v3.25.2
Note 16 - Segment Reporting
 6 Months Ended
Jun. 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 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 six months ended June 30, 2025 and 2024 is as follows:

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Three Months Ended June 30, 2025

                        

Revenues from external customers

 $24,989  $7,284  $6,962  $—  $—  $39,235 

Intersegment revenues

  —   —   401   —   (401)  — 

Net revenues

  24,989   7,284   7,363   —   (401)  39,235 

Direct materials

  13,735   1,826   4,446   —   *   20,007 

Direct labor

  4,700   1,432   *   —   —   6,132 

Indirect labor

  3,103   1,133   588   —   —   4,824 

Variable overhead

  *   975   659   —   —   1,634 

AMP credits

  (2,904)  —   —   —   —   (2,904)

Salaries and benefits

  *   *   *   654   —   654 

Share-based compensation

  *   *   *   243   —   243 

Depreciation and amortization

  964   550   113   16   —   1,643 

All other expenses (1)

  3,680   2,187   1,071   630   (401)  7,167 

Operating income (loss)

  1,711   (819)  486   (1,543)  —   (165)

Capital expenditures

  895   116   94   95   —   1,200 

 

  

Heavy Fabrications

  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Three Months Ended June 30, 2024

                        

Revenues from external customers

 $19,611  $10,454  $6,387  $—  $—  $36,452 

Intersegment revenues

  —   —   76   —   (76)  — 

Net revenues

  19,611   10,454   6,463   —   (76)  36,452 

Direct materials

  10,498   2,658   3,692   —   *   16,848 

Direct labor

  2,635   1,604   *   —   —   4,239 

Indirect labor

  2,752   1,298   385   —   —   4,435 

Variable overhead

  *   1,284   543   —   —   1,827 

AMP credits

  (1,678)  —   —   —   —   (1,678)

Salaries and benefits

  *   *   *   401   —   401 

Share-based compensation

  *   *   *   237   —   237 

Depreciation and amortization

  1,022   553   105   38   —   1,718 

All other expenses (1)

  2,825   2,575   1,115   729   (76)  7,168 

Operating income (loss)

  1,557   482   623   (1,405)  —   1,257 

Capital expenditures

  370   280   123   17   —   790 

 

  Heavy Fabrications  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Six Months Ended June 30, 2025

                        

Revenues from external customers

 $50,236  $13,251  $12,586  $—  $—  $76,073 

Intersegment revenues

  —   —   424   —   (424)  — 

Net revenues

  50,236   13,251   13,010   —   (424)  76,073 

Direct materials

  28,357   3,266   7,776   —   *   39,399 

Direct labor

  8,462   2,693   *   —   —   11,155 

Indirect labor

  5,914   2,262   1,135   —   —   9,311 

Variable overhead

  *   1,849   1,132   —   —   2,981 

AMP credits

  (5,468)  —   —   —   —   (5,468)

Salaries and benefits

  *   *   *   1,052   —   1,052 

Share-based compensation

  *   *   *   389   —   389 

Depreciation and amortization

  1,985   1,099   227   34   —   3,345 

All other expenses (1)

  7,034   3,793   1,924   1,563   (424)  13,890 

Operating income (loss)

  3,952   (1,711)  816   (3,038)  —   19 

Capital expenditures

  1,756   142   94   124   —   2,116 

 

  Heavy Fabrications  

Gearing

  

Industrial Solutions

  

Corporate

  

Eliminations

  

Consolidated

 

For the Six Months Ended June 30, 2024

                        

Revenues from external customers

 $41,628  $18,791  $13,649  $—  $—  $74,068 

Intersegment revenues

  —   —   807   —   (807)  — 

Net revenues

  41,628   18,791   14,456   —   (807)  74,068 

Direct materials

  23,045   4,488   8,078   —   *   35,611 

Direct labor

  5,520   2,985   *   —   —   8,505 

Indirect labor

  5,441   2,605   767   —   —   8,813 

Variable overhead

  *   2,287   1,000   —   —   3,287 

AMP credits

  (3,395)  —   —   —   —   (3,395)

Salaries and benefits

  *   *   *   980   —   980 

Share-based compensation

  *   *   *   409   —   409 

Depreciation and amortization

  1,933   1,093   205   83   —   3,314 

All other expenses (1)

  5,483   4,825   2,016   1,692   (807)  13,209 

Operating income (loss)

  3,601   508   2,390   (3,164)  —   3,335 

Capital expenditures

  831   1,348   338   17   —   2,534 

 

* 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

 
  

June 30,

  

December 31,

 

Segments:

 

2025

  

2024

 

Heavy Fabrications

 $51,112  $43,035 

Gearing

  39,649   41,406 

Industrial Solutions

  16,993   14,864 

Corporate

  63,363   48,488 

Eliminations

  (40,606)  (19,503)
  $130,511  $128,290