| Segment Information |
Note 4 – Segment Information The Company’s operations consist of two operating and reportable segments, Manufacturing and Aftermarket. The Company identifies reportable segments based on differences in products and services. The Company’s Manufacturing segment includes new railcar manufacturing, used railcar sales, and major conversions and rebodies. The Company’s Aftermarket segment includes the selling of forged, cast and fabricated railcar parts and supplies for all railcar types, and provides aftermarket services including safety training, railcar inspections, and preventative maintenance. The Company’s designated Chief Operating Decision Maker (“CODM”) is our President and Chief Executive Officer. The CODM uses segment gross profit and segment operating income to allocate resources to segments during the planning and forecasting process and assess performance in a given period. Segment gross profit and segment operating income include all external revenues attributable to the segments as well as operating costs and income that management believes are directly attributable to the current production of goods and services. The Company’s management reporting package does not include interest revenue, interest expense or income taxes allocated to individual segments and these items are not considered as a component of segment operating income. Intersegment revenues were not material in any period presented. A summary of segment information and reconciliation to consolidated income before income taxes is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, 2026 |
|
|
|
Manufacturing |
|
|
Aftermarket |
|
|
Total |
|
Revenues |
|
$ |
104,282 |
|
|
$ |
8,856 |
|
|
$ |
113,138 |
|
Cost of sales |
|
|
101,000 |
|
|
|
5,967 |
|
|
|
|
Segment gross profit |
|
$ |
3,282 |
|
|
$ |
2,889 |
|
|
$ |
6,171 |
|
Other segment items (1) |
|
|
599 |
|
|
|
946 |
|
|
|
|
Segment operating income |
|
$ |
2,683 |
|
|
$ |
1,943 |
|
|
$ |
4,626 |
|
Reconciliation of segment operating income to consolidated loss before income taxes: |
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(8,922 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(3,045 |
) |
Loss on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
(24,889 |
) |
Consolidated other expense |
|
|
|
|
|
|
|
|
(218 |
) |
Consolidated loss before income taxes |
|
|
|
|
|
|
|
$ |
(32,448 |
) |
|
|
|
|
|
|
|
|
|
|
Reconciliation of segment gross profit to consolidated loss before income taxes: |
|
|
|
|
|
|
|
$ |
6,171 |
|
Other segment items (1) |
|
|
|
|
|
|
|
|
1,545 |
|
Segment operating income |
|
|
|
|
|
|
|
|
4,626 |
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(8,922 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(3,045 |
) |
Loss on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
(24,889 |
) |
Consolidated other expense |
|
|
|
|
|
|
|
|
(218 |
) |
Consolidated loss before income taxes |
|
|
|
|
|
|
|
$ |
(32,448 |
) |
(1) Other segment items in Manufacturing and Aftermarket segments include selling, general and administrative expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
June 30, 2025 |
|
|
|
Manufacturing |
|
|
Aftermarket |
|
|
Total |
|
Revenues |
|
$ |
110,757 |
|
|
$ |
7,866 |
|
|
$ |
118,623 |
|
Cost of sales |
|
|
95,831 |
|
|
|
4,971 |
|
|
|
|
Segment gross profit |
|
$ |
14,926 |
|
|
$ |
2,895 |
|
|
$ |
17,821 |
|
Other segment items (1) |
|
|
402 |
|
|
|
510 |
|
|
|
|
Segment operating income |
|
$ |
14,524 |
|
|
$ |
2,385 |
|
|
$ |
16,909 |
|
Reconciliation of segment operating income to consolidated loss before income taxes: |
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(9,202 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(4,382 |
) |
Loss on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
(47,630 |
) |
Consolidated other income |
|
|
|
|
|
|
|
|
3,296 |
|
Consolidated loss before income taxes |
|
|
|
|
|
|
|
$ |
(41,009 |
) |
|
|
|
|
|
|
|
|
|
|
Reconciliation of segment gross profit to consolidated loss before income taxes: |
|
|
|
|
|
|
|
$ |
17,821 |
|
Other segment items (1) |
|
|
|
|
|
|
|
|
912 |
|
Segment operating income |
|
|
|
|
|
|
|
|
16,909 |
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(9,202 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(4,382 |
) |
Loss on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
(47,630 |
) |
Consolidated other income |
|
|
|
|
|
|
|
|
3,296 |
|
Consolidated loss before income taxes |
|
|
|
|
|
|
|
$ |
(41,009 |
) |
(1) Other segment items in Manufacturing and Aftermarket segments include selling, general and administrative expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, 2026 |
|
|
|
Manufacturing |
|
|
Aftermarket |
|
|
Total |
|
Revenues |
|
$ |
157,238 |
|
|
$ |
20,208 |
|
|
$ |
177,446 |
|
Cost of sales |
|
|
146,637 |
|
|
|
13,828 |
|
|
|
|
Segment gross profit |
|
$ |
10,601 |
|
|
$ |
6,380 |
|
|
$ |
16,981 |
|
Other segment items (1) |
|
|
963 |
|
|
|
1,895 |
|
|
|
|
Segment operating income |
|
$ |
9,638 |
|
|
$ |
4,485 |
|
|
$ |
14,123 |
