v3.26.1
Note 17 - Segment Reporting
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

NOTE 17— 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. In conjunction with the Abilene sale, the results of operations of the wind and industrial fabrication operations, including operations historically in Manitowoc, Wisconsin, have been reclassified to discontinued operations on the condensed consolidated statements of operations and retrospectively for all periods presented beginning in the second quarter of 2026. The Company’s discontinued operations exclude the results of PRS operations. Accordingly, we have revised our segment presentation to include two reportable operating segments: Gearing and Industrial Solutions. 

 

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

 

Gearing 

 

The Company provides gearing, gearboxes and precision machined components to a broad set of customers in diverse markets including: power generation, onshore and offshore oil and gas fracking and drilling, material handling, wind energy, surface and underground mining, steel, infrastructure, marine, defense, and other industrial markets. The Company  has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and Original Equipment Manufacturers (“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 also supports the U.S. wind repowering and solar power generation market via their manufacturing and kitting capabilities 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 and Other and Eliminations

 

“Corporate and Other” includes the assets and selling, general and administrative expenses of the Company’s corporate office as well as results for our PRS product line operations. Due to the PRS balances being less significant than our other operations, they do not meet the quantitative threshold for determining reportable segments. “Corporate and Other” and “Eliminations” comprise 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 and reconciliations to consolidated amounts for the three and six months ended June 30, 2026 and 2025 is as follows:

 

  

Gearing

  

Industrial Solutions

  

Corporate and Other

  

Eliminations

  

Consolidated

 

For the Three Months Ended June 30, 2026

                    

Revenues from external customers

 $9,045  $13,172  $2,086  $—  $24,303 

Intersegment revenues

  —   —   —   —   — 

Net revenues

  9,045   13,172   2,086   —   24,303 

Direct materials

  2,646   7,406             

Direct labor

  1,737   *             

Indirect labor

  1,333   709             

Variable overhead

  1,127   874             

Depreciation and amortization

  530   79   166   —   775 

All other expenses (1)

  1,896   1,765             

Operating (loss) income

  (224)  2,339   (2,362)  —   (247)

Capital expenditures

  307   182   —   —   489 

 

  

Gearing

  

Industrial Solutions

  

Corporate and Other

  

Eliminations

  

Consolidated

 

For the Three Months Ended June 30, 2025

                    

Revenues from external customers

 $7,284  $6,962  $274  $—  $14,520 

Intersegment revenues

  —   401   —   (401)  — 

Net revenues

  7,284   7,363   274   (401)  14,520 

Direct materials

  1,826   4,446             

Direct labor

  1,432   *             

Indirect labor

  1,133   588             

Variable overhead

  975   659             

Depreciation and amortization

  550   113   69   —   732 

All other expenses (1)

  2,187   1,071             

Operating (loss) income

  (819)  486   (2,048)  —   (2,381)

Capital expenditures

  116   94   118   —   328 

 

  

Gearing

  

Industrial Solutions

  

Corporate and Other

  

Eliminations

  

Consolidated

 

For the Six Months Ended June 30, 2026

                    

Revenues from external customers

 $17,499  $22,408  $2,342  $—  $42,249 

Intersegment revenues

  —   —   —   —   — 

Net revenues

  17,499   22,408   2,342   —   42,249 

Direct materials

  4,657   12,328             

Direct labor

  3,306   *             

Indirect labor

  2,592   1,407             

Variable overhead

  2,145   1,688             

Depreciation and amortization

  1,059   175   282   —   1,516 

All other expenses (1)

  4,020   2,845             

Operating (loss) income

  (280)  3,965   (5,014)  —   (1,329)

Capital expenditures

  1,253   206   1,773   —   3,232 

 

  

Gearing

  

Industrial Solutions

  

Corporate and Other

  

Eliminations

  

Consolidated

 

For the Six Months Ended June 30, 2025

                    

Revenues from external customers

 $13,251  $12,586  $3,555  $—  $29,392 

Intersegment revenues

  —   424   —   (424)  — 

Net revenues

  13,251   13,010   3,555   (424)  29,392 

Direct materials

  3,266   7,776             

Direct labor

  2,693   *             

Indirect labor

  2,262   1,135             

Variable overhead

  1,849   1,132             

Depreciation and amortization

  1,099   227   141   —   1,467 

All other expenses (1)

  3,793   1,924             

Operating (loss) income

  (1,711)  816   (3,328)  —   (4,223)

Capital expenditures

  142   94   195   —   431 

 

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

 

Consolidated amounts are not presented for significant segment expense categories because reconciliation to comparable consolidated amounts is not required by ASC 280. 

 

(1) All other expenses primarily consist of:

       

       Gearing-salaries and benefits and rent 

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

 

  

Total Assets as of

 
  

June 30,

  

December 31,

 
   2026   2025 

Gearing

 $44,196  $40,752 

Industrial Solutions

  26,897   20,222 

Corporate and Other

  39,440   78,061 

Assets - discontinued operations

  13,147   43,800 

Eliminations

  (11,507)  (66,030)
  $112,173  $116,805