Use these links to rapidly review the document
BROADWIND ENERGY, INC. FORM 10-K TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

Table of Contents

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Commission File Number 0-31313

BROADWIND ENERGY, INC.

(Exact name of Registrant as specified in its charter)

Registrant's telephone number, including area code:(630) 637-0315

Securities registered pursuant to Section 12(b) of the Act:None

Securities registered pursuant to Section 12(g) of the Act:Common Stock, $0.001 par value

         Indicate by check mark whether the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. Yes o    No ý

         Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o    No ý

         Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ýo

         Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

         Indicate by check mark whether the Registrant is a shell company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934. Yes o    No ý

         The aggregate market value of the Registrant's voting common stock held by non-affiliates of the Registrant, based upon the $18.50$11.32 per share closing sale price of the Registrant's common stock on June 30, 20082009 (the last business day of the Registrant's most recently completed second quarter), was approximately $584,607,826.$386,816,829. For purposes of this calculation, the Registrant's directors and executive officers and holders of 10% or more of the Registrant's outstanding shares of voting common stock have been assumed to be affiliates, with such affiliates holding an aggregate of 64,869,99262,430,684 shares of the Registrant's voting common stock on June 30, 2008,2009, and shares held by such affiliates are not included in this calculation.

         Number of shares of Registrant's common stock, par value $0.001, outstanding as of March 11, 2009,9, 2010, was 96,477,915.106,701,127.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Registrant's Notice of Annual Meeting and Proxy Statement for the Registrant's 20092010 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report.

Table of Contents

BROADWIND ENERGY, INC.

FORM 10-K

TABLE OF CONTENTS

i

Table of Contents

PART I

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains "forward-looking statements"—that is, statements related to future, not past, events—as defined in Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that reflect our current expectations regarding our future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Forward-looking statements include any statement that does not directly relate to a current or historical fact. We have tried to identify forward-looking statements by using words such as "anticipate," "believe," "plan," "expect," "intend," "will," "should," "may," "plan" and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to us and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Item 1A "Risk Factors" in Part I of this Annual Report on Form 10-K that could cause our actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Our forward-looking statements may include or relate to the following: (i) our plans to continue to grow our business through organic growth and integration of previous and future acquisitions; (ii) our beliefs with respect to the sufficiency of our working capitalliquidity and our plans to evaluate alternate sources of funding if necessary; (iii) our abilityexpectations relating to comply with loan covenants;the extension, continuation or renewal of federal tax incentives and grants and state renewable portfolio standards; (iv) our expectations relating to construction of new facilities, and expansion of existing facilities;facilities and sufficiency of our existing capacity to meet the demands of our customers and support expectations regarding our growth; (v) our plans with respect to the use of proceeds from financing activities; (vi) our beliefs and expectations relating to the recent economic downturn and the potential impact it may have on our business, including our customers; and (vii) the anticipated benefits of our remediation efforts on the strength of our internal control processes and our plans with respect to future remediation efforts.efforts; and (viii) our beliefs regarding the state of the wind energy market generally. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Except as expressly required by the federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason.

ITEM 1.    BUSINESS

        As used in this Annual Report on Form 10-K, the terms "we," "us," "our," "Broadwind," and the "Company,""Company" refer to Broadwind Energy, Inc., a Delaware incorporated company headquartered in Naperville, Illinois, and its wholly-owned subsidiaries.

BUSINESS OVERVIEWBusiness Overview

        We are a supplier of value-addedBroadwind Energy provides technologically advanced high-value products and services to the North AmericanU.S. wind energy sector as well as other energy-related industries.industry. We providebelieve we are the only independent company that offers our breadth of products and services to the market. Our product and service portfolio provides our customers, such as leadingincluding wind turbine manufacturers, wind farm developers and developers, wind farm operators, and service companies, with access to a broad rangearray of wind component and service offerings. Since 2006,offerings, which we have made significant investmentsbelieve is becoming increasingly important in today's wind market. We also provide technical service and precision repair and engineering and specialized logistics to the wind industry in the United States, a highly-fragmented market in which we hold a significant position. We have long standing relationships with our primary customers, who include several leading participants in the U.S. wind sector.

        We believe we are well positioned to capture market opportunities associated with the anticipated growth of ourin the wind farm development business through a series of acquisitions. In doing so, we have developed a broad, U.S.-based supplyin the United States. We believe this turn-around will be

Table of Contents

chain fordriven by: (i) macroeconomic factors, including a broad economic recovery, an increase in overall energy prices and federal and state-level wind development in North America. Our five businesses are currently organized in two operating segments:Productsincentives, (ii) broad upgrades to existing transmission infrastructure andServices.

Products

        The Products segment includes three subsidiaries that manufacture increasing proliferation of smart grid technology, and sell products such as high precision gears for wind turbines, custom-engineered gearing systems for(iii) the mining, energy,maturation of technologies and industrial sectors, structural wind towers, internal tower components, and large fabricated and machined components (e.g., crane parts and dipper buckets). Specific services provided include key technology areas such as grinding and finishing of gears and gear sets, steel plate processing, heavy welding and custom corrosion protection of components. Our primary focus is onwithin the wind energy industry; however,industry, including increased turbine efficiencies, a coordinated global supply chain and improved equipment maintenance and reliability. Given our Products segment also services mining, construction, oil and gas, and other industrial energy applications.installed capital base, we believe we will be able to substantially grow revenues prior to investing in additional capital equipment.

        The Products segment has undergone a significant expansion in the last two years and reflects the operationsAs of December 31, 2009, we had four subsidiaries which consisted of Brad Foote Gear Works, Inc. ("Brad Foote"), Tower Tech Systems Inc. ("Tower Tech"), and R.B.A., Inc. ("RBA"). As of December 31, 2008, the segment had approximately 800 employees, and operated in Wisconsin, Texas, Illinois, and Pennsylvania. Taking into account our acquisition of RBA on October 1, 2007 and Brad Foote on October 19, 2007, our Products segment had revenues of $29,804,000 and $177,114,000, in 2007 and 2008, respectively.

        A summary of the three subsidiaries that comprise our Products segment follows:

•

Brad Foote, founded in 1924 and acquired by us in October 2007, is the largest precision gear manufacturer for the wind energy industry in North America. Brad Foote produces precision and custom-engineered gearing systems for wind power generation, oil production, steel, and transportation industries. Brad Foote has two facilities in Cicero, Illinois and one in Neville Island, Pennsylvania which represent the largest gear grinding and carburizing capacity in North America. As of December 31, 2008, Brad Foote had approximately 435 employees and total manufacturing space of approximately 569,000 square feet.



•

Tower Tech, founded in 2003 and acquired by us in February 2006, manufactures utility-scale wind towers for wind energy development. Today, Tower Tech is a leading manufacturer of wind towers and specializes in delivering the larger and heavier next generation of wind towers to our customers. Since 2004, Tower Tech has manufactured more than 250 towers for its customers. Tower Tech has strategically located facilities in Manitowoc, Wisconsin and Abilene, Texas and a partially constructed third wind tower manufacturing facility in Brandon, South Dakota. Tower Tech's facilities have a combined annual production capacity which supports up to 1,500MW of wind energy production on an annual basis. As of December 31, 2008, Tower Tech had approximately 293 employees and total manufacturing space of approximately 346,000 square feet in its Manitowoc and Abilene facilities.

Table of Contents

•

RBA, founded in 1985 and acquired by us in October 2007, specializes in heavy steel fabrication and performs specialty welding services. RBA refurbishes, assembles and welds heavy equipment for the crane manufacturing, construction, marine, and mining and metals industries. RBA's specialized welding expertise supports and will assist Tower Tech in developing Tower Tech's technical expertise in providing future generations of customized wind towers. RBA has facilities in Manitowoc, and Clintonville, Wisconsin. As of December 31, 2008, RBA had approximately 70 employees and total manufacturing space of approximately 100,000 square feet.

Services

        The Services segment was established upon our acquisition of Energy Maintenance Service, LLC ("EMS") in January 2008 and expanded with our acquisition of Badger Transport, Inc. ("Badger") in June 2008. This. In December 2009, we merged the operations of our R.B.A., Inc. ("RBA") subsidiary into Tower Tech.

        In December 2009, we revised our reporting segment specializes in construction, operationspresentation into four reportable operating segments: Towers, Gearing, Technical and maintenance,Engineering Services, and Logistics. Accordingly, all current and prior period financial results have been revised to reflect these changes. For additional financial information related to our segments, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and component repair services for the wind industry as well as specialized heavy haul trucking services to installation sites. Services provided include constructionResults of Operations" and technical support in the erection of wind turbine generators, scheduled and un-scheduled maintenance, fiberglass inspections, general repair and training, and the transportation of oversize/overweight equipment and machinery.

        As of December 31, 2008, the segment had approximately 300 employees. Currently, the Services segment has service hub locations in South Dakota, Texas and Wisconsin and satellite field service centers in California and Illinois. In fiscal year 2008, and taking into account the acquisition of EMS on January 16, 2008 and Badger on June 4, 2008, the Services segment had revenues of $41,502,000.

        A summary of each of the two subsidiaries that comprise our Services segment follows:

•

EMS, founded in 1998 and acquired by us in January 2008, provides construction, operations and maintenance, and component repair services for the wind industry. EMS specializes in wind turbine repair offerings, including major component refurbishing, wind turbine maintenance, construction support and engineering and advisory services. The company's customers include turbine and component manufacturers, wind farm owners and developers. EMS' main office is in Gary, South Dakota and it has major repair hubs in Howard, South Dakota and Abilene, Texas as well as satellite field service centers in California and Illinois. As of December 31, 2008, EMS had approximately 260 employees.



•

Badger, founded in 1982 and acquired by us in June 2008, is a provider of transportation services of oversize/overweight equipment and machinery, primarily to the wind industry. The company specializes in the transport of tower sections, blades, nacelles and other oversized equipment for large industrial applications. Badger has been in business for over 25 years, with 15 years in specialized heavy haul and more than 11 years serving the wind industry. Badger operates from its headquarters in Clintonville, Wisconsin. As of December 31, 2008, Badger had approximately 50 employees and operated or leased a total of 64 trailers.

        See Note 2119 "Segment Reporting" ofin Item 15 in the notes to our consolidated financial statements for a discussion of summary financial information by segment.

        The following is a description of our product and service offerings:

BUSINESS AND OPERATING STRATEGYTowers

        We manufacture structural towers for wind turbines. We specialize in heavier "next generation" wind towers that are larger, more technically advanced towers, designed for 2 megawatt ("MW") and larger wind turbines. Since starting commercial production in 2005, we have produced over 500 towers. Our production facilities are strategically located in close proximity to the primary U.S. wind resource regions, sited in Wisconsin, Texas and South Dakota. When our Brandon, South Dakota facility becomes operational, our three tower production facilities will have a combined annual tower production capacity sufficient to support turbines generating more than 1,500 MW of power.

        Our business strategy isstructural towers for wind turbines are predominantly sold to capitalize onwind turbine manufacturers who utilize our products in the anticipated growthassembly of wind turbines. Due to the highly specialized nature of our products, they are generally sold through our direct sales force following an evaluation, qualification and testing period, which may occur over a number of months. We compete based on product performance, quality, price, location and available capacity. We have periodically entered into multi-year framework agreements under which we expect to provide products to certain key customers over multi-year periods. Our principal wind tower customers include Gamesa, Vestas and Nordex. We also manufacture specialty fabrications and heavy weldments for wind energy and other industrial customers.

Gearing

        We manufacture high precision gearing systems for wind turbines. We also manufacture custom-engineered gearing systems for the mining, energy sectors in the U.S. by providingand other industrial sectors.

        We produce to the highest value-added componentsindustry quality standards, and services acrosswe were the windfirst U.S. gear manufacturer to achieve ISO 9001 certification. We use an integrated manufacturing process, which includes our machining process in Cicero, Illinois, our heat treatment process in Neville Island, Pennsylvania and other energy sector supply chains. We seekour finishing process in our Cicero factory. These complex production processes allow us to expandmanufacture custom products to meet the stringent tolerances and high quality standards of our market share in the North American wind energy industry and other energy sectors and to be the leading provider of a comprehensive supply solution to our customers in North America. The recent downturn in the economy and the effects of the disruptions in the global credit markets and financial systems have had a negative effect on the wind industry and global heavy manufacturing industry and has limited our short term growth prospects. In

Table of Contents

lightturbine customers. Our precision gearing manufacturing facilities have the production capacity to support turbines producing more than 4,000 MW of power annually.

        Due to the highly specialized nature of our gearing, it is generally sold through our direct sales force following an evaluation, qualifying, prototyping and testing period, which may occur over a number of months. We compete based on product performance, quality, price and available capacity. We have periodically entered into multi-year framework agreements under which we expect to provide products to certain key customers over multi-year periods. Our principal customers include General Electric and Clipper Windpower, both of whom have been long-standing customers. We are currently in discussions with large global gear drive original equipment manufacturers with the aim of becoming a gearing system supplier to one or more of these challengescompanies.

        We also manufacture gearing for industrial markets including mining and oilfield equipment. We target niche markets and applications that require the strict tolerances and high quality standards of our beliefprocesses. These products serve to diversify our customer and product portfolio and balance our plant loadings.