|
Reconciliation of segment operating income to consolidated income before income taxes: |
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(19,013 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(6,421 |
) |
Gain on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
24,215 |
|
Consolidated other expense |
|
|
|
|
|
|
|
|
(24 |
) |
Consolidated income before income taxes |
|
|
|
|
|
|
|
$ |
12,880 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of segment gross profit to consolidated income before income taxes: |
|
|
|
|
|
|
|
$ |
16,981 |
|
Other segment items (1) |
|
|
|
|
|
|
|
|
2,858 |
|
Segment operating income |
|
|
|
|
|
|
|
|
14,123 |
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(19,013 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(6,421 |
) |
Gain on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
24,215 |
|
Consolidated other expense |
|
|
|
|
|
|
|
|
(24 |
) |
Consolidated income before income taxes |
|
|
|
|
|
|
|
$ |
12,880 |
|
(1) Other segment items in Manufacturing and Aftermarket segments include selling, general and administrative expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, 2025 |
|
|
|
Manufacturing |
|
|
Aftermarket |
|
|
Total |
|
Revenues |
|
$ |
200,932 |
|
|
$ |
13,981 |
|
|
$ |
214,913 |
|
Cost of sales |
|
|
173,896 |
|
|
|
8,802 |
|
|
|
|
Segment gross profit |
|
$ |
27,036 |
|
|
$ |
5,179 |
|
|
$ |
32,215 |
|
Other segment items (1) |
|
|
759 |
|
|
|
1,076 |
|
|
|
|
Segment operating income |
|
$ |
26,277 |
|
|
$ |
4,103 |
|
|
$ |
30,380 |
|
Reconciliation of segment operating income to consolidated income before income taxes: |
|
|
|
|
|
|
|
|
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(18,802 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(8,718 |
) |
Gain on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
5,258 |
|
Consolidated other income |
|
|
|
|
|
|
|
|
3,157 |
|
Consolidated income before income taxes |
|
|
|
|
|
|
|
$ |
11,275 |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of segment gross profit to consolidated income before income taxes: |
|
|
|
|
|
|
|
$ |
32,215 |
|
Other segment items (1) |
|
|
|
|
|
|
|
|
1,835 |
|
Segment operating income |
|
|
|
|
|
|
|
|
30,380 |
|
Unallocated corporate expenses |
|
|
|
|
|
|
|
|
(18,802 |
) |
Consolidated interest expense |
|
|
|
|
|
|
|
|
(8,718 |
) |
Gain on change in fair market value of Warrant liability |
|
|
|
|
|
|
|
|
5,258 |
|
Consolidated other income |
|
|
|
|
|
|
|
|
3,157 |
|
Consolidated income before income taxes |
|
|
|
|
|
|
|
$ |
11,275 |
|
(1) Other segment items in Manufacturing and Aftermarket segments include selling, general and administrative expenses. A summary of segment depreciation, amortization and capital expenditures is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
1,481 |
|
|
$ |
1,431 |
|
|
$ |
2,978 |
|
|
$ |
2,796 |
|
Aftermarket |
|
|
309 |
|
|
|
35 |
|
|
|
617 |
|
|
|
71 |
|
Corporate |
|
|
55 |
|
|
|
84 |
|
|
|
114 |
|
|
|
179 |
|
Consolidated depreciation and amortization |
|
$ |
1,845 |
|
|
$ |
1,550 |
|
|
$ |
3,709 |
|
|
$ |
3,046 |
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
|
$ |
533 |
|
|
$ |
562 |
|
|
$ |
532 |
|
|
$ |
847 |
|
Aftermarket |
|
|
203 |
|
|
|
- |
|
|
|
351 |
|
|
|
- |
|
Corporate |
|
|
- |
|
|
|
46 |
|
|
|
- |
|
|
|
91 |
|
Consolidated capital expenditures |
|
$ |
736 |
|
|
$ |
608 |
|
|
$ |
883 |
|
|
$ |
938 |
|
Segment assets represent operating assets and exclude intersegment accounts, deferred tax assets and income tax receivables. The Company does not allocate cash and cash equivalents to its operating segments as the Company’s treasury function is managed at the corporate level. A summary of segment assets is as follows:
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2026 |
|
|
2025 |
|
Assets: |
|
|
|
|
|
|
Manufacturing |
|
$ |
128,208 |
|
|
$ |
141,583 |
|
Aftermarket |
|
|
28,564 |
|
|
|
27,202 |
|
Corporate |
|
|
63,734 |
|
|
|
65,943 |
|
Total operating assets |
|
|
220,506 |
|
|
|
234,728 |
|
Consolidated income taxes receivable and deferred income taxes |
|
|
55,590 |
|
|
|
55,321 |
|
Consolidated assets |
|
$ |
276,096 |
|
|
$ |
290,049 |
|
A summary of revenues and long-lived assets by geographic information is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Information |
|
|
|
Revenues (a) |
|
|
Long Lived Assets (b) |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
December 31, |
|
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
United States |
|
$ |
113,138 |
|
|
$ |
118,623 |
|
|
$ |
177,446 |
|
|
$ |
214,913 |
|
|
$ |
11,050 |
|
|
$ |
11,809 |
|
Mexico |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
61,206 |
|
|
|
64,318 |
|
Total |
|
$ |
113,138 |
|
|
$ |
118,623 |
|
|
$ |
177,446 |
|
|
$ |
214,913 |
|
|
$ |
72,256 |
|
|
$ |
76,127 |
|
(a) Revenue is attributed to countries based on the location in which control transfers to the customer. (b) Long lived assets include property, plant and equipment, net, right-of-use (ROU) assets, and long-lived intangible assets. |