Q4 2024 Broadwind Inc Earnings Call

Operator: Greetings and welcome to Broadwind's fourth quarter and full year 2024 results conference. At this time, all participants are on a listen. The question and answer session will follow the formal. If anyone should require operator assistance during the conference, please press star zero on the button.

Greetings and welcome to broad one's fourth quarter and full year 2024 results conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: As a reminder, this conference is being I would now like to turn the conference over to your host. Thank you.

As a reminder, this conference is being recorded.

Speaker Change: I'd now like to turn the conference over to your host Mr. Tom Giacomini. Thank you you may begin.

Tom Ciccone: Good morning and welcome to the Broadwind fourth quarter and full year 2024 results conference call.

Tom Giacomini: Good morning, and welcome to the Bravo in fourth quarter and full year 2024 results conference call.

Tom Ciccone: Leading the call today is our CEO, Eric Blashford, and I'm Tom Ciccone, the company's Vice President and Chief Financial Officer. We issued a press release before the market opened today detailing our 4th quarter results. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, Actual results may differ materially. For a discussion of some of the factors that could cause our actual results to differ, please refer to the risk factor section of our latest annual and quarterly filings with the SEC.

Tom Tony: Leading the call today is our CEO, Eric Blatchford, I'm, Tom Tony <unk>, the company's Vice President and Chief Financial Officer.

Tom Tony: We issued a press release before the market opened today detailing our fourth quarter results.

Tom Tony: I would like to remind you that management's commentary and responses to questions. On today's conference call May include forward looking statements, which by their nature are uncertain and outside of the company's control.

Tom Tony: Although these forward looking statements are based on management's current expectations and beliefs actual results may differ materially.

For a discussion of some of the factors that could cause our actual results to differ please.

Tom Tony: Please refer to the risk factors section of our latest annual and quarterly filings with the SEC.

Tom Ciccone: Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in the press release issued today.

Tom Tony: Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in the press release issued today.

Tom Ciccone: At the conclusion of our prepared remarks, we will open the line for questions.

Tom Tony: At the conclusion of our prepared remarks, we will open the line for questions.

Eric Blashford: With that, I'll turn the call over to Eric. Thanks, Tom, and welcome to those joining us today. In a transitional demand environment, Broadwind delivered strong commercial and operational execution during 2024. culminating in full year revenue and adjusted EBITDA of $143 million and $13.3 million respectively. while we continue to experience a near-term pause in demand for new wind towers. and Oil & Gas Gearing during the fourth quarter, recent cost actions, together with stable demand and improved order activity across many of our diverse markets, resulted in a strong fourth quarter performance, which included revenue and adjusted EBITDA of $34 million and $2.1 million, respectively.

Tom Tony: That I'll turn the call over to Eric.

Eric: Thanks, Tom and welcome to those joining us today.

Speaker Change: And a transitional demand environment Robin delivered strong commercial and operational execution during 2024.

Speaker Change: Culminating in full year revenue and adjusted EBITDA of $143 million and $13 $3 million respectively.

While we continued to experience a near term pause in demand for new wind towers.

Speaker Change: And oil and gas gearing during the fourth quarter.

Speaker Change: Recent cost actions.

Speaker Change: Together with stable demand and improved order activity across many of our diverse markets resulted in a strong fourth quarter performance, which included revenue and adjusted EBITDA of $34 million and $2 $1 million respectively.

Eric Blashford: Importantly, while fourth quarter demand conditions were mixed, our order rates increased materially during the period, with orders increasing 85% from the fourth quarter 2023 to $37 million. Order growth was broad-based, moving higher across nearly all of our end markets. Orders within our heavy fabrications business sought continued strong demand for the adapters used to repower wind turbines. Increased demand for our natural gas pressure reduction system. and from our industrial sector, which includes our first sizable order in the hydroelectric market. Yearing orders nearly doubled year-over-year, led by increasing demand. for the Industrial and Steel Markets. Orders from our industrial solutions segment increased 21% year over year due to continued strength in the global gas turbine market.

Speaker Change: Importantly, while fourth quarter demand conditions were mixed our order rates increased materially during a period with orders increasing 85%.

Speaker Change: From the fourth quarter of 2000 $23 million to $37 million.

Speaker Change: Order growth was broad based moving higher across nearly all of our end markets.

Or does it have a center of heavy fabrications business saw continued strong demand for.

Speaker Change: For the adapters used to Repower wind turbines.

Speaker Change: Increased demand for a natural gas pressure reduction systems.

Speaker Change: From our industrial sector, which includes our first sizable order in the hydro electric market.

Speaker Change: Gearing orders nearly doubled year over year led by increasing demand.

Speaker Change: For the industrial and steel markets.

Speaker Change: Orders from our industrial solutions segment increased 21% year over year.

Speaker Change: Due to continued strength in the global gas turbine market.

Speaker Change: Okay.

Eric Blashford: At a commercial level, we continue to expand our product mix with a higher-margin adjacent market. Quoting activity remains elevated in all segments. but most notably in our heavy fabrications and industrial solutions businesses. where we're seeing strong interest from the power generation market. Interestingly, we're also beginning to see some meaningful activity from the oil and gas gearing market for the first time in nearly two years. We're pleased to see that the investments made in the quality certifications over the last year are generating new quote opportunities and bookings in the aeroderivative turbine and aerospace vertical. Operationally, we continue to prudently invest in equipment technology.

Speaker Change: At a commercial level, we continue to expand our product mix with higher margin adjacent markets.

Speaker Change: Putting activity remains elevated in all segments.

Speaker Change: But most notably in our heavy fabrications and industrial solutions businesses.

Speaker Change: Where we're seeing strong interest from the power generation markets.

Speaker Change: Interestingly, we're also beginning to see some meaningful activity from the oil and gas gearing market.

For the first time in nearly two years.

Speaker Change: We're pleased to see that the investments made in the quality certifications over the last year.

Speaker Change: Generating new quote opportunities and bookings in the Aero derivative turbine and aerospace verticals.

Speaker Change: Operationally, we continue to prudently invest in equipment technology.

Eric Blashford: to improve our process capabilities, reduce costs. and improve our profitability. We've upgraded key fabrication equipment in our manufacturing facilities. as we seek to capitalize on demand growth. which includes recent orders for larger scale towers. ordered by our customers for 2025 production run. Gearing continues to invest in quality and security certification. such as the AS9100 and ITAR registrations earned in 2024. followed by the CMMC 2.0, a cybersecurity requirement for the defense industry, which we will achieve in 2025.

Speaker Change: To improve our process capabilities reduce costs.

