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SEGMENT REPORTING | 12 Months Ended
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Dec. 31, 2018
SEGMENT REPORTING |
SEGMENT REPORTING | 16. SEGMENT REPORTING The Company is organized into reporting segments based on the nature of the products 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. On February 1, 2017, the Company acquired Red Wolf, and Red Wolf is being operated as a wholly-owned subsidiary, as more fully described in Note 21, “Business Combinations” of these consolidated financial statements. The Red Wolf acquisition aligns with the Company’s growth strategy approved by our Board in late 2016 to expand and diversify our business through organic growth and strategic bolt-on acquisitions. Red Wolf’s operations is being reported in the “Process Systems” segment. As a result of the 2017 Red Wolf acquisition, the Company revised its segment presentation to include three reportable operating segments: Towers and Weldments, Gearing and Process Systems. All current and prior period financial results have been revised to reflect these changes. In the fourth quarter of 2017, the segment changed its name from “Towers and Weldments” to “Towers and Heavy Fabrications” to more accurately reflect the nature of the segment’s activities. The Company’s segments and their product offerings are summarized below: Towers and Heavy Fabrications The Company manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for multiple 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 facilities have a combined annual tower production capacity of up to approximately 550 tower towers (1650 tower sections), sufficient to support turbines generating more than 1,100 MW of power. This product segment also encompasses the fabrication of heavy 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. Process Systems The Company acquired Red Wolf on February 1, 2017 and as a result, aggregated its Abilene, TX fabrication business with Red Wolf to form the Process Systems reportable segment. This segment provides contract manufacturing services that include build-to-spec, kitting, fabrication and inventory management for customers throughout the U.S. and in foreign countries, primarily supporting the natural gas turbine market. Corporate and Other “Corporate” includes the assets and SG&A expenses of the Company’s corporate office. “Eliminations” comprises adjustments to reconcile segment results to consolidated results. The accounting policies of the reportable segments are the same as those referenced in Note 1, “Description of Business and Summary of Significant Accounting Policies” of these consolidated financial statements. Summary financial information by reportable segment is as follows:
|  |  | Towers and |  |  |  |  | Process |  |  |  |  |  |  |  |  |  |
|  |  | Heavy Fabrications |  | Gearing |  | Systems |  | Corporate |  | Eliminations |  | Consolidated |
For the Year Ended December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers |  |  | $ | 68,773 |  | $ | 38,376 |  | $ | 18,231 |  | $ | — |  | $ | — |  | $ | 125,380 |
Intersegment revenues |  |  |  | 42 |  |  | — |  |  | 88 |  |  | — |  |  | (130) |  |  | — |
Net revenues |  |  |  | 68,815 |  |  | 38,376 |  |  | 18,319 |  |  | — |  |  | (130) |  |  | 125,380 |
Operating (loss) profit |  |  |  | (4,346) |  |  | 51 |  |  | (16,442) |  |  | (4,329) |  |  | — |  |  | (25,066) |
Depreciation and amortization |  |  |  | 4,986 |  |  | 2,255 |  |  | 1,709 |  |  | 233 |  |  | — |  |  | 9,183 |
Capital expenditures |  |  |  | 1,441 |  |  | 706 |  |  | 31 |  |  | 146 |  |  | — |  |  | 2,324 |
Total assets |  |  |  | 32,866 |  |  | 37,028 |  |  | 13,731 |  |  | 243,867 |  |  | (228,327) |  |  | 99,165 |
|  | Towers and |  |  |  |  | Process |  |  |  |  |  |  |  |  |  |
|  | Heavy Fabrications |  | Gearing |  | Systems |  | Corporate |  | Eliminations |  | Consolidated |
For the Year Ended December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers |  | $ | 103,389 |  | $ | 26,006 |  |  | 17,390 |  | $ | — |  | $ | — |  | $ | 146,785 |
Operating (loss) profit |  |  | 2,667 |  |  | (2,632) |  |  | (2,269) |  |  | (5,199) |  |  | — |  |  | (7,433) |
Depreciation and amortization |  |  | 4,638 |  |  | 2,430 |  |  | 1,706 |  |  | 225 |  |  | — |  |  | 8,999 |
Capital expenditures |  |  | 5,355 |  |  | 726 |  |  | 426 |  |  | 181 |  |  | — |  |  | 6,688 |
Assets held for sale |  |  | — |  |  | 560 |  |  | — |  |  | 20 |  |  | — |  |  | 580 |
Total assets |  |  | 27,958 |  |  | 38,016 |  |  | 26,442 |  |  | 249,346 |  |  | (229,412) |  |  | 112,350 |
The Company generates revenues entirely from transactions completed in the U.S. and its long‑lived assets are all located in the U.S. All intercompany revenue is eliminated in consolidation. During 2018, two customers accounted for more than 10% of total net revenues. These two customers accounted for revenues of $72,851 for fiscal year 2018, with one reported within the Towers and Heavy Fabrications segment and one reported within the Gearing segment. During 2017, one customer accounted for more than 10% of total net revenues or $100,413 in revenue for fiscal year 2017, which was reported within the Towers and Heavy Fabrications segment. During the years ended December 31, 2018 and 2017, five customers accounted for 78% and 85%, respectively, of total net revenues.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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