Broadwind (NASDAQ:BWEN) reported first-quarter financial results on Tuesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Access the full call at https://viavid.webcasts.com/starthere.jsp?ei=1759548&tpkey=a364a86340
Summary
Broadwind Inc reported strong revenue growth in their Gearing and Industrial Solutions segments, with a 40% increase in Gearing and 60% in Industrial Solutions year-over-year, driven by demand in power generation and infrastructure markets.
The company is strategically exiting the wind tower production by Q3 2026, focusing on its core businesses in Gearing and Industrial Solutions, which are higher growth and more predictable.
Orders in the Gearing segment increased by 65%, with a backlog of $30.5 million, while Industrial Solutions saw a 44% increase in orders, driving a record backlog of $43.3 million.
The company invested in new equipment and technology to enhance process capabilities, reduce costs, and improve profitability, including expanding production space in North Carolina by 30%.
First quarter consolidated revenues were $34.1 million, an 8% decrease from the prior year due to the wind down of the Manitowoc operations, but Gearing and Industrial Solutions segments saw revenue increases of over 40% and 60%, respectively.
Broadwind Inc has withdrawn its full-year 2026 financial guidance following the sale of the Abilene facility, as they complete the shift away from wind tower production.
Management highlighted ongoing strong order growth in power generation and critical infrastructure markets, positioning the company for future growth and improved utilization of its manufacturing footprint.
Full Transcript
OPERATOR
Greetings and welcome to Broadwind’s first quarter 2026 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 *0 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.
Tom Ciccone (Vice President and Chief Financial Officer)
Good morning and welcome to the Broadwind first quarter 2026 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 a 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. At the conclusion of our prepared remarks, we will open the line for questions. With that, I’ll turn the call over to Eric.
Eric Blashford (Chief Executive Officer)
Thank you Tom and welcome to our call today. During the first quarter we advanced our business transformation strategy while delivering strong revenue growth, margin realization and order momentum in our core Gearing and industrial solutions segments. Higher demand in the power generation and critical infrastructure end markets drove revenue growth of more than 40% in gearing and more than 60% in industrial solutions year over year. We anticipate our strategic exit from wind tower production will be complete in the third quarter of 2026, so gearing and Industrial Solutions will represent our core businesses moving forward. Excluding the divested product lines within the heavy fabrication segment, Broadwind generated approximately $64 million of revenue on a trailing 12 month basis through the end of the first quarter. Our remaining businesses are higher growth, more predictable, more profitable and not policy dependent with meaningfully improved earnings quality over time. We will use our core Gearing Industrial solutions segments as a platform to grow a business of increasing scale and profitability. Within the gearing segment, Q1 orders increased more than 65% to $13.2 million, supporting a backlog of $30.5 million demand growth within the gearing segment has been largely driven by strong customer activity and power generation driven by the AI data center boom as well as industrial and mining markets. Quoting Activity remains robust with green shoots now forming in defense, Our Industrial Solutions segment had yet another strong quarter as orders increased 44% year over year to $14.6 million, driving backlog to a record $43.3 million. Natural gas turbine demand remains very strong, also driven by the AI data center boom as well as global electrification representing key growth drivers for this segment and we are happy to meet that demand operationally. We continue to invest in equipment and technology to increase our process capabilities, reduce costs and improve our profitability in gearing. This quarter we commissioned new very high precision grinding and mechanical balancing equipment to improve quality and reduce lead times in the production of high speed reduction gearing such as the gearing used on natural gas turbines. These technology improvements make us one of the most vertically integrated manufacturers of these types of critical components in the US in the industrial solutions segment, we continue to make investments to improve our capacity and capabilities and in order to meet the strong customer demand that we’re experiencing from our key gas turbine equipment customers, we are on track to expand our local footprint in our North Carolina facility in Q2. This expansion will increase production space in North Carolina by 30% which is necessary to service our strong backlog to position us to handle the future growth projected in this market. Within our heavy fabrication segment, Q1 revenue decreased by 35% reflecting the sale of the Manitowoc industrial fabrications business last year. Lower PRS demand and the residual impact of the OEM directed by material supply issue we experienced late last year. Revenue on our gearing segment increased 42% year over year to $8.5 million. Given the steady ramp up in power generation related demand within Industrial Solutions revenue grew 64% year over year to $9.2 million primarily due to stronger shipments of natural gas turbine components. In summary, the team and business continue to perform well as we sharpen our focus within adjacent higher margin precision manufacturing verticals. Our progress on industry specific certifications such as as 9100 for aerospace and Defense and the Cybersecurity Maturity model certification or CMMC 2.0 for the defense market and others, combined with targeted investments in capacity and capability is yielding the results we expected and more. Our decision to strategically pivot from the unpredictable, uncertain and policy dependent wind tower business and repurpose that capital toward higher growth, more predictable, more profitable markets positions us well for the future. With that, I’ll turn the Call over to Tom for a discussion of our first quarter financial performance.
Tom Ciccone (Vice President and Chief Financial Officer)
Thank you Eric turning to slide 5 for an overview of our first quarter performance. First quarter consolidated revenues of 34.1 million representing an 8% decrease versus the prior year period. As expected, we experienced a decrease in our heavy fabrication segment. However, outside of the heavy fabrication segment, first quarter revenues within our gearing and industrial solutions segments increased more than 40% and 60% respectively, reflective of the strong order activity levels we’ve been recognizing. Adjusted EBITDA declined slightly to 2.2 million versus the prior year of 2.4 million. However, adjusted EBITDA increased approximately 16% sequentially, driven by improved capacity utilization and a more profitable mix. First quarter orders remained strong at over $37 million. Orders increased within our gearing and industrial solutions segments driven by strength in the power generation and natural gas turbine verticals, while orders decreased within our heavy fabrication segment, reflective of our exit of the Manitowoc facility late in 2025. Turning to Slide 6 for a discussion of our heavy fabrication segment. As expected, with the wind down of the Manitowoc operations, we continue to see decreases in revenue, orders and backlog. We anticipate this to continue going forward, especially in light of our recently announced sale of our Abilene facility pursuant to which we strategically exited the wind market. First quarter orders of 9.7 million primarily consist wind tower production that will continue through Q3 of 2026 out of the Abilene facility, as well as some baseline PRS activity. As a reminder, we will retain the PRS business we are evaluating. Segment reporting following the divest will provide additional detail as the process is finalized. First quarter revenues of 16.4 million and adjusted EBITDA of 1.7 million are both down versus the comparative prior year period due to the wind down of our Manitowoc operations, the resolved raw material supply issue and lower PRS demand. Turning to Slide 7, Q1 gearing orders remained strong at 13.2 million, an increase of 66% versus the prior year and 36% sequentially. We ended Q1 with over $30 million in backlog, a level we have not reached since 2023. As we noted in prior quarters, we continue to see strong orders from power generation …
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