Speaker Change: And improve our profitability.

Speaker Change: We've upgraded key fabrication equipment in our manufacturing facilities.

Speaker Change: As we seek to capitalize on demand growth.

Speaker Change: Which includes recent orders for larger scale towers.

Speaker Change: Order by our customers for 2025 production runs.

Speaker Change: Gearing continues to invest in quality and security certification.

Speaker Change: Such as the a S 9100, and I toured registrations earned in 2024.

Speaker Change: Followed by the C. M M C 2.0, a cyber security requirement for the defense industry.

Speaker Change: Which we will achieve in 2025.

Eric Blashford: Beginning in the first quarter of 2024, we undertook significant cost actions to align our structure with the current demand environment. These actions equated to about $4 million in annualized cost savings, which is evident in our 2024 results. and we'll continue to into 2025. As demand conditions begin to improve, we believe these actions position Broadwind to realize improved operating leverage in 2025. Q4 revenue was behind the prior year quarter. primarily due to reduced activity within our wind and oil and gas markets. our non-wind activity levels remain relatively stable. as we see demand for our precision manufacturing capabilities across multiple markets.

Speaker Change: Beginning in the first quarter of 2024, we undertook a significant cost actions to align our structure with.

Speaker Change: The current demand environment.

Speaker Change: These actions equated to about $4 million in annualized cost savings, which is evidenced in our 'twenty 'twenty four results.

Speaker Change: And we'll continue to move into 2025.

Speaker Change: As demand conditions begin to improve we believe these actions position broad went to realize improved operating leverage in 2025.

Speaker Change: Q4 revenue was behind the prior year quarter.

Speaker Change: Primarily due to reduced activity within our wind and oil and gas markets.

Speaker Change: Our non wind activity levels remained relatively stable.

Speaker Change: As we see demand for our precision any factoring capabilities across multiple markets, most notably in power generation and industrials.

Eric Blashford: most notably in power generation and industrial. Within our heavy fabrication segment, Q4 revenue was $20 million. down 31% from a year ago. mostly due to the decline in tower production and natural gas pressure reducing systems or PRS shipments. partially offset. by increased sales of mining equipment. Gearing revenue is $7.6 million, a 31% reduction year-over-year due to broad-based softness in the oil and gas and steel markets. partially offset by strength in mining and aftermarket wind. Industrial solutions revenue was $5.9 million, down slightly year-over-year, primarily due to the timing of certain aftermarket shipments into the natural gas turbine market.

Speaker Change: Within our heavy fabrications segment Q4 revenue was $20 million.

Speaker Change: Down 31% from a year ago.

Speaker Change: Mostly due to the decline in tower production and natural gas pressure, reducing systems our P. S shipments.

Speaker Change: Partially offset.

Speaker Change: By increased sales of mining equipment.

Gearing revenue was $7.6 million or 31% reduction year over year.

Speaker Change: Due to broad based softness in the oil and gas and steel markets.

Speaker Change: Partially offset by strength in mining and aftermarket win.

Speaker Change: Yeah.

Speaker Change: Industrial solutions revenue was $5 $9 million down slightly year over year.

Speaker Change: Primarily due to the timing of certain aftermarket shipments into the natural gas turbine market.

Eric Blashford: In summary, the operating performance of all divisions continues to be strong. as we quickly respond to demand fluctuations in business while maintaining profitability.

Speaker Change: In summary.

Speaker Change: The operating performance of all divisions continues to be strong.

Speaker Change: As we quickly respond to demand fluctuations in business, while maintaining profitability.

Tom Ciccone: With that, I'll turn the call over to Tom for a discussion of our fourth quarter financial performance. Thank you, Eric. Turning to slide five for an overview of our fourth quarter performance. Fourth quarter consolidated revenues were $33.6 million compared to $46.6 million in the prior year. This represents a 28% decrease versus the prior year quarter as our production levels continue to be impacted by the ongoing pause within the onshore wind industry, as well as the extended slowdown within the oil and gas sector. adjusted EBITDA margin fell to 6.4% due primarily to lower capacity utilization partially offset by the targeted cost reductions we took earlier this year.

Speaker Change: With that I'll turn the call over to Tom for a discussion of our fourth quarter financial performance.

Tom: Thank you Eric.

Tom: Turning to slide five for an overview of our fourth quarter performance.

Tom: Fourth quarter consolidated revenues were $33 6 million compared to $46 6 million in the prior year quarter.

Tom: This represents a 28% decrease versus the prior year quarter as our production levels continue to be impacted by the ongoing pause within the onshore wind industry as well as the extended slowdown within the oil and gas sector.

Tom: Adjusted EBITDA margin fell to six 4% due primarily to lower capacity utilization, partially offset by the targeted cost reductions we took earlier earlier this year.

Tom Ciccone: From an order perspective, we experienced a rebound in activity during the quarter with consolidated orders of almost 38 million, representing our highest intake level in nearly two years. It should be noted that within all three segments, orders increase sequentially, quarter over quarter, and on a year over year basis.

Tom: From an order perspective, we experienced a rebound in activity during the quarter with consolidated orders of almost 38 million, representing our highest intake level in nearly two years.

Tom: It should be noted that was in all three segments.

Tom: Orders increased sequentially quarter over quarter and on a year over year basis.

Tom Ciccone: Turning to slide 6 for discussion of our heavy fabrication segment. Fourth quarter orders of $22.4 million are up both sequentially and versus the prior year period as we continue to recognize orders related to wind repowering projects and strength within our industrial market. Fourth quarter revenues were $20.4 million, down almost $9 million versus the prior year quarter, reflective of lower power volumes as well as lower PRS shifts. During the fourth quarter, we recognized adjusted EBITDA of $2.6 million, a decrease of $1.1 million versus the prior year period. Despite the decreased revenue levels, we were able to maintain our adjusted EBITDA margin as our drop in capacity utilization was partially offset by targeted cost actions taken.

Tom: Turning to slide six for a discussion of our heavy fabrication segment.

Tom: Fourth quarter orders of $22 4 million are up both sequentially and versus the prior year period as we continue to recognize orders related to wind repowering projects.

Tom: And strength within our industrial market.

Tom: Fourth quarter revenues were $20 4 million down almost $9 million versus the prior year quarter reflective of lower power volumes as well as lower P. R. S shipments.

Tom: During the fourth quarter, we recognized adjusted EBITDA of $2 6 million, a decrease of $1 1 million versus the prior year period.

Tom: Despite the decreased revenue levels, we were able to maintain our adjusted EBITDA margin is are dropping capacity utilization was partially offset by targeted cost actions taken.

