UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 `
Date of report (Date of earliest event reported): February 27, 2018
 
BROADWIND ENERGY, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware	 	001-34278	 	88-0409160	
(State or Other Jurisdiction of	 	(Commission File Number)	 	(IRS Employer Identification No.)	
Incorporation)	 	 	 	 	
 
3240 South Central Avenue, Cicero, Illinois 60804
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s Telephone Number, Including Area Code: (708) 780-4800
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 2.02.  Results of Operations and Financial Condition.
 
On February 27, 2017, Broadwind Energy, Inc. (the “Company”) issued a press release announcing its financial results as of and for the quarter ended December 31, 2017.  The press release is incorporated herein by reference and is attached hereto as Exhibit 99.1.
 
The information contained in, or incorporated into, this Item 2.02 of this Current Report on Form 8-K (this “Report”), including Exhibit 99.1, is furnished under Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act regardless of any general incorporation language in such filings.
 
Item 7.01. Regulation FD Disclosure.
 
An Investor Presentation dated February 27, 2018 is incorporated herein by reference and attached hereto as Exhibit 99.2.
 
The information contained in, or incorporated into, this Item 7.01 of this Report, including Exhibit 99.2 attached hereto, is furnished under Item 7.01 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act regardless of any general incorporation language in such filings.
 
This Report shall not be deemed an admission as to the materiality of any information in this Report that is being disclosed pursuant to Regulation FD.
 
Please refer to Exhibit 99.2 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto.
 
Item 9.01. Financial Statements and Exhibits.
 
(d)		Exhibits	
 	 	 	
EXHIBIT
NUMBER		DESCRIPTION	
99.1	 	Press Release dated February 27, 2018	
99.2	 	Investor Presentation dated February 27, 2018	

 

 	2 	 	

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	BROADWIND ENERGY, INC.	
 	 	
February 27, 2018	By:	/s/ Stephanie K. Kushner	
 	 	Stephanie K. Kushner	
 	 	Chief Executive Officer	
 	 	(Principal Executive Officer)	

 

 	3 	 	

EXHIBIT INDEX
 
EXHIBIT
NUMBER	 	DESCRIPTION	
 	 	 	
99.1	 	Press Release dated February 27, 2018	
99.2	 	Investor Presentation dated February 27, 2018	

4

EXHIBIT 99.1
Broadwind Energy Announces Q4 and Full Year 2017 Results

Highlights:
·	2017 orders of $88 million include sustained strong Gearing segment orders of $37 million and Process Systems segment orders of $16 million

·	2017 revenue of $147 million – 41% lower tower sales volumes, partially offset by increases in other segments

·	Full year EPS loss of $.21 attributable to low tower production in second half of year

·	“Towers and Weldments” segment renamed “Towers and Heavy Fabrications” to reflect expanded manufacturing competencies and a broader commercial strategy

