BROADWIND INC

Previous wording

We received $18,372 in new orders in the second quarter of 2024, down from $25,361 in the second quarter of 2023. Within our Heavy Fabrications segment, industrial fabrication orders decreased 47%, primarily due to reduced demand for our Pressure Reducing Systems (“PRS”) units. Partially offsetting this was an increase in orders primarily due to the timing of orders associated with wind repowering projects. Gearing segment orders decreased 19% from the prior year period primarily due to reduced demand from industrial and steel customers. Orders within our Industrial Solutions segment decreased 37% compared to the prior year quarter primarily due to a reduction in orders associated with aftermarket projects.

Current wording

We received $22,975 in new orders in the third quarter of 2024, up from $15,890 in the third quarter of 2023. Within our Heavy Fabrications segment, orders increased primarily due to the timing of orders associated with wind repowering projects. Partially offsetting this was a 56% decrease in industrial fabrication orders, primarily due to reduced industrial and mining demand. Orders within our Industrial Solutions segment increased 52% compared to the prior year quarter primarily due to an increase in orders associated with new gas turbine projects. Gearing segment orders increased 46% from the prior year period primarily due to improved demand from most markets served.

Previous wording

We recognized revenue of $36,452 in the second quarter of 2024, down 28% compared to the second quarter of 2023. Within the Heavy Fabrications segment wind tower revenue decreased 48% from the prior year period primarily due to a decrease in tower sections sold** **as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Gearing segment revenue decreased 5% relative to the comparable prior year period primarily due to reduced shipments within most markets served. Industrial Solutions segment revenue increased by 3% from the prior year period primarily due to increased shipments of aftermarket gas turbine content.

Current wording

We recognized revenue of $35,503 in the third quarter of 2024, down 38% compared to the third quarter of 2023. Within the Heavy Fabrications segment wind tower revenue decreased 45% from the prior year period primarily due to a decrease in tower sections sold as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Additionally, industrial fabrication revenues decreased primarily due to reduced shipments of our Pressure Reducing Systems (“PRS”) units from the prior year period. Gearing segment revenue decreased 20% relative to the comparable prior year period primarily due to reduced shipments to oil and gas (“O&G”) customers, partially offset by increased shipments to industrial customers. Industrial Solutions segment revenue decreased by 23% from the prior year period primarily due to reduced shipments to international customers.

Previous wording

We recorded net income of $482 or $0.02 per share in the second quarter of 2024, compared to net income of $1,415 or $0.07 per share in the second quarter of 2023. This decrease in net income was primarily attributable to lower tower sales within our Heavy Fabrications segment and the corresponding decrease in the Advanced Manufacturing Production tax credits (“AMP credits”) earned. This was partially offset by the absence of proxy-contest related expenses that were recognized in the prior year quarter.

Current wording

We recorded net income of** **$74 or $0.00 per share in the third quarter of 2024, compared to net income of $4,394 or $0.21 per share in the third quarter of 2023. This decrease in net income was primarily attributable to lower tower sales within our Heavy Fabrications segment and the corresponding decrease in the Advanced Manufacturing Production tax credits (“AMP credits”) earned.

Previous wording

Gross profit decreased by $2,767 when compared to the prior year period, primarily due to lower sales and the decrease in AMP credits earned, partially offset by reduced overhead costs. Operating expenses decreased from the prior year period primarily due to the absence of proxy-contest related expenses that were recognized in the prior year quarter and lower employee compensation in the current year quarter.

Current wording

Gross profit decreased by $4,970 when compared to the prior year period, primarily due to lower sales and the decrease in AMP credits earned. Operating expenses decreased from the prior year period primarily due to lower incentive compensation and commissions in the current year quarter.

Previous wording

Within our Heavy Fabrications segment, industrial fabrication orders decreased 47%, primarily due to reduced demand for our PRS units. Partially offsetting this was an increase in orders due to the timing of orders associated with wind repowering projects. Segment revenues decreased by 42% compared to the prior year period primarily due to a 48% decrease in wind tower revenue. The decrease in wind revenue was primarily a result of less tower sections sold, as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Additionally, industrial fabrication revenues decreased by 27% during the current year period primarily due to reduced shipments of our PRS units in the current year quarter.

