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Broadwind Energy Inc. Reports Operating Results (10-Q)

August 08, 2012 | About:

10qk

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Broadwind Energy Inc. (BWEN) filed Quarterly Report for the period ended 2012-06-30.

Broadwind Energy Inc. has a market cap of $41 million; its shares were traded at around $0.2894 with and P/S ratio of 0.2.

Highlight of Business Operations:

Gross profit decreased by $1,273, from $2,932 during the three months ended June 30, 2011, to $1,659 during the three months ended June 30, 2012. The decrease in gross profit was primarily attributable to a decline in Towers and Weldments gross profit due to the lack of higher margin fabrication-only towers in the current quarter and restructuring costs at Gearing, partially offset by improved volume and margins in both Services and Gearing, as compared to the same period in the prior year. As a result, our gross margin decreased from 7.5% during the three months ended June 30, 2011, to 3.0% during the three months ended June 30, 2012. Gross profit excluding restructuring charges declined by $857, and the resulting gross margin percentage would have been 3.7% in the absence of those restructuring charges.

Towers and Weldments segment revenues increased by $12,500, from $24,495 during the three months ended June 30, 2011, to $36,995 during the three months ended June 30, 2012. The 51% increase in revenues is due to a heavy mix of fabrication-only tower sections in the prior year quarter and growth in weldment sales. Revenues increased despite a 4% decrease in the volume of wind tower sections sold in the second quarter of 2012 compared to 2011. In the current year significant steel costs were included in all of our towers sales, while in the prior year period, fabrication-only tower sections represented 50% of our volume. We estimate that the impact of the reduced share of fabrication-only tower sections accounted for approximately $10,500 of the increase in Towers and Weldment revenues from the prior year quarter.

Gross profit decreased $1,620, from $5,511 during the six months ended June 30, 2011, to $3,891 during the six months ended June 30, 2012. The decrease in gross profit was primarily attributable to a decline in Towers and Weldments gross profit due to a lower margin sales mix of towers in the current half and restructuring costs of $848 at Gearing, largely offset by improved volume and margins in Gearing, as compared to the same period in the prior year. As a result, our gross margin decreased from 6.7% during the six months ended June 30, 2011, to 3.5% during the six months ended June 30, 2012. Gross profit excluding restructuring charges declined by $815, and the resulting gross margin percentage would have been 4.2% in the absence of those restructuring charges.

Towers and Weldments segment revenues increased by $19,498, from $52,666 during the six months ended June 30, 2011, to $72,164 during the six months ended June 30, 2012. The 37% increase in revenues is due to a heavy mix of fabrication-only tower sections in the prior year period and growth in weldment sales. Revenues increased despite a 13% decrease in the volume of wind tower sections sold, and a 12% decrease in the volume of megawatt capacity sold in the second half of 2012 compared to 2011. In the current year significant steel costs were included in all of our towers sales, while in the prior year period, fabrication-only tower sections represented 46% of our volume. We estimate that the impact of the reduced share of fabrication-only tower sections accounted for approximately $21,500 of the increase in Towers and Weldment revenues from the prior year period.

Gearing segment revenues increased by $4,034, from $26,062 during the six months ended June 30, 2011, to $30,096 during the six months ended June 30, 2012. The 15% increase in total revenues was attributable to a 61% increase in industrial sales, partially offset by a 41% decrease in wind gearing sales as compared to the prior year period. Gearing sales related to new wind installations was 6% in the six months ended June 30, 2012.

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