·	2018 market outlook significantly improved due to accelerating commercial momentum
CICERO, Ill., Feb. 27, 2018 (GLOBE NEWSWIRE) -- Broadwind Energy, Inc. (NASDAQ:BWEN) reported sales of $17.8 million in Q4 2017, compared to $48.2 million in Q4 2016. The significant decrease was due primarily to weak Towers and Heavy Fabrications segment revenue, down $38.1 million compared to Q4 2016, as tower customers curtailed purchases beginning in the third quarter in order to draw down component inventories. The very low tower revenue was partially offset by $5.1 million of sales from the Process Systems segment due primarily to the acquisition of Red Wolf Company, LLC earlier this year, and $2.6 million increased sales from the Gearing segment due to the strong order intake from oil and gas customers which began early in 2017.
The Company reported a net loss from continuing operations of $6.9 million, or $.45 per share, in Q4 2017, compared to a net income from continuing operations of $.4 million, or $.03 per share, in Q4 2016. The earnings reversal was largely due to the significantly weaker results from the Towers and Heavy Fabrications segment, where tower build was very high in Q4 2016 to meet the terms of the Production Tax Credit qualification, but was curtailed in Q4 2017.
The Company reported a non-GAAP adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, share-based payments and restructuring costs) loss of $4.0 million in Q4 2017, compared to EBITDA of $2.5 million in Q4 2016 (please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release). The decrease was due primarily to the weaker results from the Towers and Heavy Fabrications segment as noted above.
Broadwind CEO Stephanie Kushner stated, “Despite growth in both the Gearing and Process Systems segments, 2017 was a challenging year due to weak second half tower production, while our major customer rightsized their inventory. In response, we took swift action to reduce the workforce accordingly, and to reduce factory overhead and operating expenses. At the same time, we have also made capital investments to add capabilities in our Manitowoc, Wisconsin plant to support an expansion and diversification of our other heavy fabrications business, in alignment with strengthening mining and infrastructure markets. We are committed to diversifying our customer base to reduce the volatility in our order and production pattern.
The medium-term outlook for wind energy remains strong. As announced previously, 2018 tower production volume is recovering and we expect a significant improvement in capacity utilization in our plants as we progress through this year. In response to the ramp up in production, we have called back or hired a significant number of employees to support our production needs in 2018.”
Kushner continued, “In our Gearing segment, we booked $37 million in new orders in 2017, a 150% increase from 2016, due to the rebound in the oil and gas industry and successful penetration of a number of new accounts. Our current backlog and order intake support production at a quarterly run rate of $9-10 million in 2018. As previously announced, our fourth quarter revenue fell short of guidance due mainly to supply chain constraints in the Gearing segment as the industry rebounds at a very high rate. We are seeing supply pressures normalize as businesses adjust to the higher demand levels.”
Our Process Systems segment contributed $17 million in revenue, due principally to the acquisition of Red Wolf on February 1, 2017. Although we remain excited about this business, we have experienced headwinds in the gas turbine manufacturing and service business, where Red Wolf’s legacy business was concentrated. We continue to work on penetrating new markets and adding diverse customers.”
Kushner concluded, “Following a disappointing 2017, 2018 is off to a brighter start. As our tower order book firms and our gearing and heavy fabrications business accelerates, we expect consolidated Q1 2018 revenue of $28-30 million, with an EBITDA loss of about $1 million. Our backlog supports a further rise in revenue in Q2 2018 to approximately $40 million and a return to positive EBITDA generation. We expect to see additional growth in the back half of the year.”
For FY 2017, revenue totaled $146.8 million, compared to $180.8 million for FY 2016. The 19% decrease was due primarily to a $56.8 million decrease in Tower and Heavy Fabrication segment revenue partially offset by $17.4 million of sales from the Process Systems segment primarily due to the acquisition of Red Wolf earlier this year and $5.4 million of higher sales in the Gearing segment.
The net loss from continuing operations for FY 2017 totaled $3.2 million, or $.21 per share, compared to net income from continuing operations of $1.3 million, or $.09 per share, for FY 2016. The decrease was due primarily to a $7.6 million reduction in net income from the Towers and Heavy Fabrications segment, somewhat offset by a $5.1 million, or $.34 per share, income tax benefit due to the partial release of a tax valuation allowance related to the Red Wolf acquisition earlier in 2017.
The net loss from discontinued operations for FY 2017 totaled $.5 million, or $.03 per share, compared to a net loss from discontinued operations for FY 2016 of $1.0 million, or $.07 per share, as activities in the discontinued Services segment have substantially wound down.
The Company reported non-GAAP adjusted EBITDA of $2.8 million for FY 2017, compared to non-GAAP adjusted EBITDA of $9.6 million for FY 2016. The significant decrease was primarily due to the weaker results in the Towers and Heavy Fabrications segment. The decrease in non-GAAP adjusted EBITDA was partly offset by a $.6 million improvement in Gearing segment EBITDA and a $2.5 million reduction in corporate, which reflected lower expenses, and included the $1.4 million benefit triggered by a partial reversal of a reserve for the payment of a contingent consideration associated with the Red Wolf acquisition (please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release).
Orders and Backlog
The Company booked $12.3 million of net new orders in Q4 2017, down from $32.3 million booked in Q4 2016. Orders in the Towers and Heavy Fabrication segment totaled $2.5 million in Q4 2017, reflecting the weaker demand from our tower customers who were drawing down component inventories. Gearing segment orders totaled $7.4 million in Q4 2017, up substantially from Q4 2016 orders of $2.9 million, due to recovery in the oil and gas industry, and an expansion of the customer base. Process Systems segment orders totaled $2.4 million in Q4 2017 due to weak demand from gas turbine OEM’s.
FY 2017 orders totaled $87.6 million, compared to $275.0 million in FY 2016, which included a $137 million multi-year tower order that supports deliveries through 2019.
At December 31, 2017, total backlog was $138.2 million, compared to a backlog of $188.7 million at December 31, 2016.
Segment Results
Towers and Heavy Fabrications (formerly known as Towers and Weldments)
Broadwind Energy produces fabrications for wind, oil and gas, mining and other industrial applications, specializing in the production of wind turbine towers.
Towers and Heavy Fabrications segment sales totaled $4.2 million in Q4 2017, down 90% from $42.3 million in Q4 2016, due to a significant reduction in tower volume as a result of a major customer working down its inventory.
Towers and Heavy Fabrications operating loss in Q4 2017 totaled $4.5 million compared to operating income of $2.8 million in Q4 2016 due to the lower volume of towers sold in Q4 2017. Towers and Heavy Fabrications segment net loss in Q4 2017 totaled $4.2 million compared to net income of $1.8 million in Q4 2016. Non-GAAP adjusted EBITDA loss totaled $3.0 million in Q4 2017, compared to Non-GAAP adjusted EBITDA of $3.9 million in Q4 2016 due mainly to the factors described above (please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release).
Towers and Heavy Fabrications segment sales for FY 2017 totaled $103.4 million, compared to $160.2 million for FY 2016 due to a 41% decrease in towers sold beginning mid-year 2017, partially offset by higher average prices due to a more complex tower design, and higher material costs which are generally passed through to the customer.
