Broadwind, Inc. (BWEN) Q4 2020 Earnings Report, Transcript and Summary

Greetings, and welcome to the Broadwind Fourth Quarter and Full Year 2020 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jason Bonfigt, Chief Financial Officer of Broadwind. Thank you, sir. You may begin.

Good morning, and welcome to the Broadwind Fourth Quarter and Full Year 2020 Results Conference Call. Leading the call today is our CEO, Eric Blashford; and I'm Jason Bonfigt, the company's CFO. We issued a press release before the market opened today, detailing our fourth quarter and full year 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 actual results to differ, please refer to the Risk Factors sections of our latest annual and quarterly filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during our call in the press release issued this morning. At the conclusion of our prepared remarks, we will open the line for questions. With that, I'll turn the call over to Eric.

Thank you, Jason, and welcome to those joining us today. Broadwind reported strong full year results, highlighted by significant growth in total revenue, margin capture, free cash flow and adjusted EBITDA, as total wind tower section sales approached multiyear highs. While pandemic related headwinds impacted both our supply chain and labor pool throughout the year, we continued to advance a long-term strategy focused on end market diversification, improved operational execution and cost discipline. Concurrently, we continued to pursue both new organic and inorganic growth opportunities that leverage our proven technical capabilities, complete turnkey solutions and expertise in designing and producing complex fabrications across a wide range of industries. Demand fundamentals in our core wind energy markets remained strong exiting the year. During the past decade, cost competitiveness of wind improved materially versus other forms of energy, with the unsubsidized levelized cost of wind energy having declined 70% since 2009. As the cost of wind energy has declined, policymakers have set forth incentives to drive increased third-party investment in wind technologies, ushering a new golden age for investments in renewable energy. In December 2020, Congress approved an additional year of the PTC at the 60% subsidy level, together with a new 30% ITC for offshore wind, creating the potential for increased tower demand over the medium term. Longer term, we view the recent decision by the Biden administration to reenter the Paris climate accord, a potential for a new infrastructure spending bill, together with the reintroduction of the GREEN Act as favorable catalyst for the sector. Given the success of last year's antidumping trade case, we believe the domestic wind tower manufacturers are uniquely positioned to benefit from these favorable market dynamics. As we have done throughout the pandemic, we continue to produce and ship products to meet our customers' needs. Our order rates have declined since the COVID-19 outbreak, as our customers continued to manage through supply chain disruptions and economic uncertainty. However, with our quoting activity having strengthened for several consecutive months, we anticipate a gradual recovery in first half 2021 order flow. The full impact of the virus on our business and end markets remains difficult to quantify, but we anticipate that market cash, the current cash and availability on our credit facility will continue to provide adequate liquidity to support our business during this transitional period. Our fourth quarter revenue was $40.3 million, down 18% year-over-year due to a number of pandemic-related supply chain challenges and the delayed delivery of a tower order to a new customer. Within our Heavy Fabrications segment, we experienced a 30% year-over-year decline in tower sections sold in the fourth quarter, given an unusually strong OEM prebuy cycle we saw last year ahead of an anticipated PTC expiration. As we've discussed on previous calls, orders in the towers business tend to vary from quarter-to-quarter. However, fourth quarter orders were well above prior year fourth quarter even as our backlog decreased. At this time, our optimal tower capacity is more than 50% booked for 2021 and we are in continuing discussions with our OEM customers to satisfy their tower demand for the remainder of the year. Our Gearing business continues to see pandemic-related delays in customer activity, which impacted our fourth quarter results. However, we are beginning to see improved demand activity through February with backlog at levels consistent with the prior year period. Revenue for our Industrial Solutions segment improved on a year-over-year basis as demand has increased in the natural gas turbine market. As I referenced earlier, our full year performance was outstanding. We sold 1,150 tower sections in 2020, an increase of 23% year-over-year due to increased investment in wind installations. We're proud to have added two additional tower customers in 2020, positioning us to further capitalize on favorable demand conditions within the domestic wind market. We ended the year with an improved balance sheet, with cash and credit line availability up 27% and a net debt-to-TTM adjusted EBITDA of 0.2 times. I'll now turn the call over to Jason for a deeper look into our financial performance.