Current wording

Within our Heavy Fabrications segment, orders increased 39% from the prior year period as wind orders increased primarily due to the timing of orders associated with wind repowering projects. Partially offsetting this was a 56% decrease in industrial fabrication orders, primarily due to reduced demand from industrial and mining customers. Segment revenues decreased by 46% compared to the prior year period primarily due to a 45% decrease in wind tower revenue. The decrease in wind tower revenue was primarily a result of less tower sections sold, as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Additionally, industrial fabrication revenues decreased by 50% during the current year period primarily due to reduced shipments of our PRS units in the current year quarter.

Previous wording

Heavy Fabrications segment operating results decreased by $2,310 as compared to the prior year period. The decrease in operating performance was primarily a result of** **lower tower sales and the corresponding reduction in AMP credits recognized, as well as lower industrial fabrication revenues. These factors were partially offset by reduced overhead costs. Operating margin was 7.9% during the three months ended June 30, 2024 compared to 11.4% during the three months ended June 30, 2023 primarily due to the factors described above.

Current wording

Heavy Fabrications segment operating income decreased by $3,561 as compared to the prior year period. The decrease in operating performance was primarily a result of lower tower sales and the corresponding reduction in AMP credits recognized, as well as lower industrial fabrication revenues. These factors were partially offset by reduced** **overhead costs. Operating margin was 10.8% during the three months ended September 30, 2024 compared to 15.1% during the three months ended September 30, 2023 primarily due to the factors described above.

Previous wording

Gearing segment orders decreased 19% from the prior year period primarily due to reduced demand from industrial and steel customers. Gearing revenue was down 5% relative to the comparable prior year period reflective of reduced shipments within most markets served, partially offset by higher shipments to aftermarket wind customers.

Current wording

Gearing segment orders increased 46% from the prior year period primarily due to improved demand from most markets served. Gearing revenue was down 20% relative to the comparable prior year period reflective of reduced shipments to O&G customers, partially offset by higher shipments to industrial customers.

Previous wording

Gearing segment operating income increased by $134 from the prior year period. This increase was primarily attributable to** **a more profitable product mix sold and cost savings, partially offset by lower sales. Operating margin was 4.6% during the three months ended June 30, 2024, an increase from 3.2% during the three months ended June 30, 2023, driven primarily by the items identified above.

Current wording

Gearing segment operating income decreased by $343 from the prior year period. This decrease was primarily attributable to lower sales, partially offset by a more profitable product mix sold and** **cost savings. Operating margin was (0.9%) during the three months ended September 30, 2024, a decrease from 2.3% during the three months ended September 30, 2023, driven primarily by the items identified above.

Previous wording

Industrial Solutions segment orders decreased from the prior year period primarily due to a decrease in orders associated with aftermarket projects. Segment revenues increased from the prior year period primarily due to increased shipments of aftermarket gas turbine content. Operating income decreased versus the prior-year period primarily as a result of a less** **profitable mix of product sold and increased operating costs.

Current wording

Industrial Solutions segment orders increased from the prior year period primarily due to an increase in orders associated with new gas turbine projects. Segment revenues decreased from the prior year period primarily due to decreased shipments to international customers. Operating income decreased versus the prior-year period primarily as a result of lower sales.

Previous wording

Corporate and Other expenses decreased during the three months ended June 30, 2024 compared to the prior year period primarily due to the absence of professional fees associated with the contested proxy election recognized in the prior year quarter and lower employee compensation.

Current wording

Corporate and Other expenses decreased during the three months ended September 30, 2024 compared to the prior year period primarily due to lower employee compensation.