FY 2017 Towers and Heavy Fabrications segment operating income totaled $2.7 million, compared to $12.8 million for FY 2016. The significant decrease in operating income was due to the lower production volume and corresponding underutilization of plant capacity, offset by significant cost reduction actions including a $1.5 million decrease in incentive compensation and staffing reductions. The Towers and Heavy Fabrications segment net income for FY 2017 totaled $.9 million compared to FY 2016 net income of $8.5 million due to the factors described above.
Gearing
Broadwind Energy engineers, builds and remanufactures precision gears and gearboxes for oil and gas, mining, steel and wind applications.
Gearing segment sales totaled $8.5 million in Q4 2017, compared to $5.9 million in Q4 2016 due primarily to stronger demand from oil and gas customers.
Gearing segment operating loss totaled $.1 million in Q4 2017, compared to an operating loss of $.2 million in Q4 2016. The slight improvement was due to the impact of the increase in volume and a $.7 million reduction in the environmental reserve due to completion of a remediation project. Partly offsetting were the impact of supply chain disruptions which led to plant underutilization and production inefficiencies. Net loss for the Gearing segment narrowed to $.1 million compared to $.2 million in Q4 2016. Non-GAAP adjusted EBITDA for Q4 2017 totaled $.6 million, compared to $.5 million for Q4 2016, due to the factors described above (please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release).
For FY 2017, Gearing segment sales totaled $26.0 million compared to $20.6 million in FY 2016. The improvement was primarily due to the strong order intake during FY 2017 related to the recovering oil and gas market.
FY 2017 Gearing segment operating loss narrowed to $2.6 million compared to FY 2016 operating loss of $3.2 million. The improvement was due primarily to the $1.9 million impact of increased sales volume, and a $.7 million reduction in the environmental reserve due to the completion of a remediation project. Partly offsetting were higher maintenance and tooling expenses associated with supporting the volume increases and higher commission expense. Gearing segment net loss for FY 2017 totaled $2.6 million compared to FY 2016 operating loss of $3.2 million. The Gearing segment reported break-even results for FY 2017 non-GAAP adjusted EBITDA, compared to non-GAAP adjusted EBITDA loss of $.6 million in FY 2016 due to the factors described above (please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release).
Process Systems
Broadwind Energy designs and manufactures custom, modular systems for compression, filtration and other specialized process applications for the global market. On February 1, 2017, the Company acquired Red Wolf which has been combined with the Abilene-based compressed natural gas (“CNG”) and fabrication business, previously reported as a part of Towers and Heavy Fabrications, to form the Process Systems segment.
Process Systems segment sales in Q4 2017 totaled $5.1 million. Q4 2017 net loss totaled $.4 million. A $.4 million of reserve was taken as a result of the decision to exit the CNG unit fabrication business. The Process Systems segment reported breakeven results for Non-GAAP adjusted EBITDA in Q4 2017 (please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release).
FY 2017 sales for the Process Systems segment totaled $17.4 million and FY 2017 net loss totaled $2.2 million. The Process Systems segment reported a Non-GAAP adjusted EBITDA loss of $.5 million for FY 2017, due principally to losses in the legacy CNG business (please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release).
Corporate
Corporate and other expenses totaled $1.6 million in Q4 2017, compared to $2.0 million in Q4 2016, mainly due to lower incentive compensation expense.
FY 2017 Corporate and other expenses totaled $5.2 million compared to $7.6 million in FY 2016. The $2.4 million reduction included a $1.4 million gain resulting from the expectation that the contingent consideration payment associated with the Red Wolf acquisition will not be paid for the first year of ownership, and reflected a $.9 million reduction in incentive compensation expense.
Cash and Liquidity
During Q4 2017, operating working capital (accounts receivable and inventory, net of accounts payable and customer deposits) decreased to $11.4 million due to the timing of customer receipts.
Capital expenditures, net of disposals, in Q4 2017 totaled $.7 million. FY 2017 capital investments totaled $6.7 million, primarily for upgrades to tower manufacturing capabilities and to expand the Abilene tower facility.
Debt and capital leases totaled $16.8 million at December 31, 2017, including the $2.6 million New Markets Tax Credit loan, which is expected to be substantially forgiven when it matures in 2018. The Company’s $25 million line of credit with Canadian Imperial Bank of Commerce had a balance of $11.5 million at December 31, 2017 and $11.8 million of availability.
The Company was not in compliance with the fixed charge coverage ratio covenant of its credit facility as of December 31, 2017. On January 29, 2018, the Company and Canadian Imperial Bank of Commerce executed the third amendment to the loan agreement waiving compliance with this covenant and amending it going forward. The third amendment included a minimum EBITDA covenant and a capital expenditure covenant through June 30, 2018.
Cash assets (cash and short-term investments) remained near zero as expected because the Company’s cash and receipts are automatically applied to the outstanding credit line balance consistent with the loan documents.
About Broadwind Energy, Inc.
Broadwind Energy, Inc. (NASDAQ:BWEN) is a precision manufacturer of structures, equipment and components for clean tech and other specialized applications. From gears and gearing systems for wind, oil and gas and mining applications, to wind towers and industrial heavy fabrications, we have solutions for the clean tech, energy and infrastructure needs of the future. With facilities throughout the U.S., Broadwind Energy's talented team is committed to helping customers maximize performance of their investments—quicker, easier and smarter. Find out more at www.bwen.com
Forward-Looking Statements
This release contains “forward looking statements”—that is, statements related to future, not past, events—as defined in Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. Forward looking statements include any statement that does not directly relate to a current or historical fact. We have tried to identify forward looking statements by using words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “plan” and similar expressions, but these words are not the exclusive means of identifying forward looking statements.
Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following: (i) state, local and federal regulatory frameworks affecting the industries in which we compete, including the wind energy industry, and the related extension, continuation or renewal of federal tax incentives and grants and state renewable portfolio standards; (ii) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units; (iii) our ability to continue to grow our business organically and through acquisitions; (iv) the sufficiency of our liquidity and alternate sources of funding, if necessary; (v) our ability to realize revenue from customer orders and backlog; (vi) our ability to operate our business efficiently, manage capital expenditures and costs effectively, and generate cash flow; (vii) the economy and the potential impact it may have on our business, including our customers; (viii) the state of the wind energy market and other energy and industrial markets generally and the impact of competition and economic volatility in those markets; (ix) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (x) the effects of the recent change of administrations in the U.S. federal government; (xi) our ability to successfully integrate and operate the business of Red Wolf Company, LLC and to identify, negotiate and execute future acquisitions; (xii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended; and (xiii) the impact of future sales of our common stock or securities convertible into our common stock on our stock price. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. We are under no duty to update any of these statements. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change.

