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SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2015
SEGMENT REPORTING  
SEGMENT REPORTING

NOTE 13 — 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 multiple megawatt (“MW”) 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 1,000 MW of power. This product segment also encompasses the manufacture of 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 wind turbines. 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. Previously, the Company operated drivetrain service centers in both of these locations, 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. The Company has recently consolidated the two service centers into the drivetrain service center in Abilene, Texas (the “Abilene Gearbox Facility”) in order to reduce overhead costs.

 

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 and six months ended June 30, 2015 and 2014 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Towers and

    

 

 

    

 

 

    

 

 

 

    

 

    

 

 

 

 

 

Weldments

 

Gearing

 

Services

 

Corporate

 

 

Eliminations

 

Consolidated

 

For the Three Months Ended June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$
54,994

 

$
7,568

 

$
2,663

 

$

 —

 

$

 —

 

$
65,225

 

Intersegment revenues (1)

 

 
37

 

 
398

 

 
23

 

 

 —

 

 
(458)

 

 

 —

 

Operating profit (loss)

 

 
7,155

 

 
(1,524)

 

 
(1,764)

 

 
(2,007)

 

 
1

 

 
1,861

 

Depreciation and amortization

 

 
915

 

 
1,244

 

 
315

 

 
44

 

 

 —

 

 
2,518

 

Capital expenditures

 

 
276

 

 
381

 

 
105

 

 
2

 

 

 —

 

 
764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Towers and

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

For the Three Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$
52,794

 

$
12,139

 

$
3,448

 

$

 —

 

$

 —

 

$
68,381

 

Intersegment revenues (1)

 

 
97

 

 
285

 

 
34

 

 

 —

 

 
(416)

 

 

 —

 

Operating profit (loss)

 

 
8,561

 

 
(1,800)

 

 
(1,319)

 

 
(3,386)

 

 
45

 

 
2,101

 

Depreciation and amortization

 

 
1,007

 

 
1,805

 

 
306

 

 
32

 

 

 —

 

 
3,150

 

Capital expenditures

 

 
1,878

 

 
342

 

 
95

 

 
27

 

 

 —

 

 
2,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Towers and

    

 

 

    

 

 

    

 

 

 

    

 

    

 

 

 

 

 

Weldments

 

Gearing

 

Services

 

Corporate

 

 

Eliminations

 

Consolidated

 

For the Six Months Ended June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$
95,792

 

$
15,999

 

$
4,485

 

$

 —

 

$

 —

 

$
116,276

 

Intersegment revenues (2)

 

 
268

 

 
574

 

 
139

 

 

 —

 

 
(981)

 

 

 —

 

Operating profit (loss)

 

 
8,290

 

 
(2,736)

 

 
(4,388)

 

 
(4,291)

 

 
8

 

 
(3,117)

 

Depreciation and amortization

 

 
1,829

 

 
2,541

 

 
637

 

 
90

 

 

 —

 

 
5,097

 

Capital expenditures

 

 
787

 

 
454

 

 
276

 

 
87

 

 

 —

 

 
1,604

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Towers and

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

Weldments

 

Gearing

 

Services

 

Corporate

 

Eliminations

 

Consolidated

 

For the Six Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$
100,928

 

$
20,414

 

$
5,839

 

$

 —

 

$

 —

 

$
127,181

 

Intersegment revenues (2)

 

 
257

 

 
784

 

 
81

 

 

 —

 

 
(1,122)

 

 

 —

 

Operating profit (loss)

 

 
14,172

 

 
(4,765)

 

 
(2,658)

 

 
(5,638)

 

 
(5)

 

 
1,106

 

Depreciation and amortization

 

 
1,991

 

 
3,606

 

 
619

 

 
48

 

 

 —

 

 
6,264

 

Capital expenditures

 

 
3,111

 

 
976

 

 
125

 

 
330

 

 

 —

 

 
4,542

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets as of 

 

 

 

June 30,

 

December 31,

 

Segments:

 

2015

 

2014

 

Towers and Weldments

    

$
59,138

    

$
50,691

 

Gearing

 

 
45,325

 

 
50,238

 

Services

 

 
9,259

 

 
10,884

 

Assets held for sale

 

 
1,517

 

 
738

 

Corporate

 

 
292,796

 

 
297,754

 

Eliminations

 

 
(275,974)

 

 
(263,688)

 

 

 

$
132,061

 

$
146,617

 

 

(1)

Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled $398 and $285 for the three months ended June 30, 2015 and 2014, respectively.

(2)  Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled  

      $574 and $784 for the six months ended June 30, 2015 and 2014, respectively.