bwen20230630

bwen20230630_10q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34278

BROADWIND, INC.

(Exact name of registrant as specified in its charter)

Delaware		88-0409160
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3240 S. Central Avenue, Cicero, IL 60804

(Address of principal executive offices)

(708) 780-4800

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value	BWEN	The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☒		Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period to comply with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of registrant’s common stock, par value $0.001, outstanding as of August 9, 2023: 21,304,988.

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BROADWIND, INC. AND SUBSIDIARIES

INDEX

		Page No.

PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Financial Statements	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
Signatures		30

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PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

BROADWIND, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)

	*June 30,*			*December 31,*
	*2023*			*2022*

ASSETS
CURRENT ASSETS:
Cash	$	2,095		$	12,732
Accounts receivable, net		28,796			17,018
AMP credit receivable		6,729			—
Contract assets		2,228			1,955
Inventories, net		48,555			44,262
Prepaid expenses and other current assets		3,143			3,291
Total current assets		91,546			79,258
LONG-TERM ASSETS:
Property and equipment, net		46,787			45,319
Operating lease right-of-use assets, net		15,488			16,396
Intangible assets, net		2,395			2,728
Other assets		749			839
TOTAL ASSETS	$	156,965		$	144,540
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Line of credit and current portion of long-term debt	$	13,110		$	1,170
Current portion of finance lease obligations		1,590			2,008
Current portion of operating lease obligations		1,737			1,882
Accounts payable		28,419			26,255
Accrued liabilities		5,680			4,313
Customer deposits		30,360			34,550
Total current liabilities		80,896			70,178
LONG-TERM LIABILITIES:
Long-term debt, net of current maturities		7,203			7,141
Long-term finance lease obligations, net of current portion		3,531			4,226
Long-term operating lease obligations, net of current portion		15,917			16,696
Other		20			26
Total long-term liabilities		26,671			28,089
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; 21,578,925 and 21,127,130 shares issued as of June 30, 2023, and December 31, 2022, respectively		22			21
Treasury stock, at cost, 273,937 shares as of June 30, 2023 and December 31, 2022		(1,842	)		(1,842	)
Additional paid-in capital		398,180			397,240
Accumulated deficit		(346,962	)		(349,146	)
Total stockholders’ equity		49,398			46,273
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	156,965		$	144,540

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BROADWIND, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues	$	50,843		$	50,012		$	99,716		$	91,856
Cost of sales		42,510			47,618			84,407			87,450
Gross profit		8,333			2,394			15,309			4,406
OPERATING EXPENSES:
Selling, general and administrative		5,952			4,122			11,478			8,024
Intangible amortization		165			184			333			367
Total operating expenses		6,117			4,306			11,811			8,391
Operating income (loss)		2,216			(1,912	)		3,498			(3,985	)
OTHER EXPENSE, net:
Interest expense, net		(751	)		(776	)		(1,239	)		(1,121	)
Other, net		(22	)		—			(24	)		21
Total other expense, net		(773	)		(776	)		(1,263	)		(1,100	)
Net income (loss) before provision for income taxes		1,443			(2,688	)		2,235			(5,085	)
Provision for income taxes		28			15			51			22
NET INCOME (LOSS)		1,415			(2,703	)		2,184			(5,107	)
NET INCOME (LOSS) PER COMMON SHARE—BASIC:
Net income (loss)	$	0.07		$	(0.13	)	$	0.10		$	(0.26	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC		21,091			20,244			20,981			19,977
NET INCOME (LOSS) PER COMMON SHARE—DILUTED:
Net income (loss)	$	0.07		$	(0.13	)	$	0.10		$	(0.26	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED		21,409			20,244			21,390			19,977

The accompanying notes are an integral part of these condensed consolidated financial statements.

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BROADWIND, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share data)

	*Common Stock*				*Treasury Stock*						*Additional*
	*Shares*		*Issued*					*Issued*			*Paid-in*		*Accumulated*
	*Issued*		*Amount*		*Shares*			*Amount*			*Capital*		*Deficit*			*Total*

BALANCE, December 31, 2021		19,859,650	$	20		(273,937	)	$	(1,842	)	$	395,372	$	(339,416	)	$	54,134
Stock issued for restricted stock		480,595		—		—			—			—		—			—
Stock issued under defined contribution 401(k) retirement savings plan		146,790		—		—			—			282		—			282
Share-based compensation		—		—		—			—

SEC Form 10-Q filed by Broadwind Inc.