Broadwind, Inc. (NASDAQ:BWEN) Q1 2024 Earnings Conference Call May 14, 2024 11:00 AM ET

Company Participants

Tom Ciccone – Vice President and Chief Financial Officer
Eric Blashford – President and Chief Executive Officer

Conference Call Participants

Eric Stine – Craig-Hallum
Justin Clare – Roth MKM
Martin Malloy – Johnson Rice
Amit Dayal – H.C. Wainwright

Operator

Greetings, and welcome to Broadwind’s First Quarter 2024 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Tom Ciccone, Chief Financial Officer. Thank you. You may begin.

Tom Ciccone

Good morning, and welcome to the Broadwind first 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 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

Thanks, Tom. And welcome to those joining us today. Broadwind delivered solid Q1 results, highlighted by improved margin realization, higher net income, and increased adjusted EBITDA, even though revenue was down from the prior year quarter, offsetting a transitional pause in new wind tower demand. First quarter results benefited from a higher value sales mix, price discipline and targeted cost reduction actions to yield improvement in gross margin and EBITDA margin of 330 basis points and 270 basis points, respectively. This marks our fifth consecutive quarter of profitability despite lingering wind-related headwinds.

We booked $29 million of orders in the first quarter, a decline as compared to the prior year period but up nearly 44% sequentially versus Q4 2023, continuing the favorable order trend across all divisions, which began in the second half of last year. Gearing orders increased sequentially across all markets, led by wind, mining and energy. We also continue to see strong activity levels from the natural gas turbine market serviced by our Industrial Solutions segment driven by global electricity demand growth and a shift away from coal-fired power around the world. At a commercial level, we continue to expand our product mix within higher margin adjacent markets.