Quarter 1

Q2 2026 Earnings Call — August 11, 2026

Analyst (Ross): Hi, this is Stephan Thomason on for Justin Clare. You had another quarter of strong orders and decided to improve visibility in the balance of 26, but did not reinstate guidance. What else to have from here to give you guys enough confidence to re-guide? Thank you.

Executive (Title): Yeah, I'll take that. You know, just

at this time, given the ongoing wind down of our operations in Abilene, we just didn't think it was prudent for that to happen.

So we definitely want that wind down of the operations to be complete, which is happening here in Q3 as scheduled. So that would be the first kind of domino to fall before we would be putting back, you know, guidance out there.

Analyst (Ross): Okay, good to know. And then my next question would be on gearing. So what drove the strong gearing orders? Was there any outsized notable orders or is this a good indication of future demand?

Executive (Title): Yeah, I would say this is a good indication of future demand. And guys, sorry, we've got a thunderstorm warning behind us. If you hear the siren, that's what it is, but we're fine. So yeah, the demand was across all of our normal verticals. Oil and gas, I mentioned in my prepared remarks, Rig counts are starting to go up a bit. They're up about 9%. But we think that's primarily due to customers putting older rigs that have been sidelined back in action. So we're seeing some aftermarket demand from that. But I think in general, Stephan, it would be indicative of future demand.

Analyst (Craig Hallam): Hi, Eric Ciccone. Hi, Eric. Good morning. So, I mean, you're almost done with the remnants of wind. I know it's another quarter, so just curious. I mean, it sounds like you're certainly being thoughtful in terms of potential additions to the platform, but any thoughts you can share on areas of capabilities that you might be looking at. Any details would be very helpful.

Executive (Title): Yeah, we're willing. Thanks, Eric. This is Eric. We're focused on opportunities that expand our precision manufacturing capabilities. We're looking at the power gen, critical infrastructure, grid hardening, maybe even defense and aerospace. But, you know, attractive targets would be complementary in terms of customers, capabilities, or capacity. We're not going to recreate the wheel. We see our gearing business and our industrial solutions business as core, and so we want to add to those businesses and serve those customers. That's where we're hunting now, Eric.

Analyst (Craig Hallam): Okay, not too far afield from what you've got in place now, it sounds like.

Executive (Title): Yeah, we see PowerGen and critical infrastructure and grid as really long-term plays. I mean, it's a 10- or 15-year demand cycle here, so I think investing in those markets would prove well from an acquisition standpoint for us.

Analyst (Craig Hallam): Got it. Okay. Thank you. And then maybe just turning to industrial solutions, Deb, that you've completed the 30% expansion. But, I mean, if you could talk about your potential to do that longer term. And I guess the reason for that question is, correct me if I'm wrong, but I think you lag your largest customer by five to six quarters. And that customer in the last quarter or two has seen a massive upstep in orders and their message has turned on background. So just thoughts about your potential to expand more beyond the 30%.

Executive (Title): Yeah, that customer, again, that's GE for Nova. It's common knowledge that they are a primary customer in that segment. They're expecting growth of 18% to 20%. We think we can keep up with that. As I mentioned before, when we move into this new part of our facility, it opens up for packaging, picking and packaging space there, but what it also does is allows us to expand our manufacturing footprint in the original space. As we look to M&A, especially if we can find it more local, we will look to add manufacturing footprint there so we can continue to grow local to the Sanford, Raleigh area. So our manufacturing can be local, and then we can use that 130,000 square foot facility, which is now both manufacturing and picking and packing and shipping to be final picking and packing and shipping. So I think we can grow substantially in that facility. I've mentioned before to a $75-ish million rate, but beyond that, this M&A we're looking at in that specific facility could add manufacturing space, allowing further growth.

Analyst (Craig Hallam): Okay. And maybe just sneak one last one in. I mean, talk about the growth opportunity, as you said. I mean, it's well known. It's very much tied to GE for NOVA, which is a good thing. But, you know, maybe any limiting factors or the potential to add additional OEMs to that list.

Executive (Title): Yeah, we're actually working with all five of the top five players in natural gas turbines, both in the large scale. Sorry, guys, that's another warning here. We've got thunderstorms in the background here. But we are looking at other customers in that same segment, both in gearing and industrial solutions. They have somewhat different supply chain solutions required. So it's not exactly a match to what we primarily do for GE Renova, but we are looking at other customers in both gearing and industrial solutions in that space, in the power generation space to grow. So we're not so concentrated within that one customer.