Technical and Engineering Services

        We offer technical and precision repair and engineering services to developers and operators of wind farms and manufacturers of wind turbines. Our technical services business provides construction support and operations and maintenance services to the wind industry. Our engineering services include precision repair and refurbishment of the complex systems and components of wind turbines. Sales contacts are typically initiated through a small direct sales force, or through operating unit managers located in our geographically dispersed service locations. Sales are generally made under individual purchase orders, although we have blanket purchase orders or framework agreements in place with select key customers. Our Technical and Engineering Services business competes with a number of independent service providers in a highly-fragmented but growing industry. Our principal Technical and Engineering Services segment customers include Bluarc, NexGen Energy Partners, NextEra Energy Resources, Siemens Energy and Suzlon Wind Energy. Our service locations are in Illinois, California, South Dakota, Texas and Colorado. Our vision is to become the most comprehensive service provider to the United States and Canadian wind industry by expanding the number of our service centers and product offerings.

        Our specialty services include oil change-out, up-tower tooling for gearing systems, drive-train and blade repairs and component replacement. Our construction support capabilities include assembly of towers, nacelles, blades and other components. We also provide customer support, preventive maintenance and wind technician training. Our technicians utilize our regional service centers for storage and repair of parts as well as our training offerings.

        Through our precision repair and engineering services, we repair and refurbish complex wind components, including control systems, gearboxes and blades. We also conduct warranty inspections, commission turbines and provide technical assistance. Additionally, we build replacement control panels for kilowatt ("kW") class wind turbines and repair both kW and MW blades. A large portion of the approximately 35,000 MW installed base of wind turbines in the United States is now coming out of warranty, creating a growing need for MW gearbox refurbishment. We plan to develop during 2010 the first independent gearbox refurbishing center and gearbox test stand to perform full-load testing for MW class wind turbine units.

Logistics

        We offer specialized transportation, permitting and logistics management to the wind industry for oversize and overweight machinery and equipment. We deliver complete turbines to the installation site, including blades, nacelles and tower sections for final erection. We focus on the project

Table of Contents

management of the delivery of complete wind turbine farms. We have a fleet of over 60 specialized heavy haul trailers supporting annual delivery of 500 MW of full turbine components. We primarily compete based on the availability of our trailer asset base, our service, price and reliability. Sales contracts are typically initiated through a small direct sales force, under discrete purchase orders issued by a turbine manufacturer or wind farm developer. Although we predominantly focus on wind energy customers, we also periodically haul other oversized equipment such as large pressure vessels or other industrial equipment, in order to maintain utilization of our heavy haul fleet. Our principal customers include Gamesa and Suzlon Wind Energy.

Competitive Strengths

        We believe our business model offers a number of competitive strengths that have contributed to our commercial success and will enable us to capitalize on significant opportunities for growth. These competitive strengths include the following:

•

Strong relationships with leading wind industry players.  Our integrated business model has enabled us to hold leading positions in many of the markets we serve by successfully winning key contracts and establishing strong relationships with major wind sector manufacturers. We provide products and services to the eight largest wind turbine manufacturers currently selling in the United States: Acciona, Clipper Windpower, Gamesa, General Electric, Mitsubishi, Siemens Energy, Suzlon Wind Energy, and Vestas. We believe our relationships with leading players endorse our product quality and service capabilities and position us well to sell effectively to new customers. We intend to continue to develop long-term, multi-year contracts and strategic customer relationships across our businesses.



•

Leading service platform.  We are the largest horizontally integrated independent service provider to the U.S. wind industry. We believe that we are differentiated by the breadth of our offerings, which enables us to work with wind farm developers through a project lifecycle: construction support including logistics and transport, commissioning of the wind farm, ongoing maintenance and operational support services, precision repair and upgrades to existing installations. Our in-house gearing system manufacturing expertise positions us to enter the market for gearbox repair and refurbishment which, for MW-scale turbines, has historically been performed by non-domestic sources. We believe that our broad service offerings and technical capabilities will allow us to grow our services business significantly as the installed wind turbine base grows and wind turbines come off warranty.



•

Manufacturing and service capacity to support anticipated growth.  Over the past two years, we have made substantial upfront investments in property and equipment to position ourselves to take advantage of the expected rapid growth in the North American wind industry. We believe this capacity will allow us to quickly respond to increased demand from our customers and enable us to gain share as market growth returns. We have invested substantial capital in technology, engineering and manufacturing capabilities and capacity for both wind turbine towers and gearing systems. We have also invested significantly to grow our capacity through the addition of personnel and new technical and precision repair and engineering service offerings and by expanding our footprint of regional service centers. In connection with the expected growth of the wind power market, we believe these investments will allow us to realize significant operating leverage as we increase our revenues with minimal capital expenditure.



•

Ability to cross-sell our product and service offerings.  Our combined product and service suite provides us with opportunities to increase sales to existing customers and approach potential customers with a coordinated offering. Leveraging our broad existing customer base, we have realized additional revenues by selling products and services that our customers previously purchased from various other providers. As an example, we have provided logistics services to

Table of Contents

customers to whom we had previously only supplied towers or operations and maintenance services. We have also recently been engaged by wind farm developers for comprehensive supply chain solutions including supply of towers, gearbox rebuilds, transport and logistics and construction and commissioning support services. We believe that the breadth of our comprehensive solution is unique and is compelling for the growing segment of smaller wind developers.

•

Horizontally integrated supply chain offering with strategically located operations. We believe that we have investedthe leading North American platform designed to provide an integrated solution to the fragmented supply chain our customers face. Today, the manufacture and production of wind turbines involves over 8,000 components and many of the key inputs are both geographically dispersed and lack integration. This results in enough infrastructurehigh transportation costs and quality control issues as many developers and manufacturers are forced to coordinate among multiple suppliers. While we do not provide all key components, our wind turbine component production capabilities combined with the broad array of services we offer allows our customers to simplify coordination for these increasingly complex wind development projects. We believe the breadth of our capabilities will prove attractive to new entrants and incumbents by improving speed to market, increasing product reliability and reducing costs. Additionally, our production facilities and service offerings are strategically located near existing wind centers, which allows us to minimize our response time and reduce logistics costs for our customers.



•

Industry leading technology and manufacturing expertise.  We utilize industry-leading technology and design capabilities and have wind product manufacturing expertise. We specialize in manufacturing "next generation" wind towers, and we were the first U.S. gear manufacturer to achieve ISO 9001 certification. Our gearing systems production facilities utilize state-of-the-art Höfler production centers and are experienced in designing and manufacturing customized products to meet specific customer needs. We have diverse technical repair expertise and the necessary spare inventory to minimize costs and response time and deliver the greatest long-term value for the lifecycle of our short term goals,customers' projects. We believe our immediate focus isability to concentratedesign and manufacture high quality customized products and provide superior service creates high barriers to entry and allows us to maintain an advantage over our competition.



•

Experienced management team with decades of wind industry experience.  Our senior management team has significant industry experience and proven expertise in wind and other energy sectors and holds leadership positions in industry organizations such as the American Wind Energy Association ("AWEA"), the Canadian Wind Energy Association and the American Gear Manufacturers Association. Key areas of expertise include high technical specification industrial manufacturing, operational execution in the wind industry, strategic business development, financial planning and acquisition integration. Members of our senior management team have held positions at leading global and national wind and industrial sector companies including Vestas, General Electric, Trinity Industries, DMI Industries, British Petroleum, Regal Beloit, FMC Technologies and Federal Signal.

Business and Operating Strategy

        We intend to capitalize on achieving operational excellence withinthe anticipated growth of the wind sector in the United States and Canada by providing our existing businesses,technologically advanced, highly reliable, value-added products and components and customized services across the wind supply chain to continue to expandenhance our North American market share and to focus our efforts on maintaining adequate liquidity and working capital.leadership position.

        Our strategic objectives include the following:

•

Become the leading provider in the wind supply chain in North America by expandingUtilize our suite of productsestablished platform to increase market share and services.satisfy customer demand. We are dedicatedDuring 2008, we took steps to the identification, development, and commercialization of new products and services that utilizeenhance our manufacturing capabilities by increasing gearing production capacity and provide value-added solutions forconstructing a new state-of-the-art tower manufacturing plant in Abilene, Texas.

Table of Contents

In January 2010, we completed construction of an additional tower manufacturing plant in Brandon, South Dakota, which is not yet operational. We increased specialized heavy-haul capacity by over 20% and increased our customers. Supply chain management is critical for wind turbine manufacturers who manufacture or will soon manufacture manyservice capacity through strategic hiring and the addition of the turbines in the U.S. Our locala new facility capable of supporting MW-class blade repair. We believe our presence in key wind resource states provides us with an advantage on cost, efficiency and suite of products and services directly address this critical issuespeed to market by limiting exchange rate risk and importation and customs duties (compared to international competitors) and substantially reducing transportation and working capital costs for our customers. With the addition of businesses providing new products and services in the last two years,As a result, we have made progress in our desire to provide comprehensive solutions for our customers across the wind supply chain from full component manufacturing to delivery to site and construction support. By maintaining strategic relationshipsbelieve that we are well positioned with our customers, we are ableexisting infrastructure to understand and meet their needs across the supply chain and provide opportunities to deliver them synergies across our operating units.



•
Leverage our customer relationships within the wind industry and related sectors to cross-sell our products and services.  The wind industry manufacturing supply chain is characterized by close customer relationships based on product development and long-term supply agreements. We consider our relationships with our wind customers to be a key pillartake advantage of our future strategy and work closely with them to develop and tailor products to their individual needs. We engage with our customers on many levels: industry research and development, product design, key account management and manufacturing. We believe our single-source strategy will help leverage our existing customer relationships with the world's leading wind turbine manufacturers and help us to realize cross-selling opportunities. We will continue to seek to capture a significant share of our existing customers' demand and to diversify our revenue and customer base.


projected improvements in market conditions.

•

Continue to develop theand grow our service and maintenance businesses.  We have established a network of service centers strategically located near key wind farm sites with precision repair and engineering capabilities and skilled personnel. We believe that the after-marketthere is a significant opportunity to continue to develop this network to provide more comprehensive support businessto additional businesses in the wind industry is currently underdeveloped. Most windindustry. Wind turbine components are currentlyinitially serviced by wind turbine manufacturers throughunder applicable warranty periods.warranties, which have generally been shortening over time. We believe that, as the size of the installed base grows and ages, manufacturer warranties expire and as the complexity and size of wind turbines increase, component manufacturerswind farm operators will increasingly be askedseek third party service providers to servicemaintain their own products.assets. We intend to support our customers' service strategies, to further develop our own service channels and to capture a share of the expanding service and aftermarket support business on the basis of agreementsthrough relationships with wind turbine manufacturers, wind farm operators and independent service providers.



•

Leverage our success in North America to pursue international business opportunities. We have local service centers located closebegun to expand our focus beyond the North American wind sitesenergy market to develop an international presence as a long-term strategic objective. We believe that are centrally-placedthere has been a rapid migration of turbine manufacturers to the United States, which has allowed us to develop relationships with capital-intensive capabilities, givingleading global turbine assembly companies and increases our opportunity to leverage these relationships into global markets. We have recently restructured our management team to provide the framework for pursuing international business opportunities, which we believe will expand our revenue opportunities and enable us a competitive advantage as we capitalize on post-warranty growth in wind turbine serviceto better serve our customers, enhance our supply chain and maintenance demand.develop additional synergies across our operating units.



•

Continue to improve production technology and operational efficiency and enhance our cost structure.efficiency.  We believe that the proper coordination and integration of the supply chain are key factors that enable high operating efficiencies, increased reliability and lower costs. Our manufacturing facilities include state-of-the-art equipment and lean processes to reduce costs. Although we have achieved significant cost reductions by emphasizing flexibility inhelp enhance our manufacturing processesoperational efficiency and installing modern and more efficient equipment, we remain focused on further reducing costs.flexibility. We will continue to employpursue strategies to further optimize theour production processes at our facilities to generate increased output, leverage our scale and lower our costs while maintaining product quality with high technical specifications. Ongoing effortsquality.



•

Broaden our product offerings.  We believe that we offer one of the most complete sets of product offerings addressing the needs of customers across the North American wind supply chain. We are underwaydedicated to continuethe identification, development and commercialization of new products that take advantage of our scale in order to improve laborprovide comprehensive solutions for our customers. Since a turbine may contain more than 8,000 components, we plan to take advantage of our extensive expertise and machine efficiencies attechnological capabilities to develop the plant level, revise staffing programs and upgrade scheduling and performance systemscomplex product offerings required to increase efficiency, reduce inventories, andcompete in the North American wind market.

        As the North American wind industry matures and the complexity of wind turbines increases, complex product offerings, advanced supply chain management and specialized services will be critical for wind turbine manufacturers and wind farm developers and owners, and we intend to pursue our

Table of Contents

improvebusiness strategies and maintain and enhance our established platform to more deeply penetrate our target markets and further diversify our customer base.

Wind Turbine Components

        A wind turbine and its components represent approximately 65% of the costs of new wind farms. The manufacture and production of wind energy-related infrastructure involves over 8,000 components. The five most significant components, each of which generally accounts for more than 10% of the overall financial returnscost of a turbine, are the tower, blade system, nacelle, gearbox and cash flow. We also intendpitch systems and bearings. Additional key components include the generator and the controller. The following illustration shows the key components of a wind turbine.



Towers

        A wind tower accounts for approximately 18-27% of the total capital cost of a wind turbine. A tower's cost is proportional to continueits height and diameter. Taller towers give access to constructstronger winds and operate lean facilities near project sitesmore even wind flow, both of which lead to decrease transportation costs.