 	
 BROADWIND ENERGY, INC. AND SUBSIDIARIES	
CONSOLIDATED BALANCE SHEETS	
(IN THOUSANDS)	
 	 	 	 	
 	 	As of December 31,	 	
 	 	 	2017	 	 	 	2016	 	 	
ASSETS	 	 	 	 	 	
CURRENT ASSETS:	 	 	 	 	 	
Cash and cash equivalents	 	$	  78	 	 	$	  18,699	 	 	
Short-term investments	 	 	  - 	 	 	 	  3,171	 	 	
Restricted cash	 	 	  - 	 	 	 	  39	 	 	
Accounts receivable, net	 	 	  13,644	 	 	 	  11,865	 	 	
Inventories, net	 	 	  19,279	 	 	 	  21,159	 	 	
Prepaid expenses and other current assets	 	 	  1,798	 	 	 	  2,449	 	 	
Current assets held for sale	 	 	  580	 	 	 	  808	 	 	
Total current assets	 	 	  35,379	 	 	 	  58,190	 	 	
LONG-TERM ASSETS:	 	 	 	 	 	
Property and equipment, net	 	 	  55,693	 	 	 	  54,606	 	 	
Goodwill	 	  4,993	 	 	 	  - 	 	 	
Other intangible assets, net	 	 	  16,078	 	 	 	  4,572	 	 	
Other assets	 	 	  207	 	 	 	  294	 	 	
TOTAL ASSETS	 	$	  112,350	 	 	$	  117,662	 	 	
 	 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS' EQUITY	 	 	 	 	 	
CURRENT LIABILITIES:	 	 	 	 	 	
Line of credit, NMTC and other notes payable	 	$	  14,138	 	 	$	  - 	 	 	
Current maturities of long-term debt	 	 	  114	 	 	 	  - 	 	 	
Current portions of capital lease obligations	 	 	  762	 	 	 	  465	 	 	
Accounts payable	 	 	  11,756	 	 	 	  15,852	 	 	
Accrued liabilities	 	 	  4,393	 	 	 	  8,430	 	 	
Customer deposits	 	 	  9,791	 	 	 	  18,011	 	 	
Current liabilities held for sale	 	 	  30	 	 	 	  493	 	 	
Total current liabilities	 	 	  40,984	 	 	 	  43,251	 	 	
 	 	 	 	 	 	
