Broadwind Energy Inc. has announced that it has made a reverse split of its common stock at a ratio of one post-split share for every 10 pre-split shares. Broadwind's common stock will continue to be traded on the NASDAQ Capital Market under the symbol ‘BWEN’ and will began trading on a split-adjusted basis on Aug. 23.
Earlier this month, Broadwind reported a $4.2 million loss for the second quarter. Although the loss was smaller than the $4.4 million one reported in the second quarter of last year, the company attributed its stronger operating results to its gearing and services segments and to lower operating expenses, rather than to the tower segment of its business, which has continued to hamper its earnings results.
On May 4, the company's stockholders granted the board of directors the discretion to effect a reverse stock split of Broadwind's common stock through an amendment to its certificate of incorporation at a ratio of not less than one-for-five and not more than one-for-10.
At the effective time of the reverse stock split, every 10 shares of Broadwind's issued and outstanding common stock will be converted automatically into one issued and outstanding share of common stock without any change in the par value per share. The reverse stock split will reduce the number of shares of Broadwind's common stock outstanding from approximately 141 million shares to approximately 14 million shares.
Proportional adjustments will be made to the number of shares of Broadwind's common stock, issuable upon exercise or conversion of Broadwind's outstanding equity awards, as well as the applicable exercise price. Broadwind's authorized shares of common stock will be reduced from 300 million to 30 million.
"We are effecting this reverse stock split to raise Broadwind's common stock price in order to regain compliance with the NASDAQ Capital Market's $1.00 per share minimum bid continued listing requirement," explains Peter C. Duprey, Broadwind's president and CEO. "As our past few quarters' results demonstrate, the three-prong strategic transformation that we put in place last year is progressing well.
"We are reducing our manufacturing footprint and our cost base, have shifted our capacity and our marketing focus to non-wind sectors, and are working to improve our financial flexibility," he continues. "As a result, our Gearing business has decisively turned the corner to increasing profitability, our Services [business] is approaching break-even, our non-wind Weldments business is growing well and we have strengthened our competitive position in Towers as supply starts to come into better balance with global demand."