•

Utilize our capacity to increase market sharea higher electrical output. Industry research indicates that for tower sizes between 80 and satisfy our customers' demand for our products100 meters, each additional meter delivers 0.9% more yield. Doubling the height of the tower generally requires doubling its diameter and services.  During 2008 we took steps to increase our manufacturing capabilitiesincreasing the amount of material needed by a factor of eight, which results in a trade-off between the additional yields delivered by increasing production capacity attower height versus the additional cost of the tower. We manufacture wind towers in our Brad Foote manufacturingManitowoc, Wisconsin and Abilene, Texas facilities and by constructinghave a recently constructed, but not yet operational wind tower manufacturing plant in Abilene, Texas with an additional tower plant partially constructedfacility in Brandon, South Dakota. In addition, RBA added an additional manufacturing location in Clintonville, Wisconsin. Our service segment increased specialized heavy-haul capacity by over 20% and our EMS subsidiary increased its service capacity through strategic hiring. We are prepared to further expand manufacturing and service capacity to meet customer demand as we approach capacity constraints. However, we believe that we are well positioned to take advantage

Nacelle

        The nacelle houses most of the current market conditionswind turbine's components including the generator, gearbox and an increasecontrol systems as well as thousands of smaller components and accounts for approximately 12-22% of




Table of Contents




a wind turbine's cost. Due to the decrease in market growth with our current infrastructure. Going forward,global foundry capacity since World War II, only a relatively few suppliers are capable of the precision production required for the large size and thinness of nacelle components. Some European wind turbine manufacturers have tried to identify cast product suppliers in India and China; however, it has been difficult finding the necessary standards and quality. We do not manufacture nacelles but we plan to continue to expand our delivery options to benefit from economies of scaledo service and scope from complementary and growing businesses.



•

repair nacelle components.

Recruit, trainBlade System

        The blade and retain high quality employeeshub system (rotor) is attached to the nacelle via the rotor shaft and rotates at an angular speed dependent on the power of the wind. Blades account for approximately 20-25% of the cost of a wind turbine and are typically made out of fiberglass and epoxy resin. Blades are currently the focus of significant research and development both at national research institutions and also at wind turbine manufacturers. With lengths upwards of 60 meters, blades can be difficult and expensive to manufacture and transport. The risk of damage in transit requires careful logistics planning and creates a demand for blade production sites near the end-market. We do not manufacture blade systems but we do service and repair blade systems.

Gearbox

        The gearbox is made almost entirely of steel and is the heaviest component in the wind turbine's nacelle. The gearbox accounts for approximately 11-15% of a wind turbine's cost. The gearbox connects the low-speed shaft driven by the rotor blade to the high-speed shaft that drives the generator, increasing the rotational speeds from about 30 to 60 rotations per minute ("rpm") to about 1,200 to 1,500 rpm, which is the rotational speed required by most generators to produce electricity. Contained in the gearbox is a highly precise gearing system. We manufacture gearing systems in our currentCicero, Illinois and plannedNeville Island, Pennsylvania facilities.

Pitch Systems and Bearings  Our business relies on highly skilled workers

        Pitch systems maximize a wind turbine's energy converting efficiency by optimizing the positioning of the machine housing and blades in relation to operate sophisticated machinerythe wind direction. Pitch systems and provide specialized service with demanding technical specifications. The quality and skillsbearings account for approximately 11-15% of our personnel have been critical to our success to date and our continued growth depends on our ability to attract, train, and retain capable and dedicated employees.a wind turbine's cost. We believe we offer attractive employment opportunities in the markets in which we operate. We provide extensive training programs for new employees and continuing education for our existing employees. Many employees are able to operate a variety of different machines, depending on workload and customer orders, allowing us flexibility in our product mix. We intend to continue to place an emphasis on building a collaborate culture that fosters passion, honesty and teamwork to deliver real value for our customers and our investors.

COMPANY HISTORY

        We are a Delaware corporation. We were incorporated in Nevada in 1996 as Blackfoot Enterprises Inc. ("Blackfoot"). In February 2006, Blackfoot completed a reverse shell transaction with Tower Tech, whereupon Blackfoot became a holding company for Tower Tech, and subsequently changed its name to Tower Tech Holdings Inc. In 2008, Tower Tech Holdings Inc. reincorporated in Delaware and changed its name from Tower Tech Holdings Inc. to Broadwind Energy, Inc. Through a seriesour October 2007 acquisitions of strategic businessRBA and Brad Foote and acquisitions completedof EMS and Badger in 2007January and June of 2008, and organic growth,respectively, we expanded upon our core platform as a wind tower component manufacturer and have positioned the Company as a broad-based supply-chain provider for the windestablished our gearing systems, industrial products, technical services, precision repair and other energy-related industries.engineering and logistics businesses.

SALES AND MARKETING

        Our sales and marketing strategy is to develop and maintain long-term relationships with our customers and to offer a comprehensive suite of products and services to them. We pursue this strategy by working closely with our customers in developing and designing customized product, manufacturing, and service solutions. We also intend for our offerings to fulfill needs that our customers may consider non-core and do not desire to provide for within their organizations. We targetattempt to base-load our manufacturing facilities by negotiating long-term agreements, under which we supply our customers

Table of Contents

with productsgearing, towers or services. The majority ofindustrial products. Similarly, we seek to establish long-term relationships to provide logistics or technical and engineering services to our customers, which may be subject to framework agreements or undertaken on a project by project basis. Our customer base consists of wind turbine manufacturers who supply end-users and wind turbine developers with completed wind turbines.turbines, as well as wind farm developers and wind farm operators themselves. Within the wind industry, we have long-standing relationships with customers, engaging them at various levels from key account management, site management, research and development, product design and manufacturing up to senior management.

Table of Contents

COMPETITION

        We do not believe that any competitors exist that have developed a similar suite of products and services for the North American wind industry as those offered by our businesses. However, competition within each of our subsidiaries' niches exists and some of our customers maintain internal capabilities that compete with our offerings. Several domestic and international wind tower manufacturers compete in the United States, including Trinity Industries, Inc., Ameron International Corporation, DMI Industries, Dong Kuk, Hendricks, Trinity Industries, Inc. and DMI Industries.Win&P. We are a major North American supplier of wind energy gear sets. Approximately five companies worldwide have the proven ability and capacity to compete with Brad Footeus to supply gear sets for the wind industry. Brad Foote is a major North American supplier of wind energy gear sets. Two of the major European suppliers are owned byor affiliated with wind turbine manufacturers: Hansen (owned byTransmissions (affiliated with Suzlon energy) and Winergy/Flender (owned by Siemens). The competitors of Brad Foote within the oil and gas exploration industry arecompetitor group participating to provide industrial gearing is slightly more fragmented. These companies compete based upon price, quality, location, available capacity, and several other factors. Anderson Trucking Service and Lonestar Trucking are Badger'sour main logistics competitors, while additional competitorscompetition within our Services segment arethe market for technical and engineering services market is highly fragmented.

GOVERNMENTENVIRONMENTAL REGULATION AND COMPLIANCE

        TheOur operations of our businesses are subject to numerous federal, state, and local environmental laws and regulations. While it is the Company's primaryour objective to maintain compliance with these respective laws and regulations, it may not be possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that the Companywe may undertake in the future. We believe thatMany of our subsidiaries are in substantial compliance with such lawsfacilities have a history of industrial operations and regulations, and wecontaminants have been detected at some of our facilities. We do not currently anticipate any material capital expenditures for environmental control facilities.facilities in the near term.

BACKLOG

        ManyThe majority of our products are sold under long-term supply agreements.agreements and our services are typically sold under purchase orders and service contracts. Some of these supply agreements are structured as framework agreements, whereby we are required to reserve a specified percentage of our production capacity based upon mutually agreed production volumes. Under these framework agreements, we receive purchase orders on a monthly basis or based upon our customer's forecast of production volume levels. These long-term agreements have various terms, but generally range from several months to three years with some contracts carrying automatic renewal provisions. As of December 31, 2008,2009, the rangedollar amount of our backlog believed to be shipped in 2009firm under our supply agreements, purchase orders and service contracts was estimatedapproximately $247.3 million, of which $119.3 million is expected to be between $170 million and $212 million based upon the options thatdelivered during 2010. Deliveries during 2010 may be subject to change as a result of any future modifications to our customers may exercise during the year. In lightexisting customer framework agreements or purchase orders.

Table of the nature of the Company's operations in 2007, management does not believe that providing the backlog number for the preceding fiscal year will provide a useful comparison against the Company's current situation.Contents

SEASONALITY

        The majority of our business is not affected by seasonality. Our Services segmentseasonality, although the provision of logistical and technical services can be negatively affected by weather-related constraints.

EMPLOYEES

        The CompanyWe had 1,127690 employees as ofat December 31, 2008. As2009, of December 31, 2008, 914 of our employeeswhich 552 were in manufacturing, service, and field support related functions and 213 employees138 were in administrative functions. Approximately 32%21% of our employees are covered by two collective bargaining agreements with local unions. Theseunions in Cicero, Illinois and Neville Island, Pennsylvania. Collective bargaining agreements with our Neville Island and Cicero unions were ratified by local unions in the fourth quarter of 2009 and the first quarter of 2010, respectively, and are scheduled to expireremain in effect through October 20092012 and February 2010.2014, respectively. We consider our union and employee relations to be satisfactory.

RAW MATERIALS

        The primary raw material used in the construction of wind towers and gearing products at our Tower Tech and Brad Foote businesses, respectively, is steel in the form of steel plate, forgings, and

Table of Contents

castings. Additionally, some agreements may allow customers to independently provide steel to Tower Tech for the construction of wind towers.

        We operate a multiple sourcing strategy and source our raw materials through various suppliers located throughout the United States and abroad. We do not generally have long-term supply agreements with any of our raw materials suppliers.suppliers and closely match terms with those of our customers to limit our exposure to price fluctuations. We believe that we will be able to obtain an adequate supply of steel and other raw materials to meet our manufacturing requirements.

CUSTOMERS

        We manufacture or construct, and provide transportation and maintenance services to, a variety of customers in the wind energy, oil and gas, mining and industrial industries. The majority of our customer base consists of wind turbine manufacturers who supply end-users and wind turbine developers with completed wind turbines. In the industrial, mining and constructions sectors, we sell our products through our technically trained sales force to both owners and operators. The wind turbine market is very concentrated. According to the American Wind Energy Association's 2008 industry rankings, the top three wind turbine manufacturers in the U.S. constituted 77% of the market and the top five constituted 95% of the market. As a result, we currently have concentrations with a limited number of customers for a majority of our revenues. Sales to each of Gamesa, Clipper and General Electric Transportation Services represents an amount greater than 10% of our Company's consolidated revenues and the loss of any such customer could have a material adverse effect on the Company.

        Our current and historical portfolio of customers and collaborators includes: AWE, Babcock & Brown, Clipper, Diversified Energy Solutions, FPL Energy, Gamesa, Garrad Hassan, General Electric, Great River Energy, Horizon Wind Energy, Nordex, Reunion Power, Siemens, Suzlon, Vestas, Xcel Energy.

WORKING CAPITAL

        The Company's primary customers are wind turbine manufacturers and wind energy developers. The industry has historically produced customized and varying terms and conditions for agreements between suppliers and customers, depending on the specific objectives of each party. The Company's practices mirror this historical industry practice for negotiating agreements on a case-by-case basis. As a result, working capital needs, including levels of accounts receivable and inventory, can vary significantly from quarter to quarter based on the contractual terms agreed to by the parties, such as whether the Company is required to purchase and supply steel pursuant to such contractual terms.

QUALITY CONTROL

        We have a long-standing focus on processes for ensuring the manufacture of high quality products. To achieve high standards of production and operational quality, we implement strict and extensive quality control and inspection throughout our production processes. We maintain full, in-house controlinternal quality controls over all core manufacturing processes and carry out quality assurance inspectioninspections at the completion of each major manufacturing step to ensure the quality of our products. The manufacturing process at Brad Foote,our Gearing operation, for example, involves transforming forged steel into highhighly technical specification gears through to rough machining, hobbing, reinforcing thermal treatment, fine machining and fine grinding. We inspect and test raw materials before they enter the assembly process, re-test the raw materials after rough machining, test the functioning of gear teeth and cores after thermal treatment and accuracy test final outputs for product specifications. We believe our investment in industry-leading heat treatment, high precision machining, specialized grinding technologies, and cutting edge welding has contributed to our high product reliability and consistent performance of our products under varying operating conditions once installed.

        Our Gearing segment is ISO 9001:2000 certified and our other companies have certification programs in various stages of completion.

CUSTOMERS

        We manufacture products for and provide logistics, technical and engineering services to a variety of customers in the wind energy, oil and gas, mining and other industries. The majority of our customer base consists of wind turbine manufacturers, who supply wind farm operators and wind farm developers with completed wind turbines. In the other industrial sectors, we sell our products through our trained sales force or through manufacturers' representatives to a wide variety of customers. The wind turbine market is very concentrated. According to AWEA's 2009 industry data, the top eight wind turbine

Table of Contents

manufacturers constituted over 97% of the North American market. As a result, our concentration with a limited number of customers accounted for the majority of our revenues. Sales to each of Gamesa, Clipper Windpower, Nordex and General Electric represented an amount greater than 10% of our consolidated revenues for the year ended December 31, 2009 and the loss of one of these customers could have a material adverse effect on our business. Despite these significant customers, our customer concentration declined in 2009. In 2008, four customers accounted for greater than 75% of our total revenues compared to six customers in 2009. We intend to continue to diversify our customer base as we grow our business.

        Our current portfolio of key customers includes: Clipper Windpower, Gamesa, General Electric, Nordex, Siemens Energy, Suzlon Wind Energy, Vestas and Bluarc.