Tom Ciccone: towards the end of 2023 into 2024.

Towards the end of 2023 into 2024.

Tom Ciccone: turn to slide 7. gearing orders of $7 million are up sequentially and versus the prior year. Although we continue to experience softness in oil and gas demand, we've made investments in machine technology which are capable of finishing products to tolerances within a millionth of an inch. This level of precision is needed to serve the aerospace and aeroderivative markets.

Tom: Turning to slide seven gearing orders of 7 million are up sequentially and versus the prior year.

Tom: Although we continue to experience softness in oil and gas demand. We've made investments in machine technology, which are capable of finishing products to tolerances within a millionth of an inch.

Tom: This level of precision as needed to serve the aerospace and Aero derivative markets.

Tom Ciccone: This technology, along with our expanded commercial team and new quality certifications, is bearing fruit as we win orders in these strategic markets, in addition to growth from legacy markets. Segment revenue was $7.6 million, down $3.4 million versus the prior year quarter. Q4 segment adjusted EBITDA was $0.1 million, a decrease of $1.2 million versus the prior year quarter. These decreases are reflective of the lower order intake levels we've experienced in recent quarters.

Tom: This technology, along with our expanded commercial team and new quality certifications is bearing fruit as we win orders in the strategic markets. In addition to growth from legacy markets.

Tom: Segment revenue was $7 6 million down $3 4 million versus the prior year quarter.

Tom: Q4 segment adjusted EBITDA was <unk> 1 million, a decrease of $1 2 million versus the prior year quarter.

Tom: These decreases are reflective of the lower order intake levels, we've experienced in recent quarters.

Tom Ciccone: Turning slide 8. Industrial Solutions recorded orders totaling $8 million in the fourth quarter. The 8 million of Q4 orders, as well as the 27 million of full year orders, both represent record booking levels for the segment.

Tom: Turning to slide eight.

Tom: Industrial solutions recorded orders totaled totaling $8 million in the fourth quarter.

Tom: The $8 million of Q4 orders as well as the $27 million of full year orders both represent record booking levels for this segment.

Tom Ciccone: The segment continues to experience strong commercial interest for natural gas turbine content, most notably for new gas turbines, and we've seen order strength continue into 2025. Q4 segment revenue was $5.9 million and Q4 segment adjusted EBITDA was $0.6 million. both small decreases versus the prior year period.

Tom: The segment continues to experience strong commercial interests for natural gas turbine content, most notably for new gas turbines and we've seen order strength continue into 2025.

Tom: Q4 segment revenue was $5 9 million in Q4 segment adjusted EBITDA was point 6 million.

Tom: Both small decreases versus the prior year period.

Tom Ciccone: But it should be noted that in addition to the aforementioned order activity, full year 2024 revenue and adjusted EBITDA totals are both record levels for the segment.

Tom: But it should be noted that in addition to the aforementioned order activity full year 2020 for revenue and adjusted EBITDA totals are both record levels for the segment.

Tom Ciccone: Turning to slide nine, we ended the fourth quarter with total cash and availability on our credit facility of approximately $33 million. This is a significant sequential improvement resulting from a 13 million dollar reduction in our operating working capital.

Tom: Turning to slide nine.

Tom: We ended the fourth quarter with total cash and availability on our credit facility was approximately $33 million.

Tom: This is a significant sequential improvement, resulting from a $13 million reduction in our operating working capital.

Tom Ciccone: as we experience an increased level of advanced payments from a major customer. The decrease in operating working capital drove strong free cash flow generation in Q4.

Tom: As we experienced an increased level of advance payments from a major customer.

Tom: The decrease in operating working capital drove strong free cash flow generation in Q4.

Tom Ciccone: Moving forward into 2025, we expect deposit balances to return to more typical operating levels.

Tom: Moving forward into 2025, we expect deposit balances to return to more typical operating levels.

Tom Ciccone: Finally, with respect to our financial guidance, today we are introducing financial guidance for the full year 2025. Given our current expectations and beliefs, we anticipate full year revenue to be in the range of $140 to $160 million. and Adjusted EBITDA to be in the range of $13 to $15 million.

Tom: Finally, with respect to our financial guidance today, we are introducing financial guidance for the full year 2025.

Tom: Given our current expectations and beliefs, we anticipate full year revenue to be in the range of $140 million to $160 million and.

Tom: And adjusted EBITDA to be in the range of $13 million to $15 million.

Tom Ciccone: That concludes my remarks.

Tom: That concludes my remarks, I will turn the call back over to Eric to continue our discussion.

Eric Blashford: I will turn the call back over to Eric to continue our discussion. Thanks, Tom.

Eric: Thanks, Tom.

Eric Blashford: Now, allow me to provide some thoughts as we enter 2025, beginning with our heavy fabrication segment. We believe that the domestic onshore wind tower activity will likely continue at its present rate through 2026. We're encouraged by the continued momentum in the wind repowering market because we're seeing sustained demand from our OEM customers for the adapters we manufacture, which are required to upgrade most legacy turbines. We believe that the new tariffs announced recently... combined with the existing anti-dumping measures in place will continue to benefit the domestic wind tower manufacturer. We continue to reallocate production capacity towards stable recurring project revenue streams across diverse end markets, with recent notable wins occurring in the mining and hydroelectric vertical.

Eric: Now allow me to provide some thoughts as we enter 2025, beginning with our heavy fabrication segment.

Eric: We believe that domestic onshore wind tower activity will likely continue at its present rate through 2026.

Eric: We're encouraged by the continued momentum in the wind Repowering market, that's where we're seeing sustained demand from our OEM customers for the adapters, we manufacture which are required to upgrade most legacy turbines.

Eric: We believe that the new tariffs announced recently.

Eric: Combined with the existing anti dumping measures in place we will continue to benefit the domestic wind tower manufacturers.

Eric: We continue to reallocate production capacity towards stable recurring project revenue streams.

Eric: Across diverse end markets with recent notable wins occurring in the mining and hydroelectric verticals.

Eric Blashford: We're seeing increasing quote activity from the power generation space, especially for products supporting the nation's electrical infrastructure, such as the large transformers required to support the grid.

Eric: We're seeing increasing quote activity from the power generation space, especially for products supporting the nation's electrical infrastructure such as the large transformers required to support the grid.