LONG-TERM LIABILITIES:	 	 	 	 	 	
Long-term debt, net of current maturities	 	 	  797	 	 	 	  2,600	 	 	
Long-term capital lease obligations, net of current portions	 	 	  941	 	 	 	  1,038	 	 	
Other	 	 	  3,557	 	 	 	  2,190	 	 	
Total long-term liabilities	 	 	  5,295	 	 	 	  5,828	 	 	
 	 	 	 	 	 	
COMMITMENTS AND CONTINGENCIES	 	 	 	 	 	
 	 	 	 	 	 	
STOCKHOLDERS' EQUITY:	 	 	 	 	 	
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding	 	 	  - 	 	 	 	  - 	 	 	
Common stock, $0.001 par value; 30,000,000 shares authorized; 15,480,299 and 15,175,767 shares issued as of December 31, 2017 and 2016, respectively	 	 	  15	 	 	 	  15	 	 	
Treasury stock, at cost, 273,937 shares at December 31, 2017 and 2016	 	 	  (1,842	)	 	 	  (1,842	)	 	
Additional paid-in capital	 	 	  380,005	 	 	 	  378,876	 	 	
Accumulated deficit	 	 	  (312,107	)	 	 	  (308,466	)	 	
Total stockholders' equity	 	 	  66,071	 	 	 	  68,583	 	 	
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	 	$	  112,350	 	 	$	  117,662	 	 	

 	
 BROADWIND ENERGY, INC. AND SUBSIDIARIES	
CONSOLIDATED STATEMENTS OF OPERATIONS	
(IN THOUSANDS, EXCEPT PER SHARE DATA)	
(UNAUDITED)	
 	
 	 	Three Months Ended December 31,	 	For the Year Ended December 31,	 	
 	 	 	2017	 	 	 	2016	 	 	 	2017	 	 	 	2016	 	 	

Revenues	 	$	  17,768	 	 	$	  48,151	 	 	$	  146,785	 	 	$	  180,840	 	 	
Cost of sales	 	 	  20,869	 	 	 	  43,447	 	 	 	  138,626	 	 	 	  162,701	 	 	
Gross (loss)profit	 	 	  (3,101	)	 	 	  4,704	 	 	 	  8,159	 	 	 	  18,139	 	 	
 	 	 	 	 	 	 	 	 	 	
OPERATING EXPENSES:	 	 	 	 	 	 	 	 	 	
Selling, general and administrative	 	 	  3,117	 	 	 	  4,001	 	 	 	  13,828	 	 	 	  15,786	 	 	
Intangible amortization	 	 	  471	 	 	 	  111	 	 	 	  1,764	 	 	 	  444	 	 	
Total operating expenses	 	 	  3,588	 	 	 	  4,112	 	 	 	  15,592	 	 	 	  16,230	 	 	
Operating (loss) income	 	 	  (6,689	)	 	 	  592	 	 	 	  (7,433	)	 	 	  1,909	 	 	
 	 	 	 	 	 	 	 	 	 	
OTHER (EXPENSE) INCOME, net:	 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	  (214	)	 	 	  (194	)	 	 	  (798	)	 	 	  (625	)	 	
Other, net	 	 	  (14	)	 	 	  22	 	 	 	  3	 	 	 	  49	 	 	
Total other expense, net	 	 	  (228	)	 	 	  (172	)	 	 	  (795	)	 	 	  (576	)	 	
 	 	 	 	 	 	 	 	 	 	
Net (loss) income before benefit for income taxes	 	 	  (6,917	)	 	 	  420	 	 	 	  (8,228	)	 	 	  1,333	 	 	
Benefit for income taxes	 	 	  11	 	 	 	  14	 	 	 	  (5,045	)	 	 	  (2	)	 	
(LOSS) INCOME FROM CONTINUING OPERATIONS	 	 	  (6,928	)	 	 	  406	 	 	 	  (3,183	)	 	 	  1,335	 	 	
LOSS FROM DISCONTINUED OPERATIONS	 	 	  (53	)	 	 	  (108	)	 	 	  (458	)	 	 	  (1,016	)	 	
NET (LOSS) INCOME	 	$	  (6,981	)	 	$	  298	 	 	$	  (3,641	)	 	$	  319	 	 	

NET (LOSS) INCOME PER COMMON SHARE - BASIC:	 	 	 	 	 	 	 	 	 	
(Loss) income from continuing operations	 	$	  (0.45	)	 	$	  0.03	 	 	$	  (0.21	)	 	$	  0.09	 	 	
Loss from discontinued operations	 	 	  (0.01	)	 	 	  (0.01	)	 	 	  (0.03	)	 	 	  (0.07	)	 	
Net (loss) income	 	$	  (0.46	)	 	$	  0.02	 	 	$	  (0.24	)	 	$	  0.02	 	 	
 	 	 	 	 	 	 	 	 	 	
