NOTE 14— 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.

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 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 1,100 megawatts of power. The Company has expanded 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.

Gearing

The Company provides gearing and gearboxes to a broad set of customers in diverse markets including; onshore and offshore O&G fracking and drilling, surface and underground mining, defense, wind energy, steel, material handling and other infrastructure markets. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treatment services for aftermarket and OEM applications for nearly a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment in Neville Island, Pennsylvania.

Industrial Solutions

The Company provides supply chain solutions, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market.

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, 2020 and 2019 is as follows:




	Heavy Fabrications		Gearing		Industrial Solutions		Corporate		Eliminations		Consolidated
For the Three Months Ended March 31, 2020
Revenues from external customers	$	38,368		6,227		4,039		—		—	$	48,634
Operating profit (loss)		3,541		(261)		192		(1,792)		—		1,680
Depreciation and amortization		963		512		104		33		—		1,612
Capital expenditures		381		168		120		1		—		670




	Heavy Fabrications		Gearing		Industrial Solutions		Corporate		Eliminations		Consolidated
For the Three Months Ended March 31, 2019
Revenues from external customers	$	28,294		10,027		3,339		—		—	$	41,660
Operating (loss) profit		(222)		1,387		(285)		(1,374)		—		(494)
Depreciation and amortization		1,095		482		122		62		—		1,761
Capital expenditures		201		367		—		9		—		577


	Total Assets as of
	March 31,		December 31,
Segments:	2020		2019
Heavy Fabrications	$	52,904	$	41,432
Gearing		46,802		47,022
Industrial Solutions		9,107		8,893
Corporate		239,429		239,629
Eliminations		(213,944)		(214,110)
	$	134,298	$	122,866