Eric Blashford: We're excited about the launch of our newest model in the family of PRSs, the Broadwind Clean Fuels L70 low-flow PRS unit. This is the third model in this product family and is now in customer field trials with favorable results so far. We're seeing strong customer interest in this model and are increasing our production plan to meet the anticipated demand. Customers appreciate the unit's performance specifications, compact footprint, simplicity of operation, remote monitoring capability, and attractive price point. making it the ideal solution for industrial applications such as primary or backup power supply systems and or pipeline integrity projects.

Eric: We're excited about the launch of our newest model in the family of Prs is the broad when clean fuels L 70, low flow P. R. S unit.

Eric: This is the third model and this product family and is now in customer field trials with favorable results so far.

Eric: We're seeing strong customer interest in this model and are increasing our production plan to meet the anticipated demand.

Eric: Customers appreciate the unit's performance specifications compact footprint simplicity of operation remote monitoring capability and attractive price point.

Eric: Making it the ideal solution for industrial applications, such as primary or backup power supply systems and or pipeline integrity projects.

Eric Blashford: In our gearing segment, we continue to execute our strategy to move beyond traditional gearing toward other precision machine products. We're pleased at the increasing level of customer activity we're seeing in various new markets, such as Arrow Derivative Gas Turbines, used in data center primary or backup power, aggregate material processing, and large high-speed compressors, to name a few. Our content for these markets includes products such as airfoils, fan blades, and impellers. in addition to our more traditional gearing and shaft products. We expect that the customer assuring efforts we've seen in 2024 will accelerate. with the recently announced tariffs and are well-positioned to provide customers a quick, high-quality, and competitive domestic alternative to their legacy suppliers.

Eric: And our gearing segment, we continued to execute our strategy to move beyond traditional gearing towards other precision machine products.

Eric: We're pleased that the increasing level of customer activity, we're seeing in various new markets such as Aero derivative gas turbines.

Eric: Houston datacenter primary or backup power.

Eric: Aggregate material processing and large high speed compressors to name a few.

Eric: Our content for these markets includes products, such as airfoils fan blades and empowers.

Eric: In addition to our more traditional gearing and shafts products.

Eric: We expect that the customer sharing efforts we've seen in 2024.

Eric: Accelerate.

Eric: With the recently announced tariffs and.

Eric: We are well positioned to provide customers a quick high quality and competitive domestic alternative.

Eric: So their legacy suppliers.

Eric Blashford: Additionally . .

Eric: Additionally.

Eric Blashford: The organization upgraded and brought online two additional heat treat furnaces at our Pittsburgh location to address increasing demand and provide additional scheduling flexibility for our external heat treat customers. and Industrial Solutions, the momentum that we've experienced in the gas turbine industry this year continued through the fourth quarter and remains strong as we enter 2025. Our key customers, which are seeing strong demand for gas turbine equipment and services, are reporting strong backlogs and are increasing their production capacity in response. Accordingly, quoting activity remains high, and we are adding resources in quality, procurement, and project management to respond to customer demand.

Eric: The organisation upgraded and brought online two additional heat treat furnaces at our Pittsburgh location.

Eric: To address increasing demand and provide additional scheduling flexibility for external heat treat customers.

Eric: And.

Eric: Real solutions the momentum that we've experienced in the gas turbine industry. This year continued.

Eric: Continued through the fourth quarter.

Eric: And remains strong as we enter 2025.

Eric: Our key customers, which are seeing strong demand for gas turbine equipment and services are reporting strong backlogs and are increasing their production capacity in response.

Eric: Accordingly, quoting activity remains high.

Eric: We're adding resources and quality procurement and project management to respond to customer demand.

Eric Blashford: As a reminder, Industrial Solutions Business provides supply chain solutions, custom fabrications, and control panel manufacturing for the growing combined cycle natural gas turbine market worldwide. which is driven by demand growth attributable at least in part to data centers and other sources of increased electrical load. as a result. We achieved record orders again this year, surpassing the previous record set last year in 2023.

Eric: As a reminder, our industrial solutions business provide supply chain solutions.

Eric: Custom fabrications and control panel manufacturing for the growing combined cycle natural gas turbine market worldwide.

Eric: Which is driven by demand growth attributable at least in part data centers and other sources of increased electrical load.

As a result, we achieved record orders again this year, surpassing the previous record set last year in 2023.

Eric Blashford: In summary, I am pleased with the strong operational performance from our team this quarter. as we continue to demonstrate strong execution on our strategic priorities. Our quality, quick response, and reliable deliveries continue to win new customers for us, particularly in the gearing and heavy fabrications business. We've reduced our cost structure during a transitional period for domestic onshore wind and oil and gas gearing demand. while retaining our key talent and continuing to work on vital activities like process improvement and product expansion. We're committed to keeping our people safe and productive. Our focus on team member safety has yielded a 55% reduction in our recordable incident rate in 2024.

Eric: In summary, I'm pleased with the strong operational performance from our team this quarter.

Eric: As we continue to demonstrate strong execution on our strategic priorities are.

Eric: Our quality quick response, and reliable deliveries continued to win new customers for us, particularly in the gearing and heavy fabrications businesses.

Eric: We've reduced our cost structure during a transitional period for domestic onshore wind.

Eric: And oil and gas gearing demand.

Eric: While retaining our key talent and continuing to work on vital activities like process improvement and product expansion.

Eric: We're committed to keeping our people safe and productive.

Eric: Our focus on team member safety has yielded a 55% reduction in our recordable incident rate in 2024.

Eric Blashford: well below the industry average. and we had zero lost time incidents. We have five plants, 100% U.S. based. So we're prepared to capitalize on any opportunities. afforded by the pro-domestic manufacturing policy backdrop afforded by the current administration. while potential impacts of both tariffs and renewable energy policy changes are unknown. We're optimistic that the new policies will support the necessary rebuilding of the country's infrastructure. We're encouraged by the pace of order growth within our core non-win market. which positions us for improved optimization of our manufacturing base over the coming year.

Eric: Well below the industry average.

Eric: And we had zero lost time incidents.

Eric: We have five plants, 100% U S based.

Eric: So we're prepared to capitalize on any opportunities.

Eric: Afforded by the pro domestic manufacturing policy backdrop afforded by the current administration.

Eric: While potential impacts of both tariffs and renewable energy policy changes are unknown.

Eric: We're optimistic that the new policies will support the necessary rebuilding of the country's infrastructure.

Eric: We're encouraged by the pace of order growth within our core non wind markets.

Which positions us for improved optimization of our manufacturing base over the coming year.

Eric Blashford: as we build a firm foundation for steady, profitable growth, serving the power generation, infrastructure, and other key markets with high-quality precision components and proprietary products to capitalize on improved demand in the years ahead.

