BWEN 10-Q Quarter ended Sept. 30, 2025

NOTE 1 — BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements presented herein include the accounts of Broadwind, Inc. (the “Company”) and its wholly-owned subsidiaries Broadwind Heavy Fabrications, Inc. (“Broadwind Heavy Fabrications”), Brad Foote Gear Works, Inc. (“Brad Foote”) and Broadwind Industrial Solutions, LLC (“Broadwind Industrial Solutions”). All intercompany transactions and balances have been eliminated. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included.

Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2025, or any other interim period, which may differ materially due to, among other things, the risk factors set forth in our Annual Report on Form 10 -K for the year ended December 31, 2024 and in Part II, Item 1A of the Quarterly Report on Form 10 -Q for the quarterly period ended June 30, 2025.

The December 31, 2024 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2024 .

There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2025 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2024 .

Company Description

Through its subsidiaries, the Company is a precision manufacturer of structures, equipment and components for clean technology and other specialized applications. The Company provides technologically advanced high value products to customers with complex systems and stringent quality standards that operate in energy, mining and infrastructure sectors, primarily in the United States of America (the “U.S.”). The Company’s capabilities include, but are not limited to, the following: heavy fabrications, welding, metal rolling, coatings, gear cutting and shaping, gearbox manufacturing and repair, heat treatment, precision machining, assembly, engineering and packaging solutions. The Company’s most significant presence is within the U.S. wind energy industry, which accounted for 54 % and 43 % of the Company’s revenue during the first nine months of 2025 and 2024, respectively.

Liquidity

The Company typically meets its short term liquidity needs through cash generated from operations, its available cash balances, the 2022 Credit Facility (as defined below), equipment financing, access to the public and private debt and/or equity markets, and has the option to raise capital from the sale of the Company’s securities under the Company’s registration statement on Form S- 3 (as discussed below), and proceeds from any sales of Advanced Manufacturing Production tax credits (“AMP credits”) (discussed in Note 6 “AMP Credits” of these condensed consolidated financial statements).

See Note 9, “Debt and Credit Agreements,” of these condensed consolidated financial statements for a description of the 2022 Credit Facility and the Company’s other debt.

Debt and finance lease obligations at September 30, 2025 totaled $ 15,273 , which includes current outstanding debt and finance leases totaling $ 7,137 . The Company’s outstanding debt includes $ 5,166 outstanding from the senior secured term loan under the 2022 Credit Facility. During the nine months ended September 30, 2025, the Company borrowed on the revolving line of credit and repaid a portion of such borrowings during the period. During the nine months ended September 30, 2025, in addition to the normal required progress payments, the Company made a mandatory repayment of $ 1,600 on the outstanding senior secured term loan in conjunction with the sale of the Manitowoc industrial fabrication operations. The Company had $ 3,822 drawn on the revolving line of credit as of September 30, 2025. The Company’s revolving line of credit balance, if any, is included in the “Line of credit and current maturities of long-term debt” line item in the Company’s condensed consolidated balance sheet.

On September 22, 2023, the Company filed a shelf registration statement on Form S- 3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 12, 2023 ( the “Form S- 3” ), replacing a prior shelf registration statement which expired on October 12, 2023. The Form S- 3 will expire on October 12, 2026. This shelf registration statement, which includes a base prospectus, allows the Company to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in the prospectus supplement accompanying the base prospectus, the Company would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes.

On September 12, 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC and HC Wainwright & Co., LLC (collectively, the “Agents”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time through the Agents shares of the Company’s common stock, par value $ 0.001 per share with an aggregate sales price of up to $ 12,000 . The Company will pay a commission to the Agents of 2.75 % of the gross proceeds of the sale of the shares sold under the Sales Agreement and reimburse the Agents for the expenses incident to the performance of their obligations under the Sales Agreement. No shares of the Company’s common stock were issued under the Sales Agreement during the year ended December 31, 2024 or during the nine months ended September 30, 2025. As of September 30, 2025, shares of the Company’s common stock having a value of approximately $ 11,667 remained available for issuance under the Sales Agreement. Any additional shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S- 3 and a 424 (b) prospectus supplement.

The Company also utilizes supply chain financing arrangements as a component of its funding for working capital, which accelerates receivable collections and helps to better manage cash flow. Under these agreements, the Company has agreed to sell certain of its accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements. The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the Company’s consolidated statements of cash flows. Fees incurred in connection with the agreements are recorded as interest expense by the Company.

During the three and nine months ended September 30, 2025, the Company sold account receivables totaling $ 32,221 and $ 54,173 , respectively, related to supply chain financing arrangements, of which customers’ financial institutions applied discount fees totaling $ 847 and $ 1,344 , respectively. During the three and nine months ended September 30, 2024, the Company sold account receivables totaling $ 22,540 and $ 42,579 , respectively, related to supply chain financing arrangements, of which customers’ financial institutions applied discount fees totaling $ 583 and $ 1,099 , respectively.