Previous wording

The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Current wording

The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Previous wording

Revenues decreased by $25,648 as compared to the prior year period due to lower sales within the Heavy Fabrications and Gearing segments, partially offset by increased sales within the Industrial Solutions segment. Wind tower revenue decreased 44% from the prior year period primarily due to a 51% decrease in tower sections sold as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Industrial Solutions segment revenue increased 24% from the prior year period primarily due to increased shipments of aftermarket gas turbine content. Gearing segment revenue decreased 18% relative to the comparable prior year period reflective of reduced shipments within most markets served, partially offset by higher shipments to aftermarket wind customers.

Current wording

Revenues decreased by $47,308 as compared to the prior year period primarily due to lower sales within the Heavy Fabrications and Gearing segments, partially offset by increased sales within the Industrial Solutions segment. Wind revenue decreased 44% from the prior year period primarily due to a 52% decrease in tower sections sold as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Gearing segment revenue decreased 19% relative to the comparable prior year period reflective of reduced shipments within most markets served, but most significantly within O&G. This was partially offset by higher shipments to aftermarket wind customers. Industrial Solutions segment revenue increased 6% from the prior year period primarily due to increased shipments of new and aftermarket gas turbine content, partially offset by reduced shipments to international customers.

Previous wording

Gross profit decreased by $3,106 when compared to the prior year period, primarily due to lower sales,** **partially offset by reduced overhead costs. Operating expenses decreased from the prior year period primarily as a result of the absence of proxy-contest related expenses that were recognized in the prior year period.

Current wording

Gross profit decreased by $8,076 when compared to the prior year period, primarily due to lower sales, partially offset by reduced overhead costs. Operating expenses decreased from the prior year period primarily as a result of the absence of proxy-contest related expenses that were recognized in the prior year period.

Previous wording

Within our Heavy Fabrications segment, wind tower orders decreased compared to the prior year period primarily due to the timing of tower orders. Additionally, industrial fabrication orders decreased by 19% in the current year period primarily due to reduced demand for our PRS units, partially offset by improved demand from mining and industrial customers. Segment revenues decreased by 36% during the six months ended June 30, 2024 primarily due to a 44% decrease in wind tower revenue. The decrease in wind revenue was primarily a result of less tower sections sold as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025.

Current wording

Within our Heavy Fabrications segment, orders decreased 22% primarily due to reduced demand for our PRS units. These decreases were partially offset by an increase in orders associated with wind repowering projects.** **Segment revenues decreased by 40% during the nine months ended September 30, 2024 primarily due to a 44% decrease in wind tower revenue. The decrease in wind revenue was primarily a result of less tower sections sold as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025.

Previous wording

Heavy Fabrications segment operating results decreased by $3,056 as compared to the prior year period. The decrease in operating performance was primarily a result of lower tower sales and the corresponding reduction in AMP credits recognized. These factors were partially offset by improved operating efficiencies. Operating margin was 8.7% during the six months ended June 30, 2024 compared to 10.2% during the six months ended June 30, 2023 primarily due to the factors described above.

Current wording

Heavy Fabrications segment operating income decreased by $6,616 as compared to the prior year period. The decrease in operating performance was primarily a result of lower tower sales and the corresponding reduction in AMP credits recognized. These factors were partially offset by reduced overhead costs. Operating margin was 9.4% during the nine months ended September 30, 2024 compared to 12.0% during the nine months ended September 30, 2023 primarily due to the factors described above.

Previous wording

Gearing segment orders decreased 17% from the prior year period primarily due to reduced demand from O&G customers, partially offset by increased demand from aftermarket wind customers. Gearing revenue was down 18% relative to the comparable prior year period reflective of reduced shipments within most markets served, partially offset by higher shipments to aftermarket wind customers.

Current wording

Gearing segment orders decreased 8% from the prior year period primarily due to reduced demand from O&G customers, partially offset by increased demand from aftermarket wind customers. Gearing segment revenue decreased 19% relative to the comparable prior year period reflective of reduced shipments within most markets served, but most significantly within O&G. This was partially offset by higher shipments to aftermarket wind customers.

Previous wording

Gearing segment operating income decreased by $421 compared to the prior year period. This decrease was primarily attributable to lower sales, partially offset by a more profitable product mix sold and cost savings. Operating margin was 2.7% during the six months ended June 30, 2024, a decrease from 4.0% during the six months ended June 30, 2023, driven primarily by the items identified above.