Thanks, Eric. Fourth quarter consolidated sales were $40.3 million compared to $49.3 million in the prior year quarter. Importantly, we started producing for a new tower customer in Q4, but the revenue was delayed into Q1. We are continuing to see new orders from this customer, and we are encouraged that we're producing for three of the four top wind turbine OEMs in 2020. This expansion of our tower customer base positions us to improve tower plant utilization over the long term. For the full year, consolidated sales were $198.4 million, which includes approximately $60 million of nonwind revenue. However, since the beginning of the pandemic, we have seen reduced demand from cyclical end markets, mostly impacting our Gearing segment and also our industrial fabrication product lines. New orders and customer offtake have been notably weak in mining, construction and oil and gas markets. Despite this, we believe our strategy of diversifying our customer base remains the best path forward, positioning us to diversify end market exposure while optimizing our workforce and plant utilization. As Eric mentioned in his remarks, we have begun to see customer activity levels accelerate, positioning us for growth in the second half of 2021. As we mentioned on recent calls, we continue to experience significant disruptions in our supply chains due to the pandemic. These disruptions have included situations where multiple suppliers were either behind schedule or could not meet quality specifications together with labor availability issues and challenges. These disruptions, along with lower operating levels within our Gearing segment led to gross margins of approximately 6.7%. For the full year, gross margins expanded 50 basis points to 9.1% as increases in tower plant utilization were partially offset by the combination of supply chain and staffing disruptions. Additionally, Gearing volumes and performance weighed on consolidated gross margins by approximately 375 basis points. Fourth quarter operating expenses as a percent of sales were approximately 11%, up sequentially due to lower volumes. Operating expenses declined compared to the prior year quarter by $900,000, primarily due to the absence of accelerated amortization in the prior year and lower incentive compensation. Interest expense declined to $300,000 from $500,000 in the prior year quarter due to lower debt levels and a reduction in our borrowing rate. Notwithstanding the pandemic headwinds, we generated $200,000 of adjusted EBITDA in the fourth quarter, a decrease of $1.6 million versus the prior year period. For the year, we generated $8 million of EBITDA, an $800,000 improvement when compared with our performance in 2019. Turning to Slides 6 and 7 for a discussion of our Heavy Fabrications segment. Fourth quarter sales were $29.8 million compared to $37.6 million in the prior year quarter, a reduction driven by lower demand and delay in delivery on a new customer order. Fourth quarter orders were $27.5 million compared to $5.3 million in the prior year quarter. As of this call, we have approximately 50% of our 2021 optimal tower production capacity sold. Industrial fabrication orders have been impacted negatively since Q1, as mining and construction customers deferred capital purchase and destocking of their inventory levels. Average tower selling prices per unit were higher in the quarter, primarily driven by stronger commercial environment when the orders were placed in the prior year, together with the benefit associated with the production of larger more complex tower designs. Notwithstanding lower sections sold in the current year quarter, the complexity of multiple design changeovers, ongoing supply chain challenges and staffing constraints, segment EBITDA increased to $2.7 million. From a full year perspective, segment revenue increased 21%, primarily a result of expansion of our tower customer base, an increase in demand to support strong U.S. wind installation activities in 2020. As a result of improved plant utilization, EBITDA increased 115% to $14.4 million in 2020. EBITDA margins expanded to 9.3% in 2020. While this was an improvement year-over-year, margins were impacted by several points due to supply chain disruptions throughout the year and multiple design changeovers for three turbine OEMs. Turning to Slide 8 in our Gearing segment. As we highlighted on our last call, we are continuing to see increased customer interest in quoting activities, which we then started to see flow into our order book