Eric: As we build a firm foundation for steady profitable growth, serving the power generation infrastructure and other key markets with high quality precision components and proprietary products to capitalize on improved demand in.

Eric: In the years ahead.

Moderator: With that, I'll turn the call back over to the moderator for the Q&A session. Thank you.

Eric: With that I'll turn the call back over to the moderator for the Q&A session.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the Q1.

Operator: At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone. Any confirmation, tell them to indicate your line is in the question area.

Operator: You may press star 2 if you'd like to remove your question. One moment, please, while we pull.

Eric: One moment, please while we poll for questions.

Eric Stine: My first question comes from Eric Stine with Craig Hallam. Please proceed with your question. Hi, Eric. Hi, Tom. Hi, Eric. Good morning, Eric. Good morning.

Speaker Change: Our first question comes from Eric Stine with Craig Hallum. Please proceed with your question.

Eric Stine: Hi, Eric Hi, Tom.

Speaker Change: Hi, Eric Good morning.

Eric Blashford: So first of all, just on wind, just to confirm, so I know in your in your release, you were talking about expecting wind soft through 25, but I believe, just to confirm, you said you kind of expect this to be the situation through 26, and I guess meaning some improvement in 27. So that'd be first, and then second, can you just remind me of the visibility you've got for the GE work you're doing under the contract that you received a number of quarters? Sure. I see the demand as muted. Certainly, we can be optimistic beyond 25, but I'd expect 26 to be about the same as 25, just based on indications we're getting from customers and some conversations I've had with industry peers and whatnot.

Speaker Change: Good morning, So first of all just on wind just to confirm so I know in your in your release you were talking about expecting wind softness.

Speaker Change: Through 'twenty five but I believe just to confirm you said you kind of expect this to be a the situations through 'twenty six and I guess, meaning some improvement in twenty-seven. So that'd be first and then second can you just remind me of the visibility you've got for the G work Youre doing under the contract that you receive.

Speaker Change: <unk> a number of quarters ago.

Speaker Change: Sure Yeah, I see the demand is muted certainly we can be optimistic beyond beyond 25, but I would expect 26 to be about the same as twenty-five just based on indications we're getting from customers in some conversations I've had with industry peers and whatnot regarding.

Eric Blashford: Regarding the visibility we have through 2025, we have, I would say, firm visibility through really through the whole year 2025. We know exactly the towers we're going to build through September and have indications beyond that, Eric. got it. Okay.

Speaker Change: The visibility we have through 2025, we have I would say firm visibility through really through the whole year of 2025, and we know exactly the towers, we're going to build through September and have indications beyond that Eric.

Eric Stine: Got it Okay, and then maybe sticking.

Eric Blashford: And then maybe sticking with that, when you think about 2025, and I know you gave the guidance range, but how should we think about the linearity of that, you know, maybe, maybe helpful, just, you know, something on q1. And then just the remainder of the year given, you know, some visibility from wind, but also I would think some visibility in your backlog across the rest Well, I think wind is going to be relatively stable through the full year, except we did have some pull-in at the end of 24 that we thought we were going to be able to recognize revenue in Q1-25.

Eric Stine: Sticking with that when you think about 2025 and I know you gave the guidance range.

Eric Stine: But how should we think about the linearity of that you know maybe it may be helpful. Just you know something on Q1, and then just the remainder of the year given you know some visibility from wind, but also I would think some visibility in your backlog across the rest of the business.

Eric Stine: Sure well I think wind is going to be relatively stable through the through the food for the through the full year, except we did have some pull in at the end of at the end of 'twenty for that we thought were going to be able to recognize revenue and in Q1 25, so that benefited.

Tom Ciccone: So that benefited Q4-24 to the somewhat detriment of Q1-25, not really hurting the year, but it actually moved some things around. So I would say regarding the pace of the year, I would say it's ratably increasing through the year. Q1 is going to be probably the lowest quarter because of the pull-ins. We had pull-ins, by the way, Eric, not only in towers, but also in gearing and in industrial solutions. So it made for a strong Q4, but a little bit of a softer Q1 based on the backlog we have. And then I'd say, like I said, ratable through the year increases.

Speaker Change: Q4, 'twenty four to the somewhat detriment of of Q1, 'twenty five not really hurting the year, but it actually moved some things around so I would say regarding the pace of the year I would say, it's ratably increasing through the year Q1's going to be probably the lowest quarter because of the pull ins we had pull ins by the way Eric not only in towers, but also in gearing and in.

Speaker Change: Industrial solutions. So it made for a strong Q4, but a little bit of a softer Q1 based on the backlog we have and then I'd say like I said ratable through the year increases yeah, Eric the only thing I would add to that is in addition to kind of a ramping up throughout the year. I think Q1 will be a little will be adversely impacted by some lower production levels and within our.

Eric Blashford: Yeah, Eric, the only thing I would add to that is, in addition to kind of a ramping up throughout the year, I think Q1 will be adversely impacted by some lower production levels within our gearing segment, just as we start the year, as we had some lower order intake quarters earlier in the year. Okay, that is very helpful. And then maybe lastly, just sticking on the order front, it sounds like, I mean, certainly you had... I think you cited a very strong quoting activity on your Q3 call, and obviously that played out with order strength in Q4.

Eric Stine: Our gearing segment, just as we start the year as we had some lower order intake quarters earlier in the year.

Speaker Change: Yeah.

Speaker Change: Okay that is very helpful. And then maybe lastly, just sticking on the order front it sounds like I mean, certainly you had.

Speaker Change: Thank you cited a very strong quoting activity on your Q3 call and obviously you know that slide out with order strength in Q4 I'm. It sounds like you continue to see that that I'm quoting activity and you know maybe thoughts on what you see in terms of book to Bill throw.

Eric Blashford: Sounds like you continue to see that quoting activity, and maybe thoughts on what you see in terms of book-to-bill throughout 2025. Yeah, it's exciting. You know, frankly, it's nice to see what we've what we've done in our non-win markets. We've, I know I've said on previous calls, we first set forth the process capability. So we built that up in multiple divisions. Then we had the quality certifications that we won, the ITAR, the CMMC, the AS9100, the ASME DIV2. So we have those all in place now, which customers want. And then we've improved our sales force so we can reach these customers.

Speaker Change: 2025.

Speaker Change: Yes, it's exciting.

Speaker Change: Frankly, it's nice to see what we've what we've done in our non wind markets. We've I know Ive said on previous calls we first set forth the process capabilities. So we built that up in multiple divisions. Then we had the quality certifications that we won the eye toward the C. M. M. C. A S 9100, the ASME dip too so we have.

