BROADWIND, INC. 10-Q

Item 1. Financial Statements   BROADWIND, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share data)         September 30,     December 31,       2021     2020                     ASSETS                 CURRENT ASSETS:                 Cash   $ 2,335     $ 3,372   Accounts receivable, net     16,131       15,337   Employee retention credit receivable     503       —   Contract assets     1,491       2,253   Inventories, net     24,876       26,724   Prepaid expenses and other current assets     2,220       2,909   Total current assets     47,556       50,595   LONG-TERM ASSETS:                 Property and equipment, net     44,239       45,195   Operating lease right-of-use assets     18,462       19,321   Intangible assets, net     3,636       4,186   Other assets     585       385   TOTAL ASSETS   $ 114,478     $ 119,682   LIABILITIES AND STOCKHOLDERS’ EQUITY                 CURRENT LIABILITIES:                 Line of credit and other notes payable   $ 5,445     $ 1,406   Current portion of finance lease obligations     1,886       1,427   Current portion of operating lease obligations     1,732       1,832   Accounts payable     13,773       18,180   Accrued liabilities     4,040       6,307   Customer deposits     7,680       18,819   Total current liabilities     34,556       47,971   LONG-TERM LIABILITIES:                 Long-term debt, net of current maturities     228       9,381   Long-term finance lease obligations, net of current portion     2,762       1,996   Long-term operating lease obligations, net of current portion     18,863       19,569   Other     917       104   Total long-term liabilities     22,770       31,050   COMMITMENTS AND CONTINGENCIES                     STOCKHOLDERS’ EQUITY:                 Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding     —       —   Common stock, $0.001 par value; 30,000,000 shares authorized; 19,753,256 and 17,211,498 shares issued as of September 30, 2021, and December 31, 2020, respectively     20       17   Treasury stock, at cost, 273,937 shares as of September 30, 2021 and December 31, 2020     ( 1,842 )     ( 1,842 ) Additional paid-in capital     394,300       384,749   Accumulated deficit     ( 335,326 )     ( 342,263 ) Total stockholders’ equity     57,152       40,661   TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 114,478     $ 119,682       The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 1 Table of Contents     BROADWIND, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data)       Three Months Ended September 30,     Nine Months Ended September 30,       2021     2020     2021     2020   Revenues   $ 40,389     $ 54,614     $ 119,608     $ 158,174   Cost of sales     38,315       50,876       115,054       142,847   Gross profit     2,074       3,738       4,554       15,327   OPERATING EXPENSES:                                 Selling, general and administrative     3,888       4,030       12,623       12,537   Intangible amortization     183       183       550       550   Total operating expenses     4,071       4,213       13,173       13,087   Operating (loss) income     ( 1,997 )     ( 475 )     ( 8,619 )     2,240   OTHER (EXPENSE) INCOME, net:                                 Paycheck Protection Program loan forgiveness     —       —       9,151       —   Interest expense, net     ( 269 )     ( 507 )     ( 816 )     ( 1,654 ) Other, net     185       ( 1 )     7,322       ( 3 ) Total other (expense) income, net     ( 84 )     ( 508 )     15,657       ( 1,657 ) Net (loss) income before provision for income taxes     ( 2,081 )     ( 983 )     7,038       583   Provision for income taxes     24       20       101       103   NET (LOSS) INCOME     ( 2,105 )     ( 1,003 )     6,937       480   NET (LOSS) INCOME PER COMMON SHARE—BASIC:                                 Net (loss) income   $ ( 0.11 )   $ ( 0.06 )   $ 0.38     $ 0.03   WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC     19,418       16,866       18,460       16,741   NET (LOSS) INCOME PER COMMON SHARE—DILUTED:                                 Net (loss) income   $ ( 0.11 )   $ ( 0.06 )   $ 0.36     $ 0.03   WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED     19,418       16,866       19,218       17,278       The accompanying notes are an integral part of these condensed consolidated financial statements.   