in the fourth quarter. Gearing segment orders improved to $5.7 million, following two consecutive quarters near $3 million. Following healthy Q1 order activity levels in 2020, we saw our customers constrain capital spending and reduce inventory levels. These responses to the pandemic, together with lower oil and gas activity, led to a challenging year for the segment. Our backlog was $14.4 million as of year-end, flat on a year-over-year basis. Fourth quarter segment sales declined to $4.9 million from $7.6 million in the prior year due to lower demand from oil and gas and mining customers. As a result of lower plant utilization and manufacturing inefficiencies associated with lower sales volumes, the segment realized a $1.5 million EBITDA loss during the quarter. We have and will continue to take actions to preserve margins and cash, including rightsizing labor and deferring capital purchases while they're in this challenging environment. We expect an improvement in operating performance in Q1, both in sales and in EBITDA. Turning to Slide 9 for a discussion of our Industrial Solutions segment. Industrial Solutions recorded $2.7 million of new orders in Q4, down from $4.3 million compared to the prior year period, primarily a result of the timing of orders. Trailing 12-month segment orders are approximately $17.9 million, up roughly 9% over the prior year due to customer regaining share, higher aftermarket activities and our progress expanding share within that customer. Segment backlog ended the year at $7.2 million, down slightly year-over-year. Our pipeline of opportunities remains robust, and we expect to gain momentum in the first half. Fourth quarter segment sales increased to $5.8 million from $4.1 million in the prior year, given the strength in gas turbine component demand and by the timing of customer projects. Segment adjusted EBITDA was $500,000. The operating leverage associated with increased volume and effective cost management has resulted in full year EBITDA of $1.4 million, a significant increase over 2019. Turning to Slide 10. At year-end 2020, operating working capital was $5.1 million or 3% of sales, an $8.5 million sequential improvement, primarily due to the timing of receipts from customers. DSO continues to trend favorably at 35 days, and deposits in AP were modestly higher, resulting in the cash conversion cycle of roughly 13 days. Total cash and availability under our credit facility remains above historical levels with over $24 million of liquidity at year-end. Given strong free cash flow in Q4, we reduced borrowings under a line of credit from $8 million in Q3 to $1 million at year-end, and, additionally, we had over $3 million of cash on our balance sheet. In the second half of 2020, we generated approximately $16 million of free cash flow. As we highlighted on previous calls this year, we received approximately $9 million of proceeds under the Paycheck Protection Program. We believe we met all the requirements set forth by the treasury to apply for the loans and did so in good faith, ensuring continued employment for our employees during a period of widespread economic uncertainty, which continues today. We are planning to submit our forgiveness application to our lender and the SBA in Q1. The U.S. treasury previously announced that all borrowers that received PPP loans in excess of $2 million will be audited. However, the timeline for their audit remains unclear. To the extent the PPP loans are not forgiven, the company is required to repay the loans over a two-year period at a 1% interest rate. Our net leverage declined to the lowest level seen in several years, ending the quarter at 0.2 times trailing 12-month EBITDA after netting out the PPP loans. We believe we are well positioned to manage through the pandemic, supply chain and weather-related challenges, given our low leverage profile and healthy liquidity position. Lastly, although we've provided the first half 2021 guidance in late January, we have chosen to withdraw this guidance due to escalating supply chain challenges as well as a temporary plant closure associated with extreme weather conditions in Texas. We are continuing to assess the impacts of these situations and will likely reinstate guidance in the future as we confirm timing of critical supply chain deliveries and modify delivery schedules with our customers. That concludes my remarks. I'll turn the call back over to Eric for an overview of conditions within our end markets in addition to some concluding remarks.

