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What changed in BROADWIND, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BROADWIND, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+139 added−134 removedSource: 10-K (2025-03-05) vs 10-K (2024-03-05)

Top changes in BROADWIND, INC.'s 2024 10-K

139 paragraphs added · 134 removed · 119 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

30 edited+1 added−2 removed60 unchanged
Biggest changeAppeals of several of the USDOC determinations are currently pending at the CIT and the CAFC. 7 Within our industrial fabrications product line of our Heavy Fabrications segment, our competitors in a fragmented market include Weldall Manufacturing and AT&F Advanced Metals, along with a large number of other regional competitors.
Biggest changeIn July 2025, the USITC and USDOC will conduct a required “five-year review” of the trade orders on Canada, Indonesia, Korea, and Vietnam to determine whether the orders should be revoked. 6 Within our industrial fabrications product line of our Heavy Fabrications segment, our competitors in a fragmented market include Weldall Manufacturing and AT&F Advanced Metals, along with a large number of other regional competitors.
Our diversification efforts are impacted in part by the end-market demand outlook. 5 ● Improve capacity utilization and broaden our manufacturing capabilities . Subject to labor availability, we have manufacturing capacity available that could support a significant increase in our annual revenues for heavy fabrications, gearing and industrial solutions.
Our diversification efforts are impacted in part by the end-market demand outlook. ● Improve capacity utilization and broaden our manufacturing capabilities . Subject to labor availability, we have manufacturing capacity available that could support a significant increase in our annual revenues for heavy fabrications, gearing and industrial solutions.
We have designed and manufacture a mobile, modular pressure reducing system for the compressed natural gas virtual pipeline market. We manufacture components for buckets, shovels, car bodies, drill masts and other products that support mining and construction markets. In other industrial markets, we provide crane components, pressure vessels, frames and other structures.
We have designed and manufacture a mobile, modular pressure reducing system (“PRS”) for the compressed natural gas virtual pipeline market. We manufacture components for buckets, shovels, car bodies, drill masts and other products that support mining and construction markets. In other industrial markets, we provide crane components, pressure vessels, frames and other structures.
Gearing We provide 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 O&G fracking and drilling, marine and other industrial markets.
Gearing We provide 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 O&G fracking and drilling, marine, defense, and other industrial markets.
The following table summarizes the key markets served and product offering of our three segments: Segment Heavy Fabrications Gearing Industrial Solutions Key Markets Served -Wind Power Generation -Onshore & Offshore -Combined Cycle Natural -Surface and Underground Mining Oil and Gas Fracking/Drilling Gas Power Generation -Material Handling -Surface and Underground Mining -Solar Power Generation -Oil and Gas -Steel Production -Wind Power Generation -Construction -Infrastructure -Infrastructure -Wind Power Generation -Pulp and Paper -Material Handling -Marine -Waste Processing Products -Wind Towers/Adaptors -Loose Gearing -Supply Chain Solutions -Industrial Fabrications: -Custom Gearboxes -Inventory Management Mining Components -Gearbox Repair -Kitting and Assembly Crane Components -Heat Treat Services -Solar Inverter Racks Pressure Reducing Systems -Solar Powered Shelters/Charging Stations Other Frames/Structures Pressure Vessels 4 Business and Operating Strategy We intend to capitalize on the markets for wind energy, gas turbines, O&G, mining, and other industrial verticals in North America by leveraging our core competencies in welding, manufacturing, assembling and kitting.
The following table summarizes the key markets served and product offering of our three segments: Segment Heavy Fabrications Gearing Industrial Solutions Key Markets Served -Wind Power Generation -Onshore & Offshore -Combined Cycle Natural -Surface and Underground Mining Oil and Gas Fracking/Drilling Gas Power Generation -Material Handling -Surface and Underground Mining -Solar Power Generation -Oil and Gas -Steel Production -Wind Power Generation -Construction -Infrastructure -Infrastructure -Wind Power Generation -Pulp and Paper -Material Handling -Marine -Waste Processing -Defense Products -Wind Towers/Adaptors -Loose Gearing -Supply Chain Solutions -Industrial Fabrications: -Custom Gearboxes -Inventory Management Mining Components -Gearbox Repair -Kitting and Assembly Crane Components -Heat Treat Services -Solar Inverter Racks Pressure Reducing Systems -Precision Machining -Solar Powered Shelters/Charging Stations Other Frames/Structures Pressure Vessels 4 Business and Operating Strategy We intend to capitalize on the markets for wind energy, gas turbines, O&G, mining, and other industrial verticals in North America by leveraging our core competencies in welding, manufacturing, assembling and kitting.
Our business development team uses market data, including marketing databases, information gathered at industry and trade shows, internet research and website marketing to identify and target new customers. 6 CUSTOMERS We manufacture products for a variety of customers in the wind energy, O&G, gas turbine, mining, and other industrial markets.
Our business development team uses market data, including marketing databases, information gathered at industry and trade shows, internet research and website marketing to identify and target new customers. 5 CUSTOMERS We manufacture products for a variety of customers in the wind energy, O&G, gas turbine, mining, and other industrial markets.
We have legal title to the raw materials and pass the raw material cost through to our end customer plus a conversion margin. 9 Outside of these directed buys, we operate a multiple supplier sourcing strategy and source our raw materials through various suppliers located throughout the U.S. and abroad.
We have legal title to the raw materials and pass the raw material cost through to our end customer plus a conversion margin. 8 Outside of these directed buys, we operate a multiple supplier sourcing strategy and source our raw materials through various suppliers located throughout the U.S. and abroad.
A four-year collective bargaining agreement in regards to the Cicero, Illinois facility was negotiated in February 2022 and is expected to remain in effect through February 2026. We believe that our relationship with our employees is generally positive.
A four-year collective bargaining agreement in regard to the Cicero, Illinois facility was negotiated in February 2022 and is expected to remain in effect through February 2026. We believe that our relationship with our employees is generally positive.
However, claims asserted in the future against the Company for work-related injury or illnesses could increase our costs. 8 Environmental Our operations are subject to numerous federal, state and local environmental laws and regulations.
However, claims asserted in the future against the Company for work-related injury or illnesses could increase our costs. 7 Environmental Our operations are subject to numerous federal, state and local environmental laws and regulations.
Our capabilities include but are not limited to the following: heavy fabrications, welding, metal rolling, coatings, gear cutting and shaping, gearbox manufacturing and repair, heat treat, assembly, engineering and packaging solutions. We were incorporated in 1996 in Nevada as Blackfoot Enterprises, Inc., and through a series of subsequent transactions, became Broadwind Energy, Inc., a Delaware corporation, in 2008.
Our capabilities include but are not limited to the following: heavy fabrications, welding, metal rolling, coatings, gear cutting and shaping, gearbox manufacturing and repair, heat treatment, precision machining, assembly, engineering and packaging solutions. We were incorporated in 1996 in Nevada as Blackfoot Enterprises, Inc., and through a series of subsequent transactions, became Broadwind Energy, Inc., a Delaware corporation, in 2008.
As of December 31, 2023, approximately 18% of our employees were covered by collective bargaining agreements with local unions in our Cicero, Illinois and Neville Island, Pennsylvania locations.
As of December 31, 2024, approximately 18% of our employees were covered by collective bargaining agreements with local unions in our Cicero, Illinois and Neville Island, Pennsylvania locations.
We leverage a global supply chain to provide instrumentation & controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes & wiring, energy storage services and electromechanical devices. We also provide packaging solutions and fabricate panels and sub-assemblies to reduce our customers’ costs, improve manufacturing velocity and reliability.
We leverage a global supply chain to provide instrumentation & controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes & wiring, and electromechanical devices. We also provide packaging solutions and fabricate panels and sub-assemblies to reduce our customers’ costs, improve manufacturing velocity and reliability.
We believe that execution of our investment strategy provides significant opportunity to generate stockholder value, through profitable growth and leveraging a significant unrealized economic asset, over $290 million of net operating losses (“NOLs”) as of December 31, 2023 which can be used to cover future prospective tax liabilities. ● Streamline front-end processes to operational efficiency .
We believe that execution of our investment strategy provides significant opportunity to generate stockholder value, through profitable growth and leveraging a significant unrealized economic asset, over $295 million of net operating losses (“NOLs”) as of December 31, 2024 which can be used to cover future prospective tax liabilities. ● Streamline front-end processes to operational efficiency .
As of December 31, 2023, the dollar amount of our backlog based on unfulfilled POs and supply agreements was approximately $183 million. This represents a 38% decrease from the backlog at December 31, 2022. Backlog as of December 31, 2023 and 2022 is net of revenue recognized over time as described in Note 2, “Revenues” of our consolidated financial statements.
As of December 31, 2024, the dollar amount of our backlog based on unfulfilled POs and supply agreements was approximately $125 million. This represents a 31% decrease from the backlog at December 31, 2023. Backlog as of December 31, 2024 and 2023 is net of revenue recognized over time as described in Note 2, “Revenues” of our consolidated financial statements.
According to Wood Mackenzie Power & Renewables 2023 industry data, the top four wind turbine manufacturers comprised approximately 88% of the U.S. market. As a result, although we have historically produced towers for a broad range of wind turbine manufacturers, in any given year a limited number of customers have accounted for the majority of our revenues.
