Welcome to the second quarter 2013 Broadwind Energy Incorporation Earnings Conference Call. My name is [Lorisa] and I’ll be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session. Now I’ll turn the call over to Joni Konstantelos. Joni, you may begin.

Thank you. Good morning and welcome to Broadwind Energy’s second quarter 2013 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 bwen.com. Second Slide, please; 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-Q, 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, Pete Duprey.

Thanks, Joni and thanks, everyone for joining the call. Let’s turn to Slide 3. This morning, we’ve reported our second quarter results. We completed another solid quarter with results in line with our overall forecast. The Towers business was the shining start of the Group. This segment had strong order intake of $52 million, the industrial Weldments business increased top line revenue by 42%, compared with a year ago. EBITDA for the segment almost tripled to $5.3 million as a result of greater productivity, less rework and improved tower mix, as well as a reduction in excess capacity in the market. Tower business would have had an even better quarter and had not been for $4.4 million of revenue for completed towers awaiting in customer sign-off on a first article qualification falling out of the quarter. Customer sign-off was subsequently received and the revenue will be recognized in the third quarter. On the flip side, the Gearing business, we faced a number of challenges as we deal with a weaker market in mining and natural gas, somewhat offset by a stronger oil market. The Gearing business faced many of the same challenges that the Tower business faced last year. Our Gearing product mix has become more variable with more machine setups and we have shifted production to more completed gearboxes, which is more complex compared to loose gearing. Similar to the Towers segment, the Gearing business has engaged in a series of process improvement projects to improve their on-time delivery and throughput, which I’ll discuss later in the call. In the Services business, we have experienced a significant slowdown in field service work, as a result of wind farm owners in sourcing more work during this period of record low construction activity or their deferring work such as turbine upgrades.…

Thank you, Pete and good morning. Turning first to Slide 8, the abbreviated income statement. As Pete discussed, our sales revenue was down from last year and lower than we expected due to weak Gearing and Services revenue and slippage of $4.4 million of completed tower revenue into Q3. Despite the lower revenue, our gross profit and gross profit margin improved significantly. Gross profit of $2.6 million was net of $1.2 million of restructuring cost and the gross profit margin excluding restructuring of $7.4% was double the prior year bringing in the year-to-date profit margin to 6.6% up 240 basis points from last year. Operating expenses were up $100,000 from last year but include a $450,000 increase in intangible amortization expense. The effect which was largely offset by lower expenses across the number of other categories. Our operating loss of $2.3 million included $1.3 million of restructuring expense as we accelerate spending into the final stages of our Cicero plant consolidation. Adjusted EBITDA was $2.7 million up sharply from last year and bringing the year-to-date total to $4 million. This is in line with the guidance provided last quarter despite the lower revenue. The EPS loss was $0.01 per share, we had guided to a slight positive EPS but the net asset sale gain which included both the brand and plant and some surplus Gearing assets was smaller than we forecast. Slide 9 please, simply put, Broadwind’s turnaround plan is dependent on raising our gross margin percent and holding or decreasing the percent of revenues spent on operating expenses. On the left hand side, we’ve updated the gross margin chart to show the results from the first half an average of 6.6% excluding restructuring and on track with our 2013 target of 6% to 7%. The production improvements in towers,…

(Operator Instructions) Our first question is from Sanjay Shrestha from Lazard Capital. Sanjay Shrestha – Lazard Capital Markets: Great, good morning, guys a few questions. So as we sort of think about 2014, obviously with meaningful uptake in the Tower business. When you talk about getting to the profitability for that year how are you sort of thinking about the Gearing business and some of the opportunities maybe even consolidation or obviously ongoing for the cost reduction. Can you sort of further elaborate on that a little bit?

Sure Sanjay. I’ll start by saying we haven’t done our budget yet or we are just starting kicking off the budgeting process for 2014, so I’m going to speak in generality. We expect to see improvement in Gearing in 2014, because most of the disruptive portion of the consolidation now is going to finish a little bit earlier in the fourth quarter. So we are going to get – we expect to get some better product flow and we also – we’ve kind of expanded our sales and marketing effort and we think we are going to be able to bring more revenue to the top line. The towers is going to be fairly significant, we are talking about 100 tower increase though the towers are $400,000 or so a piece, and the margin we get double digit, so that’s going to help us very significantly, getting that plan, really though the plans really operating at full capacity. Right now it’s just too soon to call what is going to happen in services, a lot of its going to depend on what we see this quarter with some improvement in the installation rate, but obviously that’s a smallest part of our business. Sanjay Shrestha – Lazard Capital Markets: Got it. So on that – that was going to be my follow-up question, actually. On the service side, you are right, if the general expectation on basically, sort of installation picking up pretty dramatically from 13 to 14, shouldn’t it naturally also lead to more service business as the market is now back to being a bit more normal and therefore, with everything, you guys are doing, we should see some nice uptick in that business for you guys. Is that a no you don’t know?

Yeah I think Sanjay, we were maybe thrown a curve ball a bit, as Stephanie mentioned, we went from 8.4 gigawatts to almost nothing in the – 8.4 in fourth quarter to almost nothing in the first half of this year. I don’t think we expected it to be that dramatic and I think a lot of the owner operators kind of hunkered down and we are getting a lot of their development efforts underway. So we do expect to see an uptick in the third and fourth quarter of this year, and I think in many respects 2014 is going to look – from an activity level look a lot like last year, a lot of projects going in the ground and so they will need construction support, redeploy some of their people working on non-routine maintenance to construction, that will open up some opportunity for us. So again as Stephanie mentioned, we haven’t done our budget yet for next year, but we certainly would expect a rebound in services for 2014. Sanjay Shrestha – Lazard Capital Markets: And one final question, so as we sort of go through the second half of this year. We should probably hear continued sort of the win for you guys on the tower side of the business, given what is looking like a pretty big growth in the wind market, right. That is a fair assessment.