WORKING CAPITAL

        Our primary customers are wind turbine manufacturers and wind farm developers. The industry has historically entered into customized contracts with varying terms and conditions between suppliers and customers, depending on the specific objectives of each party. Our practices mirror this historical industry practice for negotiating agreements on a case-by-case basis. As a result, working capital needs, including levels of accounts receivable and inventory, can vary significantly from quarter to quarter based on the contractual terms associated with that quarter's sales, such as whether we are required to purchase and supply steel pursuant to such contractual terms.

CORPORATE INFORMATION

        Our principal executive office is located at 47 East Chicago Avenue, Suite 332, Naperville, IL 60540. Our phone number is (630) 637-0315 and our website address iswww.broadwindenergy.com.

OTHER INFORMATION

        On our website atwww.broadwindenergy.com, we make available under the "Investors" menu selection, free of charge, our Annual Reports on Form 10-K and Form 10-KSB, Quarterly Reports on Form 10-Q and Form 10-QSB, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such reports or amendments are electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"). Materials that we file or furnish to the SEC may also be read and copied at the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet site atwww.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with SEC.

ITEM 1A.    RISK FACTORS

Risks Related to Our Business

Our businesses, and therefore our results of operations and financial condition, may continue to be adversely affected by the current disruptiondislocation in the global credit markets and instability of financial systems.economic uncertainty.

        The recent disruption in the global credit markets, the re-pricing of credit risk and the deterioration of the financial and real estate markets generally, particularly in the U.S.United States and Europe, have all contributed to a reduction in consumer spending and a declinecontraction in the overall U.S. economy. Although the recent disruptions were initially in the housing, financial and insurance sectors, it appears that this deterioration has further expanded to the general economy and other sectors,global economic growth including the wind energy sector. Tight credit, increased unemployment and reduced consumer confidence may haveThe recession has had negative effects on demand for alternative sources of energy and consequently for our product and service offerings. Although there is a growing confidence that the global economies have resumed growth, there remains risk that the recovery will be short-lived, such recovery may not include the industries or markets in which we conduct our business or the

Table of Contents

downturn may resume. In addition, some economists are predicting thatbecause there is a long lead-time between orders for wind products and delivery, there is generally a lag before the U.S. economy,impact of changed economic conditions affects our results, and possibly the global economy, has entered intoan improvement in economic conditions may not be reflected in our financial results of operations in a prolonged recession or even a depression as a result of the foregoing factors. Such a prolonged downturncorresponding manner. Any deterioration in the U.S. or global economyeconomic conditions could have a material adverse effect on our business in a number of ways, including lower sales and extended renewal cycles if there is a reduction in demand for wind energy and such deterioration could have a material adverse effect on our liquidity, results of operations and financial condition.

        In addition, if these conditions continue or worsen, they may result in reduced worldwide demand for energy and additional difficulties in obtaining financing, which may adversely affect our business. Risksparticular, risks we might face could include: potential declines in revenues in our business segments due to reduced orders or other factors caused by economic challenges faced by our customers and prospective customers, and potential adverse impactsan inability to finance our operating needs on our ability to access creditreasonable terms.

The U.S. wind industry is reliant on tax and other financing sources (and the cost thereof) beyond the approved credit lines we currently have. Each ofeconomic incentives and political and governmental policies. A significant change in these conditions may also impact our ability to finance future acquisitions or significant capital expenditures relating to new projectsincentives and lines of business.

A disruption of economic growth in the wind industrypolicies could negatively impact our results of operations and growth.

        Our business segments are focused on supplying products and services to wind turbine manufacturers and owners and operators of wind energy generation facilities. Currently theThe wind industry is dependent upon federal tax incentives and state renewable portfolio standards.standards and may not be economically viable absent such incentives. The federal

        In a Schedule 13D filed with the SEC on November 10, 2008, Tontine Capital Partners, L.P. ("TCP"), Tontine Capital Overseas Master Fund, L.P. ("TMF"), Tontine Partners, L.P. ("TP"), Tontine Overseas Fund, Ltd. ("TOF") and Tontine 25 Overseas Master Fund, L.P. ("T25" and collectively with TP, TOF, TCP, TMF and their affiliates, "Tontine") stated its intention to explore alternatives for the disposition of its equity interest in the Company. Tontine owns approximately 49% of our outstanding common stock as of December 31, 2008. We have from time to time relied on Tontine for financingoperations will generate sufficient cash flows from private placements ofin an amount sufficient to enable us to pay our common stock. Tontine's intentions with respect to our common stock may affect our ability to raise cash from financing activities and could affect our liquidity.indebtedness.

        We rely on access to both shortshort- and long-term capital markets as a source of liquidity for capital requirements not satisfied by cash flows from operations. While we anticipate that our current cash resources, cash generated through our operations, and cash proceeds from our January 2010 common stock offering will be adequate to meet our liquidity needs for at least the next twelve months, we do not have any significant committed sources of liquidity. If we are not able to access capital at competitive rates, the ability to implement our business plans may be adversely affected. Unprecedented disruptions inIn the current credit and financial markets, particularly in the United States and Europe, have had a significant material adverse impact on a numberabsence of financial institutions and have limited access to capital resources, we could face substantial liquidity problems and creditmight be required to dispose of material assets or operations at times when the prices for many companies. These disruptions could make it more difficult for the Companysuch assets are depressed. We may not be able to obtainconsummate those dispositions. Furthermore, these proceeds may not be adequate to meet our debt financing for its operations, acquisitions and anticipated capital expenditures or increase its cost of obtaining financing, which could have a material adverse effect on the Company's liquidity, results of operations and financial condition.service obligations then due.

        Additionally, our current short- and long-term debt agreements contain various financial covenants. Violations of such covenants may restrict our ability to obtain the additional financing we need to implement our growth strategy. In the event of a loan covenant violation and inability to obtain waivers, our loans would be due immediately and our ability to obtain financing could be severely impacted. As previously disclosed, as a result of restating our financial statements for the quarterly period ended September 30, 2008, Brad Foote was in violation of two of its covenants in its Loan Agreement, dated as of January 17, 1997, as amended (the "Loan Agreement") with Bank of America, formerly LaSalle Bank National Association ("BOA"). Brad Foote obtained a waiver of these covenant violations from BOA as of September 30, 2008, and otherwise was in compliance with the financial and other covenants contained in the Loan Agreement as of September 30, 2008.

Table of Contents

        On January 16, 2009, Brad Foote, 1309 South Cicero, LLC ("1309") and 5100 Neville Road, LLC ("5100") (each a wholly-owned subsidiary of Brad Foote) entered into an Omnibus Amendment Agreement dated January 15, 2009 (the "Omnibus Amendment") with BOA, amending the Loan Agreement. Among other things, the Omnibus Amendment provided that BOA waive Brad Foote's violation of the two covenants in the Loan Agreement with which Brad Foote had not been in compliance for the period from December 31, 2008 up to but not including January 20, 2009. The Omnibus Amendment also provided that Brad Foote's financial covenants and events of default under the Loan Agreement be amended and restated.

        On March 13, 2009, Brad Foote, 1309 and 5100 entered into a Second Omnibus Amendment Agreement (the "Second Omnibus Amendment") with BOA and, in connection therewith, the Company, 1309 and 5100 entered into a Reaffirmation of agreements and covenants in the Loan Agreement and related documents (the "Reaffirmation"). Among other things, the Second Omnibus Amendment further amended and restated certain financial covenants under the Loan Agreement and shortened the maturities of certain of the loans outstanding under the Loan Agreement. Pursuant to the Second Omnibus Amendment, Brad Foote paid BOA $1.5 million of the amount outstanding on its revolving note under the Loan Agreement ($500,000 of which was paid by the Company on behalf of Brad Foote) and will pay an extension fee on a monthly basis through the end of 2009. In addition, the Second Omnibus Amendment also provided that the revolving note under the Loan Agreement be amortized pursuant to monthly payments, that the maturity date of the revolving note under the Loan Agreement be extended to January 15, 2011, that BOA's revolving credit commitment under the Loan Agreement be terminated and that BOA shall have no obligation to make revolving loans to Brad Foote under the Loan Agreement. While we expect that we will be in compliance with the amended and restated covenants contained in the Loan Agreements, there can be no certainty that Brad Foote will be in compliance with such covenants for any future periods or that Brad Foote will be able to attain a waiver from BOA in the event of a violation of one or more such covenants. Please see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" for a more detailed discussion of the Loan Agreement.

        The Board of Directors of the Company has established a Finance Committee to, among other things, assist the Board in monitoring and evaluating the Company's liquidity, short- and long-term financing plans and capital structure.

We may have difficulty raising additional financing when needed or on acceptable terms, which could force us to delay, reduce or eliminate some or all of our development plans.

        Our limited resources and limited operating history may make it difficult to borrow funds to increase the amount of capital available to us to carry out our business. The amount and nature of any such borrowings would depend on numerous considerations, including our capital requirements, our perceived ability to meet debt service on any such borrowings and the then prevailing conditions in the financial markets, as well as general economic conditions. There can be no assurance that debt financing, if required or sought, would be available on terms deemed to be commercially acceptable by us and in our best interest.

There can be no assurances that our operations will generate sufficient cash flows or that credit facilities will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund other liquidity needs.

        Our ability to make scheduled payments on our existing or future debt obligations and other financial obligationsfund operations will depend on our future financial and operating performance. While we have repaid approximately $19.1 million in outstanding indebtedness to Bank of America and Investors Community Bank in January 2010, and we believe that we will continue to have sufficient cash flows to operate our businesses, there can be no assurances that our operations will generate sufficient cash flows or that credit facilities will be available to us in an amount sufficient to enable us to pay our remaining indebtedness or to fund our other liquidity needs. If we cannot make scheduled

Table of Contents

payments on our debt, we will be in default and, as a result, among other things, our debt holders could declare all outstanding principal and interest to be due and payable and we could be forced into bankruptcy or liquidation or required to substantially restructure or alter our business operations or debt obligations.

Our financial and operating performance is subject Moreover, if we are unable to prevailing economic and industry conditions and to financial, business and other factors, some of which are beyond our control.

        If our cash flows and capital resources are insufficient to fund our debt service obligations, we will likely face increased pressure to dispose of assets, seekobtain additional capital or restructure or refinanceif our indebtedness. These actions could have a material adverse effect on our business, financial condition and results of operations. In addition, we cannot assure that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements since our credit agreements restrict our ability to dispose of assets and use the proceeds from such dispositions. For example, we may need to refinance all or a portion of our indebtedness on or before maturity. There can be no assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. In the absence of improved operating results and access to capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions or to obtain the proceeds realized. Additionally, these proceeds may not be adequate to meet our debt service obligations then due.

Our credit agreements limit our ability to take various actions, and a default under our credit agreements could have a material adverse impact on our business.

        Our credit agreements limit our ability to take various actions, including paying dividends and disposing of assets. Accordingly, we may be restricted from taking actions that management believes would be desirable and in the best interests of us and our stockholders. Our credit agreements also require us to satisfy specified financial and non-financial covenants. A breach of any covenants contained in our credit agreements could result in an event of default under the agreements. Upon the occurrence of an event of default under our credit agreements, the lenders may not be required to lend any additional amounts to us and could elect to declare all borrowings outstanding thereunder, together with accrued and unpaid interest and fees, to be due and payable, which could also result in an event of default under our other agreements relating to our borrowings, any of which could have a material adverse effect on our business or financial condition.

        As a result of these covenants, we are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. Our ability to comply with the covenants and restrictions contained in the agreements governing our indebtedness may be affected by economic, financial and industry conditions beyond our control. If we were unable to refinance these borrowings on favorable terms, our results of operations and financial condition could be adversely impacted by increased costs and less favorable terms, including higher interest rates and more restrictive covenants. The instruments governing the terms of any future refinancing of any borrowings are likely to contain similar or more restrictive covenants.

Our level of indebtedness could adversely affect our business, and certain of our indebtedness matures in the near term.

        As of December 31, 2008, our consolidated indebtedness totaled approximately $43.3 million, $11.8 million of which Broadwind has guaranteed for our wholly-owned subsidiaries. As of March 13, 2009, approximately $36.5 million of outstanding indebtedness was guaranteed by Broadwind. Wecurrent

Table of Contents

cannot assure you that our businessessources of financing are reduced or unavailable, we will generate sufficient cash flow from operationslikely be required to pay this debt. In addition, approximately $14.0 million of our indebtedness is scheduled to mature during 2009.

        Our significant debt service obligations:

•

may limit our ability to obtain additional financing in excess of our current borrowing capacity on satisfactory terms to fund working capital requirements, capital expenditures, acquisitions, debt service requirements, capital stock and debt repurchases, dividends, distributions and other general corporate requirements or to refinance existing indebtedness;



•

require us to dedicate a substantial portion of our cash flows to the payment of principal and interest on our debt which willdelay, reduce the funds we have availablescope of, or eliminate our plans for other purposes;



•

limitexpansion and growth and this could affect our liquidity and operational flexibility and our ability to respond to the challenging economic and business conditions that currently exist or that we may face in the future;



•

may require us in the future to reduce discretionary spending, dispose of assets or forgo acquisitions or other strategic opportunities;



•

impose on us additional financial and operational restrictions;



•

expose us to increased interest rate risk because a substantial portion of our debt obligations are at variable interest rates; and



•

subject us to market and industry speculation as to our financial condition and the effect of our debt level and debt service obligations on our operations, which speculation could be disruptive to our relationships with customers, suppliers, employees, creditors and other third parties.

