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Note 16 - Segment Reporting
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

NOTE 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 (“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 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, frames and other structures. Prospectively, in conjunction with the sale of the Manitowoc industrial fabrication operations, the Company will have annual tower production capacity of up to approximately 220 towers (660 tower sections) and capacity utilization of approximately 800 MW of power. 

 

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, 2025 and 2024 is as follows:

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Three Months Ended September 30, 2025

                        

Revenues from external customers

 $29,364  $7,003  $7,872  $—  $—  $44,239 

Intersegment revenues

  —   66   —   —   (66)  — 

Net revenues

  29,364   7,069   7,872   —   (66)  44,239 

Direct materials

  18,440   1,355   4,710   —   *   24,505 

Direct labor

  4,481   1,438   *   —   —   5,919 

Indirect labor

  2,781   1,162   611   —   —   4,554 

Variable overhead

  *   952   573   —   —   1,525 

AMP credits

  (4,081)  —   —   —   —   (4,081)

Salaries and benefits

  *   *   *   657   —   657 

Share-based compensation

  *   *   *   152   —   152 

Depreciation and amortization

  799   537   120   17   —   1,473 

All other (income) expenses (1)

  (3,339)  2,177   1,413   636   (66)  821 

Operating income (loss)

  10,283   (552)  445   (1,462)  —   8,714 

Capital expenditures

  341   44   85   —   —   470 

 

  

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 

Direct materials

  12,026   2,427   3,310   —   *   17,763 

Direct labor

  2,627   1,388   *   —   —   4,015 

Indirect labor

  2,554   1,195   418   —   —   4,167 

Variable overhead

  *   1,099   501   —   —   1,600 

AMP credits

  (2,905)  —   —   —   —   (2,905)

Salaries and benefits

  *   *   *   677   —   677 

Share-based compensation

  *   *   *   169   —   169 

Depreciation and amortization

  999   534   109   29   —   1,671 

All other expenses (1)

  3,069   2,602   937   561   (1)  7,168 

Operating income (loss)

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

Capital expenditures

  588   123   24   10   —   745 

 

  Heavy Fabrications  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Nine Months Ended September 30, 2025

                        

Revenues from external customers

 $79,600  $20,254  $20,458  $—  $—  $120,312 

Intersegment revenues

  —   66   424   —   (490)  — 

Net revenues

  79,600   20,320   20,882   —   (490)  120,312 

Direct materials

  46,797   4,621   12,486   —   *   63,904 

Direct labor

  12,943   4,132   *   —   —   17,075 

Indirect labor

  8,695   3,424   1,747   —   —   13,866 

Variable overhead

  *   2,802   1,706   —   —   4,508 

AMP credits

  (9,549)  —   —   —   —   (9,549)

Salaries and benefits

  *   *   *   1,709   —   1,709 

Share-based compensation

  *   *   *   541   —   541 

Depreciation and amortization

  2,784   1,636   348   51   —   4,819 

All other expenses (1)

  3,695   5,968   3,334   2,199   (490)  14,706 

Operating income (loss)

  14,235   (2,263)  1,261   (4,500)  —   8,733 

Capital expenditures

  2,097   186   179   124   —   2,586 

 

  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 

Direct materials

  35,071   6,915   11,388   —   *   53,374 

Direct labor

  8,147   4,373   *   —   —   12,520 

Indirect labor

  7,995   3,800   1,185   —   —   12,980 

Variable overhead

  *   3,386   1,502   —   —   4,888 

AMP credits

  (6,300)  —   —   —   —   (6,300)

Salaries and benefits

  *   *   *   1,657   —   1,657 

Share-based compensation

  *   *   *   579   —   579 

Depreciation and amortization

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

All other expenses (1)

  8,551   7,428   2,951   2,252   (808)  20,374 

Operating income (loss)

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

Capital expenditures

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

 

* 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

 
  

September 30,

  

December 31,

 

Segments:

 

2025

  

2024

 

Heavy Fabrications

 $40,064  $43,035 

Gearing

  38,818   41,406 

Industrial Solutions

  17,822   14,864 

Corporate

  45,807   48,488 

Eliminations

  (22,863)  (19,503)
  $119,648  $128,290