Note 16 - Segment Reporting

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

16. SEGMENT REPORTING

The Company is organized into reportable 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 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 (1650 tower sections), sufficient to support turbines generating more than 1.7 GW of power (assuming a 3 MW tower). The Company has expanded its production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and OEM components utilized in surface and underground mining, construction, material handling, 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, 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 & controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes & wiring, and electromechanical devices. The Company also provides packaging solutions and fabricates panels and sub-assemblies to reduce customers’ costs, improve manufacturing velocity and reliability.

Corporate and Other

“Corporate” includes the assets and SG&A 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, “Description of Business and Summary of Significant Accounting Policies” of these consolidated financial statements. Summary financial information by reportable segment is as follows:

	Heavy Fabrications			Gearing			Industrial Solutions		Corporate			Eliminations			Consolidated
For the Year Ended December 31, 2024
Revenues from external customers	$	82,657			35,588			24,891		—			—		$	143,136
Intersegment revenues		—			—			1,165		—			(1,165	)		—
Net revenues		82,657			35,588			26,056		—			(1,165	)		143,136
Direct materials		46,398			8,797			14,867		—			*			70,062
Direct labor		11,356			5,797			*		—			—			17,153
Indirect labor		10,575			4,972			1,711		—			—			17,258
Variable overhead		*			4,397			1,861		—			—			6,258
AMP credits		(8,819	)		—			—		—			—			(8,819	)
Salaries and benefits		*			*			*		2,332			—			2,332
Share-based compensation		*			*			*		859			—			859
Depreciation and amortization		3,938			2,183			427		136			—			6,684
All other expenses (1)		12,081			9,580			3,925		2,703			(1,165	)		27,124
Operating income (loss)		7,128			(138	)		3,265		(6,030	)		—			4,225
Capital expenditures		1,617			1,554			397		50			—			3,618
Total assets		43,035			41,406			14,864		48,488			(19,503	)		128,290

	Heavy Fabrications			Gearing		Industrial Solutions		Corporate			Eliminations			Consolidated
For the Year Ended December 31, 2023
Revenues from external customers	$	133,368			45,408		24,701		—			—		$	203,477
Intersegment revenues		—			—		458		—			(458	)		—
Net revenues		133,368			45,408		25,159		—			(458	)		203,477
Direct materials		76,769			13,819		14,460		—			*			105,048
Direct labor		17,084			6,993		*		—			—			24,077
Indirect labor		13,202			6,085		1,379		—			—			20,666
Variable overhead		*			5,499		1,973		—			—			7,472
AMP credits		(13,354	)		—		—		—			—			(13,354	)
Salaries and benefits		*			*		*		2,646			—			2,646
Share-based compensation		*			*		*		634			—			634
Depreciation and amortization		3,517			2,270		380		216			—			6,383
All other expenses (1)		21,144			8,896		3,807		5,388			(469	)		38,766
Operating income (loss)		15,006			1,846		3,160		(8,884	)		11			11,139
Capital expenditures		4,739			1,398		214		54			—			6,405
Total assets		46,931			48,599		16,295		58,487			(35,156	)		135,156

* 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 and utilities

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

         Corporate-professional expenses

The Company generates revenues entirely from transactions completed in the U.S. and its long-lived assets are all located in the U.S. All intercompany revenue is eliminated in consolidation. Transactions between reportable segments are treated consistent with the accounting policies referenced in Note 1, “Description of Business and Summary of Significant Accounting Policies” of these consolidated financial statements. During 2024, one customer accounted for more than 10% of total net revenues. The customer, reported within the Heavy Fabrications segment, accounted for revenues of $71,607. During 2023, one customer accounted for more than 10% of total net revenues. The customer, reported within the Heavy Fabrications segment, accounted for revenues of $107,555.