According to Wood Mackenzie Power & Renewables 2024 industry data, the top two wind turbine manufacturers comprised approximately 91% of the U.S. market. As a result, although we have historically produced towers for a broad range of wind turbine manufacturers, in any given year a limited number of customers have accounted for the majority of our revenues.
Within our other industrial markets served, our customer base includes steel producers, ship builders, and manufacturers of material handling, pulp and paper and other power generation equipment. Sales to GE Renewable Energy represented greater than 10% of our consolidated revenues for the year ended December 31, 2023.
Within our other industrial markets served, our customer base includes steel producers, ship builders, and manufacturers of material handling, pulp and paper and other power generation equipment. Sales to GE Vernova represented greater than 10% of our consolidated revenues for the years ended December 31, 2024 and 2023.
The increase in OWC was driven primarily by higher accounts receivable balances. 10 CORPORATE INFORMATION Our principal executive office is located at 3240 South Central Avenue, Cicero, IL 60804. Our phone number is (708) 780-4800 and our website address is www.bwen.com.
The decrease in OWC was driven primarily by lower accounts receivable balances. 9 CORPORATE INFORMATION Our principal executive office is located at 3240 South Central Avenue, Cicero, IL 60804. Our phone number is (708) 780-4800 and our website address is www.bwen.com.
We believe our investment in industry leading heat treatment, high precision machining, specialized grinding technologies and cutting-edge welding has contributed to our high product reliability and the consistent performance of our products under varying operating conditions. All of our core operating facilities are ISO 9001:2015 certified. We will continue our efforts to achieve the highest quality standards.
We believe our investment in industry leading heat treatment, high precision machining, specialized grinding technologies and cutting-edge welding has contributed to our high product reliability and the consistent performance of our products under varying operating conditions. All of our core operating facilities are ISO 9001:2015 certified.
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 1,100 MW of power.
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).
Court of International Trade and at the same time excluded CS Wind Vietnam from the antidumping order. In April 2019, the USDOC extended the term of these duties for an additional five-year period.
Court of International Trade but excluded CS Wind Vietnam from the antidumping order. In April 2019, the USDOC extended the term of these duties for an additional five-year period.
Additionally, we are developing new variations of our Pressure Reducing Systems (“PRS”) unit which supplies compressed natural gas to regions without established infrastructure as part of the virtual pipeline.
Additionally, we are developing new variations of our PRS unit which supplies compressed natural gas to regions without established infrastructure as part of the virtual pipeline.
Our strategic objectives include the following: ● Diversify our customer and product line concentrations . In 2023, sales derived from our top five customers represented 65% of total sales and sales into the wind energy industry represented 49% of total sales.
Our strategic objectives include the following: ● Diversify our customer and product line concentrations . In 2024, sales derived from our top five customers represented 73% of total sales and sales into the wind energy industry represented 44% of total sales.
Court of International Trade (“CIT”). Then in September 2020, a new trade case was brought before the USDOC and USITC, to assess whether wind towers imported from India, Malaysia, and Spain were being sold in the U.S. at less than fair value.
The Indonesia countervailing duty order was later revoked after an appeal to the U.S. Court of International Trade (“CIT”). Then in September 2020, a new trade case was brought before the USDOC and USITC, to assess whether wind towers imported from India, Malaysia, and Spain were being sold in the U.S. at less than fair value.
SEASONALITY The majority of our business is not affected by seasonality. EMPLOYEES We had 444 U.S.-based employees at December 31, 2023, of which 398 were in manufacturing related functions and 46 were in administrative functions.
SEASONALITY The majority of our business is not affected by seasonality. EMPLOYEES We had 411 U.S.-based employees at December 31, 2024, of which 366 were in manufacturing related functions and 45 were in administrative functions.
We are working to improve our capacity utilization and financial results by leveraging our existing manufacturing capacity and adjusting capacity where we can, in response to changing market conditions.
We are working to improve our capacity utilization and financial results by leveraging our existing manufacturing capacity and adjusting capacity where we can, in response to changing market conditions. ● Pursue opportunistic acquisitions as well as organic investments.
The table below summarizes our employees as of December 31, 2023: Number of Employees As of Segment December 31, 2023 Heavy Fabrications 266 Gearing 118 Industrial Solutions 47 Corporate 13 Total 444 RAW MATERIALS The primary raw material used in the construction of heavy fabrication and gearing products is steel in the form of plate, bar stock, forgings and castings.
The table below summarizes our employees as of December 31, 2024: Number of Employees As of Segment December 31, 2024 Heavy Fabrications 238 Gearing 112 Industrial Solutions 50 Corporate 11 Total 411 RAW MATERIALS The primary raw material used in the construction of heavy fabrication and gearing products is steel in the form of plate, bar stock, forgings and castings.
Our OWC at December 31, 2023 was $19,408, or 10% of trailing three months of sales annualized, compared to December 31, 2022, when OWC was $475, or 0.3% of trailing three months of sales annualized.
Our OWC at December 31, 2024 was $19,287, or 14% of trailing three months of sales annualized, compared to December 31, 2023, when OWC was $19,408, or 10% of trailing three months of sales annualized.
Following a renewed surge of tower imports from countries not impacted by existing tariffs, in July 2020, the USDOC issued antidumping and countervailing duty orders on imports of wind towers from Canada, Indonesia, and Vietnam and an antidumping order on imports of towers from Korea. The Indonesia countervailing duty order was later revoked after an appeal to the U.S.
Following a renewed surge of tower imports from countries not impacted by existing duties, in July 2020, the USDOC issued antidumping and countervailing duty orders on imports of wind towers from Canada, Indonesia, and Vietnam—including CS Wind Vietnam—and an antidumping order on imports of towers from Korea.
The USDOC and USITC issued affirmative final determinations in all three antidumping (India, Malaysia, and Spain) and two countervailing duty cases (India and Malaysia). The USDOC imposed orders for two cases in August 2021 and the remainder in December 2021.
The USDOC and USITC issued affirmative final determinations in all three antidumping (India, Malaysia, and Spain) and two countervailing duty cases (India and Malaysia). The USDOC imposed orders for two cases in August 2021 and the remainder in December 2021. Appeals of the Canada and Korea antidumping determinations are currently pending at the U.S.
As a result, we have an ongoing initiative to diversify our customer base. COMPETITION Each of our businesses faces competition from both domestic and international companies.
The loss of this customer could have a material adverse effect on our business, results of operation or financial condition. As a result, we have an ongoing initiative to diversify our customer base. COMPETITION Each of our businesses faces competition from both domestic and international companies.
Removed
In our Heavy Fabrications segment, we have expanded production capabilities and leveraged our fabrication competencies to support growth in mining, material handling, O&G, infrastructure, and other industrial markets. ● Pursue opportunistic acquisitions as well as organic investments.
Added
Our Gearing segment is also AS9100D certified as of August 2024 and has the ability to produce aerospace components. Additionally, our Gearing and Heavy Fabrications segments completed International Traffic in Arms Regulations registrations in 2024 to protect the intellectual property of our defense customers. We will continue our efforts to achieve the highest quality standards.
Removed
Sales to Siemens Gamesa Renewable Energy (“SGRE”) and GE Renewable Energy each represented greater than 10% of our consolidated revenues for the year ended December 31, 2022. The loss of one of these customers could have a material adverse effect on our business, results of operation or financial condition.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, both Siemens Energy, Inc. and Gamesa Wind US, LLC, were customers for our tower business until early 2017, at which time they merged into SGRE. Customer consolidation may result in pricing pressures, leading to downward pressure on our margins and profits, and may also disrupt our supply chain relationships.
Biggest changeCustomer consolidation may result in pricing pressures, leading to downward pressure on our margins and profits, and may also disrupt our supply chain relationships. 12 We face competition from industry participants who may have greater resources than we do.
The elimination of, or reduction in, state or federal government policies that support renewable energy could have a material adverse impact on our business, results of operations, financial performance and future development efforts. Changes to trade regulation, quotas, duties or tariffs, and sanctions caused by changing U.S. and geopolitical policies, may impact our competitive position or adversely impact our margins.
The elimination of, or reduction in, state or federal government policies that support renewable energy could have a material adverse impact on our business, results of operations, financial performance and future development efforts. 17 Changes to trade regulation, quotas, duties or tariffs, and sanctions caused by changing U.S. and geopolitical policies, may impact our competitive position or adversely impact our margins.
Our discovery of, or failure to discover, material issues during due diligence investigations of acquisition targets, either before closing with regard to potential risks of the acquired operations, or after closing with regard to the timely discovery of breaches of representations or warranties, could materially harm our business.
Our discovery of, or failure to discover, material issues during due diligence investigations of acquisition targets, either before closing with regard to potential risks of the acquired operations, or after closing with regard to the timely discovery of breaches of representations, warranties or covenants, could materially harm our business.
Because of this variability, we believe that comparisons of our operating results in any particular quarterly period may not be a reliable indicator of future performance. 11 Additionally, if our relationships with our significant customers should change materially, it could be difficult for us to immediately and profitably replace lost sales in a market with such concentration, which could have a material adverse effect on our operating and financial results.