        For a more detailed discussion of the indebtedness of Broadwind and its subsidiaries, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 and Note 12 "Debt and Credit Agreements" in Part IV, Item 15 of this Annual Report on Form 10-K.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

        As of December 31, 2008, approximately $31.4 million of our borrowings were at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same. In connection with the acquisition of Brad Foote in October 2007, the Company assumed two interest rate swap agreements. These swap agreements related to two outstanding equipment loans with a notional amount totaling $8.6 million and involved the exchange of a floating interest rate for a fixed interest rate. These swaps are scheduled to mature in January 2011 and April 2012. We may use interest rate derivatives to hedge the variability of the cash flows associated with our existing or forecasted variable rate borrowings. Although we may enter into additional interest rate swaps, involving the exchange of floating for fixed rate interest payments, to reduce interest rate volatility, we cannot provide assurances that we will be able to do so or that such swaps will be effective.overall operations.

Growth and diversification through acquisitions and internal expansion may not be successful, and could result in poor financial performance.

        To execute our business strategy, we may seek to acquire new businesses. We may not be able to identify appropriate acquisition candidates or successfully negotiate, finance or integrate acquisitions. If we are unable to make acquisitions, we may be unable to realize the growth we anticipate. Future acquisitions could involve numerous risks including difficulties in integrating the operations, services, products and personnel of the acquired business;business, and the potential loss of key employees, customers and suppliers of

Table of Contents

the acquired business. If we are unable to successfully manage these acquisition risks, future earnings may be adversely affected.

        We may also plan to continue to grow our existing business through increased production levels at existing facilities and through expansion to new manufacturing facilities and locations, such as our recently completedthe tower manufacturing facility in Abilene, Texas that we completed in January 2009 and our partially constructed but not yet operational tower manufacturing facility in Brandon, South Dakota. In addition, we intend to utilize funds raised in our recently completed equity offering to establish a MW gearbox test stand and refurbishment facility during 2010. Such expansion and any future expansion will require coordinated efforts across the Company and continued enhancements to our current operating infrastructure, including management and operations personnel, systems and equipment, and property. Difficulties or delays in acquiring and effectively integrating any new facilities may adversely affect future performance. For example, we recorded higher costs in 2008 to handle a higher volume of orders, and in 2009 in connection with the startup of production at our Abilene facility. Moreover, if our expansion efforts do not adequately predict the demand of our customers and our potential customers, our future earnings may be adversely affected.

We have a limited operating history.

        In February 2006, the Company completed a reverse shell transaction with Tower Tech, whereupon we became a holding company for Tower Tech. From the third quarter of 2007 through June of 2008, we acquired RBA, Brad Foote, EMS and Badger, all of which had been stand-alone private companies prior to when they were acquired by Broadwind. Our limited operating history and the limited period of time during which we have operated in our current form makes it difficult to evaluate our business. In addition, the uncertainty of our future performance and ability to maintain or improve our financial, sales and operating systems, procedures and controls increase the risk that we may be unable to continue to successfully operate our business. In the event that we are not able to manage our growth and operate as a public company due to our limited experience, our business may suffer uncertainty and failures.

We face intense competition from industry participants who may have greater resources than we do.

        Our businesses are subject to risks associated with competition from new or existing industry participants who may have more resources and better access to capital. Many of our competitors and potential competitors may have substantially greater financial, customer support, technical and marketing resources, larger customer bases, longer operating histories, greater name recognition and more established relationships in the industry than we do. Among other things, these industry participants compete with our subsidiariesus based upon price, quality, location and available capacity. We cannot be sure that we will have the resources or expertise to compete successfully in the future. Some of our competitors may also be able to provide customers with additional benefits at lower overall costs to increase market share. We cannot be sure that we will be able to match cost reductions by our competitors or that we will be able to succeed in the face of current or future competition. In addition, we may face competition from our customers as they seek to be more vertically integrated and offer full service packages. Some of our customers are also performing more services themselves.

We have generated limited revenue and have generated net losses and negative cash flows since our inception.

        We have experienced operating losses, as well as net losses, for each of the years during which we have operated. In addition, in light of current economic conditions, we anticipate that future losses and negative cash flow isare possible for the foreseeable future. We have incurred significant costs in connection with the development of our businesses and there is no assurance that we will achieve sufficient revenues to offset anticipated operating costs. Although we anticipate deriving revenues from the sale of our products and services, no assurance can be given that these products can be sold on a net profitprofitable basis. If we achieve profitability, we cannot give any assurance that we would be able to sustain or increase profitability on a quarterly or annual basis in the future.

Table of Contents

We may not be able to effectively utilize the additional production capacity at our new wind tower manufacturing facility in Brandon, South Dakota.

        We recently completed construction of a third wind tower manufacturing facility in Brandon, South Dakota and we anticipate that the facility will become operational as business warrants and pending the installation of certain additional equipment. If there is insufficient market demand for the towers we intend to produce at this facility, it could be difficult or impossible for us to operate the facility in a profitable or cost-effective manner. If we elected not to commence operations at the facility, we would continue to incur significant fixed costs associated with ownership of the facility, and there can be no assurance that we would be able to sell or otherwise dispose of the facility on terms deemed to be commercially reasonable by us if we sought to do so in the future.

Our future operating results and the market price of our common stock could be materially adversely affected if we are required to take additional write downs to the carrying value of goodwill or intangible assets associated with any of our operating segments in the future.

        We review our goodwill balances for impairment on at least an annual basis through the application of a fair-value-based test. We perform our review of goodwill based on the carrying value of these assets as of October 31 of each year and the estimate of fair-value for each of our operating segments is based primarily on projected future results, cash flows and other assumptions. The first step involves a comparison of the estimated fair value of a reporting unit to its carrying amount, including goodwill. In performing the first step, we determine the fair value of our reporting units using a combination of an income approach by preparing a discounted cash flow analysis and a market-based approach based on our market capitalization. If the estimated fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired and the second step of the impairment test is not necessary. If the carrying amount of a reporting unit exceeds its estimated fair value, then the second step of the goodwill impairment test must be performed. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with its carrying amount to measure the amount of impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. As a result, the estimated fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

        We did not identify a triggering event during 2009 which would require an early assessment of impairment, however, in connection with our annual goodwill impairment analysis as of October 31, 2009 which was completed in March 2010, we determined that the goodwill balance attributable to our Gearing segment was impaired due to a deterioration in financial performance during 2009 and as a result of the subsequent fourth quarter revision in our projection of future operating results and cash flows in light of the continued economic downturn on the wind gearing industry.

        We review our intangible assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable. Due to the revision in our projections of operating results and cash flows within our Gearing segment, we deemed this a triggering event, and subsequently tested all of our intangible assets for impairment. The completion of our impairment analysis during February 2010 indicated that the customer relationship intangibles associated with our Gearing segment were impaired as a result of a decline in projected future operating results. The decline in our estimates of future operating results and corresponding discounted cash flows indicated that the fair value of these customer relationships was less than the carrying value of these assets. Additionally, we determined that the carrying value of our RBA trade name was impaired as a result of the merger of RBA's operations into our Towers segment in

Table of Contents

December 2009 and that RBA's customer relationship intangible was impaired due to a revision in projected revenues and cash flows associated with this customer relationship. Accordingly, we recorded goodwill and intangible impairment charges of $24.3 million and $57.9 million, respectively. In the future, if our projected discounted cash flows associated with our operating segments do not exceed the carrying value of their net assets, we may be required to record additional write downs of the carrying value of goodwill, intangible assets or other long-lived assets associated with any of our operating segments and our operating results and the market price of our common stock may be materially adversely affected.

        As of December 31, 2009, our goodwill and intangible balances were $9.7 million and $37.2 million, respectively. The 2008-2009 recession has impacted our financial results and has reduced near-term purchases from certain of our key customers and may continue to do so in the future. We may determine that our expectations of future financial results and cash flows from one or more of our businesses has decreased or a decrease in our stock valuation may occur, which could result in a review of our goodwill and intangible assets associated with these businesses. Since a large portion of the value of our intangibles has been ascribed to projected revenues from certain key customers, a change in our expectation of future cash from one or more of these customers could indicate potential impairment to the carrying value of our assets.

Disruptions in the supply of parts and raw materials, or changes in supplier relations, may negatively impact our operating results.

        We are dependent upon the supply of certain raw materials used in our production process and these raw materials are exposed to price fluctuations on the open market. Raw material costs for items such as steel, the primary raw material used by us, has fluctuated significantly and may continue to fluctuate. To reduce price risk caused by market fluctuations, we have generally incorporated price adjustment clauses in our sales contracts. However, limitations on availability of raw materials or increases in the cost of raw materials (including steel), energy, transportation and other necessary services may impact our operating results if our manufacturing businesses are not able to fully pass on the costs associated with such increases to their respective customers. Alternatively, we will not realize material improvements from declines in steel prices as the terms of many of our contracts provide that we pass through these costs to our customers.

        In addition, we may encounter supplier constraints, be unable to maintain favorable supplier arrangements and relations or be affected by disruptions in the supply chain caused by such events as natural disasters, power outages and the effect of labor strikes. In the event of significant increases or decreases in the price of raw materials, particularly steel, our margins and profitability could be negatively impacted.

If our projections regarding the future market demand for our products are inaccurate, our operating results and our overall business may be adversely affected.

        We have made significant capital investments in anticipation of rapid growth in the U.S. wind energy market. The expansion of our internal manufacturing capabilities has required significant up-front fixed costs. If market demand for our products does not increase as quickly as we have anticipated and align with our expanded manufacturing capacity, we may be unable to offset these costs and to achieve economies of scale, and our operating results may continue to be adversely affected as a result of high operating expenses, reduced margins and underutilization of capacity. Alternatively, if we experience rapid demand for our products in excess of our estimates, our installed capital equipment and existing workforce may be insufficient to support higher production volumes, which could harm our customer relationships and overall reputation. In addition, we may not be able to expand our workforce and operations in a timely manner, procure adequate resources, or locate suitable third-party suppliers, to respond effectively to changes in demand for our existing products or to the demand for new

Table of Contents

products requested by our customers, and our business could be adversely affected. Our ability to meet such excess customer demand could also depend on our ability to raise additional capital and effectively scale our manufacturing operations.

If our estimates for warranty expenses differ materially from actual claims made, or if we are unable to reasonably estimate future warranty expense for our products and services, our business and financial results could be negatively affected.

        We provide warranty terms generally ranging between two and seven years to our tower and gearing customers depending upon the specific product and terms of the customer purchase agreement. We reserve for warranty claims based on industry experience and estimates made by management based upon a percentage of our product sales revenues. From time to time, customers have submitted warranty claims against us. However, we have a limited history on which to base our warranty estimates for certain products which we manufacture. Our assumptions could be materially different from the actual performance of our products in the future and could exceed the levels against which we have reserved. In some instances our customers have interpreted the scope and coverage of certain of our warranty provisions differently from our interpretation of such provisions. The expenses associated with remediation activities in the wind energy industry can be substantial and if we are required to pay such costs in connection with a customer's warranty claim we could be subject to additional unplanned cash expenditures. If our estimates prove materially incorrect, or if we are required to cover remediation expenses in addition to our regular warranty coverage, we could be required to accrue additional expenses and could face a material unplanned cash expenditure, which could harm our financial and operating results.

Material weaknesses or other deficiencies in our internal controlcontrols over financial reporting, including potential failure to prevent or detect errors or fraud, could affect the accuracy of our reported financial results.

        Management has identified a material weaknessesweakness in internal controls over financial reporting in 2008,2009, relating to non-routine revenue transactions, as referenced in Item 9A, Controls"Controls and ProceduresProcedures" of this Annual Report filed on Form 10-K. The Company restated certain financial information in its Form 10-Q for the quarter ended September 30, 2008 on account of certain material weaknesses in internal controls over its financial reporting. Internal control weaknesses or deficiencies may continue to affect our ability to close our financial reporting on a timely basis or report accurate numbers. In addition, acquisitions of companies lacking sufficient financial and internal control expertise may affect our ability to comply with public company reporting requirements in the future, including meeting filing deadlines established by the SEC, and ensuring that our Company-wide controls and procedures are adequate to provide financial information in a timely and reliable matter. We may incur substantial additional costs to bring acquired companies' systems into compliance with Section 404 of the Sarbanes-Oxley Act of 2002, as amended ("Sarbanes-Oxley"). Our ability to attract and retain qualified financial experts will also impact our ability to comply with financial reporting and Sarbanes-Oxley regulations. If we are not able to maintain the requirements of Section 404 of Sarbanes-Oxley in a timely manner or with adequate compliance, we may be subject to sanctions or investigation by regulatory authorities. This type of action could adversely affect our financial results or investors' confidence in our company and our ability to access capital markets and could cause our stock price to decline.

We are required to devote substantial time to compliance initiatives, which may divert management's attention from the growth and operation of our business.

        As a public company, we incur significant legal, accounting and other expenses, and we are subject to the SEC's rules and regulations relating to public disclosure that generally involve a substantial expenditure of financial resources and managerial time. In addition, Sarbanes-Oxley, as well as rules subsequently implemented by the SEC, require changes in corporate governance practices of public companies. Full compliance with these rules and regulations has significantly increased our legal and financial compliance costs and has made some activities more time-consuming and costly. We may also incur substantial additional costs to bring acquired companies' systems into compliance with Section 404 of Sarbanes-Oxley. Such additional reporting and compliance costs may negatively impact our financial results. To the extent our earnings suffer as a result of the financial impact of our SEC reporting or compliance costs, our ability to develop an active trading market for our securities could be harmed.

        As a public company, we also expect that new rules and regulations may make it more difficult and expensive for us to obtain director and officer liability insurance in the future, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers.