2 Table of Contents     BROADWIND, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (in thousands, except share data)       Common Stock     Treasury Stock     Additional                       Shares     Issued             Issued     Paid-in     Accumulated               Issued     Amount     Shares     Amount     Capital     Deficit     Total                                                             BALANCE, December 31, 2019     16,830,930     $ 17       ( 273,937 )   $ ( 1,842 )   $ 383,361     $ ( 340,776 )   $ 40,760   Stock issued for restricted stock     83,050       —       —       —       —       —       —   Share-based compensation     —       —       —       —       308       —       308   Net income     —       —       —       —       —       954       954   BALANCE, March 31, 2020     16,913,980     $ 17       ( 273,937 )   $ ( 1,842 )   $ 383,669     $ ( 339,822 )   $ 42,022   Stock issued for restricted stock     199,636       —       —       —       —       —       —   Share-based compensation     —       —       —       —       248       —       248   Net income     —       —       —       —       —       529       529   BALANCE, June 30, 2020     17,113,616     $ 17       ( 273,937 )   $ ( 1,842 )   $ 383,917     $ ( 339,293 )   $ 42,799   Stock issued for restricted stock     6,401       —       —       —       —       —       —   Share-based compensation     —       —       —       —       207       —       207   Sale of common stock, net     91,481       —       —       —       232       —       232   Net loss     —       —       —       —       —       ( 1,003 )     ( 1,003 ) BALANCE, September 30, 2020     17,211,498     $ 17       ( 273,937 )   $ ( 1,842 )   $ 384,356     $ ( 340,296 )   $ 42,235                                                             BALANCE, December 31, 2020     17,211,498     $ 17       ( 273,937 )   $ ( 1,842 )   $ 384,749     $ ( 342,263 )   $ 40,661   Stock issued for restricted stock     241,806       —       —       —       —       —       —   Stock issued under defined contribution 401(k) retirement savings plan     26,265       —       —       —       258       —       258   Share-based compensation     —       —       —       —       219       —       219   Shares withheld for taxes in connection with issuance of restricted stock     ( 105,399 )     —       —       —       ( 847 )     —       ( 847 ) Sale of common stock, net     1,100,000       1       —       —       6,100       —       6,101   Net loss     —       —       —       —       —       ( 1,210 )     ( 1,210 ) BALANCE, March 31, 2021     18,474,170     $ 18       ( 273,937 )   $ ( 1,842 )   $ 390,479     $ ( 343,473 )   $ 45,182   Stock issued for restricted stock     440,611       1       —       —       —       —       1   Stock issued under defined contribution 401(k) retirement savings plan     71,334       —       —       —       312       —       312   Share-based compensation     —       —       —       —       445       —       445   Shares withheld for taxes in connection with issuance of restricted stock     ( 124,814 )     —       —       —       ( 644 )     —       ( 644 ) Sale of common stock, net     797,697       1       —       —       3,247       —       3,248   Net income     —       —       —       —       —       10,252       10,252   BALANCE, June 30, 2021     19,658,998     $ 20       ( 273,937 )   $ ( 1,842 )   $ 393,839     $ ( 333,221 )   $ 58,796   Stock issued for restricted stock     9,583       —       —       —       —       —       —   Stock issued under defined contribution 401(k) retirement savings plan     87,615       —       —       —       300       —       300   Share-based compensation     —       —       —       —       193       —       193   Shares withheld for taxes in connection with issuance of restricted stock     ( 2,940 )     —       —       —       ( 12 )     —       ( 12 ) Sale of common stock, net     —       —       —       —       ( 20 )     —       ( 20 ) Net loss     —       —       —       —       —       ( 2,105 )     ( 2,105 ) BALANCE, September 30, 2021     19,753,256     $ 20       ( 273,937 )   $ ( 1,842 )   $ 394,300     $ ( 335,326 )   $ 57,152     The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 3 Table of Contents     BROADWIND, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)       Nine Months Ended September 30,       2021     2020   CASH FLOWS FROM OPERATING ACTIVITIES:                 Net income   $ 6,937     $ 480   Adjustments to reconcile net cash used in operating activities:                 Depreciation and amortization expense     4,758       4,761   Paycheck Protection Program loan forgiveness     ( 9,151 )     —   Deferred income taxes     19       12   Change in fair value of interest rate swap agreements     18       161   Stock-based compensation     