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SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2014
SEGMENT REPORTING  
SEGMENT REPORTING

NOTE 14 — SEGMENT REPORTING

 

The Company is organized into reporting segments based on the nature of the products and services offered and business activities from which it earns revenues and incurs expenses for which discrete financial information is available and regularly reviewed by the Company’s chief operating decision maker. The Company’s segments and their product and service offerings are summarized below:

 

Towers and Weldments

 

The Company manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for two megawatt (“MW”) and larger wind turbines. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 500 towers, sufficient to support turbines generating more than 1,200 MW of power. This product segment also encompasses the manufacture of specialty fabrications and specialty weldments for mining and other industrial customers.

 

Gearing

 

The Company engineers, builds and remanufactures precision gears and gearing systems for oil and gas, wind, mining, steel and other industrial applications. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment in Neville Island, Pennsylvania.

 

Services

 

The Company offers a comprehensive range of services, primarily to wind farm developers and operators. The Company specializes in non-routine maintenance services for both kilowatt and megawatt turbines. The Company also offers comprehensive field services to the wind energy industry. The Company is increasingly focusing its efforts on the identification and/or development of product and service offerings which will improve the reliability and efficiency of wind turbines, and therefore enhance the economic benefits to its customers. The Company provides wind services across the U.S., with primary service locations in South Dakota and Texas. In February 2011, the Company put into operation its Abilene, Texas drivetrain service center facility (the “Gearbox Facility”), which is focused on servicing the growing installed base of MW wind turbines as they come off warranty and, to a limited extent, industrial gearboxes requiring precision repair and testing.

 

Corporate and Eliminations

 

“Corporate” includes the assets and selling, general and administrative expenses of the Company’s corporate office. “Eliminations” comprises adjustments to reconcile segment results to consolidated results.

 

Summary financial information by reportable segment for the three months ended March 31, 2014 and 2013 is as follows:

 

For the Three Months Ended March 31, 2014:

 

Towers and
Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

48,134

 

$

8,275

 

$

2,391

 

$

—

 

$

—

 

$

58,800

 

Intersegment revenues (1)

 

160

 

499

 

47

 

—

 

(706

)

—

 

Operating profit (loss)

 

5,612

 

(2,966

)

(1,339

)

(2,253

)

(49

)

(995

)

Depreciation and amortization

 

984

 

1,801

 

313

 

16

 

—

 

3,114

 

Capital expenditures

 

1,233

 

634

 

30

 

303

 

—

 

2,200

 

 

For the Three Months Ended March 31, 2013:

 

Towers and

Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

29,868

 

$

8,169

 

$

7,469

 

$

—

 

$

—

 

$

45,506

 

Intersegment revenues (1)

 

3

 

2,551

 

15

 

—

 

(2,569

)

—

 

Operating profit (loss)

 

2,154

 

(2,977

)

(702

)

(2,961

)

2

 

(4,484

)

Depreciation and amortization

 

951

 

2,710

 

313

 

12

 

—

 

3,986

 

Capital expenditures

 

242

 

643

 

213

 

277

 

—

 

1,375

 

 

 

 

Total Assets as of

 

 

 

March 31,

 

December 31,

 

Segments:

 

2014

 

2013

 

 

 

 

 

 

 

Towers and Weldments

 

$

56,913

 

$

51,934

 

Gearing

 

62,428

 

66,208

 

Services

 

15,249

 

14,800

 

Assets held for sale

 

1,582

 

1,970

 

Corporate

 

300,408

 

300,835

 

Eliminations

 

(282,964

)

(272,053

)

 

 

$

153,616

 

$

163,694

 

 

(1)   Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled $499 and $2,551 for the three months ended March 31, 2014 and 2013, respectively.