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Note 15 - Segment Reporting
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 15— 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.

 

The Company’s segments and their product and service offerings are summarized below: 

 

Heavy Fabrications

 

The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. The Company’s most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve capacity utilization, reduce customer concentrations, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and adapters primarily to wind turbine manufacturers. 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 550 towers (1,650 tower sections), sufficient to support turbines generating more than 1,500 MW of power. The Company has expanded its production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and original equipment manufacturer (“OEM”) components utilized in surface and underground mining, construction, material handling, oil and gas (“O&G”) and other infrastructure markets. The Company has designed and manufactures a mobile, modular pressure reducing system for the compressed natural gas virtual pipeline market. The Company manufactures components for buckets, shovels, car bodies, drill masts and other products that support mining and construction markets. In other industrial markets, the Company provides crane components, pressure vessels, frames and other structures.

 

Gearing 

 

The Company provides gearing, gearboxes and precision machined components to a broad set of customers in diverse markets including surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore oil and gas fracking and drilling, marine, defense, and other industrial markets. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in addition to gearbox repair in Cicero, Illinois, and heat treatment and gearbox repair in Neville Island, Pennsylvania.

 

Industrial Solutions 

 

The Company provides supply chain solutions, light fabrication, inventory management and kitting and assembly services, primarily serving the combined cycle natural gas turbine market. The Company has recently expanded into the U.S. wind power generation market, by providing tower internals kitting solutions for on-site installations, as OEMs domesticate their supply chain due to lead time and reliability issues. The Company leverages a global supply chain to provide instrumentation and controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes and wiring, and electromechanical devices. The Company also provides packaging solutions and fabricates panels and sub-assemblies to reduce customers’ costs and improve manufacturing velocity and reliability.

 

Corporate

 

“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. 

 

The accounting policies of the reportable segments are the same as those referenced in Note 1, “Basis of Presentation” of these condensed consolidated financial statements. Summary financial information by reportable segment for the three and nine months ended September 30, 2024 and 2023 is as follows:

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Three Months Ended September 30, 2024

                        

Revenues from external customers

 $20,600  $9,167  $5,736  $—  $—  $35,503 

Intersegment revenues

  —   —   1   —   (1)  — 

Net revenues

  20,600   9,167   5,737   —   (1)  35,503 

Operating income (loss)

  2,230   (78)  462   (1,436)  —   1,178 

Depreciation and amortization

  999   534   109   29   —   1,671 

Capital expenditures

  588   123   24   10   —   745 

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Three Months Ended September 30, 2023

                        

Revenues from external customers

 $38,326  $11,404  $7,433  $—  $—  $57,163 

Intersegment revenues

  —   —   1   —   (1)  — 

Net revenues

  38,326   11,404   7,434   —   (1)  57,163 

Operating income (loss)

  5,791   265   846   (1,535)  —   5,367 

Depreciation and amortization

  896   563   94   52   —   1,605 

Capital expenditures

  1,098   190   31   19   —   1,338 

      

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Nine Months Ended September 30, 2024

                        

Revenues from external customers

 $62,228  $27,958  $19,385  $—  $—  $109,571 

Intersegment revenues

  —   —   808   —   (808)  — 

Net revenues

  62,228   27,958   20,193   —   (808)  109,571 

Operating income (loss)

  5,832   429   2,852   (4,600)  —   4,513 

Depreciation and amortization

  2,932   1,627   315   112   —   4,986 

Capital expenditures

  1,419   1,471   362   27   —   3,279 

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Nine Months Ended September 30, 2023

                        

Revenues from external customers

 $103,864  $34,347  $18,668  $—  $—  $156,879 

Intersegment revenues

  —   —   457   —   (457)  — 

Net revenues

  103,864   34,347   19,125   —   (457)  156,879 

Operating income (loss)

  12,448   1,194   2,311   (7,091)  3   8,865 

Depreciation and amortization

  2,610   1,715   280   167   —   4,772 

Capital expenditures

  3,916   1,314   49   36   —   5,315 

 

  

Total Assets as of

 
  

September 30,

  

December 31,

 

Segments:

 

2024

  

2023

 

Heavy Fabrications

 $44,253  $46,931 

Gearing

  44,796   48,599 

Industrial Solutions

  14,576   16,295 

Corporate

  57,784   58,487 

Eliminations

  (36,285)  (35,156)
  $125,124  $135,156