Because of this variability, we believe that comparisons of our operating results in any particular quarterly period may not be a reliable indicator of future performance. 10 Additionally, if our relationships with our significant customers should change materially, it could be difficult for us to immediately and profitably replace lost sales in a market with such concentration, which could have a material adverse effect on our operating and financial results.
We cannot assure that government support for renewable energy will continue including any assurance regarding the adoption of any of the clean energy provisions of President Biden’s Build Back Better agenda.
We cannot assure that government support for renewable energy will continue including any assurance regarding the adoption of any of the clean energy provisions of former President Biden’s Build Back Better agenda.
If the supply of skilled labor is constrained or our costs of attracting and maintaining a workforce increase, our profit margins could decrease, and our growth potential and brand image could be impaired. 12 If our estimates for warranty expenses differ materially from actual claims made, or if we are unable to reasonably estimate future warranty expense for our products, our business and financial results could be adversely affected.
If the supply of skilled labor is constrained or our costs of attracting and maintaining a workforce increase, our profit margins could decrease, and our growth potential and brand image could be impaired. 11 If our estimates for warranty expenses differ materially from actual claims made, or if we are unable to reasonably estimate future warranty expense for our products, our business and financial results could be adversely affected.
Any failure to negotiate and conclude a new collective bargaining agreement with a union when the applicable agreement expires could result in strikes, boycotts, or other labor disruptions. As of December 31, 2023, these collective bargaining units represented approximately 18% of our workforce. Our ability to hire and retain qualified personnel at competitive cost could adversely affect our business.
Any failure to negotiate and conclude a new collective bargaining agreement with a union when the applicable agreement expires could result in strikes, boycotts, or other labor disruptions. As of December 31, 2024, these collective bargaining units represented approximately 18% of our workforce. Our ability to hire and retain qualified personnel at competitive cost could adversely affect our business.
Failure to obtain needed licenses could delay or prevent the development, manufacture or sale of our products, and could necessitate the expenditure of significant resources to develop or acquire non infringing intellectual property. 15 We may need to pursue lawsuits or legal action in the future to enforce our intellectual property rights and to determine the validity and scope of the proprietary rights of others.
Failure to obtain needed licenses could delay or prevent the development, manufacture or sale of our products, and could necessitate the expenditure of significant resources to develop or acquire non infringing intellectual property. 16 We may need to pursue lawsuits or legal action in the future to enforce our intellectual property rights and to determine the validity and scope of the proprietary rights of others.
We used at least 60% of our PPP Loan proceeds to pay for payroll costs and the balance on other eligible qualifying expenses that we believe to be consistent with the PPP. 14 During the second quarter of 2021, all of our PPP Loans were forgiven by the SBA. However, the U.S.
We used at least 60% of our PPP Loan proceeds to pay for payroll costs and the balance on other eligible qualifying expenses that we believe to be consistent with the PPP. 15 During the second quarter of 2021, all of our PPP Loans were forgiven by the SBA. However, the U.S.
Our PPP Loans were forgiven, but we may still be subject to audit and any resulting adverse audit financings of non-compliance could result in the repayment of a portion or all of the PPP Loans and may restrict our flexibility in operating our business or otherwise adversely affect our results of operations.
Our PPP Loans were forgiven, but we may still be subject to audit and any resulting adverse audit findings of non-compliance could result in the repayment of a portion or all of the PPP Loans and may restrict our flexibility in operating our business or otherwise adversely affect our results of operations.
During 2023, we did not incur significant remediation costs or penalties related to environmental matters. Our ability to comply with regulatory requirements and potential environmental, social and governance (“ESG”) regulations and trends is critical to our future success, and there can be no guarantee that our businesses are in full compliance with all such requirements.
During 2024, we did not incur significant remediation costs or penalties related to environmental matters. 18 Our ability to comply with regulatory requirements and potential environmental, social and governance (“ESG”) regulations and trends is critical to our future success, and there can be no guarantee that our businesses are in full compliance with all such requirements.
These risks include, among other things: ● Variability in the prices and relative demand for oil, gas, minerals and other commodities; ● Changes in domestic and global political and economic conditions affecting the O&G and mining industries; ● Changes in technology; ● Changes in the price and availability of alternative fuels and energy sources and changes in energy consumption or supply; and ● Changes in federal, state and local regulations, including, among other regulations, relating to hydraulic fracturing and greenhouse gas emissions. 13 If our projections regarding the future market demand for our products are inaccurate, our operating results and our overall business may be adversely affected.
These risks include, among other things: ● Variability in the prices and relative demand for oil, gas, minerals and other commodities; ● The cyclical nature of certain markets (i.e., the O&G market); ● Changes in domestic and global political and economic conditions affecting the O&G and mining industries; ● Changes in technology; ● Changes in the price and availability of alternative fuels and energy sources and changes in energy consumption or supply; and ● Changes in federal, state and local regulations, including, among other regulations, relating to hydraulic fracturing and greenhouse gas emissions. 13 If our projections regarding the future market demand for our products are inaccurate, our operating results and our overall business may be adversely affected.
A proxy contest or related activities on the part of activist stockholders could adversely affect our business for a number of reasons, including, without limitation, the following: ● Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of our Board of Directors (the “Board”), management and our employees; ● Perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, customers and others important to our success, any of which could negatively affect our business and our results of operations and financial condition; ● Action by activist stockholders may be exploited by our competitors, cause concern to our current or potential customers and make it more difficult to attract and retain qualified personnel; ● A successful proxy contest could result in a change in control of our Board, and such an event could subject us to certain contractual obligations under several material agreements, including our existing Amended and Restated 2015 Equity Incentive Plan (as amended, the “2015 EIP”), and underlying award agreements and certain employment agreements; ● If nominees advanced by activist stockholders are elected or appointed to our Board with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans or to realize long-term value from our assets, and this could in turn have an adverse effect on our business and on our results of operations and financial condition; and ● Proxy contests may cause our stock price to experience periods of volatility.
A proxy contest or related activities on the part of activist stockholders could adversely affect our business for a number of reasons, including, without limitation, the following: ● Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming, disrupting our operations and diverting the attention of our Board, management and our employees; ● Perceived uncertainties as to our future direction may result in the loss of potential business opportunities and may make it more difficult to attract and retain qualified personnel, business partners, customers and others important to our success, any of which could negatively affect our business and our results of operations and financial condition; ● Action by activist stockholders may be exploited by our competitors, cause concern to our current or potential customers and make it more difficult to attract and retain qualified personnel; ● A successful proxy contest could result in a change in control of our Board, and such an event could subject us to certain contractual obligations under several key agreements, including our existing Amended and Restated 2015 Equity Incentive Plan (as amended, the “2015 EIP”), and underlying award agreements and certain employment and lease agreements; ● If nominees advanced by activist stockholders are elected or appointed to our Board with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans or to realize long-term value from our assets, and this could in turn have an adverse effect on our business and on our results of operations and financial condition; and ● Proxy contests may cause our stock price to experience periods of volatility. 14 FINANCIAL RISKS We have generated substantial net losses since our inception.
If our ESG practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and employee retention may be negatively impacted based on an assessment of our ESG practices. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If our ESG practices do not meet investor or other industry stakeholder expectations and standards, which continue to evolve, our brand, reputation and employee retention may be negatively impacted based on an assessment of our ESG practices.
We have incurred significant costs in connection with the development of our businesses, and because we have operated at low-capacity utilization in certain facilities, there is no assurance that we will generate sufficient revenues to offset anticipated operating costs.
Historically, we have had several years in which we have experienced operating losses. We have incurred significant costs in connection with the development of our businesses, and because we have operated at low-capacity utilization in certain facilities, there is no assurance that we will generate sufficient revenues to offset anticipated operating costs.
In 2023, the closing price of our common stock varied from a high of $5.92 per share to a low of $1.77 per share. Stockholders may have incurred substantial losses with regard to any investment in our common stock adversely affecting stockholder confidence. Limitations on our ability to utilize our NOLs may negatively affect our financial results.
In 2024, the closing price of our common stock varied from a high of $4.42 per share to a low of $1.55 per share. Stockholders may have incurred substantial losses with regard to any investment in our common stock adversely affecting stockholder confidence. Limitations on our ability to utilize our NOLs may negatively affect our financial results.
We face competition from industry participants who may have greater resources than we do. Our businesses are subject to risks associated with competition from new or existing industry participants who may have more resources and better access to capital.
Our businesses are subject to risks associated with competition from new or existing industry participants who may have more resources and better access to capital.
Treasury Department, (ii) subsequent amendments to or interpretations of the law, and/or iii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, could result in material adverse changes to the benefits we have recognized and expect to recognize.
Treasury Department, (ii) subsequent amendments to or interpretations of the law, and/or (iii) future laws or regulations rendering certain provisions of the IRA less effective or ineffective, in whole or in part, could result in material adverse changes to the benefits we have recognized and expect to recognize. Several significant administrative law cases were decided by the U.S.
Some of the markets we serve have a limited number of customers. In 2023, one customer, GE Renewable Energy, accounted for more than 10% of our consolidated revenues, and our five largest customers accounted for 65% of our consolidated revenues.
