Broadwind Energy NASDAQ: BWEN reported lower consolidated first-quarter revenue as the company continued to wind down and divest parts of its heavy fabrication business, while management pointed to strong order growth and improving profitability in its Gearing and Industrial Solutions segments.
Chief Executive Officer Eric Blashford said the quarter reflected continued progress on the company’s “business transformation strategy,” with the Gearing and Industrial Solutions segments benefiting from demand tied to power generation and critical infrastructure markets. He said the company expects its strategic exit from wind tower production to be complete in the third quarter of 2026.
“Gearing and Industrial Solutions will represent our core businesses moving forward,” Blashford said. Excluding divested product lines within the heavy fabrication segment, he said Broadwind generated about $64 million of revenue on a trailing 12-month basis through the end of the first quarter.
Revenue Declines as Heavy Fabrication Winds Down
Vice President and Chief Financial Officer Thomas Ciccone said first-quarter consolidated revenue was $34.1 million, down 8% from the prior-year period. Adjusted EBITDA was $2.2 million, compared with $2.4 million a year earlier, but rose about 16% sequentially, which Ciccone attributed to better capacity utilization and a more profitable mix.
The Heavy Fabrication segment posted first-quarter revenue of $16.4 million and adjusted EBITDA of $1.7 million, both down from the prior-year period. Ciccone said the decrease reflected the wind-down of the Manitowoc operation, a previously resolved raw material supply issue and lower PRS demand. First-quarter orders in the segment were $9.7 million, consisting primarily of wind tower production expected to continue through the third quarter of 2026 at the Abilene facility, along with baseline PRS activity.
Ciccone said Broadwind will retain the PRS business and is evaluating segment reporting following the divestiture.
Gearing Orders Rise on Power Generation Demand
The Gearing segment recorded first-quarter orders of $13.2 million, up 66% from the prior year and 36% sequentially. Backlog exceeded $30 million, which Ciccone said was the highest level since 2023. Segment revenue was $8.5 million, up 42% from the prior-year period, and adjusted EBITDA was $0.6 million, compared with an adjusted EBITDA loss of $0.2 million a year earlier.
Blashford said demand in the Gearing segment has been driven by power generation, industrial and mining markets, with power generation activity tied in part to the AI data center boom. He also said quoting activity remains strong, with emerging opportunities in defense.
The company has commissioned new high-precision grinding and mechanical balancing equipment aimed at improving quality and reducing lead times in high-speed reduction gearing, including gearing used on natural gas turbines. Blashford said those investments make Broadwind “one of the most vertically integrated manufacturers” of such critical components in the United States.
Industrial Solutions Sets Record Backlog
Industrial Solutions posted first-quarter orders of $14.6 million, up 44% from the prior year, and backlog reached a record $43.3 million. Ciccone said the segment set records for both orders and backlog during the quarter and was on track to do so again in the second quarter after recording more than $10 million in orders during April alone.
Revenue in the segment was $9.2 million, up 64% from the prior-year period, driven primarily by stronger shipments of natural gas turbine components. Adjusted EBITDA was $1.8 million, or 19% of revenue, compared with $0.5 million and an 8.7% margin a year earlier.
Blashford said natural gas turbine demand remains strong, supported by AI-related data center demand and global electrification trends. The company is also expanding its Sanford, North Carolina, facility near Raleigh. Blashford said the expansion, expected in the second quarter, will increase production space in North Carolina by 30% to help serve backlog and projected future growth.
Guidance Withdrawn After Abilene Sale
Broadwind ended the first quarter with more than $25 million of total cash and availability on its credit facility, or $16.4 million after adjusting for a minimum excess availability requirement, Ciccone said. He added that, on a pro forma basis for the sale of the Abilene facility, liquidity improves by about $10 million, reflecting credit availability adjustments and required debt payments.
The company withdrew its full-year 2026 financial guidance following the Abilene facility sale. Ciccone said operating working capital increased slightly in the first quarter, as decreases in Heavy Fabrication were more than offset by increases in Gearing and Industrial Solutions tied to higher activity levels.
During the question-and-answer session, Ciccone said the remaining Heavy Fabrication backlog of about $25 million is primarily tower-related and should convert “very, very ratably” over the next two quarters. He also said the company had about $10 million of operating working capital associated with the wind business at quarter-end, which is expected to decline, though increases in Gearing and Industrial Solutions may partially offset that benefit.
Management Sees Growth in Power, Defense and Infrastructure
Blashford said Broadwind’s remaining facilities in Chicago, Pittsburgh and Sanford, North Carolina, provide more than 450,000 square feet of manufacturing space. He said the company is seeing strong order activity in distributed power, small-frame and utility-scale natural gas turbines, and infrastructure-related markets.
In response to a question from Eric Stine of Craig-Hallum, Ciccone said management expects first-quarter revenue to be the “low water mark” for both Gearing and Industrial Solutions, with steady growth expected over the balance of the year. Blashford added that some orders are being booked into 2027 and “a little bit into 2028,” based on customer delivery timing rather than Broadwind’s production capability.
On oil and gas, Blashford said Gearing demand remains tied largely to aftermarket activity rather than new rigs. He said customers are replacing wear parts and putting some older rigs back to work, while the U.S. rig count remains down.
Asked by Amit Dayal of H.C. Wainwright about future margins, Ciccone said Gearing margins should continue to improve as volumes rise and operating leverage increases. For Industrial Solutions, he said revenue is expected to rise, but margins may normalize after a favorable product mix in recent quarters.
Blashford also said the company is evaluating inorganic growth opportunities using Gearing and Industrial Solutions as platforms. Areas of interest include precision machining with exposure to defense and aerospace, power generation and grid hardening, including transmission and distribution infrastructure.
“We’ve refocused our business, are investing wisely, and are taking decisive strategic actions towards higher value growing end markets,” Blashford said.
About Broadwind Energy NASDAQ: BWEN
Broadwind Energy, Inc NASDAQ: BWEN is an engineering and manufacturing company focused on the design, production and service of heavy industrial equipment for energy infrastructure and related markets. The company's offerings include custom-engineered gearboxes, couplings, hydrodynamic drives and utility-scale wind turbine towers. In addition to new equipment, Broadwind Energy provides aftermarket repair, refurbishment and testing services to support the long-term operation of energy and industrial assets.
The company operates through two principal segments.
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