Thanks, Jason. Turning to Slide 12 for further discussion of our outlook for the domestic wind market. As predicted, 2020 was a robust year for onshore capacity additions with 16.9 gigawatts installed. Expectations for 2021 remains strong, with an anticipated drop off after the PTC expires. While analysts attempt to predict future demand in a rapidly changing environment, major catalysts are likely to improve the long-term outlook of wind energy. We now have a renewable friendly administration. It has already taken steps to drive renewable investment, including the recent PTC extension and the evaluation of the GREEN Act, which includes a longer-term PTC incentive through 2026. An infrastructure bill would likely include a build-out of power transmission, which could connect new sources of supply to areas of demand. From my point of view, I support such legislation and believe it will get passed through Congress and signed into law. It is bipartisan support and would be an investment in our country's infrastructure, providing dependable, low cost, clean energy while supporting thousands of good-paying U.S. jobs. And as turbine technology continues to evolve, new, more efficient turbines would further reduce the levelized cost of wind energy. And to that point, the powering of existing wind assets to leverage current turbine technology could provide a meaningful lift of demand. Commercial and industrial buyers have been a major driver of wind power demand over the past several years, and further ESG mandates would promote wind development. Offshore remains an attractive growth area for wind capacity additions in the U.S., primarily off the coast of the eastern states with more than 34 gigawatts in the pipeline. This source of clean power is key to meeting individual state initiatives designed to transition away from the use of fossil fuels in the medium to long term. As we look outside of wind, we continue to make progress across a number of diverse end markets. Our customer diversification initiative remains central to our overall plan to optimize our factories as wind tower orders vary from quarter-to-quarter, while wind renewables and other forms of clean power remain core to our business. We have increased our nonwind revenue by 3 times in the last four years, with nonwind revenue sitting at more than $60 million annually. Today, our fastest growing nonwind segments include power generation, mining and the industrial segment, which includes our penetration into the material handling and marine markets. In 2020, we did see some pandemic-related impact to those more cyclical markets, but we anticipate a gradual recovery in those markets throughout 2021. Looking ahead, our focus remains on improving asset utilization, increasing the efficiency of our global supply chain while growing market share in areas where we see opportunities for profitable growth. In our Heavy Fabrications segment, we are working to sell the remainder of our 2021 capacity and adding capabilities to improve our asset utilization and output. We continue to evaluate the offshore turbine market in the U.S. for possible points of entry, as we continue to expand our mix of complementary industrial fabrication customers. In the Gearing segment, we are looking to shift our sales mix toward industries, which tend to be less cyclical and offer a more balanced revenue stream. And we will grow our custom gearbox business through more emphasis into the repair and upgrade categories. In the Industrial Solutions segment, we will continue to expand our market share, both domestically and internationally, by increasing content with existing customers and focusing on new opportunities in the EPC space. I'm pleased to report another successful cross-divisional sales effort in which the Industrial Solutions segment is entering the wind tower internals market, having just won two significant orders, which will be shipped later this year. In summary, as a key participant in the global clean energy transition, Broadwind is well positioned for profitable growth. We see a continued long-term growth path for wind in the U.S., given the more than 80 gigawatts of installations planned over the next 10 years, including new offshore opportunities. Furthermore, the recent changes in the regulatory backdrop, such as re-entering the Paris climate accord, the PTC and ITC announcement and the reintroduction of the GREEN Act, all point to increased third-party investment in sectors we serve, creating the potential for a sustained increase in demand for our products. Given the continued strength of our balance sheet, we are well capitalized to pursue both organic and inorganic opportunities that further support our growth strategy. With that said, I'll turn the call over to the moderator for the Q&A session.