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC	 	 	  15,171	 	 	 	  14,876	 	 	 	  15,053	 	 	 	  14,843	 	 	
 	 	 	 	 	 	 	 	 	 	
NET (LOSS) INCOME PER COMMON SHARE - DILUTED:	 	 	 	 	 	 	 	 	 	
(Loss) income from continuing operations	 	$	  (0.45	)	 	$	  0.03	 	 	$	  (0.21	)	 	$	  0.09	 	 	
Loss from discontinued operations	 	 	  (0.01	)	 	 	  (0.01	)	 	 	  (0.03	)	 	 	  (0.07	)	 	
Net (loss) income	 	$	  (0.46	)	 	$	  0.02	 	 	$	  (0.24	)	 	$	  0.02	 	 	
 	 	 	 	 	 	 	 	 	 	
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED	 	 	  15,171	 	 	 	  15,096	 	 	 	  15,053	 	 	 	  15,081	 	 	

 

BROADWIND ENERGY, INC. AND SUBSIDIARIES	
CONSOLIDATED STATEMENTS OF CASH FLOWS	
(IN THOUSANDS)	
(UNAUDITED)	
 	
 	 	Twelve Months Ended December 31,	 	
 	 	 	2017	 	 	2016	 	 	
CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	
Net (loss) income	 	$	  (3,641	)	$	  319	 	 	
Loss from discontinued operations	 	 	  (458	)	 	  (1,016	)	 	
(Loss) income from continuing operations	 	 	  (3,183	)	 	  1,335	 	 	
 	 	 	 	 	
Adjustments to reconcile net cash used in operating activities:	 	 	 	
Depreciation and amortization expense	 	 	  8,999	 	 	  6,914	 	 	
Impairment charges	 	 	  80	 	 	  - 	 	 	
Deferred income taxes	 	 	  (5,045	)	 	  - 	 	 	
Remeasurement of contingent consideration	 	 	  (1,394	)	 	  - 	 	 	
Stock-based compensation	 	 	  813	 	 	  753	 	 	
Allowance for doubtful accounts	 	 	  37	 	 	  61	 	 	
Common stock issued under defined contribution 401(k) plan	 	 	  316	 	 	  - 	 	 	
Gain on disposal of assets	 	 	  (12	)	 	  (217	)	 	
Changes in operating assets and liabilities:	 	 	 	 	
Accounts receivable	 	 	  884	 	 	  (2,141	)	 	
Inventories	 	 	  7,057	 	 	  3,060	 	 	
Prepaid expenses and other current assets	 	 	  651	 	 	  (933	)	 	
Accounts payable	 	 	  (5,287	)	 	  989	 	 	
Accrued liabilities	 	 	  (4,921	)	 	  297	 	 	
Customer deposits	 	 	  (8,219	)	 	  8,057	 	 	
Other non-current assets and liabilities	 	 	  (126	)	 	  (875	)	 	
Net cash (used in) provided by operating activities of continued operations	 	 	  (9,350	)	 	  17,300	 	 	
 	 	 	 	 	
CASH FLOWS FROM INVESTING ACTIVITIES:	 	 	 	 	
Cash paid in acquisition	 	 	  (16,449	)	 	  - 	 	 	
Purchases of available for sale securities	 	 	  - 	 	 	  (19,223	)	 	
Sales of available for sale securities	 	 	  2,221	 	 	  13,061	 	 	
Maturities of available for sale securities	 	 	  950	 	 	  9,170	 	 	
Purchases of property and equipment	 	 	  (6,688	)	 	  (6,624	)	 	
Proceeds from disposals of property and equipment	 	 	  72	 	 	  452	 	 	
Net cash used in investing activities of continued operations	 	 	  (19,894	)	 	  (3,164	)	 	
 	 	 	 	 	
CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	
Net proceeds from issuance of stock	 	 	  - 	 	 	  19	 	 	
Proceeds from line of credit	 	 	  158,856	 	 	  - 	 	 	
Payments on line of credit	 	 	  (148,009	)	 	  - 	 	 	
Net proceeds on long-term debt	 	 	  457	 	 	  (2,799	)	 	
Principal payments on capital leases	 	 	  (644	)	 	  (539	)	 	
Net cash provided by (used in) financing activities of continued operations	 	 	  10,660	 	 	  (3,319	)	 	
 	 	 	 	 	
DISCONTINUED OPERATIONS:	 	 	 	 	
Operating cash flows	 	 	  (78	)	 	  731	 	 	
Investing cash flows	 	 	  - 	 	 	  615	 	 	
Financing cash flows	 	 	  - 	 	 	  58	 	 	
Net cash (used in) provided by discontinued operations (1)	 	 	  (78	)	 	  1,404	 	 	
 	 	 	 	 	
Add: Cash balance of discontinued operations, beginning of period	 	 	  2	 	 	  - 	 	 	
Less: Cash balance of discontinued operations, end of period	 	 	  - 	 	 	  2	 	 	
 	 	 	 	 	