857       763   Allowance for doubtful accounts     ( 434 )     47   Common stock issued under defined contribution 401(k) plan     870       —   Gain on disposal of assets     ( 33 )     —   Changes in operating assets and liabilities:                 Accounts receivable     ( 360 )     ( 5,898 ) Employee retention credit receivable     ( 503 )     —   Contract assets     763       ( 1,475 ) Inventories     1,848       6,383   Prepaid expenses and other current assets     689       ( 303 ) Accounts payable     ( 4,321 )     ( 3,900 ) Accrued liabilities     ( 2,285 )     678   Customer deposits     ( 11,139 )     ( 4,193 ) Other non-current assets and liabilities     644       9   Net cash used in operating activities     ( 10,823 )     ( 2,475 ) CASH FLOWS FROM INVESTING ACTIVITIES:                 Purchases of property and equipment     ( 1,369 )     ( 1,597 ) Proceeds from disposals of property and equipment     33       —   Net cash used in investing activities     ( 1,336 )     ( 1,597 ) CASH FLOWS FROM FINANCING ACTIVITIES:                 Proceeds from line of credit     120,485       142,348   Payments on line of credit     ( 116,446 )     ( 146,216 ) Proceeds from long-term debt     613       9,530   Payments on long-term debt     ( 159 )     ( 1,003 ) Principal payments on finance leases     ( 1,197 )     ( 694 ) Shares withheld for taxes in connection with issuance of restricted stock     ( 1,503 )     —   Proceeds from sale of common stock, net     9,329       232   Net cash provided by financing activities     11,122       4,197   NET (DECREASE) INCREASE IN CASH     ( 1,037 )     125   CASH beginning of the period     3,372       2,416   CASH end of the period   $ 2,335     $ 2,541     The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 4 Table of Contents   BROADWIND, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars are presented in thousands, except share, per share and per employee data or unless otherwise stated)     NOTE 1 — BASIS OF PRESENTATION     The unaudited condensed consolidated financial statements presented herein include the accounts of Broadwind, Inc. (the “Company”) and its wholly-owned subsidiaries Broadwind Heavy Fabrications, Inc. (“Broadwind Heavy Fabrications”), Brad Foote Gear Works, Inc. (“Brad Foote”) and Broadwind Industrial Solutions, LLC (“Broadwind Industrial Solutions”). All intercompany transactions and balances have been eliminated. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10 -Q and Article 10 of Regulation S- X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included.   Operating results for the  three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2021, or any other interim period, which may differ materially due to, among other things, the risk factors set forth in our Annual Report on Form 10 -K for the year ended December 31, 2020 .   The December 31, 2020 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2020 .   There have been no material changes in the Company’s significant accounting policies during the  nine months ended September 30, 2021 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2020 .   Company Description      Through its subsidiaries, the Company is a precision manufacturer of structures, equipment and components for clean technology and other specialized applications. The Company provides technologically advanced high value products to customers with complex systems and stringent quality standards that operate in energy, mining and infrastructure sectors, primarily in the United States of America (the “U.S.”). The Company’s capabilities include, but are not limited to the following: heavy fabrications, welding, metal rolling, coatings, gear cutting and shaping, heat treatment, assembly, engineering and packaging solutions. The Company’s most significant presence is within the U.S. wind energy industry, which accounted for 66 % and 72 % of the Company’s revenue during the first   nine months of 2021  and 2020, respectively.    Liquidity   The Company typically meets its short term liquidity needs through cash generated from operations, its available cash balances, the Credit Facility (as defined below), equipment financing, and access to the public or private debt and/or equity markets, including the option to raise capital from the sale of our securities under the Form S- 3  (as discussed below).   See Note 7, “Debt and Credit Agreements,” of these condensed consolidated financial statements for a complete description of the Credit Facility and the Company’s other debt.    