Investors in Broadwind Energy (NASDAQ:BWEN) would probably rather forget the last twelve months. Shares in the Illinois based provider of parts and services to wind turbine manufacturers and wind farm developers have eroded from a 12 month high of $12.00 per share to $3.42 per share yesterday – their lowest price in the past year.
Much of the share price performance has been beyond the control of the company, which along with the rest of the US wind industry, was pummelled after the collapse of Lehman Brothers (LEHMQ.PK) in September 2008, which inflamed an already tight market for debt financing. Since then, raising debt to finance expansion or capital intensive developments, like wind farms, has been tough, to say the least.
This was reflected in first quarter results from Broadwind which were released this morning. The company reported revenues of $22 million for the three months ended 31 March 2010, down from $53.1 million in Q1 2009. The substantially lower revenues pushed the company to a first quarter net loss of $14.1 million, or 14 cents per share (Q1 2009: net loss $7.2 million, or 7 cents per share). At quarter-end, available cash totaled $26.3 million.
Revenues were lower in all segments due to reduced purchases under the Company's key framework agreements, lower service revenues resulting from the timing of wind farm installation and maintenance projects and a reduction in non-wind related revenues.
Broadwind reports results in four segments: Towers, Gearing, Technical and Engineering Services and Logistics.
In Towers, revenue was $12 million in the first quarter, compared to $20 million in Q1 2009. The decrease was blamed on a 27% decline in the average selling price of wind towers manufactured combined with a 15% decline in wind tower production. Meanwhile in Gearing, the drop was even more severe, with revenues of $7.7 million in the first quarter of 2010, compared to $23.0 million in Q1 2009.
The wind focused group went on to report that it had felt the full impact of the economic slowdown which hit the wind industry in late 2008, which showed little sign of improvement until the third quarter or 2009, when the US Government’s stimulus package for renewable investments started to feed into the industry.
The good news for Broadwind lies on the horizon. The NASDAQ listed company said it had now hired back or called back an additional 25% of its workforce since the beginning of the year, as volumes begin to build. Broadwind believes the first quarter of 2010 will be the ‘low point’ of the year, and is forecasting sequential growth in quarterly sales for the rest of 2010.
CEO J. Cameron Drecoll noted:
We continue to prepare Broadwind for the expected upswing in wind turbine orders and installations. With the completion of our common stock offering in January, we raised about $54 million in proceeds to repay a significant portion of our debt, fund general operating needs, and to finance key capital investments to help us grow our revenues and to become profitable.
Broadwind recently completed the construction of its third wind tower manufacturing facility in South Dakota, which boosted the company’s annual tower capacity to 1,500 megawatts. The company also recently started investment in a gearbox refurbishment facility in Texas.
During the quarter, new orders totaled $18 million leaving the order backlog unchanged from year-end at $244 million.
Disclosure: No position