Thank you. We will now be having our question-and-answer session. [Operator Instructions] Our first question comes from Eric Stine with Craig-Hallum. Please proceed with your question.

So maybe if we could just start with wind. I know you mentioned that 50% of your capacity is booked for 2021. And I know that this is far from a normal year, given the COVID-related issues on timing and the supply chain. But maybe how you envision that playing out going forward, maybe comparing to what it is in a typical year at this point in the year and just the confidence that you fulfill that going forward?

Well, this is not a typical year. Typically, in this year, we'd be a little bit ahead of where we are right now as far as bookings. Wind projects tend to be spiky. Orders in wind do tend to be spiky. We are working with our OEM customers on particular orders to make certain that we satisfy their demand for the rest of 2021 behind where we normally are. And again, as a reminder, last year, we were that far ahead, because customers placed orders well in advance of their normal cycle, because they wanted to secure capacity for shipments in 2020 and 2021.

I'll just add that the materials could be the longest lead time to get the steel and to get the other internals for projects, and those lead times are four to five months. So I think that still gives us confidence that we can sell out additional orders, yet that can be - that can flow into revenue this year.

Got it. And then you mentioned a little bit about offshore and how that's developing. And I know there continues to be some movement on the project front, but also reading maybe it's because of the timing of the ITC by 2020 - for 2026 or before 2026. Maybe how all of those puts and takes kind of dictate what you're doing or maybe the urgency or the trajectory of the activity you're doing in advance of that?

Well, there's 34 gigawatts of wind planned for offshore. And those projects are all the way from Virginia all the way up through Connecticut. So we're continuing to monitor all of those. And they're in various stages of completion. So I still think a lot of those are yet to be let even in terms of tenders and whatnot. We are in discussions, as I've mentioned before, with multiple states to see if there's a potential location where we might be able to work with our customers and maybe developers in those states to look to how we would maybe enter that market. I do remind you, though, that we can enter that market not only through towers but through our other divisions as well. So we're looking at how best to take advantage of that market. We do believe it's strong and believe it's going to be strong for the next 10 years at least.

Right. And you'll be part of it, okay. Okay. Maybe last one from me just on Gearing. You have talked about kind of cautious optimism that things were improving there. And maybe I'm reading into it a little here too much, but it does seem like it's subtle, but that you are a little more confident on that. And just curious, I mean, is that, that you've seen the order activity pick up and it's been a little bit more sustained? Is it discussions with customers? Or if I am correct on that, maybe just a little bit more in-depth on why you seem more optimistic on Gearing?

Yes, I think you are correct in that. And it seems like the Gearing business, because of the industrials that we play in, in that particular business, if the industrials are slightly down, we tend to be down further than that. If the industrials tend to be up, we tend to be up further than that. So that dynamic, we are seeing a lot more increases and not only in some of our markets, but really in all of our markets, in industrial, power generation, steel, utilities, infrastructure, and even our oil and gas market is starting to come back a bit too. So you're right in that we are much more optimistic now than we would have been two quarters ago.

Thank you. Our next question comes from Amit Dayal with H.C. Wainwright. Please proceed with your question.

Just to make sure I heard this correctly - are you removing the guidance for the first 1H '21?

We are. We did have a plant closure associated with the Texas weather last week that impacted production obviously. And we are - and it's also impacting our supply chain as well, this weather disruption. So the plant is operational. Again, we're working through the schedules and the supply chain. And as soon as we have that information, we will reinstate guidance for the first half. As we were looking at - as we were entering the year, we expected Q1 to be very comparable with our Q4 performance. And now that some of the - there could be some delays in some of - and the timing of those revenues into Q2. So I think that just gives you a little bit more color of how we think the cadence will be first quarter into the second quarter.

Okay. So more pushouts versus any losses in contracts or projects, et cetera, right?

All pushouts. No customer cancellations.

Okay. Understood. The roughly $93 million that you have in backlog, what is the timeline for deliveries on this?

There's approximately $70 million within our Heavy Fabrications business, and that is all related to 2021 production. With - and then I would say most of it, probably 95% of that, of the Gearing amount, which is about $14 million or so, that will be - that will ship in 2021 as well. And then the balance of Industrial Solutions is 2021.

