Welcome to the Broadwind Energy Q2 2015 Earnings Conference Call. [Operator Instructions]. I'll now turn the call over to Joni Konstantelos, Director of Investor Relations. Please go ahead, ma'am.

Thank you. Good morning, and welcome to Broadwind Energy's second quarter 2015 Earnings Conference Call. With me today are Broadwind's President and CEO, Peter Duprey; and Broadwind's Executive Vice President and CFO, Stephanie Kushner. This morning's earnings news release is available on our website at www.bwen.com. Before we begin today, I would like to caution you that this call will include some forward-looking statements regarding our plans and market outlook and also will reference some non-GAAP financial measures. Actual results may differ materially from these forward-looking statements. Please refer to our SEC filings and consider the incorporated risks and uncertainties disclosed there, including our Form 8-K and the attached news release filed with the SEC this morning and our Form 10-K which will be filed later today. We assume no obligation to update any forward-looking statements or information. Having said that, I will turn the call over to our President and CEO, Peter Duprey.

Overall we had a solid second quarter, our results were in-line with guidance that we provided on a Q1 call and probably more importantly our results - our Q2 results are in-line with the Q2 results for the prior year driven by the operational recovery of the towers division. Our gearing business continues to grapple with weakness in the oil and gas mining markets but was able to offset the substantial reduction in revenue with aggressive expense management and lower restructuring and depreciation cost. Also this morning in our press release we announced that our Board of Directors approved the plan to evaluate strategic alternatives for our services business. We had some consolidation occurring in the wind service market with greater importance being placed on stronger, well-capitalized businesses we believe now is a good time to look at alternatives. Turn slide 3, please, we will start with the tower business. Our Abilene facility is back on track as the upper chart shows with the average weekly section production increase to eight sections per week up from five sections in Q1, 2015 and in-line with the prior second quarter. We continue to work to refine our process flows, our shop or constructions and to better optimize the flow through the plan. We made significant strides in upgrading the Abilene team and ensuring they can work together to achieve the production targets. [Indiscernible] to our facility, the plant continues to run very well. Our continuous improvement or CI efforts as call them resulted in a 25% increase in the average weekly section production in Q2 2015 compared to Q1 of 2014. The outstanding performance at the Manitowoc clinic enable us to stay on track and to make up production short falls that occurred in Abilene . With Abilene production margin system and…

Thanks, Peter. The second quarter represented a big improvement from Q1 with the revenues rebounding the $65.2 million thanks the improved performance of our tower business. Both the [indiscernible] product line and the gearing segment had continued to be impacted by the weak energy and mining markets and sales from our services segment trailed both prior year and our outlook. Our gross margin [indiscernible] nicely in the first quarter 11.1% in Q2 up from a very low 1.4% during Q1. We trailed last year's gross margin primarily because of weakness in our involvements in services business. As we mentioned last quarter we’re idling one our [indiscernible] plant and have consolidated our two gear box manufacturing shops into one to reduce overhead in-light of software demand. Our operating expenses averaged 8.2% of sales a record low for Broadwind. This reflects the benefit of the cost reduction activity that we initiated at the beginning of the year. Our cost management is making a difference. In fact our Q2 overhead expense was down a $1 million from Q1 which exceeds the $600,000 quarterly target we decided in April. As Pete we mentioned we returned profitability in the quarter and earned $0.11 per share in the middle of our $0.09 to $0.13 guidance. Turning to slide 8, Pete has already talked about the timing on tower orders which were up sharply from a very low prior year figure. Sales in the quarter totaled a 142 towers right in-line with our outlook and $55 million in revenue at the low end of our guidance. We invoiced two of the towers that ran inventory at the end of the first quarter and that cash has been collected. This puts us at 245 towers sold in the first half in reach of our 500 tower target for…

So to summarize the quarter, I think the take away plan is the charge is getting back into the stride that it was in a year ago before the Abilene issues. Now as Stephanie just mentioned now the Q3 guidance is 63 million to 65 million in revenue and 46 million of EBITDA. I would expect further progress in rounding out a major tower order in Q3 and I still believe that 500 tower production for this year is achievable. And as Stephanie mentioned from the liquidity point of view by the end of Q3 our cash balance should be returning to a $5 million to $7 million range as the inventories continue to burn down. And by the end of Q3 we should have some better direction regarding new strategies around our services business. So I think there are some very good reasons why here got to be optimism around Broadwind. We will now open the call to questions.

[Operator Instructions]. And we have a question from Jimmy Baker from B. Riley & Co. Please go ahead.

I just wanted to first drill down on single liquidity commentaries so I understand you’re not giving consolidated full year guidance but you did indicate that cash balance will end the year by about 50 million, I just want to confirm if given your commentary regarding no drawings on the ABL, that you are actually guiding to 50 million of net cash at year-end and then to achieve that level of cash generation is it fair to say you expect Q4 EBITDA to be comfortably positive, just doing the math it seems like you need a little more than just a Q3 EBITDA and working capital cost to get there.