Some of the markets we serve have a limited number of customers. In 2024, one customer, GE Vernova, accounted for more than 10% of our consolidated revenues, and our five largest customers accounted for 73% of our consolidated revenues.
There can be no assurance that the Rights Plan will be effective in protecting our NOL carryforwards. Additionally, because the Rights Plan subjects any person that acquires 4.9% of our common stock without the Board’s permission to significant dilution, it could make it harder for a third party to acquire us without the consent of the Board.
Additionally, because the Rights Plan subjects any person that acquires 4.9% of our common stock without the Board’s permission to significant dilution, it could make it harder for a third party to acquire us without the consent of the Board.
They can also result from internal compromises, such as human error, or malicious acts. While we seek to employ measures to prevent, detect, and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber event. Cybersecurity incidents could disrupt our business and compromise confidential information belonging to us and third parties.
While we seek to employ measures to prevent, detect, and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber event. Cybersecurity incidents could disrupt our business and compromise confidential information belonging to us and third parties.
These uncertainties may include changes in laws and policies in areas such as corporate taxation, taxation on imports of internationally sourced products, international trade including trade treaties such as the United States-Mexico-Canada Agreement, environmental protection and workplace safety laws, labor and employment law, immigration and health care, which individually or in the aggregate could materially and adversely affect our business, results of operations or financial condition.
These uncertainties may include changes in laws and policies in areas such as corporate taxation, taxation and tariffs on imports of internationally sourced products, international trade including trade treaties such as the United States-Mexico-Canada Agreement, environmental protection and workplace safety laws, labor and employment law, immigration and health care.
A successful claim against us could have a material adverse effect on our business. Cybersecurity incidents could disrupt our business and result in the compromise of confidential information.
A successful claim against us could have a material adverse effect on our business. Cybersecurity incidents could disrupt our business and result in the compromise of confidential information and changes in information security and privacy laws, regulations, policies and contractual obligations could adversely affect our business.
Our diversification efforts into the natural gas turbine power generation, O&G, mining and other industries may require additional investments in personnel, equipment and operational infrastructure.
Our diversification efforts into natural gas turbine power generation (also known as aeroderivatives), defense, mining, precision machining, O&G and other power generation markets may require additional investments in personnel, equipment and operational infrastructure.
Our business is at risk from and may be impacted by information security incidents, including attempts to gain unauthorized access to our confidential data and data systems, ransomware, malware, business email compromise, phishing attacks, and other electronic security events. Such incidents can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats.
Our business is at risk from and may be impacted by information security incidents, including attempts to gain unauthorized access to our confidential data and data systems, ransomware, malware, business email compromise, phishing attacks, and other electronic security events, which are increasing in frequency and sophistication.
If the inflation rate continues to increase, it will likely affect our expenses, including, but not limited to, employee compensation and labor expenses and increased costs for supplies, and we may not be successful in offsetting such cost increases. In addition, historically we have carried a significant amount of variable rate debt which is subject to fluctuations in interest rates.
If the inflation rate continues to increase, it will likely continue to affect our expenses, including, but not limited to, employee compensation and labor expenses and increased costs for supplies, and we may not be successful in offsetting such cost increases.
Additionally, the war in Ukraine has led to economic sanctions imposed against Russia by the U.S. and certain European nations, including a prohibition on doing business with certain Russian companies. Such sanctions may impact companies in many sectors and could lead to volatility of prices in the global energy industry.
Additionally, the war in Ukraine has led to economic sanctions imposed against Russia by the U.S. and certain European nations, including a prohibition on doing business with certain Russian companies which may have led to, or may lead to, certain retaliatory trade restrictions from Russia.
The Rights Plan is intended to deter any person or group from being or becoming the beneficial owner of 4.9% or more of our common stock and thereby triggering a further limitation of our available NOL carryforwards. See Note 14, “Income Taxes” of our consolidated financial statements for further discussion of our Rights Plan.
The Rights Plan is intended to deter any person or group from being or becoming the beneficial owner of 4.9% or more of our common stock and thereby triggering a further limitation of our available NOL carryforwards. On February 3, 2025, the Board approved an amendment which included an extension of the Rights Plan for an additional three years.
Certain government agencies, including the U.S. Treasury, have previously implemented and may implement policies that have resulted and may continue to result in significantly increased interest rates and borrowing costs. Recent increases in interest rates will result in increased interest expense to the extent we cannot limit our debt balances.
In addition, historically we have carried a significant amount of variable rate debt which is subject to fluctuations in interest rates. Certain government agencies, including the U.S. Treasury, have previously implemented and may implement policies that have resulted and may continue to result in significantly increased interest rates and borrowing costs.
We received a notice dated January 18, 2023 from WM Argyle Fund, LLC (“WM Argyle”), which allegedly owned approximately 1.0% of the Company’s outstanding shares at the time of submission, purporting to nominate a slate of six candidates for election as directors at our 2023 Annual Meeting of Stockholders.
In 2023, WM Argyle Fund, LLC (“WM Argyle”) submitted a notice to the Board of Directors (the “Board”) purporting to nominate a slate of six candidates for election as directors at our 2023 Annual Meeting of Stockholders.
Many of the products we sell, and related services that we provide require that we have skilled labor in our manufacturing facilities.
Many of the products we sell, and related services that we provide require that we have skilled labor in our manufacturing facilities. The availability of labor in the markets in which we operate has declined in recent years and competition for such labor has increased, especially under current inflationary pressures.
Certain other geopolitical conflicts, including the war between Israel and Hamas may also lead to material disruptions to certain supply chains and volatility in prices. 16 We could incur substantial costs to comply with environmental, health and safety (“EHS”) laws and regulations and to address violations of or liabilities under these requirements.
We could incur substantial costs to comply with environmental, health and safety (“EHS”) laws and regulations and to address violations of or liabilities under these requirements.
Additionally, if we implement emerging technologies such as artificial intelligence and machine learning into our products and services, we may not be able to anticipate vulnerabilities, flaws or security threats resulting from the use of such technology and develop adequate protection measures.
Such technologies present unique business opportunities along with rapidly changing legal and regulatory risks, and we may not be able to anticipate vulnerabilities, flaws or security threats resulting from the use of such technology and develop adequate protection measures.
The extent and duration of the war and extent and strength of the sanctions are still developing, and the corresponding effect on the Company remains uncertain.
The extent and duration of the war and extent and strength of the sanctions are still developing, and the corresponding effect on the Company remains uncertain. Certain other geopolitical conflicts, including the war between Israel and Hamas has also lead to material disruptions to certain supply chains and volatility in prices.
For example, some wind turbine manufacturers are using wind turbine towers made partially or wholly from concrete instead of steel.
For example, some wind turbine manufacturers are using wind turbine towers made partially or wholly from concrete instead of steel. Additionally, we continue to evaluate the implementation of emerging technologies such as generative artificial intelligence and machine learning into our products and services.
We may not be able to pass price increases on to our customers and may not be able to secure adequate alternative sources of steel on a timely basis. The existence of government subsidies available to our competitors in certain countries may affect our ability to compete on a price basis.
While future trade actions on inputs such as steel may affect our pricing, the continued presence of unfairly traded imports in the market may hamper our ability to pass those price increases along. Additionally, the existence of government subsidies available to our competitors in certain countries may affect our ability to compete on a price basis.
These tariffs, along with any additional tariffs or trade restrictions that may be implemented by the U.S. or other countries, could result in further increased prices and a decreased available supply of steel and other imported components and inputs.
There is a possibility that such sanctions or trade restrictions may be expanded, or new sanctions or trade restrictions may be imposed by the U.S., Russia, China or other countries, which could further disrupt supply chains and increase volatility of pricing.
Removed
The availability of labor in the markets in which we operate has declined in recent years and competition for such labor has increased, especially under the economic crises experienced throughout and following the COVID-19 pandemic and current inflationary pressures.
Added
For example, President Trump has indicated that his administration is likely to impose significant tariffs on imported goods. The imposition of such tariffs may strain international trade relations or impact costs of raw materials. Additionally, an advisory commission, the “Department of Government Efficiency” was announced to reform federal government processes and reduce expenditures.
Removed
FINANCIAL RISKS We have substantially generated net losses since our inception. We have experienced operating losses since inception, except that we were profitable in 2016, 2021, and 2023.
Added
Pressures on and uncertainty surrounding the U.S. federal government’s budget, and potential change in budgetary priorities could adversely affect individual programs and delay purchasing or payment decisions by certain of our customers. All of these uncertainties may individually or in the aggregate materially and adversely affect our business, results of operations or financial condition.
Removed
Tariffs have resulted in increased prices, including with respect to certain steel products, and could adversely affect our consolidated results of operations, financial position and cash flows.
Added
Such incidents can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. They can also result from internal compromises, such as human error, or malicious acts.
Removed
Imports from China and Vietnam have declined following a determination by the U.S. International Trade Commission (“USITC”) in 2013 that wind towers from those countries were being sold in the U.S. at less than fair value. As a result of the determination, the U.S.
Added
Certain of our suppliers and third parties we transact business with may receive information provided by us or by our customers and may also be at risk and impacted by cybersecurity incidents.