Speaker Change: Those all in place now, which customers want and then we've improved our sales force. So we can reach these customers. So it's nice to see the that really manifest itself in some strong quoting activity in three and four now the order activity is following that we don't win them all.

Eric Blashford: So it's nice to see that really manifest itself in some strong quoting activity in three and four. And now the order activity is following that. We don't win them all, but we're excited about what we are winning, especially in the strategic markets like power gen, aero derivatives, a little bit of aerospace that takes a little bit longer, and then even medical. In terms of book to bill, Eric, I think, you know, within our gearing segment, we can we can expect a book to bill greater than one, you know, within industrial solutions with a strong backlog, you know, closer to one.

Speaker Change: But we're excited about what we are winning especially in the strategic markets like power Gen.

Speaker Change: Aero derivatives, a little bit of aerospace that takes little bit longer and then even medical.

Speaker Change: Yeah in terms of book to Bill Erik I think you know within our gearing segment. We can we can expect at book to Bill greater than one.

Speaker Change: Within industrial solutions with a strong backlog at closer to one but heavy fab.

Amit Dayal: But in Heavy Fab, you know, because we're working off the LTA and we're not announcing new orders, as you know, you know, that until we start announcing new orders or counting orders, you know, that we probably won't be greater than one in terms of book to bill. Okay, thank you. Thanks, Eric. Appreciate it.

Speaker Change: Because were working off the L. T a word and we're not announcing new orders yeah as you know.

Speaker Change: Until we start announcing new orders and or counting orders.

Speaker Change: We probably won't be up greater than one in terms of book to Bill.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks, Ed I appreciate it.

Amit Dayal: Our next question comes from Amit Dayal with H.C. Wainwright. Please proceed with your question. Thank you. Good morning, guys. I'm just trying to understand, you know, from a previous release, you're saying project activity is low, but order activity has improved. Can you help us understand, you know, what that means in terms of, you know, the setup you have right now? Well, if we're talking about project activity in terms of wind, wind is muted right now. We have a strong backlog. We've got good customer communications and visibility. But for new orders for wind, it would be somewhat muted.

Speaker Change: Our next question comes from Amit Dayal with H C. Wainwright. Please proceed with your question.

Amit Dayal: Thank you good morning, guys everybody matters.

Amit Dayal: Trying to understand it'll from your press release, you were saying project activities move but order activity has improved can you help us understand you know what that means.

Amit Dayal: In terms of you know the setup you have right now.

Amit Dayal: Okay.

Amit Dayal: Well, we're talking about the if you're talking about project activity in farm informed of wind wind is muted right now we have a strong backlog we've got good customer.

Amit Dayal: Communications and visibility.

Amit Dayal: But for new orders for wind it would be somewhat would it be somewhat muted.

Eric Blashford: Is that the question you're asking? I want to make sure I'm answering the correct question. Yeah, I'm just trying to reconcile those two things. So the project activity that you are talking about is more on the customer side and the order activity is more on what you are, from a backlog perspective, I guess, right? So just trying to see how these two are sort of balancing each other out or how they're impacting the guidance you've provided. Sure. When we talk about project, we're talking about active orders that we have, and then we're talking about prospective orders and booking, which would be in the future, future orders we expect.

Amit Dayal: Is that is that the question, you're asking I'm not going to make sure I'm entering the correct I'm just trying to reconcile those two things. So the project activity that you are talking about is more on the customer side.

Amit Dayal: And the order activities more than you know what you are.

Amit Dayal: So from a backlog perspective, I guess right. So just trying to see right.

Amit Dayal: Sort of.

Amit Dayal: Balancing each other out or you know how theyre impacting the guidance you provided basically.

Amit Dayal: Sure when we talk about project, we're talking about active orders that we have and we're talking about prospective orders in booking which would be in the future future orders and we expect that to a little positive.

Eric Blashford: That's the whole positive book to build that we're talking about. I think that's the answer to your question. Again, we've got good visibility on our wind. Wind backlog, wind production through most of 2025, and not only just towers, but we also have a nice backlog on the adapters that I mentioned in the press release, which are used to upgrade legacy turbines, so we're doing both. And those run down the same line, so that's good capacity utilization for wind. But the rest of it, we were entering with a pretty strong backlog in industrial fab outside of wind, quite a strong backlog in industrial solutions that we mentioned before, and I would say a growing backlog in Bradford and gearing, because we did have soft orders in Q2 and Q3, and those are the orders we're actually building now in Q1 2025.

Amit Dayal: The book to Bill that we're talking about I think that's the answer to your question again, we've got good visibility onto our wind.

Amit Dayal: Wind backlog when production through most of 2025 and not only just towers, but we also we're also have a nice backlog on the adapters that I mentioned in the press release, which which are used to to upgrade legacy turbines. So we're doing both.

Amit Dayal: And those run down the same line. So that's good capacity utilization for wind, but the rest of it we were entering but a pretty strong backlog in industrial fab outside of wind quite a strong backlog our industrial solutions that we mentioned before and I would say a growing backlog.

Amit Dayal: In and Brad Foote and gearing because we did have soft orders in Q2 in Q3 and those are the orders were actually building now in in Q1 2025.

Amit Dayal: Understood. No, that's helpful.

Speaker Change: Understood. That's helpful. Thank you.

Amit Dayal: Thank you. You talked a little bit about tariffs. Um, sure. Is that already reflected as much as you can, I guess, you know, in the guidance you provided? I mean, there could be some, you know, other developments that could impact this, but, you know, for what would be some sort of the positives and the negatives that we should sort of keep, you know, an eye on as the year plays out from a tariff perspective? Well, we're very transparent with our customers and our suppliers, and we've all kind of been through this before, so we understand how to deal with it.

Amit Dayal: You talked a little bit more tires.

Speaker Change: Sure.

Speaker Change: Is that already reflected as much as you can I guess you know in the guidance you provided I mean, there could be some other developments that could impact this.

Speaker Change: What would be some sort of the positives and the negatives that we should sort of keep.

In Ireland.

Speaker Change: As the year plays out from a diner perspective.

Well, we're very transparent with our with our customers and our suppliers and we've all kind of been through this before so we understand.

Eric Blashford: We quote, as you may remember, first of all, some of our products are pass-through. Wind, as an example, is pass-through, so any increases we would get would be automatically pass-through for the most part with heavy steel plate and whatnot. But outside of that, we quote to order, so we need to be very prudent in how we quote, make sure that the lead times and the quotes that we're getting from our suppliers are current, and then we're actually limiting the quote life of the quotes we're providing to our customers to make sure that we have time to react to any possible inflationary increases we get from suppliers.