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	 	 	  (18,660	)	 	  12,219	 	 	
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH beginning of the period	 	 	  18,738	 	 	  6,519	 	 	
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH end of the period	 	$	  78	 	$	  18,738	 	 	
 	 	 	 	 	
Supplemental cash flow information:	 	 	 	 	
Interest paid	 	$	  585	 	$	  494	 	 	
Income taxes paid	 	$	  44	 	$	  23	 	 	
 	 	 	 	 	
Non-cash activities:	 	 	 	 	
Issuance of restricted stock grants	 	$	  813	 	$	  753	 	 	
Equipment additions via capital lease	 	$	  844	 	$	  1,616	 	 	
Contingent consideration related to business acquisition	 	$	  2,534	 	$	  - 	 	 	
 	 	 	 	 	
Red Wolf acquisition:	 	 	 	 	
Assets acquired	 	$	  26,602	 	 	 	
Liabilities assumed	 	$	  7,619	 	 	 	

 	
BROADWIND ENERGY, INC. AND SUBSIDIARIES	
SELECTED SEGMENT FINANCIAL INFORMATION	
(IN THOUSANDS)	
(UNAUDITED)	
 	
 	 	Three Months Ended	 	Twelve Months Ended  	 	
 	 	December 31,	 	December 31,	 	
 	 	 	2017	 	 	 	2016	 	 	 	2017	 	 	 	2016	 	 	
ORDERS:	 	 	 	 	 	
Towers and Heavy Fabrications	 	$	  2,543	 	 	$	  29,389	 	 	$	  34,873	 	 	$	  260,790	 	 	
Gearing	 	 	  7,398	 	 	 	  2,913	 	 	 	  36,928	 	 	 	  14,220	 	 	
Process Systems	 	 	  2,358	 	 	 	  - 	 	 	 	  15,761	 	 	 	  - 	 	 	
Total orders	 	$	  12,299	 	 	$	  32,302	 	 	$	  87,562	 	 	$	  275,010	 	 	
 	 	 	 	 	 	 	 	 	 	
REVENUES:	 	 	 	 	 	
Towers and Heavy Fabrications	 	$	  4,195	 	 	$	  42,262	 	 	$	  103,389	 	 	$	  160,210	 	 	
Gearing	 	 	  8,495	 	 	 	  5,889	 	 	 	  26,006	 	 	 	  20,648	 	 	
Process Systems	 	 	  5,078	 	 	 	  - 	 	 	 	  17,390	 	 	 	  - 	 	 	
Corporate and Other	 	 	  - 	 	 	 	  - 	 	 	 	  - 	 	 	 	  (18	)	 	
Total revenues	 	$	  17,768	 	 	$	  48,151	 	 	$	  146,785	 	 	$	  180,840	 	 	
 	 	 	 	 	 	 	 	 	 	
OPERATING PROFIT/(LOSS):	 	 	 	 	 	
Towers and Heavy Fabrications	 	$	  (4,510	)	 	$	  2,772	 	 	$	  2,667	 	 	$	  12,788	 	 	
Gearing	 	 	  (70	)	 	 	  (162	)	 	 	  (2,632	)	 	 	  (3,244	)	 	
Process Systems	 	 	  (464	)	 	 	  - 	 	 	 	  (2,269	)	 	 	  - 	 	 	
Corporate and Other	 	 	  (1,645	)	 	 	  (2,018	)	 	 	  (5,200	)	 	 	  (7,635	)	 	
Total operating (loss)/profit	 	$	  (6,689	)	 	$	  592	 	 	$	  (7,434	)	 	$	  1,909	 	 	
 	 	 	 	 	 	 	 	 	 	
Non-GAAP Financial Measure
The Company provides non-GAAP adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, share based compensation, and other stock payments) as supplemental information regarding the Company’s business performance. The Company’s management uses adjusted EBITDA when it internally evaluates the performance of the Company’s business, reviews financial trends and makes operating and strategic decisions. The Company believes that this non-GAAP financial measure is useful to investors because it provides investors with a better understanding of the Company’s past financial performance and future results, and it allows investors to evaluate the Company’s performance using the same methodology and information as used by the Company’s management. The Company's definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts.