So just to clarify, I really haven't changed my guidance from last quarter. And when I say above 15 million we do have that term loan in place now which will be at I guess $4.7 million at the end of the year. So last quarter I said about 10, now I'm saying about 15 but in the interim we put - it would be $4.7 million debt on the book.

Okay, so north of 10 million in net cash at the end of the year?

Yes and then we’re certainly focused on having positive EBITDA every quarter including Q4 and we really are not giving specific guidance beyond the third quarter.

And maybe you can just speak to the impact on the profitability from [indiscernible] when did you idol that facility? Did you see any impact in Q2 or is that incremental and then I guess separately indicated that [indiscernible] strength in orders during Q4, can you just talk about what's giving you that confidence and if there is any relationship that we should be aware between those customers and weldments?

Yes, we haven't idled the facility because we’re building out current orders. We haven't idled it in the second quarter. But we will see the effects in the third quarter. It's not a huge number in terms of fixed overhead maybe a couple 100, thousand dollars partly because we’re going to be using some of that space to kind of improve the layout of some of our tower inventory. So just to be able to help the tower floor up at Manitowoc since its operating at such a high capacity level.

And then Jimmy with respect to the gearings side of the business, I think the drop in the oil and gas market was so dramatic and rapid that whatever inventory our customers had on hand they just sort of almost stopped orders, earned their inventory. So what we’re seeing for Q3 and Q4 we would expect some uptick in coming orders around the oil and gas market but clearly not to any level that we saw last year. Weldments is maybe not as dramatic but we’re not seeing really much of an uptick in the mining market, I mean what's going on in China and [indiscernible] I don’t think they are painting a real optimistic picture. So we’re working through that in our heavy business and I think certainly idling the Manitowoc facility makes sense. There was more activity in our heavy Abilene facility so we’re watching the cost very, very closely.

Okay, then on the tower side of the business very nice improvement there, where do you stand in terms of available capacity for 2016 where would you like that to be at year-end, should we take your commentary regarding the competitive environment I mean that 2016 capacity is potentially being bit out at lower margin?

So where we’re on towers is we’re about 30% sold for '16, you know I said in my prepared remarks that I would expect a another major order in the third quarter so I would say by the end of the third quarter we have sold out north of half of our volume for 2016. The comments around the competitiveness of the tower market is we’re seeing as I said tower is coming in from Canada and from Mexico. I think that Texas market there is a lot of activity in Texas. I would say that in the northern market there is probably a little less demand. So I'm expecting some pricing pressure. We had in place some initiatives to reduce cost. So I don’t see a huge impact on margins for 2016 but certainly the market is not as strong as it was say in 2013 and 2014.

And then lastly, could you just provide us a timeline for a strategic review of your services segment and I bet you’re going to speculate no potential outcomes but if you were to exit that business would you expect to see any impact of the balance of your [indiscernible] in terms of either customer loss of cost absorption issues or is it simple as just doing the math that if you exit you gain another 5 million or so in annual EBIT from the renewal of the losses.

Yes the path is pretty straightforward, we have sum gears that are sold into our services business but it's not a material item. I think in terms of timing our objective would be to get this finished by year-end.

And our next question is from Angie Storozynski from Macquarie. Please go ahead.

I want to tickle back to competition towers and potential margins. Now is this the only worry that you’ve, I mean is there a chance for instance that your volumes overall for towers would come down because of competition?

Yes there is always that possibility but we’re in a pretty deep discussions with a number of customers and - I still see a lot of demand and particularly when you look at what's happening in Washington as well as the comment in made on clinging to our plan that - I think there is enough activity out there where we should be able to get closer to the capacity levels we run in the last couple of years.

Can you remind us what is the annual capacity of the towers?

It's 500 towers a year.

And then you guys are not providing guidance for the fourth quarter, is it purely because you’re in discussions to diverse the services business and that would be an ensuing factor that guidance would be basically binary?

It's something we agreed with our board earlier this year given some of the volatility that we were seeing in the markets that we would just keep our guidance a little shorter.

Okay so you’re not going to be able to provide any outlook for 2016?

Yes I said volatility in markets and it's really volatility in our operations as well, so it's really both of those factors. I think we will get more comfortable and more confidence as time goes on.

[Operator Instructions]. Showing no further questions at this time we will conclude our question and answer session. I would like to turn the conference back over to Peter Duprey for any closing remarks.

Just appreciate everybody joining the call. As I said overall I thought it was a good recovery from our troubles in our Abilene facility I think that’s now behind us and frankly we’re very optimistic about the future and look forward to reporting the third quarter results in the few months. Thanks for joining.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines.