Broadwind, Inc.

Greetings and welcome to Broadwind's third quarter 2024 conference, 2024 results conference call. At this time, all participants are on a listen-only mode. A 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. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tom Ciccone. Thank you. You may begin.

Good morning, and welcome to the Broadwin Third Quarter 2024 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 third 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 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 factor 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. 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. Robin delivered a solid Q3, highlighted by near double-digit EBITDA margin in our seventh consecutive profitable quarter, despite reduced revenue. Offsetting a transitional pause in new wind tower demand Third quarter results benefited from a higher value sales mix, improved execution, and targeted cost reduction actions. We booked $23 million in orders in the third quarter, a 45% increase from the year-ago period, driven by increased demand across all reporting segments. Heavy fabrication saw increased demand for the adapters used to repower wind turbines and for our pressure reduction systems, partially offset by decreased orders in the industrial and mining sectors. Gearing orders increased 46% year-over-year due to increased demand from the power generation and infrastructure markets. Orders from our industrial solutions segment increased 52% year-over-year due to strength in the global gas turbine market. At a commercial level, we continue to expand our product mix within higher margin adjacent markets. Quoting activity is elevated at all segments. But most notably in our heavy fabrications and industrial solutions businesses, we're quoting as up more than triple year over year, reflecting improved demand and the impact of our commercial efforts across our non-win markets, such as material handling, mining, and power generation. Operationally, we continue to invest in innovative technology to improve our process capabilities, reduce costs, and improve our profitability. our tower facility in Abilene, and sold a new portable milling system to machine flanges. This new flange mill is used to machine the surface between the top flange of a tower and the cell of a wind turbine. The new mill holds tighter tolerances, improves surface finish, and reduces setup time for a total reduction time of approximately 25% for that key process. Gearing continues to invest in technology that supports improved efficiency and speed to market. Most recently, the organization has deployed portable laser scanning and product measurement equipment to develop the 3D models used by our commercial team to quote gearbox designs, retrofits, or repairs, reducing our quote turnaround time by 75%, literally from weeks to days. Beginning in the first quarter of this year, we undertook significant action to align our cost structure with the current demand environment. In combination, these actions will contribute more than $4 million and annualized cost savings, which is evident in our results. As demand conditions begin to improve, we believe these actions position Broadwind to realize improved operating leverage entering 2025. Q3 revenue declined versus year-ago levels, primarily due to lower tower demand. Our non-wind activity levels remain relatively stable as we see demand for our precision manufacturing capabilities across multiple markets. In Q3, We generated EBITDA of $3.4 million and net income of $0.1 million. Within our heavy fabrication segment, Q3 revenue was $21 million, down 46% from a year ago, primarily due to the decline in tower production and PRS shipments, partially offset by increased sales of mining equipment. Gearing revenue was $9.2 million, a 19.6 reduction year-over-year due to broad-based softness in the oil and gas market, offset by an uptick in sales into the mining and industrial categories. Industrial Solutions revenue was $5.7 million, down 22.8% year-over-year, primarily due to the absence of a large international project shipped last year, which did not repeat. In summary, the operating performance of all divisions continues to be strong, as we quickly respond to demand fluctuations in the business. With that, I'll turn the call over to Tom for a discussion of our third quarter financial performance.