        It may be time-consuming, difficult and costly for us to continue our development and implementation of the internal controls and reporting procedures required by Sarbanes-Oxley. Some members of our management team have limited or no experience operating a company with securities traded or listed on an exchange, or subject to SEC rules and requirements, including SEC reporting practices and requirements that are applicable to a publicly traded company. We may need to recruit, hire, train and retain additional financial reporting, internal controls and other personnel in order to develop and implement appropriate internal controls and reporting procedures.

Table of Contents

Our future operating results and the market price of the common stock could be materially adversely affected if we are required to write down the carrying value of goodwill or intangible assets associated with any of our operating segments in the future.

        In accordance with the Statement of Financial Accounting Standards ("SFAS") No. 142,Goodwill and Other Intangible Assets ("SFAS 142"), we review our goodwill and intangible balances for impairment on at least an annual basis through the application of a fair-value-based test. Our estimate of fair-value for each of our operating segments is based primarily on projected future results and cash flows and other assumptions. In addition, in accordance with the Statement of Financial Accounting Standards No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS 144"), we review long-lived assets whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. In October of 2008, we performed our annual test for goodwill impairment and determined that the goodwill balance related to RBA was impaired. This determination indicated a decline in the projected fair value of RBA net assets based upon forecasted operating results. Our analysis indicated that the projected discounted cash flows associated with RBA's net assets did not exceed their carrying value. As a result, we recorded a goodwill impairment charge of approximately $2.4 million during the fourth quarter of 2008. In the future, if our projected discounted cash flows associated with our operating segments do not exceed the carrying value of their net assets, we may be required to record additional write downs of the carrying value of goodwill, intangible assets or other long-lived assets associated with any of our operating segments in accordance with SFAS 142 and SFAS 144, and our operating results and the market price of our common stock may be materially adversely affected.

Disruptions in the supply of parts and raw materials, or changes in supplier relations, may negatively impact our operating results.

        The Company is dependent upon the supply of certain raw materials used in its production process and these raw materials are exposed to price fluctuations on the open market. Raw material costs for items such as steel, the primary raw material used by the Company, have fluctuated significantly and may continue to fluctuate. To reduce price risk caused by market fluctuations, the Company has incorporated price adjustment clauses in certain sales contracts, however, limitations on availability or increases or decreases in the cost of raw materials, including steel, the cost of energy, transportation and other necessary services may impact our operating results, because our manufacturing businesses may not be able to fully pass on the costs associated with such increases or decreases to their respective customers.

        In addition, we may encounter supplier constraints, be unable to maintain favorable supplier arrangements and relations or be affected by disruptions in the supply chain caused by such events as natural disasters, power outages and the effect of labor strikes. In the event of significant increases or decreases in the price of raw materials, particularly steel, our margins and profitability could be negatively impacted.

Restrictions on transport and significant fluctuations in fuel costs could affect distribution access to certain geographical areas.

        Significant fluctuations in fuel costs and transport restrictions could negatively impact transport of large products such as towers, blades and nacelles. Depending on the location of our customers' and potential customers' wind projects, they may choose to limit their transportation expenses by choosing to source component purchases in geographic areas where our operations are not located. In addition, rising fuel costs and transport restrictions could have a material effect on the business and operations of Badger, our specialized heavy haul trucking subsidiary.

Table of Contents

Trade restrictions may present barriers to entry in certain international markets.

        Restrictions on trade with certain international markets could affect our ability to expand into thesethose markets. In addition, the existence of government subsidies available to our competitors in certain countries may affect our ability to compete on a price basis.

Table of Contents

We may be unable to keep pace with rapidly changing technology in wind turbine component manufacturing.

        The global market for wind turbines is rapidly evolving technologically. Wind turbines are progressively becoming larger and more powerful, and ourOur component manufacturing equipment and technology may not be suited for future generations of products being developed by wind turbine companies. To maintain a successful business in our field, we must keep pace with technological developments and changing standards of our customers and potential customers and meet their constantly evolving demands. If we fail to adequately respond to the technological changes in our industry, or are not suited to provide components for new types of wind turbines, the Company'sour net worth, financial condition and operating results may be adversely affected.

We rely on unionized labor, the loss of which could adversely affect theour future success of the Company.success.

        We are dependent on the services of unionized labor and have collective bargaining agreements with certain of our operations workforce.workforce at our Cicero and Neville Island gearing facilities. The loss of the services of these and other personnel, whether through terminations, attrition, labor strike, or otherwise, or a material change in our collective bargaining agreements, could have a material adverse impact on us and our future profitability. Collective bargaining agreements have been ratified by collective bargaining units in place at our Brad Foote subsidiary's PittsburghCicero and CiceroNeville Island facilities are under contract throughand expire in October 2012 and February 2014, respectively. As of December 31, 2009, and 2010, respectively and representour collective bargaining units represented approximately 32%21% of the Company'sour workforce.

TheWe need to hire additional qualified personnel, including management personnel, and the loss of our key personnel could harm our business.

        Our future success will depend largely on the skills, efforts and motivation of our executive officers and other key personnel. Our success also depends, in large part, upon our ability to attract and retain highly qualified management and key personnel throughout our organization. During 2010, we will likely need to hire additional personnel, including management personnel, to fill in our organization. We face competition in the attraction and retention of personnel who possess the skill sets that we seek. In addition, key personnel may leave our company and subsequently compete against us. The loss of the services of any of our key personnel, or our failure to attract and retain other qualified and experienced personnel on acceptable terms, could have a material adverse effect on our business, results of operations, or financial condition.

Our ability to comply with regulatory requirements is critical to our future success and our current level of controls cannot guarantee that we are in compliance with all such requirements.

        As a manufacturer and distributor of wind and other energy industry products we may be or become subject to the requirements of federal, state and local or foreign regulatory authorities. In addition, we are subject to a number of industry standard-setting authorities, such as the American Gear Manufacturers Association and the American Welding Society. In addition, many of our products are or may become subject to the requirements of federal, state and local or foreign regulatory authorities. Changes in the standards and requirements imposed by such authorities could have a material adverse effect on us. In the event we are unable to meet any such standards when adopted, our business could be adversely affected. We may not be able to obtain all regulatory approvals, licenses and permits that may be required in the future, or any necessary modifications to existing regulatory approvals, licenses and permits, or maintain all required regulatory approvals, licenses and permits.

        While we believe that our businesses are currently in compliance with the requirements of federal, state and local or foreign regulatory authorities applicable to them, our current internal controls are likely insufficient toThere can be no guarantee that our businesses are in full compliance with such standards and requirements. We

Table of Contents

continue to develop our internal controls with a goal of providing a greater degree of certainty that our businesses are in compliance with applicable governmental and regulatory requirements, but our current level of internal control may fail to reveal to us material instances of non-compliance with such requirements, and such non-compliance could have a material adverse effect on our business.

Table of Contents

Our principal stockholder holds a large percentage of our common stock and influences our affairs significantly but has publicly stated its intention to liquidate certain of its holdings in various investments, which may include shares of our common stock.significantly.

        Tontine ownsCapital Partners, L.P. ("TCP"), Tontine Capital Overseas Master Fund, L.P. ("TMF"), Tontine Partners, L.P. ("TP"), Tontine Overseas Fund, Ltd. ("TOF"), Tontine 25 Overseas Master Fund, L.P. ("T25"), TCP Overseas Master Fund II, L.P. ("TCP2" and collectively with TP, TOF, TCP, TMF, T25 and their affiliates, "Tontine") owned approximately 49%47.7% of our outstanding common stock as of December 31, 2008.2009 and owns approximately 37.5% of our common stock after completion of our equity offering in January 2010. Tontine has, and will continue to have the right to designate three individuals on our Board of Directors pursuant to a Securities Purchase Agreement entered into with Broadwind in August 2007. As a result, Tontine has, and will continue to have, the voting power to significantly influence our policies, business and affairs, and the outcome of any corporate transaction or other matter, including mergers, consolidations and the sale of all, or substantially all, of our assets. Tontine's significant ownership level may have the effect of delaying, deterring, or preventing a change in control that otherwise could result in a premium in the price of our common stock. Tontine and its affiliates may invest in entities that directly or indirectly compete with us or companies in which they currently invest may begin competing with us. As a result of these relationships, when conflicts between the interests of Tontine and the interests of our other stockholders arise, the Tontine-designated directors may have conflicts of interest. Although our directors and officers will have a duty of loyalty to us under Delaware law and our certificate of incorporation, transactions that we enter into in which a director or officer has a conflict of interest are generally permissible, if done in compliance with Delaware law. The actions of Tontine may have the effect of influencing changes in control or changes in management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in their best interest.

        As stated above, Tontine in Schedule 13D filed withWe may not have the SEC on November 10, 2008 stated its intentiontechnical expertise and we may be unable to explore alternatives forsecure the dispositionnecessary patents or other intellectual property rights needed to successfully market new products that we may develop.

        A key element of its equity interestour business and operating strategy is to exploit our technological ability to design new manufacturing processes and products to take advantage of the anticipated growth in the Company. North American wind market. Historically, we have not developed patented technology or engaged in technical design work on a significant scale. If we are unable to develop new manufacturing processes and products that are attractive to our customers and potential customers, or if we are unable to secure the necessary patents or other intellectual property rights needed to prevent our competitors from developing and marketing substantially similar products, we could experience a material adverse effect on our business and results of operations.

We cannot insure against all potential risks and may have granted Tontine registration rightsdifficulty insuring our business activities or become subject to increased insurance premiums.

        Our business is subject to a number of risks, including inherent risks associated with respectmanufacturing, heavy-haul transport, and service and construction support for wind turbines. To mitigate the risks associated with our business, we have obtained various insurance policies. However, our insurance policies have high deductibles in certain instances and do not cover losses as a result of certain events such as terrorist attacks. In addition, our insurance policies are subject to annual review by our insurers and these policies may not be renewed at all or on similar or favorable terms. If we were to incur a significant uninsured loss or a loss in excess of the Broadwind common stock it holds. Sales of substantial amountslimits of our common stock ininsurance policies, the public market, or the perception that these sales may occur,results could affect the managementhave a material adverse effect on our business, financial condition and results of our company and could cause the market price of our common stock to decline.operations.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

Table of Contents

ITEM 2.    PROPERTIES

        Our corporate headquarters is located in Naperville, Illinois, which is a suburb located west of Chicago, Illinois. In addition, our subsidiaries own or lease operating facilities, which are presented by operating segment as follows:

(1)

Construction of the tower manufacturing facility located in Brandon, South Dakota location is a partially constructed wind tower manufacturing facility.was completed in January 2010, and we anticipate that the facility will become operational as business warrants and pending the installation of certain additional equipment.

        We consider that our facilities are in good condition and are adequate for our present and future needs.

ITEM 3.��    LEGAL PROCEEDINGS

        From time to time, we anticipate that Broadwind orand its subsidiaries may beare involved in litigation relating to claims arising out of itsour operations in the normal course of business. As of December 31, 2008,2009, we are not aware of material pending legal proceedings or threatened litigation that would have a material adverse effect on our financial condition or results of operations, although no assurance can be given with respect to the ultimate outcome of pending actions.

        In September 2007, Tower Tech received a notice of violation from the Wisconsin Department of Natural Resources ("WDNR") stating that Tower Tech was in violation of several provisions of the state's air pollution laws and regulations in connection with the construction and operation of two new paint booths at its Manitowoc, Wisconsin facility. Tower Tech has entered into negotiations with the WDNR, and currently the WDNR is seeking only monetary penalties and no other relief.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSRESERVED

        No matters were submitted to a vote of our security holders during the fourth quarter of 2008.

Table of Contents

PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        OurPrior to April 9, 2009, our common stock is currently listedwas quoted on the OTC Bulletin Board electronic quotation system ("OTCBB") under the symbol "BWEN."BWEN.OB." The Company changed its name from Tower Tech Holdings Inc. to Broadwind Energy, Inc. on February 28, 2008. On March 4, 2008, and in connection with the name change, shares of the Company'sOur common stock which had previously tradedbegan trading on the NASDAQ Global Select Market ("NASDAQ") on April 9, 2009 under the ticker symbol "TWRT," began trading under the ticker symbol "BWEN."

        The following table sets forth the range of high and low bid quotations for each quarter within the last two fiscal years as reported by the OTCBB. These quotationsOTCBB for each quarter during 2008, the first quarter of 2009 and for the second quarter for the period of April 1 through April 8, 2009. Quotations on the OTCBB reflect inter-dealer prices, withoutwhich do not include retail mark-up, mark-down or commissions, and may not necessarily represent actual sale prices:

        The publishedprices. For the second quarter of 2009 since April 9, 2009 and for the third and fourth quarters of 2009, the table sets forth the high and low bid quotationsprices of our common stock as reportedtraded on the OTCBB onNASDAQ Global Select Market.

        The most recent closing price for our common stock as of March 11, 2009, were $3.25 and $3.00 per share, respectively.9, 2010 was $5.44. As of March 9, 2009,2010, there were 6761 holders of record of our common stock.

        We have never paid cash dividends on our common stock and have no current plan to do so in the foreseeable future. The declaration and payment of dividends on our common stock are subject to the discretion of our Board of Directors and are further limited by our existing credit agreements as describedand other contractual agreements we may have in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Annual Report on Form 10-K. Specifically, certain of these credit agreements restrict the ability of the Company's subsidiaries (which are the borrowers under such credit agreements)place from time to distribute funds to Broadwind that might otherwise be used to pay dividends.time. The decision of our Board of Directors to pay future dividends will depend on general business conditions, the effect of a dividend payment on our financial condition, and other factors the Board of Directors may consider relevant. The current policy of our Board of Directors is to reinvest earnings in our operations to promote future growth and to fund potential acquisitions.