Okay. Understood. And in your January update, you had talked about some power delivery delays, et cetera. With this weather issue in Texas, is that kind of still in play for you? Or was that issue addressed and now you have other delays that you are sort of dealing with?

I'm not sure I fully understand the question. Can you repeat the question? I'm not sure I understand where you're going.

So you talked about certain push-outs from the fourth quarter revenue to the first.

Yes.

Yes, with respect to tower deliveries. I'm wondering if those deliveries took place, and now you're dealing with other problems that came in?

Those ones that were pushed out, they're shipping in Q1. What we are talking about is production in Q1 that we would have likely shifted towards the end of Q1 that could slip into Q2 because it is still shut. We lost about a week, a little bit more than a week of full production in Texas, frankly, as most of the companies in Texas and the Oklahoma area did. So that's why there's the uncertainty of Q1 into Q2.

I would say, in general, since our last announcement, the supply chain issues seem to be intensifying. And we just - we want to be careful with our guidance and that we have a good understanding of when we're going to receive those parts, so we can provide thoughtful guidance and not have - and be able to articulate the Q1 and Q2 performance.

No, that's understandable. Just one last question from me. You're talking about sort of inorganic growth efforts. Do you have potential targets in mind? What are you thinking of potentially considering for that part of the story?

Yes. Well, we definitely do have - we have some targets in mind. But all those targets would be in line with our strategy. We've got a strategy to look at inorganic growth opportunities and maybe the $20 million to $30 million size range. It would be consistent with our present core competencies, but aligned with our long-term strategy, which is to maintain a focus on clean tech on renewables, if it's possible. So it's a key focus of ours.

So two pieces to that to what Eric just talked about from a potential either acquisition or investments within our companies to build out within that space or in the offshore space as well as those opportunities emerge.

Understood. Just one last one just kind of from me. Maybe, on the gross margin side, should we expect 2021 to be reflective of 2020 in terms of your gross margins?

I think we'll provide more clarity on that once we provide guidance on the first half.

Thank you. Our next question comes from Justin Clare with ROTH Capital Partners. Please proceed with your question.

So I guess, first, I just want to understand the situation in Texas a little bit better. It sounds like you lost one week of production. But it sounds like things are back up and running at this point. So are there any risks for losing more production than the one week? Or is that really - is the risk just confined to that kind of time period?

Well, our production - yes, about one week, just like millions of other people in companies in Texas, we lost water, natural gas and electricity for the better part of a week. But we were fortunately able to take down our operations carefully. So nothing was really damaged. So we were able to bring it back up carefully. So our equipment is functioning, and we're back in operation. The other side of that, though, is incoming materials. We are receiving materials. They are coming in. But we know that some of the suppliers that are in that area may have been impacted as well. So that could be a further drag on it, Justin. But for all intents and purposes, we're up and running now. The employees, which were impacted, their homes were impacted, but they're all back and safe and on the job and working.

I'll just add. This is a busy plant for us with seemingly a nice backlog. And to recover those production slots is challenging, and I view them as lost production slots for the year. We'll certainly attempt to make them up, but it's very difficult to recapture that week's loss.

Okay, okay. Got it. And then just on the supply chain issues, so it sounds like they're intensifying. Is that primarily related to issues in Texas? Or are you seeing this as more of a broad-based issue? And then is this impacting really the wind tower segment? Or are you seeing this effect Gearing, Industrial Solutions as well, like in terms of the intensifying of the supply chain issues?

Yes. It's - that's a really good question, Justin. Thank you for that. So just to remind, the towers business uses a global supply chain. About 25% of those materials in terms of value come from Far East suppliers. And when the pandemic started in Q1 and Q2, most of those internals, which is what we call them, were either on their way or in United States. As it moved through Q2 and Q3, those suppliers started having trouble either with their own workforces, their supply chains or even logistics. We saw - we're seeing some things such as port congestion even to the point of even a shortage of ships or shipping containers. Now that's starting to ease up, but it's primarily on the towers side and primarily on the tower internal side. With regard to the domestic production in Texas and Oklahoma, there could be some impact to local deliveries, but we don't see that as much of a challenge as the internals. By way of the other divisions, a little bit of impact to Gearing, but really only if there are local sub-suppliers that have pandemic-related shortages of staffing. But the primary impact would be on the towers business.