Removed
Department of Commerce (“USDOC”) issued antidumping and countervailing duty orders on imports of wind towers from China and an antidumping duty order on imports of towers from Vietnam. In May 2018, the U.S. Court of Appeals affirmed the decision from the U.S. Court of International Trade and at the same time excluded CS Wind Vietnam from the antidumping order.
Added
If these third parties fail to adhere to adequate data security practices, or in the event of a breach of their networks, our own and our customers’ data may be improperly accessed, used or disclosed.
Removed
In April 2019, the USDOC extended the term of these duties for an additional five-year period.
Added
Further, these third parties may incorporate generative artificial intelligence into their operations, and these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection. Additionally, the legal and regulatory environment surrounding information security and privacy in the U.S. and international jurisdictions is constantly evolving.
Removed
Following a renewed surge of tower imports from countries not impacted by existing tariffs, in July 2020, the USDOC issued antidumping and countervailing duty orders on imports of wind towers from Canada, Indonesia, and Vietnam and an antidumping order on imports of towers from Korea. The Indonesia countervailing duty order was later revoked after an appeal to the U.S.
Added
Violation or non-compliance with any of these laws or regulations could have a material adverse effect on our business, reputation and financial conditions, as well as subject us to significant fines, third party damages and other liability. See Item 1C of this Form 10-K, “Cybersecurity,” for more information on our cybersecurity risk management and governance.
Removed
Court of International Trade (“CIT”). Then in September 2020, a new trade case was brought before the USDOC and USITC, to assess whether wind towers imported from India, Malaysia, and Spain were being sold in the U.S. at less than fair value.
Added
Recent increases in interest rates will result in increased interest expense to the extent we cannot limit our debt balances. A severe or prolonged economic downturn, whether due to inflationary pressures, increased interest rates, or otherwise, could result in a variety of risks to our business, including weakened demand for our products.
Removed
The USDOC and USITC issued affirmative final determinations in all three antidumping (India, Malaysia, and Spain) and two countervailing duty cases (India and Malaysia). The USDOC imposed orders for two cases in August 2021 and the remainder in December 2021. Appeals of several of the USDOC determinations are currently pending at the CIT and the CAFC.
Added
The amendment is subject to approval by our stockholders at our 2025 Annual Meeting of Stockholders. See Note 14, “Income Taxes” of our consolidated financial statements for further discussion of our Rights Plan.
Added
There can be no assurance that the Rights Plan will be effective in protecting our NOL carryforwards or that it will be approved by our stockholders at our 2025 Annual Meeting of Stockholders.
Added
Supreme Court in 2024, most notably Loper Bright Enterprises V. Raimondo. In Loper Bright, the U.S. Supreme Court held that the U.S. Administrative Procedure Act requires that courts exercise their independent judgment when deciding whether a federal agency has acted within its statutory authority, and not to defer to an agency interpretation solely because a statute is ambiguous.
Added
These decisions may result in additional legal challenges to regulations and guidance issued by federal regulatory agencies, including the IRS, which the Company relies on and intends to rely on in the future. Successful challenges of certain regulations, any increased regulatory uncertainty, or delays or other impacts to the federal agency rulemaking process could adversely impact our business and operations.
Added
Renewed surges of unfairly traded imports continue to threaten our business segments. If existing antidumping and countervailing duty orders were removed or revoked we would expect a renewed surge of unfairly traded imports.
Added
Such sanctions may impact companies in many sectors and has lead to volatility of prices in the global energy industry and disruption and volatility in the U.S. and global markets.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOwned / Approximate Operating Segment and Facility Type Location Leased Square Footage Heavy Fabrications (1) Tower Manufacturing Manitowoc, WI Leased 194,000 Tower Manufacturing Abilene, TX Owned 175,000 Industrial Fabrications Manufacturing Manitowoc, WI Leased 84,000 Gearing and Corporate Gearing System Manufacturing—Machining and Corporate Administration Cicero, IL Leased 301,000 Gearing System Manufacturing—Heat Treatment and Gearbox Repair Neville Island, PA Owned 52,000 Industrial Solutions Industrial Solutions Manufacturing Sanford, NC Leased 105,000 (1) The Heavy Fabrications segment listing does not include the tower storage yards of 40 acres in Manitowoc, WI and 25 acres in Abilene, TX.
Biggest changeOwned / Approximate Operating Segment and Facility Type Location Leased Square Footage Heavy Fabrications (1) Tower Manufacturing Manitowoc, WI Leased 214,000 Tower Manufacturing Abilene, TX Owned 175,000 Industrial Fabrications Manufacturing Manitowoc, WI Leased 92,000 Gearing and Corporate Gearing System Manufacturing—Machining and Corporate Administration Cicero, IL Leased 301,000 Gearing System Manufacturing—Heat Treatment and Gearbox Repair Neville Island, PA Owned 52,000 Industrial Solutions Industrial Solutions Manufacturing Sanford, NC Leased 105,000 (1) The Heavy Fabrications segment listing does not include the tower storage yards of 40 acres in Manitowoc, WI and 25 acres in Abilene, TX.
ITEM 2. PROPERTIES Our corporate headquarters is located in Cicero, Illinois, a suburb located west of Chicago, Illinois. In addition, the Subsidiaries own or lease operating facilities, which are presented by operating segment as follows (information below is as of December 31, 2023).
ITEM 2. PROPERTIES Our corporate headquarters is located in Cicero, Illinois, a suburb located west of Chicago, Illinois. In addition, the Subsidiaries own or lease operating facilities, which are presented by operating segment as follows (information below is as of December 31, 2024).

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed3 unchanged
Biggest changeCommon Stock High Low 2023 First quarter $ 5.92 $ 1.77 Second quarter 5.20 3.35 Third quarter 4.59 3.10 Fourth quarter 3.46 2.05 Common Stock High Low 2022 First quarter $ 2.36 $ 1.58 Second quarter 2.17 1.52 Third quarter 3.59 1.47 Fourth quarter 2.83 1.57 The closing price for our common stock as of February 29, 2024 was $2.48.
Biggest changeCommon Stock High Low 2024 First quarter $ 2.70 $ 2.22 Second quarter 4.42 2.08 Third quarter 3.66 2.07 Fourth quarter 2.23 1.55 Common Stock High Low 2023 First quarter $ 5.92 $ 1.77 Second quarter 5.20 3.35 Third quarter 4.59 3.10 Fourth quarter 3.46 2.05 The closing price for our common stock as of February 28, 2025 was $1.57.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for information as of December 31, 2023 with respect to shares of our common stock that may be issued under our existing share-based compensation plans. 19 ITEM 6.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for information as of December 31, 2024 with respect to shares of our common stock that may be issued under our existing share-based compensation plans. 21 ITEM 6.
Repurchases There were no repurchases of our equity securities made during the years ended December 31, 2023 and 2022. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities for the years ended December 31, 2023 or 2022.
Repurchases There were no repurchases of our equity securities made during the years ended December 31, 2024 and 2023. Unregistered Sales of Equity Securities There were no unregistered sales of equity securities for the years ended December 31, 2024 or 2023.
As of February 29, 2024, there were 50 holders of record of our common stock. Dividends We have never paid cash dividends on our common stock and have no current plan to do so in the foreseeable future.
As of February 28, 2025, there were 50 holders of record of our common stock. Dividends We have never paid cash dividends on our common stock and have no current plan to do so in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

46 edited+5 added−4 removed44 unchanged
Biggest changeYear Ended December 31, 2023 vs. 2022 % of Total % of Total 2023 Revenue 2022 Revenue $ Change % Change Revenues $ 203,477 100.0 % $ 176,759 100.0 % $ 26,718 15.1 % Cost of sales 170,969 84.0 % 166,049 93.9 % 4,920 3.0 % Gross profit 32,508 16.0 % 10,710 6.1 % 21,798 203.5 % Operating expenses Selling, general and administrative expenses 20,705 10.2 % 16,592 9.4 % 4,113 24.8 % Intangible amortization 664 0.3 % 725 0.4 % (61 ) (8.4 )% Total operating expenses 21,369 10.5 % 17,317 9.8 % 4,052 23.4 % Operating income (loss) 11,139 5.5 % (6,607 ) (3.7 )% 17,746 268.6 % Other expense, net Interest expense, net (3,201 ) (1.6 )% (3,218 ) (1.8 )% 17 0.5 % Other, net (48 ) (0.0 )% 130 0.1 % (178 ) (136.9 )% Total other expense, net (3,249 ) (1.6 )% (3,088 ) (1.7 )% (161 ) (5.2 )% Net income (loss) before provision for income taxes 7,890 3.9 % (9,695 ) (5.5 )% 17,585 181.4 % Provision for income taxes 241 0.1 % 35 0.0 % 206 588.6 % Net income (loss) $ 7,649 3.8 % $ (9,730 ) (5.5 )% $ 17,379 178.6 % Consolidated Revenues increased by $26,718 during the year ended December 31, 2023 primarily due to a 14% increase in Heavy Fabrications segment revenues.