Analyst (HC Wainwright): Hey, good morning, Tom, Eric. Thanks for taking my questions. So in your backlog that you already have in the bag, is there any component of revenues that are expected from the data center market? And a corollary to that is in your pipeline, are you seeing any slowdown because of the various states and regional bans on data centers coming up?

Executive (Title): Well, we service both oil and gas and PowerGen in both divisions. It's hard to divide PowerGen into what is just general demand growth and what is specific from AI. But I do know that both our primary customers in that space tout AI as a primary demand driver, especially in the U.S. So while we think about 30% to 40% of our revenue in gearing is in PowerGen, and a higher percentage of industrial solutions in PowerGen. I don't have a specific breakdown as the drivers of that demand coming from AI, but I know it's significant if that helps you.

Analyst (HC Wainwright): Yeah, yeah, just wanted to see that. And then will you remind us in both gearing as well as industrial solutions, what is sort of the conversion cycle from backlog to adding to backlog to actually realizing those revenues in terms of months, a period. Is there any average for those two?

Executive (Title): Well, yeah, I'll take that. Typically, we've said publicly that the conversion rate for a typical gearing order is about six months. Now, given the demand that we have, again, in power generation, some of those customers have asked us to plan production beyond 2026. So it's beyond that six-month normal cycle. But say you're an oil and gas customer, you're a mining customer, or you're a material handling customer, six months is normally a good benchmark for conversion of backlog into orders. With industrial solutions, that typically, again, it's depending on the need. If it's a new install, it can be up to 18 months or even further out. If it's aftermarket, we can turn orders, we can turn backlog with well under three months if we need to. But if you're looking for a conversion rate, six months to a year is a good benchmark.

Executive (Title): Yeah, I'd also say that with the improved visibility that some of our customers have, we're seeing backlog well into the out years. We're seeing significant backlog in 2028 already. So I think that really helps kind of level set that in terms of when we're going to convert that backlog into revenue.

Analyst (HC Wainwright): Yeah, no, it is good to see that, I mean, the six-month conversion cycle for gearing is sort of typical, but then you already have advanced orders and visibility into, as you said, 27, 28. So that's always good to see. Just switching quickly to cost side, I think in prepared remarks you mentioned you're expecting to increase engineering and manufacturing resources. So how should we think of operating costs going up and maybe how does it impact gross margins in the near term?

Executive (Title): I would say that that would be ratable going forward. I wouldn't expect any degradation in gross margins due to those increases. Think in terms of quality engineers, general engineers, and production people. Just to keep the volume moving in the direction we're going, it's not going to be a lag on gross profit percentage.

Executive (Title): Yeah, I would say that particular example won't be a drag on margin. You may see some degradation due to mix change, especially within... Sorry, guys, again. We might have to take shelter here, but you may see some margin degradation due to mix, especially within our business unit, but any other cost increases would be in response to higher volumes.

Analyst (HC Wainwright): Yeah, and I guess it also speaks to leverage that you may have as you add these resources and revenues grow. So that's good to know. Thanks for taking our questions and stay safe.

Executive (Title): Yeah, we're in Chicago here. If any of our investors in Chicago, you might need to take shelter as well. Next question, please, if we have one.

Executive (Title): We have reached the end of the question and answer session. I'd now like to turn the call back over to Eric Blashford for closing comments.

Executive (Title): Well, yes, thanks for listening in, everyone. We're excited about our opportunities. We're excited about the strategic pivot and look forward to coming to you after Q3 to tell you about our results then. Thank you very much, everyone. This concludes today's conference. You may disconnect your lines

at this time, and we thank you for your participation.

Quarter 2

Q1 2026 Earnings Call — May 12, 2026

Analyst Justin Clare (Roth Capital Partners): I wanted to start out with Heavy Fab and just wanted to see how you'd frame the conversion of the remaining backlog for Heavy Fab, the $25 million. How do you expect that to convert between Q2 and Q3? And then just wanted to see how you're thinking about the inventory levels for the overall business as you convert the remaining orders for Heavy Fab here, and then what the effect could be on your overall liquidity? Because I'm imagining you may have a lower inventory level as you convert the remaining orders here.

Executive Name (Title): Thanks, Justin. So of the $25 million of backlog, the overwhelming majority of this is tower-related that will be completing out of the Abilene facility here. And that should be very, very ratable over the next two quarters. So, you know, it's probably five months, think of it, you know, one fifth over the next five months, if you will. So I think that you can, you can call that fairly ratable, you know, post close three, I mean, post Q1 here. The other thing I would mention is overall, you know, when we're looking at it, not just inventory balances, but our operating working capital, we have maybe about $10 million of operating working capital associated with our wind business at the end of the quarter. So we expect that that will obviously decrease, but we are expecting that to be partially offset by increases within our gearing and our biz segments as those businesses continue to ramp up here over the balance of the year. So there may be some benefit, but I think it'll be muted.

Analyst Justin Clare (Roth Capital Partners): And then with the sale of Abilene, just wondering how we should think about the overall operating expenses for the business here and how you anticipate that changing as you exit that wind tower business. And then any other actions we should be looking for in terms of things that you may be looking to do to optimize the business as you shift to a focus on power generation and critical infrastructure?

Executive Name (Title): Well, yeah, we do have obviously the operating expenses associated with that facility will go away as we exit the facility. I don't think that their cost structure is significantly different than what we have within the other business units. So we shouldn't see any consolidated impact there. In terms of other costs that we're looking at, we're looking at all of our costs and trying to optimize that in light of this transaction going forward.

Analyst Justin Clare (Roth Capital Partners): And then maybe just one more, you know, you had indicated natural gas content drove order growth for industrial solutions and gearing. I'm wondering if you could talk about the opportunity for Broadwind to expand, you know, content per turbine or wallet share within the nat gas end market. And then also, I guess, what you're seeing in terms of order size or project scope and how that's trending.

Executive Name (Title): Thanks, Justin. This is Eric. Well, I will tell you that we are engaged with a couple different producers of gas turbines, primarily the ones that are in the utility scale. We're engaged right now with four of the top ten right now. Of course, we do have some concentration on a couple of those. As far as content, the content for industrial solutions is broad, as we discussed before. We tend to support those installations on what's called not the hot gas path, but surrounding the hot gas path. So we continue to invest in capabilities to grow, share within that product set. So I think we are growing within our primary customer and another three on top of that. We're also growing content from industrial solutions kind of beyond what we traditionally do by taking more manufacturing on ourselves. With regard to gearing, we do reduction gearing, and we're looking at some other components within the natural gas turbine, but it will be limited primarily to that reduction gearing that we discussed before because that's primarily what these turbines need from us as far as precision machine gearing.

Analyst Eric Stein (Craig Hallam): So obviously you're focusing here. You've been investing in gearing and industrial solutions for some time. Curious, could you update us on, you've got really strong backlog in both segments. Update us on how you would expect that backlog to flow in both businesses, whether that has changed or not. improved your ability to execute on that and then just what that implies over the next, say, 12 to 18 months?

Executive Name (Title): Sure. Thanks, Eric. I think what we're seeing is we think that Q1 is probably the low watermark for our revenues for both of those segments. We do expect these revenues to ramp up. You know, I don't think we can take our order run rate and extrapolate that to mean what we're going to book in terms of revenue, because we are probably booking further into the future than we have in the past. But I think, just suffice to say, I think we can expect a steady, ratable growth for the balance of this year. And we are, I should add, that we are booking into 27, and actually a little bit into 28 now. That's depending on when the customers want the product, not depending on our capability to deliver it to when the customers want it. They are looking further out. A couple of our customers are booked literally to the end of the decade. And so we have some advance notice of some of their products. They want to secure a capacity now instead of waiting.

Analyst Eric Stein (Craig Hallam): So I don't want to put words in your mouth, but you could, it sounds like you could execute on this backlog in both segments, you know, perhaps over the next 12 or so months. But in some cases, as you said, it has to do when the customers want to that production and that that would potentially be the limiting factor correct now which also means there's more capacity we have to fill in the interim.

Executive Name (Title): Yep, yep, okay got it. I mean, is it something where you're able to disclose kind of what your, you know, the percentage and it sounds like it would be more to industrial solutions when you're talking about booking further out, but are you able to kind of give a high-level view of, say, what in that backlog, what is kind of earmarked for 26 versus 27 and 28?

Executive Name (Title): We could probably provide that on the next call. We could provide some color there. At this point, I would say it's primarily 27. Anything that's not in this year would be 27. We're just starting to touch 2028, but we can add some color to that maybe on the next call for sure. You are correct. The customer that is pushing some or requesting some 2028 is due dates, delivery dates would be out of the industrial solution segment, not so much out of gearing.

Analyst Eric Stein (Craig Hallam): Okay. Got it. And then could you just talk a little bit about gearing? You mentioned some positive trends in oil and gas, and certainly, you know, you are hearing just, I mean, it's a distant memory, but early in the year, gas prices, or I'm sorry, oil prices pretty depressed. and you're hearing people start to talk about that that's really weighed on their oil and gas business and that it really has not picked up, you know, even with oil price appreciation given geopolitical factors. So maybe talk about that. I mean, is that something that you're kind of concerned about or on the lookout for, or is there a reason that gearing would be a little bit insulated from what some others are seeing?

Executive Name (Title): Well, oil and gas gearing, as you know, has been at a low for, shoot, six or seven quarters now. And it's because of a couple of things. One is the customers are being more frugal with their capital. Their rigs are a lot more productive, so they don't need to add rigs to add output. However, what's going on now is we have customers that are putting some of their old rigs back to work and replacing some components within their existing rigs. What we're seeing is what I would call quick-turn domestic supply for our customers as they put some of their old equipment back to work.

Analyst Eric Stein (Craig Hallam): Got it. So, I mean, maybe is this a possibility that that actually – I mean, you are seeing some improvement there. As you said, low levels, but you're seeing some improvement there because customers are, in fact, a little bit cautious, but they're trying to get more out of their existing equipment rather than –

Executive Name (Title): Right. That's correct. So the rig count in the U.S. remains down. The customers aren't really putting new rigs back to work. There's been a couple over the last couple weeks that have been redeployed. But where we are seeing the demand is what I would call aftermarket, meaning the customers that have rigs working need to keep those rigs functioning, and they're replacing some of their wear parts. They're gearing wear parts with new components, not new rigs, upgrading existing rigs.

Analyst Eric Stein (Craig Hallam): All right. That's helpful. Last one for me, just, I mean, pretty clear signaling that you aim to use a stronger balance sheet to add to your business. So I'm curious, maybe it's too early or maybe you just can't talk about some specific thoughts, but just curious when you look at your platform, what are some areas where you potentially could fill in?

Executive Name (Title): Well, of course, we have been pretty open about wanting to grow inorganically. We're going to use both those platforms, gearing and industrial solutions as platforms to grow. We like precision machining with exposure to defense and aerospace. We already have some exposure to power generation. If we can find something in power generation that would make sense, we'd certainly like to bolt that on. We also like grid hardening. I think in terms of transmission distribution, a lot of the grid in the U.S. is quite old and in need of upgrade, and we think there's a position for us to take to support that upgrade.

Analyst Amit Dayal (HC Wainwright): Thank you. Good morning, everyone. Thanks for taking my questions. So it looks like, you know, you have a pretty clear strategy in front of you with the new segments you're focused on. In that context, what should we expect EBITDA margins to sort of come through maybe over the next 12 to 18 months as you sort of clean up the businesses you're exiting and focus on these new segments?

Executive Name (Title): Sure. Yeah, I'll take that one. Thanks, Mitt. So I would say within our gearing segment, we should expect margins to continue to improve. For them, it's really about volume and operating leverage. They have a big fixed cost structure, and the more revenue that we can produce out of that plant, the more profitable the overall plant is. So we should see that continue to improve radically. In terms of our biz, we should see our mix normalized. The last two quarters, I think we've got a very strong mix of products sold, and we expect that to normalize, I should say, over the balance of the year. Although revenue going up, but in terms of margins, I think you'll see that normalized a little bit over the balance of the year.

Analyst Amit Dayal (HC Wainwright): And then, you know, we've spoken about this, guys, you know, one-on-one in prior calls, but, you know, with the fabrication now sort of out of the way, is there a potential rebranding coming for the company overall?

Executive Name (Title): Yeah, the question really is we don't know yet. There's certain of our divisions are already operating with different names, Bradford Gear, which we would not rebrand. But the overall company, we're thinking about it. I would stay tuned on that. The word Broadwind has wind in it, but there's a whole lot more that Broadwind means to many people than just a wind company. So stay tuned. We've thought about it. We're considering it, but no decision at this point.

Analyst Amit Dayal (HC Wainwright): Understood. And then just last one, on the defense side, who are the customers on the defense side, Eric?

Executive Name (Title): Some of them, well, there's... Oh, what kind of a question? Just to get a sense of...

Executive Name (Title): Yeah, what I would say is some of them don't want us to disclose their name, but let's say there are parts for weapon systems, there's parts for the naval systems, and there's parts for helicopters.

Analyst Amit Dayal (HC Wainwright): Okay, thank you. And that's all I have, guys. I'll take my other questions offline. Thank you.

Executive Name (Title): Yeah, thanks, everyone, for listening today. We're on the move. We're excited to execute our strategy, so stay tuned on that. We look forward to speaking with you again after Q2 to discuss your results. Have a great day, everyone. This concludes today's conference. You may disconnect your lines

at this time, and we thank you for your participation.