Okay. Okay. That's really helpful. And then maybe one more from me just on the offshore opportunity. At this point, I wonder if you could give us a sense for when the earliest could be that you could make a decision on either a greenfield facility or whether you're still considering the opportunity with your Manitowoc plant? And then how has the introduction of the ITC for offshore wind affected the conversations with customers? It looks like the opportunity is going to be bigger now than previously expected. So could you be - or are you contemplating a larger plant than maybe previously?

Well, we certainly still remain bullish on offshore. Again, as I mentioned earlier, the 34 gigawatts of planned offshore in the United States over the next 10-plus years is very enticing and very interesting to us. With regard to the sizing of our plant, the sizing of a plant would depend on where it's located and if there are specific content requirements for the state or the states that those would - that, that plant could perhaps satisfy. So the earliest we would make a decision on a plant - things seem to be moving out a bit, Justin, I'd say, over the next several quarters. We still have plenty of time to be able to take care of that potential demand. But again, in order for us to take a step in that direction, we'd have to make certain we have some line of sight to potential contracts with one or more customers to be able to justify that plan. But again, we're still bullish on that. And just as a reminder, towers would be the largest single component to support offshore wind, but we've got the ability to support that from all three of our divisions now. And we're looking at opportunities from all three to support that new market.

Thank you. Our next question comes from Martin Malloy with Johnson Rice. Please proceed with your question.

Could you maybe speak about the status of the most recent trade case, where you are with that and the timing of any decisions we should look for?

Sure. That trade case was filed in September 2020 by the Wind Tower Trade Coalition, which Broadwind is a part of. By statute, those trade cases must be fully resolved 13 months after the filing. Sometimes it's a bit earlier, but usually, they take about that much time. So we wouldn't expect a final decision until as late as November of 2021, but it is moving its way through the ITC and the Department of Commerce. And so far, we've got good support through those entities for the case.

Okay. And then could you - on the wind side, could you maybe speak to any regional considerations on the demand that we should think about, whether it's Upper Midwest or Southwest Texas?

Sure. I think the demand for onshore wind continues to be the strongest in the southern part of the wind corridor, but it's actually moving north a bit. So we're encouraged, as it moves north, to be able to take advantage of our - both of our plants. The other dynamic we're starting to see, by the way, is a little bit of an eastern move into New York. Now a lot of that's driven by offshore, but I think a lot of it's driven by renewable state portfolio standards. So I think if you think along these lines, from the heavy demand in the southern states, the Texas, Oklahoma, Kansas area, moving north, which is toward one of our plants, frankly, and also a bit of an eastern route, because I think that's again driven by desire from the individual states to replace their fossil fuels with renewable sources.

Okay. And if I could just ask a follow-up on that, in the - as it moves north and to the east, are you in a better market position? Is there maybe a little bit less competition?

And - well, in - well, there are wind turbine tower plants in the south and in the north. We - I think we are in a very, very solid position to compete for, frankly, the whole corridor. But as it moves north, certainly that - the project would be closer to our plant in Wisconsin. So we could see some more demand in that plant. But there are other plants toward the northern side of that wind belt as well, not just Broadwind.

Thank you. There are no further questions at this time. I'd like to turn the floor back over to management for any closing remarks.

Sure. I really appreciate your interest in our company. We're proud of what we do here to support all the markets, primarily the clean tech renewable market. And we're excited to be able to present to you our results and our Q2 report. Thank you.

Ladies and gentlemen, this concludes today's webcast. You may now disconnect your lines at this time. Thank you for your participation and have a great day.