The Company anticipates that current cash resources, amounts available under the 2022 Credit Facility, sales of shares under the Sales Agreement, cash to be generated from operations and equipment financing, access to the public and private debt and/or equity markets, any potential proceeds from the sale of further Company securities under the Form S- 3, and proceeds from sales of AMP credits will be adequate to meet the Company’s liquidity needs for at least the next twelve months.

If assumptions regarding the Company’s production, sales and subsequent collections from certain of the Company’s large customers, the Company’s ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, the Company may in the future encounter cash flow and liquidity issues, which could have a material adverse impact on the Company.

If the Company’s operational performance deteriorates, the Company may be unable to comply with existing financial covenants, and could lose access to the 2022 Credit Facility. This could limit the Company’s operational flexibility, require a delay in making planned investments and/or require us to seek additional equity or debt financing. Any attempt to raise equity through the public markets could have a negative effect on the Company’s stock price, making an equity raise more difficult or more dilutive. Any additional equity financing or equity-linked financing, if available, will be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other operating and financial restrictions on the Company and could be on less favorable terms than the 2022 Credit Facility. While management believes that the Company will continue to have sufficient cash available to operate its businesses and to meet the Company’s financial obligations and debt covenants, there can be no assurances that the Company’s operations will generate sufficient cash, or that credit facilities or equity or equity-linked financings will be available in an amount sufficient to enable the Company to meet these financial obligations.

Reclassifications

Certain prior year amounts have been reclassified to conform to current year presentation in the condensed consolidated financial statements and the notes to the condensed consolidated financial statements.

Management’s Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include inventory reserves, warranty reserves, impairment of long-lived assets, allowance for credit losses, health insurance reserves, and valuation allowances on deferred taxes. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from these estimates.

NOTE 2 — REVENUES

Revenues are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

The following table presents the Company’s revenues disaggregated by revenue source for the three and nine months ended September 30, 2025 and 2024 :

Revenue within the Company’s Gearing and Industrial Solutions segments, as well as industrial fabrication product line revenues within the Heavy Fabrications segment, are generally recognized at a point in time, typically when the promised goods or services are physically transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The Company measures revenue based on the consideration specified in the purchase order and revenue is recognized when the performance obligations are satisfied. If applicable, the transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation.

For substantially all wind sales within the Company’s Heavy Fabrications segment as well as certain sales within our Gearing segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition. The Company recognizes revenue under these arrangements only when there is a substantive reason for the agreement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance. During the three and nine months ended September 30, 2025, the Company recognized $ 835 and $ 1,272 , respectively, of revenue within the Gearing segment under terms included in bill and hold sales arrangements. During the three and nine months ended September 30, 2024, the Company recognized $ 836 of revenue within the Gearing segment under terms included in bill and hold sales arrangements.

During the nine months ended September 30, 2025 and 2024, the Company recognized a portion of revenue within the Heavy Fabrications segment over time, as the products had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contracts. Because the projects are labor intensive, the Company uses labor hours as the input measure of progress for the applicable contracts. Within the Heavy Fabrications segment, the Company recognized revenue for contracts that meet over time criteria of $ 1,212 and $ 4,874 for the three and nine months ended September 30, 2025, respectively. Within the Heavy Fabrications segment, the Company recognized revenue for contracts that meet over time criteria of $ 1,373 and $ 3,720 for the three and nine months ended September 30, 2024, respectively. Contract assets are recorded when performance obligations are satisfied but the Company is not yet entitled to payment. Contract assets represent the Company’s rights to consideration for work completed but not billed at the end of the period.

The Company generally expenses sales commissions when incurred. These costs are recorded within selling, general and administrative expenses. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in the Company’s statement of operations.

The Company does not disclose the value of the unsatisfied performance obligations for contracts with an original expected length of one year or less.

NOTE 3 — NET INCOME PER SHARE

The following table presents a reconciliation of basic and diluted income per share for the three and nine months ended September 30, 2025 and 2024 , as follows:

NOTE 4 — SALE OF MANITOWOC INDUSTRIAL FABRICATION OPERATIONS

On June 4, 2025, the Company (the “Seller”) entered into a definitive agreement (the “Manitowoc Purchase Agreement”) with Wisconsin Heavy Fabrication, LLC (the “Buyer”) to sell certain assets used in its industrial fabrication operations in Manitowoc, Wisconsin including specified contracts, equipment, machinery and other personal property, and permits. The sale was completed on September 8, 2025 for a purchase price of $ 13,500 before the payment of transaction expenses in the form of cash and the assumption by the Buyer of certain liabilities of the Seller. During the three and nine months ended September 30, 2025, the Company recorded a gain on the sale of $ 8,155 and $ 8,213 , respectively, which is included in the “Gain on sale of Manitowoc industrial fabrication operations” line item in the Company’s condensed consolidated statement of operations. The Manitowoc operating results are included within the Heavy Fabrications segment and did not qualify for presentation as a discontinued operation.