Speaker Change: How to deal with it we quote as you may remember a lot of first of all some of our products are pass through Windows. And example is pass throughs. So anything we any increases we would we would get would be automatically pass through.

Speaker Change: For the most part with with heavy steel heavy steel plate and whatnot, but outside of that we quote to order. So we need to be very prudent in how we quote make sure that the lead times and the quotes that we're getting from our suppliers are current and and then we're actually limiting the quote life of the closer we're providing to our customers to make sure.

Speaker Change: That we have time to react to any possible inflationary increases we get from suppliers. They got more transparent we're gonna pass them forward.

Eric Blashford: Again, we're transparent. We're going to pass them forward so we can maintain our margins. Okay, so at least until... So far. The order activity has you haven't seen too much of a disruption in that process from this tariff related, you know Newsflip. No, we really haven't seen anything other than customers are, let's say the inquiries for on-shoring. We used to get this from an offshore supplier and we know that the on-shore prices might be a little bit higher than an offshore foreign supplier, but we want to come back and make sure that we've got a refresh quote from industrial fab or from gearing.

Speaker Change: We can maintain our margins.

Speaker Change: Okay.

Speaker Change: So at least until.

Speaker Change: Well so far.

Speaker Change: The order activity is you haven't seen too much of a disruption in that process from this status related you know.

Speaker Change: Newsweek no we really we really havent seen anything other than customers are let's say the inquiries for onshoring, we hey, we used to get this from from a from our offshore supplier and we know that your onshore prices might be a little bit higher than that in offshore.

Speaker Change: Sure foreign supplier, but we want to come back and make sure that we've got a refresh quote from from industrial fab where from from gearing so that kind of activity our customers are looking out.

Amit Dayal: So that kind of activity, our customers are looking out. And so I'd say our order activity is increasing as a result. are a few activities increasing as a result. Thank you.

Speaker Change: And so I'd say, our order activity is increasing as a result.

Speaker Change: Our bookings or our <unk>.

Speaker Change: Activity is increasing as a result.

Speaker Change: Thank you. Thank you. That's that's helpful. Just last one for me you mentioned this hydro electric offering I'm sure.

Amit Dayal: That's helpful.

Amit Dayal: This last one for me, you mentioned this hydroelectric offering. Sure. Is this sort of a new product and could this become a steady stream of revenues or is it a little bit like one-time type? Well, we think what this is, is actually as hydroelectric dams are being refurbished, there's a lot of heavy fabrication that are inside these dams that need to be replaced, refurbished, repaired. And we're capable, because we have this capability, as you know, to build large cylindrical type of things that are very precise and very robust. Our customers are coming to us for this.

Speaker Change: Is this sort of a new product and could this become a steady stream of revenues or is it a little bit like one time type.

Speaker Change: Well, we are we think what what you know what this is is actually as hydroelectric dams are being refurbished.

Speaker Change: There's a lot of heavy fabrication that are inside these dams that need to be need to be replace refurbished repaired.

Speaker Change: And we're capable because we have this capability as you know to build large cylindrical type of things that are very precise and very robust.

Speaker Change: Our customers are coming to us for this so I think it is repeating.

Amit Dayal: So I think it is repeating. These are dams that are existing. So as the infrastructure in the country needs to be upgraded, and frankly, it all does, we do see this to be a repeating revenue stream. Not nearly as significant like would be towers or whatnot, but repeating, seven digits. I understand, I mean it helps with the capacity utilization aspect of the story. It definitely helps, because it's essentially run down the same lines as the towers do, because big cylindrical things.

It's these are for these are dams that are existing so as as the infrastructure in the country get team needs to be upgraded and frankly it all does we do see this to be a a repeating revenue stream not nearly as significant like would be towers or whatnot, but repeating seven digits.

Speaker Change: Well honestly I mean, it helps with the capacity utilization aspect of it still definitely help because it's essentially run down the same lines as the as the towers do cause big cylindrical things.

Amit Dayal: That's all I have, guys, for now. I will take now the questions offline. Thank you. Thanks so much.

But that's all I have guys, who are now I will take my other questions offline. Thank you.

Speaker Change: Thank you thanks, so much.

Justin Clare: Our next question comes from Justin Clare with Roth MKM. Please proceed with your question. Hi, good morning. Thanks, guys. Morning, Justin. Morning.

Speaker Change: Our next question comes from Justin Clare with Roth M. Cam. Please proceed with your question.

Justin Clare: Hey, good morning, Thanks, guys.

Speaker Change: Good morning, John Good morning.

Justin Clare: So wanted to just touch on the 2025 guidance. It implies mid single digit revenue growth for 2025. And then just wondering if you could speak to the the growth that you're anticipating for the segments, you know, which segments might grow faster than the corporate average, what what might be a little bit slower, it sounds like gearing might be a little on the slower side. But if you just give us a little bit more granularity, that'd be helpful. I would say, as far as industrial solutions, I would say the pace of growth that we've seen over the last couple of years shows no sign of slowing down.

Speaker Change: Good morning, So wanted to just touch on the 2025 guidance. It implies mid single digit revenue growth for 2025, and then just wondering if you could speak to the growth that you're anticipating for the segments, which segments might grow faster than the corporate.

Speaker Change: What what might be a little bit slower it sounds like gearing might be a little on the slower side, but if you could just give us a little bit more granularity that'd be helpful.

Speaker Change: I would say as far as industrial solutions I would say the pace of growth that we've seen over the last couple of years shows no sign.

Speaker Change: Of slowing down and just a reminder, that's based on natural gas turbine and Aero derivative turbine, which is which is really the same thing different size.

Eric Blashford: And just a reminder, that's based on natural gas turbines and aeroderivative turbines, which is really the same thing, different size. across the world. And so as electricity demand increases, the demand for those products increases, and the demand for our products increases. So I'd say pace of growth would continue there, I'd expect, through 2025. Gearing starting from a bit of a slower start, because of the orders that we had, or the lack of orders we had in Q2 and 3, primarily driven by oil and gas. I do expect that to grow prospectively going forward, kind of ratably, but reasonably.

Speaker Change: Across the world and so as electricity demand increases the demand for those products increases and the demand for our products increases. So I would say pace of growth would continue there I'd expect through 'twenty five.

Gearing starting from a bit of a slower start because of the orders that we had or the lack of orders we had in Q2 and three primarily driven by oil and gas.

Speaker Change: I do expect that to grow prospectively going forward kind of.

Speaker Change: I'm kind of Ratably.

