Broadwind's Loss Narrows Y/Y - Analyst Blog

Broadwind Energy, Inc.'s BWEN efforts to improve the business seem to have paid off, as results for the fourth quarter of 2013 improved year over year. The company posted a loss per share of 26 cents for fourth-quarter 2013, narrower than the 41 cents loss reported in the year-ago quarter, primarily driven by improved sales. However, reported loss was wider than the Zacks Consensus Estimate of a loss of 16 cents.

For full year 2013, Broadwind reported loss per share from continuing operations of 72 cents, compared with a loss of $1.27 in 2012. Reported loss was higher than the Zacks Consensus Estimate of a loss of 68 cents per share.

Revenues: In the fourth quarter of 2013, total sales were $56.4 million, up 25.6% year over year, largely due to a rise in sales of the Towers and Weldments segment, partially offset by a decline in the Gearing and Services segments sales. Revenues were almost in line with the Zacks Consensus Estimate of $57.0 million.

Revenues from the Towers and Weldments segment increased 69.4% year over year to $43.4 million on the back of a 61% increase in the tower volume over the fourth quarter of 2012. 

The Gearing segment's revenues fell 19.0% year over year to $11.6 million, due to reduced sales to industrial, mining and steel customers. However, the decline was partially offset by increased sales for replacement wind gearing and oil and gas customers.

The Services segment generated revenues of $2.0 million, which represented a 67.2% year-over-year decline due to lower industrial drivetrain assembly work.

For full-year 2013, the company reported revenues of $215.7 million, up 2.4% compared to the previous year. Revenues were in line with the Zacks Consensus Estimate of $216.0 million.

Backlog: Exiting the quarter, the company had a two-fold increase in backlog compared to year-end 2012 to $311.0 million, the highest in the company's history. Additionally, in the reported quarter, the company booked record high new orders worth $201.0 million and almost triple on a year-over-year basis.

Costs/Margins: Gross profit margin in the quarter was 3.8%, up substantially from 0.5% in the year-ago quarter. Selling and administrative expenses in the quarter were recorded at $5.7 million, up from $5.0 million in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $2.7 million, up from $0.6 million in the fourth quarter of 2012.

Balance Sheet/Cash Flow: Exiting the fourth quarter of 2013, Broadwind's cash and cash equivalents were approximately $24.9 million, compared with $0.5 million in the year-ago quarter. Total long-term debt balance stood at $2.8 million versus $3.0 million in the fourth quarter of 2012.

For 2013, Broadwind's cash generation from operations was $26.2 million, up from cash used in operations of $2.9 million in 2012.

Other Stocks to Consider

Broadwind currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the industry include Kadant Inc. KAI, Sun Hydraulics Corp. SNHY and Altra Industrial Motion Corp. AIMC. While Kadant and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy) each, Altra Industrial has a Zacks Rank #2 (Buy).