BROADWIND ENERGY, INC. AND SUBSIDIARIES	
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES	
(IN THOUSANDS)	
(UNAUDITED)	
 	
Consolidated	 	Three Months Ended December 31,	 	Twelve Months Ended December 31,	 	
 	 	 	2017	 	 	 	2016	 	 	2017	 	 	 	2016	 	 	
Net Income/(Loss) from continuing operations	 	$	  (6,928	)	 	$	  406	 	$	  (3,183	)	 	$	  1,335	 	 	
Interest Expense	 	 	  214	 	 	 	  194	 	 	  798	 	 	 	  625	 	 	
Income Tax Provision/(Benefit)	 	 	  11	 	 	 	  14	 	 	  (5,045	)	 	 	  (2	)	 	
Depreciation and Amortization	 	 	  2,428	 	 	 	  1,776	 	 	  8,999	 	 	 	  6,914	 	 	
Share-based Compensation and Other Stock Payments	 	 	  323	 	 	 	  125	 	 	  1,223	 	 	 	  753	 	 	
Adjusted EBITDA (Non-GAAP)	 	$	  (3,952	)	 	$	  2,514	 	$	  2,792	 	 	$	  9,625	 	 	

Towers and Heavy Fabrications Segment	Three Months Ended December 31,	 	Twelve Months Ended December 31,	 	
 	 	2017	 	 	 	2016	 	 	2017	 	 	2016	 	
Net (Loss)/Income	$	  (4,207	)	 	$	  1,772	 	$	  919	 	$	  8,510	 	
Interest Expense/(Benefit)	 	  26	 	 	 	  5	 	 	  89	 	 	  26	 	
Income Tax (Benefit)/Provision	 	  (337	)	 	 	  1,001	 	 	  1,666	 	 	  4,286	 	
Depreciation and Amortization	 	  1,355	 	 	 	  1,100	 	 	  4,638	 	 	  4,166	 	
Share-based Compensation and Other Stock Payments	 	  128	 	 	 	  11	 	 	  440	 	 	  165	 	
Adjusted EBITDA (Non-GAAP)	$	  (3,035	)	 	$	  3,889	 	$	  7,752	 	$	  17,153	 	

Gearing Segment	 	Three Months Ended December 31,	 	Twelve Months Ended December 31,	 	
 	 	 	2017	 	 	 	2016	 	 	 	2017	 	 	 	2016	 	 	
Net Income/(Loss)	 	$	  (70	)	 	$	  (159	)	 	$	  (2,638	)	 	$	  (3,258	)	 	
Interest Expense	 	 	  3	 	 	 	  - 	 	 	 	  12	 	 	 	  9	 	 	
Income Tax Provision/(Benefit)	 	 	  (4	)	 	 	  (3	)	 	 	  (6	)	 	 	  4	 	 	
Depreciation and Amortization	 	 	  583	 	 	 	  627	 	 	 	  2,430	 	 	 	  2,546	 	 	
Share-based Compensation and Other Stock Payments	 	 	  64	 	 	 	  17	 	 	 	  178	 	 	 	  106	 	 	
Adjusted EBITDA (Non-GAAP)	 	$	  576	 	 	$	  482	 	 	$	  (24	)	 	$	  (593	)	 	

Process Systems	Three Months Ended December 31,	 	Twelve Months Ended December 31, 	 	
 	2017  	 	2016	 	2017  	 	  2016	 	
Net Income/(Loss)	$	  (390	)	 	$	  - 	 	$	  (2,207	)	 	$	  - 	 	
Interest Expense	 	  1	 	 	 	  - 	 	 	  5	 	 	 	  - 	 	
Income Tax Provision/(Benefit)	 	  (78	)	 	 	  - 	 	 	  (88	)	 	 	  - 	 	
Depreciation and Amortization	 	  428	 	 	 	  - 	 	 	  1,706	 	 	 	  - 	 	
Share-based Compensation and Other Stock Payments	 	  20	 	 	 	  - 	 	 	  53	 	 	 	  - 	 	
Adjusted EBITDA (Non-GAAP)	$	  (19	)	 	$	  - 	 	$	  (531	)	 	$	  - 	 	

Corporate and Other	Three Months Ended December 31,	 	Twelve Months Ended December 31,	 	
 	 	2017	 	 	 	2016	 	 	 	2017	 	 	 	2016	 	 	
Net Income/(Loss)	$	  (2,651	)	 	$	  (1,208	)	 	$	  743	 	 	$	  (3,917	)	 	
Interest Expense	 	  184	 	 	 	  189	 	 	 	  692	 	 	 	  590	 	 	
Income Tax Provision/(Benefit)	 	  430	 	 	 	  (984	)	 	 	  (6,617	)	 	 	  (4,292	)	 	
Depreciation and Amortization	 	  62	 	 	 	  49	 	 	 	  225	 	 	 	  202	 	 	
Share-based Compensation and Other Stock Payments	 	  111	 	 	 	  97	 	 	 	  552	 	 	 	  482	 	 	
Adjusted EBITDA (Non-GAAP)	$	  (1,864	)	 	$	  (1,857	)	 	$	  (4,405	)	 	$	  (6,935	)	 	

BWEN INVESTOR CONTACT: Joni Konstantelos, 708.780.4819 joni.konstantelos@bwen.com

EXHIBIT 99.2