Performance Graph

The following Performance Graph and related information shall not be deemed "soliciting material" or "filed" under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, nor shall such information be incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under such Acts, except to the extent that the Company specifically incorporates it by reference into such filing.

        The following graph compares cumulative shareholder returns for our common stock as compared with the S&P 500 and the PowerShares Global Wind Energy Index for the period from April 9, 2009

Table of Contents

(the date our common stock began trading on the NASDAQ Global Select Market) to December 31, 2009. The graph assumes an investment of $100 as of April 9, 2009 and that dividends were reinvested.

Repurchases

        We did not engage in any repurchases of our common stock during the fourth quarter of 2008.

Table of Contents2009.

Unregistered Sales of Equity Securities

        All unregistered sales of equity securities during the fourth quarter or for the year ended December 31, 20082009 have been previously disclosed on our Current Reports on Form 8-K.

Securities Authorized for Issuance Under Equity Compensation Plans

        See Part III, Item 12 "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" of this Annual Report on Form 10-K for information as of December 31, 20082009 with respect to shares of our common stock that may be issued under our existing share-based compensation plans.

ITEM 6.    SELECTED FINANCIAL DATA

        The following selected historical consolidated financial and other data are presented starting in 2006, when we acquired Tower Tech, and present financial data for the year ended December 31, 2006.        The following selected historical consolidated financial and other data are qualified in their entirety by reference to, and should be read in conjunction with, our consolidated financial statements and the related notes thereto appearing elsewhere herein and Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our selected statement of operations and statement of cash flows data set forth below for each of the three years ended December 31, 2009, 2008, 2007, 2006 and 2006,2005, and the balance sheet data as of December 31, 2009, 2008, 2007, 2006 and 2006,2005, are derived from our consolidated financial statements.

Table of Contents

(In thousands, except per share data)

Table of Contents

(1)

During the year ended December 31, 2009, we recorded goodwill and intangible impairment charges in the aggregate of $82,211 related to our Gearing and Towers segments. During the year ended December 31, 2008, we recorded a goodwill impairment charge of $2,409 related to our ProductsTowers segment. See Note 108 "Goodwill and Intangible Assets" ofin Part IV, Item 15 in the notes to our consolidated financial statements for further discussion of the impairment.impairment for these years.

Table of Contents

(2)

For any period, earnings before interest, taxes, depreciation, amortization, and share-based compensation ("EBITDAS"Adjusted EBITDA") are calculated as presented below. Additionally, the calculation of EBITDAS excludes the effect of any goodwill and intangible impairment charges.

(3)

EBITDAS margin percentage equals EBITDAS divided by total revenue. We believe that EBITDASAdjusted EBITDA is particularly meaningful due principally to the role acquisitions have played in our development. Historically, our growth through acquisitions has resulted in significant non-cash depreciation and amortization expense because a significant portion of the purchase price of our acquired businesses is generally allocated to depreciable fixed assets and long-lived assets, which primarily consistsconsist of goodwill and amortizable intangible assets. Please note that neither EBITDAS nor EBITDAS margin percentageAdjusted EBITDA should not be considered alternativesan alternative to, nor is there any implication that they areAdjusted EBITDA is more meaningful than, any measure of performance or liquidity promulgated under accounting principles generally accepted in the U.S.United States ("GAAP"). Additionally, the calculation of Adjusted EBITDA excludes the effect of any goodwill and intangible impairment charges.

(3)

Adjusted EBITDA margin percentage is equal to Adjusted EBITDA divided by total revenue.

Table of Contents

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The discussion below contains "forward-looking statements," as defined in Section 21E of the Exchange Act, that reflect our current expectations regarding our future growth, results of operations, cash flows, performance and business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. We have tried to identify forward-looking statements by using words such as "anticipate," "believe," "plan," "expect," "intend," "will," and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to us and are subject to various risks, uncertainties, and other factors, including, but not limited to, those matters discussed in Item 1A "Risk Factors" in Part I of this Annual Report on Form 10-K, that could cause our actual growth, results of operations, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances, or for any other reason.

        As used in this Annual Report on Form 10-K, the terms "we," "us," "our," "Broadwind," and "the Company"the "Company" refer to Broadwind Energy, Inc. and ourits wholly-owned subsidiaries.

(Dollars are presented in thousands unless otherwise stated)

INTRODUCTION

        Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to assist the reader in better understanding our business, results of operations, financial condition, changes in financial condition, critical accounting policies and estimates, and significant developments. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes thereto appearing elsewhere herein. This section is organized as follows:

•

Our Business—an overview of our business, a discussion of current business and industry opportunities, challenges, and risks, and a discussion of significant developments affecting our business.



•

Results of Operations—an analysis and comparison of our consolidated results of operations for the years ended December 31, 2008, 2007 and 2006, as reflected in our consolidated statements of operations.



•

Summary of Critical Accounting Policies and Estimates—a discussion of accounting policies and estimates that we believe require management's most subjective or complex judgments.



•

Liquidity, Financial Position and Capital Resources—a discussion of our primary sources and uses of cash for the years ended December 31, 2008 and 2007, a discussion of selected changes in our financial position, and a summary of our future contractual obligations.

OUR BUSINESS

Overview

        We are a supplier of value-addedBroadwind Energy provides technologically advanced high-value products and services to the North AmericanU.S. wind energy sectorindustry. We believe we are the only independent company that offers our breadth of products and services to the market. Our product and service portfolio provides our customers, including wind turbine manufacturers, wind farm developers and wind farm operators, with access to a broad array of wind component and service offerings, which we believe is becoming increasingly important in today's wind market. We manufacture gearing systems and structural towers for the wind industry. We also provide technical service and precision repair and engineering and specialized logistics to the wind industry in the United States, a highly-fragmented market in which we hold a significant position. We have long standing relationships with our primary customers, who include several leading participants in the U.S. wind sector.

        The adverse impact of the global economic downturn, which we began to experience during the latter half of 2008, continued during 2009. The continued global economic downturn coupled with a re-pricing of credit risk and a lack of adequate liquidity in the capital markets presented a number of challenges for us. On a year-over-year basis, our revenues declined by approximately 9%. While revenues within our Towers segment increased by approximately 29%, revenues within our other operating segments declined compared to the prior year. The decline in our other operating segments reflects the broader economic condition of the wind energy market, which resulted in the delay or scaling-back of production volumes under some of our key customer agreements, a decline in wind farm installation and maintenance service contracts and declining logistics business due to pricing pressures from our competition. Accordingly, the decline in production levels across our business units has created production volume inefficiencies within our operations and cost structures, which has had a negative effect on our operating profits and gross margins.

        We responded by initiating cost-cutting measures throughout our operations as well as other energy-related industries. We providereducing our customers, such as leading wind turbine manufacturerscapital spending, amending existing credit agreements and developers, wind farm operatorsentering into new debt agreements and service companies, with a broad range of component and service offerings. Since 2006,sale-leaseback transactions. In October 2009, we have made significant investments in the growthannounced our intent to sell shares of our platformcommon stock in a public offering. We completed this offering in January 2010, and raised approximately $53,900 in net proceeds through a seriesthe sale of acquisitions. In doing so, we have developed a broad, U.S.-based supply10,000,000 shares of our common stock. A portion of the

Table of Contents

chainproceeds from this offering was used to repay outstanding indebtedness under the BOA Debt Facilities and the ICB Line (each such term as defined below) and to settle our interest rate swap agreements. We intend to use the remainder of these proceeds for general operating purposes and specific capital expenditures to help us grow our business, including the anticipated establishment of a MW gearbox test stand and refurbishment center. We believe that these initiatives enable us to better manage our operating and liquidity needs and will facilitate investing in capital expenditures that will successfully grow our business along with establishing adequate liquidity to support our working capital needs if and when the wind energy developmentindustry rebounds. We also intend to strengthen our liquidity and operating position through the establishment of a senior credit facility.

        We review our goodwill balances for impairment on at least an annual basis and review our intangible and other long-lived assets for impairment whenever events or changes in North America. Our five businesses are currently organizedcircumstances indicate that the asset's carrying value amount may not be recoverable. We performed our review of goodwill based on the carrying value of these assets as of October 31, 2009, and the estimate of fair-value for each of our operating segments was based primarily on projected future results, cash flows and other assumptions. We did not identify a triggering event during 2009 which would require an early assessment of impairment, however, in twoconnection with our annual goodwill impairment analysis as of October 31, 2009 which we completed in March 2010, we determined that the goodwill balance attributable to our Gearing segment was impaired due to a deterioration in financial performance during 2009 and as a result of the subsequent fourth quarter revision in our projection of future operating segments: Productsresults and Services.

Products

        The Products segment includes three subsidiaries that manufacture and sell products such as high precision gears for wind turbines, custom-engineered gearing systems forcash flows in light of the mining, energy and industrial sectors, structural wind towers, internal tower components, and large fabricated and machined components (e.g., crane parts and dipper buckets). Specific services provided include key technology areas such as grinding and finishingeffect of gears and gear sets, steel plate processing, heavy welding and custom corrosion protection of components. Our primary focus isthe continued economic downturn on the wind energy industry; however,gearing industry. Additionally, we determined that the carrying value of our ProductsRBA trade name was impaired as a result of the merger of RBA's operations into our Towers segment also services mining, construction, oilin December 2009 and gas,that RBA's customer relationship intangible was impaired due to a revision in projected revenues and cash flows associated with this customer relationship. Accordingly, we recorded goodwill and intangible impairment charges of $24,269 and $57,942, respectively, to properly reflect the carrying value of these assets. In the future, if our projected discounted cash flows associated with our operating segments do not exceed the carrying value of their net assets, we may be required to record additional write downs of the carrying value of goodwill, intangible assets or other industrial energy applications.long-lived assets associated with any of our operating segments and our operating results, and the market price of our common stock may be materially adversely affected.

        The Products segment has undergone a significant expansionAlthough we have recently seen signals that the wind energy industry and the broader U.S. economy may be recovering from the worst of the economic downturn that began in the last two years and reflects the operationslatter half of Tower Tech, RBA and Brad Foote. As of December 31, 2008, the segment had approximately 800 employees, and operated in Wisconsin, Texas, Illinois and Pennsylvania.

Services

        The Services segment was established upon our acquisition of EMS in January 2008 and expanded withcontinued throughout 2009, we expect that the economic conditions we experienced in 2009 will continue to negatively affect our acquisitionbusiness through at least the first half of Badger2010. Based on our current expectations regarding our backlog of firm commitments, increased quoting activity, scheduled 2010 wind farm development and installation projects, and leading market indicators in June 2008. This segment specializes in construction, operations and maintenance and component repair services for the wind energy industry, as well as specialized heavy haul trucking serviceswe anticipate an upward trend in our production volumes. Although we anticipate that the wind energy market will improve during the second half of 2010, we cannot provide any assurance that improved conditions will occur or that we will be able to installation sites. Services provided include construction and technical support in the erection of wind turbine generators, scheduled and un-scheduled maintenance, fiberglass inspections, general repair and training, and the transportation of oversize/overweight equipment and machinery.

        As of December 31, 2008, the segment had approximately 300 employees. Currently, the Services segment has service hub locations in South Dakota, Texas and Wisconsin and satellite field service centers in California and Illinois.

        See Note 21 "Segment Reporting" of the notes to our consolidated financial statements for further discussion.

Summary of 2008

capitalize on those improved conditions. Below is a summary of some of therecent key events and trends from 2008:that occurred during 2009:

Summary of Recent Events

•

We establishedIn January, we completed construction and shortly thereafter commenced operations at our Services segment through the acquisition of EMS, which was completednew wind tower manufacturing facility located in January 2008, and Badger, which was completed in June 2008. The acquisition of EMS enabled the Company to provide construction, operations and maintenance and component repair services for the wind industry, and the acquisition of Badger enabled the Company to provide transportation and logistical services for the delivery of wind turbines, towers, blades and other oversized equipment for large industrial applications. These acquisitions support our development of a broad U.S.-based supply chain for wind energy development in North America.Abilene, Texas.



•

The Company madeIn February, federal economic recovery legislation was passed by Congress and signed into law by President Obama. Within this legislation, significant capital expenditures in its existing and newly acquired subsidiaries duringprovisions to benefit the year ended December 31, 2008, inrenewable energy industry were included, such as: grant programs provided through the aggregate amount of $83,720. These capital expenditures primarily consistedTreasury Department to renewable energy developers; the extension of the constructionwind energy production tax credits; a provision allowing wind developers to take an investment tax credit in lieu of Tower Tech's tower manufacturing facility in Abilene, Texas and the partial construction of its tower manufacturing facility in Brandon, South Dakota, as well as the build-out of additional facility capacity and gearing equipment expenditures at our Brad Foote subsidiary. In addition, the Company invested in new trailer and escort vehicles at its Badger subsidiary and expenditures at its EMS subsidiary

Table of Contents

relatedproduction tax credit; a provision allowing wind developers to purchasescollect the investment tax credit as a cash grant; loan guarantee programs provided through the U.S. Department of equipmentEnergy for renewable energy developers and service vehicles, purchase of a previously leased facility,manufacturers; and construction of a new servicing facility.tax credits for advanced energy manufacturers.

•

The Company appointed new senior management to existing positionsIn April, we announced that shares of our common stock had been approved for listing on NASDAQ. Shares of our common stock, which were previously listed and created new leadership positions, including: Chief Operating Officer; Chief Financial Officer; Senior Vice President, Human Resources; General Counsel; Controller; and Director of Compliance; as well as corporate-level operations oversight positions at our subsidiary companies.traded on the OTCBB, began trading on NASDAQ on April 9, 2009 under the same "BWEN" ticker symbol.