Current wording

Gearing segment operating income decreased by $765 compared to the prior year period. This decrease was primarily attributable to lower sales, partially offset by a** **more profitable product mix sold and cost savings. Operating margin was 1.5% during the nine months ended September 30, 2024, a decrease from 3.5% during the nine months ended September 30, 2023, driven primarily by the items identified above.

Previous wording

Industrial Solutions segment orders decreased from the prior year period primarily due to reduced orders associated with aftermarket projects. Segment revenues increased from the prior year period primarily due to increased shipments of aftermarket gas turbine content. Operating income increased versus the prior-year period primarily as a result of higher sales and a more profitable mix of product sold.

Current wording

Industrial Solutions segment orders increased from the prior year period primarily due to improved orders associated** with new gas turbine projects, partially offset by reduced orders associated with aftermarket projects. **Segment revenues increased from the prior year period primarily due to increased shipments of aftermarket gas turbine content, partially offset by reduced shipments to international customers. Operating income increased versus the prior-year period primarily as a result of higher sales and a more profitable mix of product sold.

Previous wording

Corporate and Other expenses during the six months ended June 30, 2024 decreased from the prior year period primarily due to the absence of professional fees associated with the contested proxy election recognized in the prior year quarter and lower medical costs.

Current wording

Corporate and Other expenses during the nine months ended September 30, 2024 decreased from the prior year period primarily due to the absence of professional fees associated with the contested proxy election recognized in the prior year quarter and lower employee compensation costs.

Previous wording

On August 4, 2022, we entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), providing the Company and its subsidiaries with a $35,000 senior secured revolving credit facility (which may be further increased by up to an additional $10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $7,578 senior secured term loan (collectively, the “2022 Credit Facility”). The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. As of June 30, 2024, cash totaled $938, a** **decrease of $161 from December 31, 2023. Debt and finance lease obligations at June 30, 2024 totaled $23,536. As of June 30, 2024, we had the ability to borrow up to an additional $17,509 under the 2022 Credit Facility.

Current wording

On August 4, 2022, we entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), providing the Company and its subsidiaries with a $35,000 senior secured revolving credit facility (which may be further increased by up to an additional $10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $7,578 senior secured term loan (collectively, the “2022 Credit Facility”). The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. As of September 30, 2024, cash totaled $1,384, an increase of $285** **from December 31, 2023. Debt and finance lease obligations at September 30, 2024 totaled $23,353. As of September 30, 2024, we had the ability to borrow up to an additional $17,614 under the 2022 Credit Facility.

Previous wording

We also have outstanding notes payable for capital expenditures in the amount of $1,793** and $1,361 as of June 30, 2024 and December 31, 2023, respectively, with $359 and $163 included in the “Line of Credit and current maturities of long-term debt” line item of our condensed consolidated financial statements as of June 30, 2024 and December 31, 2023, respectively. The notes payable have monthly payments that range from $1 to $20 and an interest rate of approximately 7%. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates that range from **September 2028 to May 2029.

Current wording

We also have outstanding notes payable for capital expenditures in the amount of $1,706** and $1,361 as of September 30, 2024 and December 31, 2023, respectively, with $365 and $163 included in the “Line of Credit and current maturities of long-term debt” line item of our condensed consolidated financial statements as of September 30, 2024 and December 31, 2023, respectively. The notes payable have monthly payments that range from $1 to $20 **and an interest rate of approximately 7%. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates that range from September 2028 to June 2029.

Previous wording

On September 22, 2023, we filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 12, 2023 (the “Form S-3”), replacing a prior shelf registration statement which expired on October 12, 2023. This shelf registration statement, which includes a base prospectus, allows us to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in the prospectus supplement accompanying the base prospectus, we would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes.

Current wording

On September 22, 2023, we filed a shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 12, 2023 (the “Form S-3”), replacing a prior shelf registration statement which expired on October 12, 2023. The Form S-3 will expire on October 11, 2026. This shelf registration statement, which includes a base prospectus, allows us to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in the prospectus supplement accompanying the base prospectus, we would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes.