Biggest changeYear Ended December 31, 2024 vs. 2023 % of Total % of Total 2024 Revenue 2023 Revenue $ Change % Change Revenues $ 143,136 100.0 % $ 203,477 100.0 % $ (60,341 ) (29.7 )% Cost of sales 121,947 85.2 % 170,969 84.0 % (49,022 ) (28.7 )% Gross profit 21,189 14.8 % 32,508 16.0 % (11,319 ) (34.8 )% Operating expenses Selling, general and administrative expenses 16,303 11.4 % 20,705 10.2 % (4,402 ) (21.3 )% Intangible amortization 661 0.5 % 664 0.3 % (3 ) (0.5 )% Total operating expenses 16,964 11.9 % 21,369 10.5 % (4,405 ) (20.6 )% Operating income 4,225 3.0 % 11,139 5.5 % (6,914 ) (62.1 )% Other expense, net Interest expense, net (3,078 ) (2.2 )% (3,201 ) (1.6 )% 123 3.8 % Other, net 79 0.1 % (48 ) (0.0 )% 127 264.6 % Total other expense, net (2,999 ) (2.1 )% (3,249 ) (1.6 )% 250 7.7 % Net income before provision for income taxes 1,226 0.9 % 7,890 3.9 % (6,664 ) (84.5 )% Provision for income taxes 74 0.1 % 241 0.1 % (167 ) (69.3 )% Net income $ 1,152 0.8 % $ 7,649 3.8 % $ (6,497 ) (84.9 )% Consolidated Revenues decreased by $60,341, or 30%, during the year ended December 31, 2024 primarily due to decreased revenues within our Heavy Fabrications and Gearing segments.
In many instances within our Heavy Fabrications segment, wind towers as well as certain 2023 sales within our Gearing segment, are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition versus shipment, due to our customers’ preference to ship products in batches to support efficient construction of wind farms.
In many instances within our Heavy Fabrications segment, wind towers as well as certain sales within our Gearing segment, are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition versus shipment, due to our customers’ preference to ship products in batches to support efficient construction of wind farms.
We follow the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition related to the uncertainty in these income tax positions. 27 LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES On August 4, 2022, we entered into a credit agreement (as amended, the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), providing the Company and its subsidiaries with a $35,000 senior secured revolving credit facility (which may be further increased by up to an additional $10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $7,578 senior secured term loan (collectively, as amended, the “2022 Credit Facility”).
We follow the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition related to the uncertainty in these income tax positions. 29 LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES On August 4, 2022, we entered into a credit agreement (as amended, the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), providing the Company and its subsidiaries with a $35,000 senior secured revolving credit facility (which may be further increased by up to an additional $10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $7,578 senior secured term loan (collectively, as amended, the “2022 Credit Facility”).
This section should also be read in conjunction with Note 1, “Description of Business and Summary of Significant Accounting Policies” in the notes to our consolidated financial statements for further discussion of these and other significant accounting policies. 25 Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
This section should also be read in conjunction with Note 1, “Description of Business and Summary of Significant Accounting Policies” in the notes to our consolidated financial statements for further discussion of these and other significant accounting policies. 27 Revenue Recognition We recognize revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
As of December 31, 2023, we have (i) debt obligations related to our Credit Facility and other notes payable as described in Note 10, “Debt and Credit Agreements” of our consolidated financial statements (ii) cash payments for operating and finance lease obligations that are described in Note 11, “Leases” of our consolidated financial statements and (iii) purchase obligations made in the normal course of business.
As of December 31, 2024, we have (i) debt obligations related to our Credit Facility and other notes payable as described in Note 10, “Debt and Credit Agreements” of our consolidated financial statements (ii) cash payments for operating and finance lease obligations that are described in Note 11, “Leases” of our consolidated financial statements and (iii) purchase obligations made in the normal course of business.
Our definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts. 21 (2) We define free cash flow as adjusted EBITDA plus or minus changes in operating working capital less capital expenditures net of any proceeds from disposals of property and equipment.
Our definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts. 23 (2) We define free cash flow as adjusted EBITDA plus or minus changes in operating working capital less capital expenditures net of any proceeds from disposals of property and equipment.
Inventories are valued based either on actual cost or using a first-in, first out method. 26 Long-Lived Assets We review property and equipment and other long-lived assets (“long-lived assets”) for impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable.
Inventories are valued based either on actual cost or using a first-in, first out method. 28 Long-Lived Assets We review property and equipment and other long-lived assets (“long-lived assets”) for impairment whenever events or circumstances indicate that their carrying amounts may not be recoverable.
In January 2023, we announced that we had entered into a supply agreement for wind tower purchases valued at approximately $175 million with a leading global wind turbine manufacturer. Under the terms of the supply agreement, order fulfillment is to occur beginning in 2023 through year-end 2024.
In January 2023, we announced that we had entered into a supply agreement for wind tower purchases valued at approximately $175 million with a leading global wind turbine manufacturer. Under the terms of the supply agreement, order fulfillment was to occur beginning in 2023 through year-end 2024.
Due to triggering events identified within our segments at various times in the past, we continue to evaluate the recoverability of certain of the long-lived assets. During the year ended December 31, 2023, we did not identify any triggering events within our segments and no impairment expense was recorded.
Due to triggering events identified within our segments at various times in the past, we continue to evaluate the recoverability of certain of the long-lived assets. During the year ended December 31, 2024, we did not identify any triggering events within our segments and no impairment expense was recorded.
During 2023 and 2022, we also recognized revenue over time, versus point in time, when products in the Heavy Fabrications segments had no alternative use to us and we had an enforceable right to payment, including profit, upon termination of the contract by the customer.
During 2024 and 2023, we also recognized revenue over time, versus point in time, when products in the Heavy Fabrications segments had no alternative use to us and we had an enforceable right to payment, including profit, upon termination of the contract by the customer.
(4) Our backlog at December 31, 2023 and 2022 is net of revenue recognized over time. Backlog as of December 31, 2023 has been adjusted to reflect updated assumptions related to raw material pricing (which is a customer passthrough) and other variables.
(4) Our backlog at December 31, 2024 and 2023 is net of revenue recognized over time. Backlog as of December 31, 2024 and December 31, 2023 has been adjusted to reflect updated assumptions related to raw material pricing (which is a customer passthrough) and other variables.
Operating margin was 4.1% for the year ended December 31, 2023 compared to 0.1% during the year ended December 31, 2022. Industrial Solutions Segment The following table summarizes the Industrial Solutions segment operating results for the twelve months ended December 31, 2023 and 2022.
Operating margin was (0.4%) for the year ended December 31, 2024 compared to 4.1% during the year ended December 31, 2023. Industrial Solutions Segment The following table summarizes the Industrial Solutions segment operating results for the twelve months ended December 31, 2024 and 2023.
No shares of our common stock were issued under the Sales Agreement during the year ended December 31, 2023. As of December 31, 2023, shares of our common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement.
No shares of our common stock were issued under the Sales Agreement during the years ended December 31, 2024 and 2023. As of December 31, 2024, shares of our common stock having a value of approximately $11,667 remained available for issuance under the Sales Agreement.
Other We have outstanding notes payable for capital expenditures in the amount of $1,361 and $1,094 as of December 31, 2023 and 2022, respectively, with $163 and $88 included in the “Line of credit and current maturities of long-term debt” line item of our consolidated financial statements as of December 31, 2023 and 2022, respectively.
Other We have outstanding notes payable for capital expenditures in the amount of $1,618 and $1,361 as of December 31, 2024 and 2023, respectively, with $371 and $163 included in the “Line of credit and current maturities of long-term debt” line item of our consolidated financial statements as of December 31, 2024 and 2023, respectively.
We recognized the AMP credits as a reduction to cost of sales in our consolidated statements of operations for the year ended December 31, 2023. The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in our consolidated balance sheet as of December 31, 2023.
We recognized the AMP credits as a reduction to cost of sales in our consolidated statements of operations for the years ended December 31, 2024 and 2023. The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in our consolidated balance sheets as of December 31, 2024 and 2023.
In early November 2023, the parties discussed their joint intent to shift approximately half of the contracted tower section orders initially planned for 2024 into 2025, while maintaining the total number of tower sections stipulated under the supply agreement. During 2023, we recognized gross AMP credits totaling $14,493, within the Heavy Fabrications segment.
In early November 2023, the parties jointly agreed to shift approximately half of the contracted tower section orders initially planned for 2024 into 2025, while maintaining the total number of tower sections stipulated under the supply agreement. During 2024 and 2023, we recognized gross AMP credits totaling $9,588 and $14,493, respectively, within the Heavy Fabrications segment.
