturing efficiencies. This year We've led a major retooling and automation of our coatings process at the Abilene plant, which is expected to be fully operational at the end of May 2023. We generated revenue of $49 million in the first quarter, a year-over-year increase of 17%, with each reporting segment posting double-digit gains. We generated $4.1 million of adjusted EBITDA in the quarter, an increase of more than $4 million versus the prior year period. resulting in a return to profitability in the period. Our heavy fabrication segment booked Q1 orders of $20 million, down 41% year over year, as expected, given that we received the $175 million multi-year tower order late last year. We're pleased to see increasing strength in our industrial fabrications product line, with orders more than doubling year over year. Our gearing orders were $12 million, down 12% year over year, led by softening of incoming oil and gas orders, partially offset by increases in orders from the industrial and steel processing sectors. Orders for industrial solutions of $7 million continue to be strong, posting a 56% increase year-over-year, led by orders for both new gas turbine builds as well as the gas turbine aftermarket. Our total backlog at the end of Q1 was $288 million. a 146% increase versus a prior year period. Quoting activity in our non-wind markets remains strong, and we expect good order flow to continue through the balance of this year. Within our heavy fabrication segment, Q1 revenue was $32 million, a 16% increase year-over-year with wind towers and other industrial fabrications, posting gains of 12% and 31%, respectively. Importantly, our new proprietary product line, the Broadwind Pressure Reducing System, or PRS, which is a vital part of the natural gas virtual pipeline system in North America, continues to perform well, with revenues up 65% year-over-year as we execute our strategy to expand in clean fuels. Gearing revenue was $12 million, a 13% increase year-over-year as customer activity continues to be strong within both the energy and industrial sectors. we are seeing the positive impact of our commercial strategy given 165% year-over-year growth in our industrial segment this quarter. In summary, I'm pleased with the operating performance of all divisions entering the year as we continue to execute our growth and diversification strategy. With that, I'll turn the call back over to Tom for a discussion of our first quarter performance.