Yeah the tower market is very robust right and now and quoting activity we are working with many of the OEMs on their volume needs and figuring out what locations, one thing that I think that’s happened is some of the OEMs were out blocking in the supply chain before they had orders. So they weren’t totally sure where they were going to lock in all of their orders, so we’ve been working very closely with a few OEMs on making sure that we are meeting their needs. Sanjay Shrestha – Lazard Capital Markets: Got it. That is all I had, guys, thank you so much.

Thanks.

Thank you. And the next question comes from Angie Storozynski from Macquarie. Angie Storozynski – Macquarie Research: Thank you. So we are hearing from wind power developers that pretty much they have to firm all of their construction plans by the fall of this year to qualify with new builds for the PTC and all of the rules regarding the start of construction. So do you think that by then, they will have a firm bill of their purchases for powers and turbines and equipment and so by then you will have a good sense of your total backlog for say to the next year or two or is there still a chance that somebody is going to be actually procuring more equipment come 2014?

Angie, I would say that if you look at the rules on the PTC extension, essentially the developer has to have started construction or put 5% of the total project cost down on – have expanded that 5%. So I’m not sure that everyone will have locked in their turbine supply, but I would think substantially most of them will and I do expect that we will see some orders in 2014 for 2015 deliveries. So I think is going to be happening is there is we are going to have to work with our manufacturers on shifting projects around depending on when they get orders. But I think directly to your question, I think your question is do we expect to be locked into 2014 by the end of the year and I think that is definitely the case in with the activity that I see, I think we are going to have very good visibility, we are 50% of the way there on locking in the pipeline for 2014 now. I will expect in the third quarter to see additional orders being recorded in and really having great visibility in the 2014 by the end of the third quarter. Angie Storozynski – Macquarie Research: Yeah, you mentioned I think last quarter, that some of the strength and the towers business was not sustainable, because some of the players might be coming back or might be reverting their manufacturing capacity or capability structure manufacturing towers. Have you seen any of those?

No, I don’t think there is going to be an influx of new players into the market, I mean there is a question as to what [west] is doing is, how much is going to be for their internal years versus third-party, there have been some announcements made that west is out doing manufacturing of towers for other players, and then obviously Trinity its not totally clear how much of their capacity for towers has shifted into rail car and other fabrication work, but I just don’t see a lot of people making huge investments in tower capacity in the United States. Angie Storozynski – Macquarie Research: Okay and lastly on the Gearing segment. So it seems like you are experiencing some growing pain, so if you try to move into gearing boxes, so you are investing money into growing your sales force and focusing on the oil and gas business. So when do you think you will have more actually to say about the capacity of that business as its being refocused now on the oil and gas sector. I mean should we expect that there is going to be a meaningful pickup already in 2014 or is this more a function of what happens to oil and gas prices?

Well the business has the capacity for around – we have enough footprint in machines to do somewhere between $120 million and $150 million of revenue on an annual basis, so we have plenty of capacity. What I tried to outline in the presentation was that we moved from wind into natural gas and mining and those markets got soft as we all know, oil is doing well and we continue to focus on winning back those new customers. So I would expect that we would have good growth for next year because our consolidation will be done, we will have some of the continuous improvement initiatives done on the front end and we will have new sales people. So I would expect that we would see a double digit type of growth on the top line for next year in Gearing. Angie Storozynski – Macquarie Research: But is it predicated on you showing actually a good track record as far as manufacturing capabilities, is that what is slowing down some of the progress in the orders, the fact that you are – have some manufacturing issues?

I think there have been some manufacturing issues, I think most customers feel like we have good quality and we are a good gear manufacturer, I think as you win back some of our former customers and new customers, there is a whole qualification process you have to go through and some time that takes longer to get completed depending the nature of the gearbox that we are making or the customer requirement. So I think it’s a good six to nine months process to really have a solid qualification with the customer. Angie Storozynski – Macquarie Research: And lastly, I know a lot has been said and talked about your services business, but have you I mean, it’s been – we have been waiting for that recovery for quite some time and demand for services business activities now. I mean have you obviously in your structuring process thought about maybe doing away with those activities, I mean do you feel like they actually add to the total value that the Company offers, the total product package that you offer?

Yeah I do, I mean I think we have some unique capabilities in our services business that we have a team, they know gearboxes, they know – they can fix major items, we are building relationships with some of the major players, and I think so in the wind business its so fairly competitive, I would have expected to see more progress on people consolidating or exiting like we saw in towers by now. So maybe we under estimated how quickly that was going to occur, but I think the other thing is we have this network of service technicians in the united states for wind, a lot of them can do the same thing for industrial boxes and that’s as I spend more time with the gearing guys I think that is a growth opportunity to use those service tax to help offer service agreements on new gearboxes to working with customers on diagnosing problems with their existing gearboxes that should also enhance new sales for the Gearing business. So I’m not at the point where I’m going to give up on the service initiative. I think there are synergies between Services and Gearing and we’ve just got to do a better job of proving that out. Angie Storozynski – Macquarie Research: That’s great. Thank you very much.

Thank you. (Operator Instruction) I’m showing no further questions at this time. I will now turn the call over to Pete Duprey for final remarks.

I would like to thank everyone for participating in the call, overall it was a strong quarter, we certainly know we’ve got some challenges in Gearing and Services, but we faced those challenges last year in our Tower business and we’ve turned that around this year in going forward and I’m very confident we can do the same thing in Gearing and Services. In our Tower business, we’ve got some of the best visibility looking forward than we’ve had in the last three to five years and I’m really looking forward to the upcoming calls and showing the progress that we are making and thanks for participating in the call.

Thank you ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.