Speaker Change: But reasonably towers is going to be flat as we indicated so so the growth that youre seeing.

Eric Blashford: Towers is going to be flat, as we indicated, so the growth that you're seeing, that we're guiding to, is really going to come from those other divisions. Okay, got it.

Speaker Change: That we're that we're guiding to is really going to come from those other divisions.

Speaker Change: Okay got it and then when I look at the adjusted.

Eric Blashford: And then when I look at the adjusted EBITDA margin that's implied for 2025, 9.3% at the midpoint, it's similar to what you guys experienced in 2024. So just wondering, you know, it sounds like you're anticipating improvement in utilization. So is there potential to lift that margin, you know, above that 9.3% in 2025? Maybe just speak to the Sure, that's correct. So, you know, at our midpoint, it's pretty close to where we ended 2024. And I think if we end up with at the higher end of our guided range, there's definitely an opportunity there as we better utilize our capacity, our plant capacity.

Speaker Change: Adjusted EBITDA margin, that's implied for 2025, a nine 3% at the midpoint.

Speaker Change: Similar to what you guys experienced in 2020 or so just wondering you know it sounds like youre anticipating improvements in utilization. So is there potential to lift that margin.

Speaker Change: Above that nine 3% in 2025, maybe just speak to the opportunity there.

Speaker Change: Sure that's correct. So it's at our midpoint, it's pretty close to where we ended 2024 and I think.

Speaker Change: If we end up with at the higher end of our guided range, there's definitely an opportunity there as we better utilize our capacity of our plant capacity. So I would definitely say that that's an opportunity.

Eric Blashford: So I would definitely say that that's an opportunity. But to add some color to that, Justin, the capacity utilization will benefit it, but as we pursue new markets, they tend to start a little bit slower with PPAPs. There's a lot of quality requirements that are required for some of these new customers and markets, so they tend to come with lower initial margins, especially with the smaller quantities. And then once you get your PPAP passed or your first run passed, then the customers tend to give us larger quantities so we can use our machines on longer runs, less setups, and that would improve the margins.

Speaker Change: But to add some color to that.

Justin Clare: Add some color to that Justin.

Justin Clare: The capacity utilization will benefit it but as we as we pursue new markets. They tend to start a little bit slower with P. Pops.

Justin Clare: There's a lot of quality requirements that are that are required for some of these new customers and markets. So they tend to come with lower initial margins, especially with the smaller quantities and then once you get your Pee Pap passed or your first run past then the customers tend to give us larger quantities. So we can use our machines.

Justin Clare: Our longer runs less setups.

Justin Clare: And that would improve the margins, but that's part of the reason we have that built in is the expectation that it's going to come.

Eric Blashford: But that's part of the reason we have that built in is the expectation that it's going to come with increased PPAPs, which are shorter runs, a little bit more margin pressure on those. Got it, got it. Okay, understood.

Justin Clare: With increased P Pops, which are shorter runs a little bit more margin pressure on those.

Justin Clare: Got it got it okay understood.

Justin Clare: And then just thinking through the executive order on wind permitting that was put in place by the new administration here, wondering if that's had any effect on order activity that you're seeing. I'm guessing maybe not at this point, but I'm wondering if there could be an impact as we get into, you know, toward the end of 2025 into 2026. In discussions with your customers, you know, are customers potentially pausing projects? Are you seeing any delays? Maybe just speak to potential impact. Yeah, I'd say, Justin, that's really the root of the comments and the beliefs that we have that 2026 might be about the same as 2025.

Justin Clare: And then just thinking through the.

Justin Clare: The executive order on wind permitting that was put in place by the New administration here wondering if that's had any effect on the order activity that you're seeing I'm guessing maybe not at this point, but I'm wondering if there could be an impact as we get into you know towards the end of 2025 into 2026.

Justin Clare: In discussions with your customers.

Justin Clare: Our our customers potentially pausing projects are you seeing any delays.

Justin Clare: Can just speak to a potential impact there.

Yeah, I'd say I'd say just that that's really the root of the comments and the beliefs that we have the 2026 might be about the same as 2025 and just as a reminder.

Eric Blashford: Just as a reminder, about 4% of wind projects are on federal lands, so those are kind of blocked off right now, which leaves 96% on state or private lands. So most of the wind activity, onshore wind activity, is on state or private lands. Now, they still require FAA permits and, to a certain extent, EPA permits for environmental protection, for wildlife and whatnot. So to the extent that that could be slowed down by a permitting slowdown for the federal government, that has the potential to slow projects, to slow projects, which is why we're thinking 2026 might be muted.

Justin Clare: About 4% of wind projects are on pulp federal lands Federal lands. So those were kind of blocked off right now, which leaves 96% on an state or private land. So most of the wind activity is on onshore wind activity is on state or private lands now there.

Justin Clare: Require FAA permits and to a certain extent EPA permits.

For poor environment, environmental protection for wildlife and whatnot, so to the extent that that could be slowed down by a permitting slowdown.

Justin Clare: For the federal government that has the potential to slow projects to slow projects, which is why we're thinking 2026 might be muted.

Eric Blashford: um meaning the same as 2025. You got it. That's why we make sense.

Justin Clare: Meaning are the same as 2025.

Justin Clare: Got it that's why it makes sense alright.

Justin Clare: All right. Go ahead. Yeah, customers is you know, developers, if there's uncertainty, it could cause them to pause. So customers are saying they really hadn't seen that yet, Justin, but there's always that you know, that backdrop that it could have. Got it. Okay, thank you.

Justin Clare: Go ahead.

Speaker Change: Yeah cause customers is you know developers if there's uncertainty it could cause them to pause.

Speaker Change: So customers are saying, they really hadn't seen that yet Justin but theres always that.

Speaker Change: The backdrop that it could happen.

Speaker Change: Got it okay all right. Thank you.

Justin Clare: Thanks, Justin.

Moderator: We have reached the end of the question and answer session.

Justin Clare: We have reached the end of the question and answer session I'd now like to turn the call back over to Eric Blatchford for closing comments.

Eric Blashford: I'd now like to turn the call back over to Eric Blashford for closing comments. Yeah, thanks everyone. I really appreciate your attention. We're excited about what's happening at Broadwind, and we look forward to coming to you at the end of Q1 to report our earnings then.

Speaker Change: Yeah. Thanks, everyone I really appreciate your attention we're excited about what's happening at Broadway and we look forward to coming to you at the at the end of Q1 to report or.

Justin Clare: Our earnings then.

Eric Blashford: Thank you.

Speaker Change: Thank you.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your.

Speaker Change: This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.