•

We committed significant resources during 2008In April, we announced that Tower Tech had obtained construction financing from Great Western Bank ("Great Western") in the amount of up to enhance$10,000. Proceeds from the control environment within the Company. An assessmentfinancing were used to finance construction of the effectiveness of the Company's internal controls as of the end of the 2008 fiscal year is includedour wind tower manufacturing facility in Item 9A Controls and Procedures of this Annual Report on Form 10-K.Brandon, South Dakota.



•

A significant portion of the cash usedIn July, we appointed Stephanie K. Kushner as Chief Financial Officer and principal financial officer. Ms. Kushner brought to fund the Company's acquisitions, working capital needs and operations described above was received through financing provided by Tontine parties pursuant to Securities Purchase Agreements entered into between the Company over 30 years of accounting and certain Tontine partiesfinance experience and has served as Chief Financial Officer and served in January 2008other senior management positions for large manufacturing and April 2008. Pursuant to the Securities Purchase Agreements, the Tontine parties purchased an aggregate of 14,594,064 unregistered shares of our common stock in private placements, for an aggregate purchase price of $117,225. Also, in April 2008, certain Tontine parties converted the original notional amount of their respective 9.5% related party notes for an aggregate of 3,333,332 in shares of the Company's unregistered common stock. In connection with the conversion, accrued interest of $1,223 on the notes was paid by the Company to such Tontine parties. On November 10, 2008, Tontine filed a Schedule 13D with the SEC in which it announced its intention to explore alternatives for the disposition its equity interest in the Company. Tontine has previously been the primary source of capital for acquisitions and expansion projects for the Company, and there can be no assurance the Company will be successful in securing a replacement source of equity capital to continue our growth and acquisition plans.publicly traded corporations.



•

Our operating resultsIn October, we filed a registration statement on Form S-1 to issue an additional 10,000,000 shares of our common stock. On January 21, 2010, we completed our public offering of Company common stock at an offering price of $5.75 per share, raising net proceeds of approximately $53,900. In the offering, we sold 10,000,000 newly issued shares, Tontine sold a combined total of 6,125,000 shares and business strategy, particularly inour Chief Executive Officer, J. Cameron Drecoll, sold 1,125,000 shares. The sales included all shares subject to the fourth quarterunderwriters' over-allotment option. After the completion of 2008, were affected bythis offering, we repaid all outstanding indebtedness under the downturn in the economyBank of America debt agreements and the effectsInvestors Community Bank line of credit for $16,076 and $3,066, respectively. As of February 28, 2010, debt, credit agreements and capital lease obligations totaled $18,722, of which $3,842 represents our minimum debt service and capital lease payments for 2010.

Table of Contents

RESULTS OF OPERATIONS

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

        The summary of selected financial data table below should be referenced in connection with a review of the disruptions infollowing discussion of our results of operations for the global credit markets and financial systems andyear ended December 31, 2009 compared to the corresponding effect on the wind industry and global heavy manufacturing industry. These conditions limited our ability to further expand upon our growth and operating strategy and restricted our ability to raise additional financing for our operations. In light of these challenges, we changed our immediate business and operating focusyear ended December 31, 2008.

Consolidated

        Total revenues decreased $19,491 or 9%, from rapidly growing the Company through strategic acquisitions and increased capital expenditures to concentrating on achieving operational excellence within our existing businesses, evaluating and restructuring our financing arrangements, and focusing our efforts on maintaining adequate levels of liquidity and working capital.

        Revenues$217,321 during the year ended December 31, 2008, were $217,321, an increase of $187,517 compared to revenues of $29,804$197,830 during the year ended December 31, 2007.2009. The increasedecrease in revenues was primarily attributable to full year operating results, and incremental growth at Brad Foote, increased wind towera 38% decline in gearing revenues, at Tower Tech, and the incremental revenues resulting from our acquisitions of EMS and Badger during 2008.

        Gross margin increased $29,431 from $3,939, or 13.2% of revenue, during the year ended December 31, 2007, to $33,370, or 15.4% of revenue, during the year ended December 31, 2008. The increase in gross margin and gross margin percentagewhich was primarily the result of an overalla reduction in wind turbine gearing production as compared to the prior year. Revenues in our Technical and Engineering Services segment decreased 12% due to the completion of a large blade refurbishment project that did not recur during 2009. These declines were partially offset by a 29% increase in wind turbine structural tower revenues as a result of new customer orders and increased manufacturing capacity associated with the addition of a new wind structural tower facility in our operating segments and attributable to the inclusion of gross margin contributed by our newly-created Services segmentAbilene, Texas in 2008.January 2009.

        Operating lossTotal cost of sales increased $2,076 from $3,535 during the year ended December 31, 2007 to $21,743$183,951 during the year ended December 31, 2008, to $186,027 during the year ended December 31, 2009. The change in cost of sales was primarily as athe result of an increase in amortizationcosts of sales of 49% and 56% in our Towers and Logistics segments, respectively. The increase in cost of sales within our Towers segment was primarily attributable to a higher percentage of steel included in the selling price of wind turbine structural towers manufactured, an increase in production costs related to higher production volumes and the inclusion of start-up and production costs for our new wind tower manufacturing facility in Abilene, Texas. The increase in cost of sales within our Logistics segment was attributable to higher depreciation expense fullrelated to capital

Table of Contents

expenditures made during 2008. The increase in cost of sales was partially offset by 30% and 10% declines in cost of sales within our Gearing and Technical and Engineering Services segments, respectively. The decrease in cost of sales in our Gearing segment was primarily attributable to the 38% decline in revenues as compared to the prior year. The decrease in cost of sales in our Technical and Engineering Services segment was due to lower direct labor costs for field technicians as a result of a 12% decline in revenues as compared to the prior year.

        Selling, general and administrative expenses decreased from $41,545 during the year ended December 31, 2008, to $34,825 during the year ended December 31, 2009. The decrease was primarily attributable to cost reduction initiatives implemented during 2009 across all reportable segments to mitigate the effects of an overall decline in production volumes. These cost reduction initiatives were partially offset by an $806 increase in share-based compensation expense as a result of an increase in restricted stock units granted and professional fees and costs of $1,201 associated with amendments to our credit agreement with Bank of America.

        We perform our annual test of goodwill impairment using a testing date as of October 31 of each year. Due to the continuing effects of the economic downturn on the wind energy industry, we revised our projected revenues and associated cash flows. The results of these revised projections indicated that the fair value of our goodwill and intangible assets related to our Gearing segment was less than the carrying value of these assets. Our analysis also indicated impairment to our trade name and customer relationship intangible assets in our Towers segment as a result of the merger of our industrial weldment business into our Towers segment in December 2009 and due to a revision in projected revenues and cash flows associated with this customer relationship. Accordingly, we recorded goodwill and intangible impairment charges of $24,269 and $57,942, to properly reflect the carrying value of these assets.

        Intangible amortization expense decreased from $11,159 during the year ended December 31, 2008, to $10,404 during the year ended December 31, 2009. The decrease was primarily due to a $1,203 reduction in amortization expense in our Gearing segment as a result of the impairment to its customer relationship intangibles. This decrease in amortization expense was partially offset by increases in trademark and customer relationship amortization expense of $367 and $99 in our Logistics segment and our Technical and Engineering Services segment, respectively, resulting from full year amortization expense associated with the acquisitions of EMS and Badger, which we acquired in January 2008 and June 2008, respectively.

        Total other expense, net, was $2,480 during the year ended December 31, 2008, compared to other income, net, of $3,929 during the year ended December 31, 2009. The increase was primarily attributable to the recognition of $5,082 in income related to an escrow agreement settlement with the former owners of Brad Foote during the second quarter of 2009.

        During the year ended December 31, 2008, we reported a provision for income taxes of $1,062 compared to a benefit for income taxes of $1,589 during the year ended December 31, 2009. The decrease in income taxes was primarily attributable to a reduction in our deferred income tax liabilities in connection with the goodwill impairment charge recorded during 2009.

        Net loss increased from $25,285 during the year ended December 31, 2008, to $110,119 during the year ended December 31, 2009, primarily as a result of the factors as described above.

Table of Contents

Towers Segment

        The following table summarizes the Towers segment operating results for the year ended December 31, 2009 and 2008:

        Towers segment revenues increased $20,755 from $72,561 during the year ended December 31, 2008, to $93,316 during the year ended December 31, 2009. Approximately 21% of the increase in revenues was attributable to an increase in materials included in the selling price of wind turbine structural towers manufactured. Additionally, revenues increased by approximately 28% in connection with new customer agreements and the corresponding increase in production volumes at our Manitowoc, Wisconsin and Abilene, Texas facilities

        Despite higher revenues, the segment incurred an operating loss of $500 due in part to the impairment charge with respect to a customer relationship and trade name intangible in the aggregate of $1,916. The trade name intangible impairment charge was attributable to the merger of our specialty weldment operations into our Towers segment in December 2009 and the customer relationship intangible impairment was due to a revision in projected revenues and cash flows associated with this customer relationship. The decrease in operating income and operating margin was also due to production inefficiencies and increased travel and administrative expenses of approximately $3,350 associated with the start-up of our second wind structural tower manufacturing facility in Abilene, Texas and our operating margins were negatively impacted by approximately $4,200 due to less profitable customer contracts as compared to the prior year.

Gearing Segment

        The following table summarizes the Gearing segment operating results for the year ended December 31, 2009 and 2008:

        Gearing segment revenues decreased $40,035 from $104,553 during the year ended December 31, 2008, to $64,518 during the year ended December 31, 2009. The decrease in revenues was primarily attributable to 46% and 27% declines in wind gearing and industrial revenues, respectively. The manufacture of wind turbine gearing, which typically accounts for the majority of our gearing revenues, continued to be negatively affected by reduced or delayed production orders from our key gearing customers.

        Gearing operating loss increased $90,445 from $6,614 during the year ended December 31, 2008, to $97,059 during the year ended December 31, 2009. The increase in operating loss was largely attributable to goodwill and intangible impairment charges of $80,295 recorded during 2009. The impairment charges were the result of a revision in our estimates of future results of operations and associated cash flows due to a decline in production volumes. Additionally, the increase in operating

Table of Contents

loss was also the result of a continued decline in wind gearing production volumes, which resulted in direct labor and manufacturing overhead inefficiencies and an under absorption of fixed operating costs. Material costs were $3,972 higher due to additional product rework costs and scrap associated with specification adjustments for new wind gearing production orders. The increase in operating loss was also impacted by higher depreciation expense of $1,792 associated with capital investments made in 2008, and expenses and fees of $1,201 incurred in connection with the negotiation of amendments to our credit facility with Bank of America, partially offset by lower outside service expenses associated with a reduced level of activity and lower selling, general and administrative expenses at Brad Foote,due to cost reduction initiatives. Gearing operating margins worsened from (6.3%) during the year ended December 31, 2008 to (150.4%) during the year ended December 31, 2009, as a result of these factors.

Technical and anEngineering Services Segment

        The following table summarizes the Technical and Engineering Services segment operating results for the year ended December 31, 2009 and 2008:

        Technical and Engineering Services segment revenues decreased $3,674 from $31,249 during the year ended December 31, 2008, to $27,575 during the year ended December 31, 2009. The decrease in revenues was primarily the result of 9% and 16% declines in our technical services and precision repair and engineering service revenues, respectively, during the current year. The decline in our technical services revenues was the result of a continued slowdown in operations and maintenance services performed for wind farm owners and operators, particularly in the fourth quarter of the year. The decline in engineering services revenues primarily relates to a decision by one of our large service customers to in-service work which was previously contracted to us.

        Technical and Engineering Services segment operating loss improved $1,212 from $1,822 during the year ended December 31, 2008, to $610 during the year ended December 31, 2009. The operating margin improved from (5.8%) in 2008 to (2.2%) in 2009. The improvement in operating loss and operating loss margin were primarily attributable to cost reduction initiatives to align our administrative and field technicians cost structures as a result of the reduction in service contracts during the current year.

Logistics Segment

        The following table summarizes the Logistics segment operating results for the year and period ended December 31, 2009 and 2008:

        Logistics segment revenues increased $3,005 from $10,253 during the period ended December 31, 2008, to $13,258 during the year ended December 31, 2009. The increase in corporaterevenues was primarily

Table of Contents

attributable to full year financial results for Badger, which we acquired in June 2008, compared to seven months of financial results during 2008. During the latter half of 2009, revenues were negatively affected by the impact of the economic downturn on the wind energy industry and competitive pricing pressure during 2009.

        Logistics segment operating income decreased $3,513 from operating income of $131 during the period ended December 31, 2008, to an operating loss of $3,382 during the year ended December 31, 2009. The operating margin decreased similarly, from 1.2% in 2008 to (25.5%) in 2009. These decreases were primarily attributable to higher fixed overhead costs of $1,959 due to higher depreciation and lease expense associated with an expansion of the heavy haul fleet in 2008 and increased selling, general and administrative expenses.expenses of $1,373 which were primarily related to full year financial results.

RESULTS OF OPERATIONSCorporate and Other

        Corporate and Other operating loss improved $5,165 from $19,251 during the year ended December 31, 2008, to $14,086 during the year ended December 31, 2009. The decrease in operating loss was primarily attributable to a $4,279 reduction in professional fees associated with due diligence and acquisition-related costs incurred in connection with acquisitions we did not complete during 2008 and also related to Sarbanes-Oxley and other compliance initiatives in addition to a $882 reduction in bad debt expense.

Table of Contents

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

        The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the year ended December 31, 2008 compared to the year ended December 31, 2007.