Welcome to the Q2 2014 Broadwind Energy Incorporated Earnings Conference Call. My name is John and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. I will now turn the call over to Joni Konstantelos.

Thank you. Good morning and welcome to Broadwind Energy's Second Quarter 2014 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. 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. We had a fantastic quarter both financially and operationally. Our sales grew 29%. We expanded margins by 470 basis points. And we had a major milestone by achieving operating profitability the first time in Broadwind's history. Our Gearing business is finally showing some positive trends as our efforts in the past several quarters are beginning to generate some results. Orders were very strong. Wait deliveries have been reduced and our inventory turns have improved from 4 to 6 compared to last quarter. We also settled our union contract negotiations at the gearing facility. From a market perspective, things are pretty positive. The wind market is still showing signs of strength for 2015 and 2016. We continue to see utilities rate-facing wind assets, primarily due to the more efficient turbines being deployed today. Both onshore and offshore oil markets are strong. And drilling for natural gas seems to be picking up. The customer demand for gearing use in mud and frac pumps is picking up nicely. The steel market seems to be spending more on CapEx to retool their facilities for greater auto demand coupled with a somewhat better economic outlook. Mining remains one market that seems flat. Turning to orders, our Gearing segment booked over $18 million in new orders during the quarter, which is the highest quarterly order rate in four years. Those orders were a nice mix of replacement wind gearing, oil and gas, and industrial gearing. The Gearing business has been very focused on adding to the sales force and improving our on-time delivery. The business has made some good progress in this area during the quarter. Additionally in services, we've seen a significant increase including activity in Q2 orders, and they were 69% over the prior year,…

Thanks, Pete. Referring to Slide 7, total Q2 revenue was $68.4 million, bringing first half revenue to $127 million, which is 29% of up to 2013 figure. And with the gross profit margin of 13.4% in the quarter, we're confident of finishing the year at the high end of our 2014 gross margin guidance of 10% to 12%. Operating expense was $6.5 million, including a $750,000 reserve related to the potential settlement of the SEC investigation regarding accounting issues in 2009 and 2010. This investigation has been underway for nearly four years, and we are in negotiation to finally put it behind us. Because the negotiations are ongoing, we do not have certainty about whether and at what cost an agreement can be reached. Despite this unbudgeted item, operating expense as a percent of sales was down to 9.5% in the quarter and 9.8% year-to-date. With our volume growth and continued cost focus, possible lines down of our restructuring activities, we are getting good operating leverage at both the gross profit and operating income line. That is 28% of our year-over-year incremental revenue hit the income line this quarter. Adjusted EBITDA rose to $5.9 million for the quarter, at the high end of my guidance. And diluted EPS totaled $0.12, in line with our projection, and as Pete mentioned, our first ever quarter of net profitability from operations. We also reported positive EPS in last year's second quarter, but that included the $3.6 million or $0.25 per share gain on the sale of our South Dakota plant, which was part of our restructuring plan. So all totaled, we reported a very significant improvement in the quarter, in line with our guidance. Towers delivered a very strong quarter, producing 119 towers and generating revenue of nearly $53 million. The section count…

(Operator Instructions) And we have a question from Katja Jancic from Sidoti & Company. Katja Jancic - Sidoti & Company: What capital expenditures do you expect this year and maybe next year, what are your expectations?

I think this year we're going to end up with about $7 million in total, including the completion of our restructuring project. And then next year, I think the question mark is whether we undergo this tower plant expansion or not, because that in and of itself could be on the order of $6 million to $8 million. I think we'll have a better feel for that as the year progresses. But absent that, our normal run rate is about 2% or so of our sales or $4 million or $5 million.

The CapEx on the towers is really just, as Stephanie said in her prepared comments, was really to eliminate some bottlenecks. It's not really building a new tower plant. It's really adding some capacity in some other areas. Katja Jancic - Sidoti & Company: What will determine the decision of whether or not you really want to make this step?

I think we're discussing with our customers today their outlook for the next couple of years and really trying to pin down some additional orders in '16 that might trigger us to really want to spend some capital to get additional throughput. Katja Jancic - Sidoti & Company: Going forward, when the restructuring is almost completed, how do you see the Gearing segment turning on? What growth do you expect from it?

I think you're starting to see it. We had nice growth this quarter compared to last quarter. As I said in some of my prepared remarks, we're seeing the steel market being fairly robust, oil and gas market is growing nicely. So we're seeing more and more opportunities. We've expanded our sales force and they're starting to bring new opportunities. So I think year-over-year growth in the 20% range is a reasonable target for that business and they should be able to achieve that. Katja Jancic - Sidoti & Company: Are you looking to expand the sales team even more?

No, I think we have a pretty good complement right now. So we've brought on some additional manufacturers' reps. I think we've got about eight manufacturers' reps onboard now. And I think we'll let them start delivering on some new sales opportunities and then maybe evaluate later next year. Katja Jancic - Sidoti & Company: Now if I understood correctly, if you do the tower expansion, upgrades, that would be covered with the line of credits?

Or cash on hand. We actually think we'll finish this year with cash on hand up over $25 million.

And I'm showing no further questions. I'll turn it back over to you, Pete.

Okay. Well, just to recap, I think it was a great quarter. I think you're really starting to see as businesses turn around, how we're able to scale the business. Primarily on a financial basis, we're starting to see much more drop to the bottomline. We're very focused on profitability. We're at a point where we'll start to realize some of those NOLs, so that would be nice. And we're really optimistic about the future and look forward to sharing some more great results next quarter. Thanks for attending the call.

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