NOTE 5 — INVENTORIES

The components of inventories as of September 30, 2025 and December 31, 2024 are summarized as follows:

NOTE 6 — AMP CREDITS

During the three and nine months ended September 30, 2025, the Company recognized gross AMP credits totaling $ 4,392 and $ 10,296 , respectively, within the Heavy Fabrications segment. During the three and nine months ended September 30, 2024, the Company recognized gross AMP credits totaling $ 3,132 and $ 6,852 , respectively, within the Heavy Fabrications segment. These AMP credits were introduced as part of the Inflation Reduction Act (“IRA”), which was enacted on August 16, 2022. The IRA includes advanced manufacturing tax credits for manufacturers of eligible components, including wind components. Manufacturers of wind components qualify for the AMP credits based on the total rated capacity, expressed on a per watt basis, of the completed wind turbine for which such component is designed. The credit originally credit applied to each component produced and sold in the U.S. beginning in 2023 through 2032. The One Big Beautiful Bill Act (the “OBBBA”), enacted on July 4, 2025, eliminates the credit for components produced and sold after 2027. Wind towers within the Company’s Heavy Fabrications segment are eligible for credits of $ 0.03 per watt for each wind tower produced. In calculating the eligible credit, the Company relied on the megawatt rating provided by the customers. Manufacturers who qualify for the AMP credits can apply to the Internal Revenue Service for cash refunds of the AMP credits, sell the AMP credits to third parties for cash, or apply the AMP credits against taxable income. The Company recognized the AMP credits as a reduction to cost of sales in the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and September 30, 2024. The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in the Company’s condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024.

During the nine months ended September 30, 2025, the Company recognized gross AMP credits totaling $ 10,296 and recognized a 6.5 % discount on the credits totaling $ 669 , which was recognized in cost of sales. The Company also incurred other miscellaneous administrative costs related to the credits in the amount of $ 77 , which have been recorded as cost of sales. Additionally, costs totaling $ 9 are included in the “Prepaid expenses and other current assets” line item of the Company’s condensed consolidated financial statements at September 30, 2025.

During the nine months ended September 30, 2024, the Company recognized gross AMP credits totaling $ 6,852 and recognized a 6.5 % discount on the credits totaling $ 445 , which was recognized in cost of sales. The Company also incurred other miscellaneous administrative costs related to the credits in the amount of $ 64 , which have been recorded as cost of sales. Additionally, costs totaling $ 42 are included in the “Prepaid expenses and other current assets” line item of the Company’s condensed consolidated financial statements at September 30, 2024.

NOTE 7 — INTANGIBLE ASSETS

Intangible assets represent the fair value assigned to definite-lived assets such as trade names and customer relationships as part of the Company’s acquisition of Brad Foote completed in 2007 as well as the noncompetition agreements, trade names and customer relationships that were part of the Company’s acquisition of Red Wolf Company, LLC completed in 2017. Intangible assets are amortized on a straight-line basis over their estimated useful lives, with a remaining life range from 0 to 2 years.

During the third quarter of 2025, the Company identified a triggering event associated with operating losses within the Gearing segment during the nine months ended September 30, 2025. The Company relied upon an undiscounted cash flow analysis and concluded that no impairment to this asset group was indicated as of September 30, 2025.

As of September 30, 2025 and December 31, 2024 , the cost basis, accumulated amortization and net book value of intangible assets were as follows:

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As of September 30, 2025 , estimated future amortization expense was as follows:

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NOTE 8 — ACCRUED LIABILITIES

Accrued liabilities as of September 30, 2025 and December 31, 2024 consisted of the following:

NOTE 9 — DEBT AND CREDIT AGREEMENTS

The Company’s outstanding debt balances as of September 30, 2025 and December 31, 2024 consisted of the following:

Credit Facility

On August 4, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), which replaced its prior credit facility and provided the Company and its subsidiaries with a $ 35,000 senior secured revolving credit facility (which may be further increased by up to an additional $ 10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $ 7,578 senior secured term loan (collectively, the “2022 Credit Facility”). The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. Net deferred financing costs related to the 2022 Credit Facility which primarily relate to the revolving credit loan, were $ 191 at September 30, 2025, which is net of accumulated amortization of $ 329 . Net deferred financing costs at December 31, 2024 were $ 269 , which is net of accumulated amortization of $ 251 . These costs are included in the “Other assets” line item of the Company’s condensed consolidated financial statements at September 30, 2025 and December 31, 2024.

On February 8, 2023, the Company executed Amendment No. 1 to Credit Agreement and Limited Waiver which waived the Company’s fourth quarter minimum EBITDA (as defined in the 2022 Credit Agreement) requirement for the period ended December 31, 2022, amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Agreement) requirements for the twelve -month period ending January 31, 2024 through and including June 30, 2024 and each twelve -month period thereafter, and amended the minimum EBITDA requirements applicable to the twelve -month periods ending March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023.

On December 19, 2024, the Company executed Amendment No. 2 to Credit Agreement, which ( 1 ) increased the outstanding principal amount of the term loan to $ 7,578 and restarted the 84 -month amortization period, and ( 2 ) amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Agreement) from 1.1:1.0 to 1.0:1.0 for each twelve -month period ending January 31, 2024 through and including December 31, 2025. Proceeds from the increased amount of the term loan were used to repay the Company’s indebtedness under its existing revolving line of credit with Wells Fargo and related fees and expenses, thereby allowing for increased availability under the existing revolving line of credit.