The following table reconciles our non-GAAP key financial measures to the most directly comparable GAAP measure: Year Ended December 31, 2023 2022 Net income (loss) from continuing operations $ 7,649 $ (9,730 ) Interest expense 3,201 3,218 Income tax provision 241 35 Depreciation and amortization 6,383 6,060 Share-based compensation and other stock payments 2,220 2,861 Proxy contest-related expenses 1,780 — Adjusted EBITDA 21,474 2,444 Changes in operating working capital (18,933 ) 18,160 Capital expenditures (6,405 ) (3,098 ) Proceeds from disposal of property and equipment 21 — Free Cash Flow $ (3,843 ) $ 17,506 22 RESULTS OF OPERATIONS Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The following table reconciles our non-GAAP key financial measures to the most directly comparable GAAP measure: Year Ended December 31, 2024 2023 Net income from continuing operations $ 1,152 $ 7,649 Interest expense 3,078 3,201 Income tax provision 74 241 Depreciation and amortization 6,684 6,383 Share-based compensation and other stock payments 2,347 2,220 Proxy contest-related expenses (10 ) 1,780 Adjusted EBITDA 13,325 21,474 Changes in operating working capital 121 (18,933 ) Capital expenditures (3,618 ) (6,405 ) Proceeds from disposal of property and equipment 159 21 Free Cash Flow $ 9,987 $ (3,843 ) 24 RESULTS OF OPERATIONS Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Sources and Uses of Cash The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Total cash (used in) provided by : Operating activities $ (6,946 ) $ 16,643 Investing activities (6,384 ) (3,098 ) Financing activities 1,697 (1,665 ) Net (decrease) increase in cash $ (11,633 ) $ 11,880 28 Operating Cash Flows During the year ended December 31, 2023, net cash used in operating activities was $6,946 compared to net cash provided by operating activities of $16,643 for the year ended December 31, 2022.
Sources and Uses of Cash The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Total cash provided by (used in) : Operating activities $ 13,806 $ (6,946 ) Investing activities (3,459 ) (6,384 ) Financing activities (3,725 ) 1,697 Net increase (decrease) in cash $ 6,622 $ (11,633 ) 30 Operating Cash Flows During the year ended December 31, 2024, net cash provided by operating activities was $13,806 compared to net cash used by operating activities of $6,946 for the year ended December 31, 2023.
(Dollar amounts are presented in thousands, except per share data and unless otherwise stated) We booked $101,060 in net new orders in 2023, down from $368,027 in 2022.
(Dollar amounts are presented in thousands, except per share data and unless otherwise stated) We booked $107,813 in net new orders in 2024, up from $101,060 in 2023.
Additionally, industrial fabrication product line revenues increased primarily due to higher shipments of our PRS units in the current year. Heavy Fabrications segment operating results improved by $16,050 as compared to the prior year.
Additionally, industrial fabrication product line revenues decreased from the prior year primarily due to reduced shipments of our PRS units in the current year. Heavy Fabrications segment operating results decreased by $7,878 as compared to the prior year.
Segment revenue increased 41% from the prior year primarily due to increased demand for new and aftermarket gas turbine content, in addition to revenue recognized from international customers. The improvement in operating income during the year ended December 31, 2023 was a result of higher sales and a more profitable mix of product sold.
Segment revenue increased 4% from the prior year primarily due to increased shipments to new and aftermarket gas turbine customers, partially offset by reduced shipments to international customers. The improvement in operating income during the year ended December 31, 2024 was a result of higher sales and a more profitable mix of product sold.
We also incurred other miscellaneous administrative costs related to selling the credits in the amount of $254, $197 of which has been recorded as cost of sales, with the remaining capitalized and included in the “Prepaid expenses and other current assets” line item of our consolidated financial statements at December 31, 2023. 20 We use our credit facility to fund working capital requirements and believe that our credit facility, together with the operating cash generated by our businesses, and any potential proceeds from access to the public or private debt or equity markets, are sufficient to meet all cash obligations over the next twelve months.
We also incurred other miscellaneous administrative costs related to the credits in the amount of $146, which have been recorded as cost of sales. 22 We use our credit facility to fund working capital requirements and believe that our credit facility, together with the operating cash generated by our businesses, and any potential proceeds from access to the public or private debt or equity markets, are sufficient to meet all cash obligations over the next twelve months.
Key Financial Measures Year Ended December 31, 2023 2022 Net revenues $ 203,477 $ 176,759 Net income (loss) $ 7,649 $ (9,730 ) Adjusted EBITDA (1) $ 21,474 $ 2,444 Capital expenditures $ 6,405 $ 3,098 Free cash flow (2) $ (3,843 ) $ 17,506 Operating working capital (3) $ 19,408 $ 475 Total debt $ 12,153 $ 8,311 Total orders $ 101,060 $ 368,027 Backlog at end of period (4) $ 183,088 $ 297,200 Book-to-bill (5) 0.5 2.1 (1) We provide non-GAAP adjusted EBITDA as supplemental information regarding our business performance.
Key Financial Measures Year Ended December 31, 2024 2023 Net revenues $ 143,136 $ 203,477 Net income $ 1,152 $ 7,649 Adjusted EBITDA (1) $ 13,325 $ 21,474 Capital expenditures $ 3,618 $ 6,405 Free cash flow (2) $ 9,987 $ (3,843 ) Operating working capital (3) $ 19,287 $ 19,408 Total debt $ 9,196 $ 12,153 Total orders $ 107,813 $ 101,060 Backlog at end of period (4) $ 125,455 $ 183,088 Book-to-bill (5) 0.8 0.5 (1) We provide non-GAAP adjusted EBITDA as supplemental information regarding our business performance.
As a result, our gross margin increased from 6.1% for the year ended December 31, 2022, to 16.0% for the year ended December 31, 2023.
As a result, our gross margin decreased from 16.0% for the year ended December 31, 2023, to 14.8% for the year ended December 31, 2024.
The notes payable have monthly payments that range from $3 to $15 and an interest rate of 6%. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates in September 2028.
The notes payable have monthly payments that range from $1 to $20 and a weighted average interest rate of 7%. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates that range from September 2028 to June 2029.
Year Ended December 31, 2023 2022 Orders $ 25,652 $ 20,333 Revenues 25,159 17,804 Operating income 3,160 120 Operating margin 12.6 % 0.7 % Industrial Solutions segment orders increased by 26% for the year ended December 31, 2023 primarily due to an increase in orders associated with new gas turbine and aftermarket projects.
Year Ended December 31, 2024 2023 Orders $ 27,317 $ 25,652 Revenues 26,056 25,159 Operating income 3,265 3,160 Operating margin 12.5 % 12.6 % Industrial Solutions segment orders increased by 6% for the year ended December 31, 2024 from the prior year primarily due to an increase in orders associated with new gas turbine projects, partially offset by reduced demand for aftermarket projects.
The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. As of December 31, 2023, cash totaled $1,099, a decrease of $11,633 from December 31, 2022. Debt and finance lease obligations at December 31, 2023 totaled $17,678, and we had the ability to borrow up to $21,714 under the 2022 Credit Facility.
The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. As of December 31, 2024, cash totaled $7,721. Debt and finance lease obligations at December 31, 2024 totaled $15,239 and we had the ability to borrow up to $24,901 under the 2022 Credit Facility.
Operating expenses as a percentage of sales increased to 10.5% in 2023 from 9.8% in 2022 primarily due to proxy-contest related expenses, higher medical costs, and increased incentive compensation. 23 Net income increased from a net loss of $9,730 for the year ended December 31, 2022 to net income of $7,649 for the year ended December 31, 2023.The increase in net income was primarily due to the factors described above.
Operating expenses as a percentage of sales increased to 11.9% in 2024 from 10.5% in 2023 primarily due to lower sales, partially offset by reduced proxy-contest related expenses, and decreased incentive compensation. 25 Net income decreased from $7,649 for the year ended December 31, 2023 to $1,152 for the year ended December 31, 2024.The decrease in net income was primarily due to the factors described above.
Gearing Segment The following table summarizes the Gearing segment operating results for the twelve months ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Orders $ 24,814 $ 53,597 Revenues 45,408 42,588 Operating income 1,846 43 Operating margin 4.1 % 0.1 % Gearing segment orders for the year ended December 31, 2023 decreased 54% compared to the year ended December 31, 2022 primarily due to reduced demand from O&G and mining customers.
Gearing Segment The following table summarizes the Gearing segment operating results for the twelve months ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Orders $ 26,562 $ 24,814 Revenues 35,588 45,408 Operating (loss) income (138 ) 1,846 Operating margin (0.4 )% 4.1 % Gearing segment orders for the year ended December 31, 2024 increased 7% compared to the year ended December 31, 2023 primarily due to improved demand from industrial and aftermarket wind customers, partially offset by reduced demand from O&G customers.
The operating margin improved from 0.7% during the year ended December 31, 2022, to 12.6% during the year ended December 31, 2023. Corporate and Other Corporate and Other expenses increased by $3,162 during the year ended December 31, 2023 primarily due to higher medical costs, increased incentive compensation, and increased professional fees associated with the contested proxy election.
The operating margin decreased from 12.6% during the year ended December 31, 2023, to 12.5% during the year ended December 31, 2024. Corporate and Other Corporate and Other expenses decreased by $2,854 during the year ended December 31, 2024 primarily due to reduced professional fees associated with the contested proxy election and lower incentive compensation.
Industrial Solutions segment orders increased by 26% in 2023 from the prior year primarily due to an increase in orders associated with new gas turbine and aftermarket projects. We recognized revenue of $203,477 in 2023, up 15% from revenue of $176,759 in 2022.
Industrial Solutions segment orders increased by 6% in 2024 from the prior year primarily due to an increase in orders associated with new gas turbine projects, partially offset by reduced demand for aftermarket projects. We recognized revenue of $143,136 in 2024, down 30% from revenue of $203,477 in 2023.
On December 31, 2023, we had $4,657 outstanding under our senior secured revolving credit facility, $6,135 outstanding under our senior secured term loan, $1,099 of cash on hand, with the ability to borrow an additional $21,714.