Previous wording

On September 12, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC and HC Wainwright & Co., LLC (collectively, the “Agents”). Pursuant to the terms of the Sales Agreement, we may sell from time to time through the Agents shares of our common stock with an aggregate sales price of up to $12,000. We will pay a commission to the Agents of 2.75% of the gross proceeds of the sale of the shares sold under the Sales Agreement and reimburse the Agents for the expenses incident to the performance of their obligations under the Sales Agreement. No shares of the Company’s common stock were issued under the Sales Agreement during the year ended December 31, 2023 or six months ended June 30, 2024. As of June 30, 2024, shares of our common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement. Any additional shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S-3 and a 424(b) prospectus supplement.

Current wording

On September 12, 2022, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC and HC Wainwright & Co., LLC (collectively, the “Agents”). Pursuant to the terms of the Sales Agreement, we may sell from time to time through the Agents shares of our common stock with an aggregate sales price of up to $12,000. We will pay a commission to the Agents of 2.75% of the gross proceeds of the sale of the shares sold under the Sales Agreement and reimburse the Agents for the expenses incident to the performance of their obligations under the Sales Agreement. No shares of the Company’s common stock were issued under the Sales Agreement during the year ended December 31, 2023 or nine months ended September 30, 2024. As of September 30, 2024, shares of our common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement. Any additional shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S-3 and a 424(b) prospectus supplement.

Previous wording

The following table summarizes our cash flows from operating, investing, and financing activities for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our cash flows from operating, investing, and financing activities for the nine months ended September 30, 2024 and 2023:

Previous wording

During the six months ended June 30, 2024,** net cash used in operating activities totaled $3,427 compared to net cash used in operating activities of $17,447 during the prior year period. The decrease in net cash used in operating activities during the current year period was primarily attributable to proceeds from the sale of the 2023 AMP credits received during the current year period and a significant increase in accounts receivable during the prior year period due to a change in payment terms with a major customer. This was partially offset by a more significant decrease in customer deposits during the current year period. **

Current wording

During the nine months ended September 30, 2024,** net cash used in operating activities totaled $986 compared to net cash used in operating activities of $22,593 during the prior year period. The decrease in net cash used in operating activities during the current year period was primarily attributable to proceeds from the sale of the 2023 AMP credits received during the current year period, in addition to a decrease in accounts receivable during the current year period compared to a significant increase in accounts receivable during the prior year period due to a change in payment terms with a major customer. This was partially offset by a more significant decrease in customer deposits during the current year period. **

Previous wording

During the six months ended June 30, 2024,** **net cash used in investing activities totaled $2,375, comp ared to net cash used in investing activities of $3,962 during the prior year period. The decrease in net cash used in investing activities as compared to the prior-year period was primarily due to a net decrease in purchases of property and equipment.

Current wording

During the nine months ended September 30, 2024,** **net cash used in investing activities totaled $3,120, comp ared to net cash used in investing activities of $5,300 during the prior year period. The decrease in net cash used in investing activities as compared to the prior-year period was primarily due to a net decrease in purchases of property and equipment.

Previous wording

During the six months ended June 30, 2024, net cash provided by financing activities totaled $5,641, compared to net cash provided by financing activities of $10,772 during the prior year period. The decrease was primarily due to decreased net borrowings under the 2022 Credit Facility in the current year period.

Current wording

During the nine months ended September 30, 2024, net cash provided by financing activities totaled $4,391, compared to net cash provided by financing activities of $16,901 during the prior year period. The decrease was primarily due to decreased net borrowings under the 2022 Credit Facility in the current year period.

Previous wording

There have been no material changes in our critical accounting estimates during the six months ended June 30, 2024 as compared to the critical accounting estimates described in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

There have been no material changes in our critical accounting estimates during the nine months ended September 30, 2024 as compared to the critical accounting estimates described in our Annual Report on Form 10-K for the year ended December 31, 2023.