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Note 15 - Segment Reporting
 3 Months Ended
Mar. 31, 2025
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 (“CODM”). The Company’s CODM has been identified as the Chief Executive Officer and President, who reviews operating income by segment in relation to total operating income to make decisions about allocating resources and assessing performance. 

 

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 repowering 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 1.7 GW 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 months ended March 31, 2025 and 2024 is as follows:

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Three Months Ended March 31, 2025

                        

Revenues from external customers

 $25,248  $5,966  $5,624  $—  $—  $36,838 

Intersegment revenues

  —   —   23   —   (23)  — 

Net revenues

  25,248   5,966   5,647   —   (23)  36,838 

Direct materials

  14,622   1,440   3,329   —   *   19,391 

Direct labor

  3,762   1,261   *   —   —   5,023 

Indirect labor

  2,811   1,129   547   —   —   4,487 

Variable overhead

  *   875   473   —   —   1,348 

AMP credits

  (2,564)  —   —   —   —   (2,564)

Salaries and benefits

  *   *   *   398   —   398 

Share-based compensation

  *   *   *   146   —   146 

Depreciation and amortization

  1,021   549   114   18   —   1,702 

All other expenses (1)

  3,355   1,604   854   933   (23)  6,723 

Operating income (loss)

  2,241   (892)  330   (1,495)  —   184 

Capital expenditures

  861   26   —   29   —   916 

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Three Months Ended March 31, 2024

                        

Revenues from external customers

 $22,016  $8,337  $7,263  $—  $—  $37,616 

Intersegment revenues

  —   —   731   —   (731)  — 

Net revenues

  22,016   8,337   7,994   —   (731)  37,616 

Direct materials

  12,547   1,829   4,386   —   *   18,762 

Direct labor

  2,885   1,382   *   —   —   4,267 

Indirect labor

  2,689   1,307   382   —   —   4,378 

Variable overhead

  *   1,003   457   —   —   1,460 

AMP credits

  (1,717)  —   —   —   —   (1,717)

Salaries and benefits

  *   *   *   579   —   579 

Share-based compensation

  *   *   *   172   —   172 

Depreciation and amortization

  911   540   100   45   —   1,596 

All other expenses (1)

  2,655   2,251   902   964   (731)  6,041 

Operating income (loss)

  2,046   25   1,767   (1,760)  —   2,078 

Capital expenditures

  461   1,068   215   —   —   1,744 

 

* Line item not deemed a significant expense for this segment (per analysis of Accounting Standards Update No. 2023-07).

 

(1) All other expenses for each reportable segment primarily consist of:

 

       Heavy Fabrications-variable overhead, salaries and benefits, and rent and utilities

       Gearing- salaries and benefits and rent 

       Industrial Solutions-direct labor, salaries and benefits, and rent and utilities

       Corporate-professional expenses

 

  

Total Assets as of

 
  

March 31,

  

December 31,

 

Segments:

 

2025

  

2024

 

Heavy Fabrications

 $51,993  $43,035 

Gearing

  38,920   41,406 

Industrial Solutions

  15,247   14,864 

Corporate

  50,667   48,488 

Eliminations

  (27,509)  (19,503)
  $129,318  $128,290