On December 31, 2024, we had no amounts outstanding under our senior secured revolving credit facility, $7,578 outstanding under our senior secured term loan, $7,721 of cash on hand, with the ability to borrow an additional $24,901.
Investing Cash Flows During the year ended December 31, 2023, net cash used in investing activities was $6,384 compared to net cash used in investing activities of $3,098 for the year ended December 31, 2022. The increase was primarily due to an increase in net purchases of property and equipment.
The decrease was primarily due to a decrease in net purchases of property and equipment. Financing Cash Flows During the year ended December 31, 2024, net cash used in financing activities totaled $3,725 compared to net cash provided by financing activities of $1,697 for the year ended December 31, 2023.
Contractual Obligations We enter into a variety of contractual obligations as part of our normal operations in addition to capital expenditures.
The decrease was primarily due to decreased net borrowings under the 2022 Credit Facility in the current year period. Contractual Obligations We enter into a variety of contractual obligations as part of our normal operations in addition to capital expenditures.
Revenues increased 7% during the year ended December 31, 2023 from the prior year primarily due to higher shipments of industrial and steel customers, partially offset by a decrease in revenue from mining and O&G customers. 24 The Gearing segment's operating income improved by $1,803 during the year ended December 31, 2023 from the year ended December 31, 2022 primarily due to higher sales, improved operational efficiencies, a more profitable product mix sold, and the absence of ramp-up costs incurred in the prior year.
Revenues decreased 22% during the year ended December 31, 2024 from the prior year primarily due to reduced shipments to O&G and steel customers, partially offset by increased shipments to aftermarket wind customers. 26 The Gearing segment's operating income decreased by $1,984 during the year ended December 31, 2024 from the year ended December 31, 2023 primarily due to lower sales, partially offset by a more profitable product mix sold and cost savings.
The decrease in net cash provided by operating activities was primarily attributable to the new AMP credit receivable and a decrease in customer deposits in 2023, versus an increase in the prior year. Partially offsetting this was a decrease in inventory during 2023 as compared to an increase in the prior year.
The increase in net cash provided by operating activities was primarily attributable to an increase in cash related to customer deposits in the current year, versus a significant decrease in cash related to customer deposits in the prior year. Additionally, we received proceeds from the sale of the 2023 AMP credits during the current year.
We reported net income of $7,649, or $0.36 per share in 2023, compared to a net loss of $9,730 or $0.48 per share in 2022 primarily due to higher sales and $14,493 of gross AMP credits (discussed below) recognized in the current year.
We reported net income of $1,152 or $0.05 per share in 2024, compared to net income of $7,649 or $0.36 per share in 2023 primarily due to lower sales and the corresponding decrease in the “AMP credits” recognized in the current year.
Industrial Solutions segment revenue increased 41% from the prior year primarily due to increased demand for new and aftermarket gas turbine content, and increased revenue from international customers.
Gearing segment revenue decreased 22% relative to 2023 primarily due to reduced shipments to O&G and steel customers, partially offset by increased shipments to aftermarket wind customers. Industrial Solutions segment revenue increased 4% from the prior year primarily due to increased shipments to new and aftermarket gas turbine customers, partially offset by decreased shipments to international customers.
The improvement in operating performance was primarily a result of reduced wind tower costs as a result of the AMP credits recognized of $14,493 in the current year. Operating profit margin was 11.3% during the year ended December 31, 2023 compared to (0.9%) during the year ended December 31, 2022.
The decrease in operating performance was primarily a result of lower tower sales and the corresponding reduction in AMP credits recognized, as well as lower industrial fabrication revenues. These factors were partially offset by reduced overhead costs. Operating profit margin was 8.6% during the year ended December 31, 2024 compared to 11.3% during the year ended December 31, 2023.
Partially offsetting this decrease in wind tower orders was a 14% increase in industrial fabrication product line orders primarily due to improved demand for our PRS units.
Within our Heavy Fabrications segment, orders increased 7% over the prior year reflecting an increase in orders associated with wind repowering projects, partially offset by a decrease in industrial fabrication product line orders primarily due to reduced demand for our PRS units.
Partially offsetting this decrease in wind tower orders was a 14% increase in industrial fabrication product line orders primarily due to improved demand for our Pressure Reducing Systems (“PRS”) units. Gearing segment orders decreased 54% from the prior year primarily due to reduced demand from O&G and mining customers.
Gearing segment orders increased 7% from the prior year primarily due to improved demand from industrial and aftermarket wind customers, partially offset by reduced demand from O&G customers.
Additionally, industrial fabrication product line revenues increased primarily due to higher shipments of our PRS units in the current year. Gearing segment revenue increased 7% relative to 2022 primarily due to higher shipments for industrial and steel customers, partially offset by a decrease in revenue from mining and O&G customers.
Gearing segment revenue decreased 22% relative to 2023 primarily due to reduced shipments to O&G and steel customers, partially offset by increased shipments to aftermarket wind customers. Industrial Solutions segment revenue increased 4% from the prior year primarily due to increased shipments to new and aftermarket gas turbine customers, partially offset by decreased shipments to international customers.
Financing Cash Flows During the year ended December 31, 2023, net cash provided by financing activities totaled $1,697 compared to net cash used in financing activities of $1,665 for the year ended December 31, 2022. The increase was primarily due to increased net borrowings under the 2022 Credit Facility in the current year period.
Partially offsetting this was an increase in inventory during the current year as compared to a decrease in the prior year. Investing Cash Flows During the year ended December 31, 2024, net cash used in investing activities was $3,459 compared to net cash used in investing activities of $6,384 for the year ended December 31, 2023.
Heavy Fabrications Segment The following table summarizes the Heavy Fabrications segment operating results for the twelve months ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Orders $ 50,594 $ 294,097 Tower sections sold 600 570 Revenues 133,368 117,206 Operating income (loss) 15,006 (1,044 ) Operating margin 11.3 % (0.9 )% Heavy Fabrications orders decreased by 83% versus the prior year primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals consistent with how orders are typically placed.
Heavy Fabrications Segment The following table summarizes the Heavy Fabrications segment operating results for the twelve months ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Orders $ 53,934 $ 50,594 Revenues 82,657 133,368 Operating income 7,128 15,006 Operating margin 8.6 % 11.3 % Heavy Fabrications orders increased 7% over the prior year primarily due an increase in orders associated with wind repowering projects.
Additionally, industrial fabrication product line revenues increased primarily due to higher shipments of our PRS units in the current year. Gearing segment revenue increased 7% relative to 2022 primarily due to higher shipments for industrial and steel customers, partially offset by a decrease in revenue from mining and O&G customers.
This was partially offset by a decrease in industrial fabrication product line orders due to reduced demand for our PRS units. Segment revenues decreased by 38% from the prior year primarily due to a 41% decrease in wind revenue as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025.
Industrial Solutions segment revenue increased 41% from the prior year primarily due to increased demand for new and aftermarket gas turbine content, in addition to increased revenue recognized from international customers. Gross profit improved by $21,798 during the year ended December 31, 2023 primarily due to the higher sales volumes within all segments and $14,493 recognized from the AMP credits.
Gross profit decreased by $11,319 during the year ended December 31, 2024 as compared to the prior year primarily due to lower sales volumes within the Heavy Fabrications and Gearing segments and the corresponding reduction in AMP credits recognized in the Heavy Fabrications segment, partially offset by reduced overhead costs.
Removed
Heavy Fabrications orders decreased by 83% from the prior year primarily due to the timing of tower orders as a major wind tower customer secured relatively longer-term capacity during the fourth quarter of 2022 instead of ordering in more regular intervals consistent with how orders are typically placed.
Added
Heavy Fabrications segment revenues decreased 38% primarily due to a 41% decrease in wind revenue as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Additionally, industrial fabrication product line revenues decreased primarily due to lower shipments of our PRS units in the current year.
Removed
Heavy Fabrications segment revenues increased by 14% primarily due to a 18% increase in wind tower revenue as a result of a 30 section increase in tower sections sold, less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers.
Added
We also incurred other miscellaneous administrative costs related to selling the credits in the amount of $254, $197 of which has been recorded as cost of sales, with the remaining capitalized and included in the “Prepaid expenses and other current assets” line item of our consolidated financial statements at December 31, 2023.
Removed
Wind tower revenue increased 18% from the prior year primarily as a result of a 30 section increase in tower sections sold, less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers.
Added
During 2024, we recognized gross AMP credits totaling $9,588 and recognized a 6.5% discount on the credits totaling $623, which was recognized in cost of sales.
Removed
Segment revenues increased by 14% primarily due to a 18% increase in wind tower revenue primarily as a result of a 30 section increase in tower sections sold, less customer supplied materials in the current year and increased steel content, which is generally a pass-through to customers.
Added
Within our Heavy Fabrications segment, wind revenue decreased 41% from the prior year as a global wind turbine manufacturer shifted approximately half of its contracted tower section orders initially planned for 2024 into 2025. Additionally, industrial fabrication product line revenues decreased 29% from the prior year primarily due to reduced shipments of our PRS units in the current year.
Added
Control is typically transferred upon shipment or delivery depending on the terms of the contract or under the terms of the bill and hold arrangements discussed below. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer.

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