Total debt and finance lease obligations at  September 30, 2021 totaled $ 10,321 , which includes current outstanding debt and finance leases totaling $ 7,331 . The Company's revolving line of credit balance is included in the “Line of credit and other notes payable” line item in the Company's condensed consolidated balance sheet. Long-term debt at December 31, 2020  included $ 9,151 of Payroll Protection Program loans (“PPP Loans”), which were forgiven by the U.S. Small Business Administration (“SBA”) during the quarter ended June 30, 2021.  See Note 7,  “Debt and Credit Agreements,” of these condensed consolidated financial statements for a complete description of the PPP Loans.    5 Table of Contents   On August 18, 2020, the Company filed a “shelf” registration statement on Form S- 3, which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 13, 2020 ( the “Form S- 3” ) and expires on October 12, 2023. This shelf registration statement, which includes a base prospectus, allows the Company at any time to offer any combination of securities described in the prospectus in one or more offerings. Unless otherwise specified in the prospectus supplement accompanying the base prospectus, the Company would use the net proceeds from the sale of any securities offered pursuant to the shelf registration statement for general corporate purposes.    On March 9, 2021, the Company entered into a $ 10,000  Equity Distribution Agreement (the “Equity Distribution Agreement”) with Craig-Hallum Capital Group, LLC. Pursuant to the terms of the Equity Distribution Agreement, the Company issued 1,897,697   shares of the Company’s common stock thereunder during the first two quarters of  2021. The net proceeds (before upfront costs) to the Company from the sale of such shares were approximately $ 9,725   after deducting commissions paid of approximately $ 275   and before deducting other expenses of $ 396 .    On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law providing numerous tax provisions and other stimulus measures, including an employee retention credit (“ERC”), which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. The ERC is available for wages paid through December 31, 2021 and is equal to 70% of qualified wages (which includes employer qualified health plan expenses) paid to employees. During each quarter of  2021, a maximum of $10,000 in qualified wages for each employee is eligible for the ERC. Therefore, the maximum tax credit that can be claimed by an eligible employer in 2021 is $7,000 per employee per calendar quarter. In the first and second quarters of 2021, the Company received ERC benefits of $ 3,372 and $ 3,593 , respectively, which were recorded in “Other income (expense), net” in the Company’s condensed consolidated statement of operations. The Company qualified for the ERC in the first quarter of 2021 because it experienced a reduction in gross receipts of more than 20% for the first quarter of 2021 compared to the first quarter of 2019, the relevant criteria for the ERC. Since the Company qualified for the ERC in the first quarter of 2021, it automatically qualified for the ERC in the second quarter of 2021. As a result of the Company averaging  500 or fewer full-time employees in 2019, all wages paid to employees were eligible for the ERC (rather than only wages paid to employees not providing services). During the third quarter of 2021 due to relatively higher revenues in 2021 as compared to the third quarter of 2019, the Company did not qualify for the ERC benefit. The receivable for the remaining uncollected ERC benefit is $503  as of September  30, 2021 and is included in the “Employee retention credit receivable” line item in the Company’s condensed consolidated balance sheet at September  30, 2021.     The Company anticipates that current cash resources, amounts available under the Credit Facility, cash to be generated from operations and any potential proceeds from the sale of further Company securities under the Form S- 3 will be adequate to meet the Company’s liquidity needs for at least the next twelve months. ​ If assumptions regarding the Company’s production, sales and subsequent collections from certain of the Company’s large customers, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, particularly in light of the COVID- 19 pandemic, emerging variants and its effects on domestic and global economies, the Company may in the future encounter cash flow and liquidity issues. If the Company’s operational performance deteriorates significantly, it may be unable to comply with existing financial covenants, and could lose access to its Credit Facility. This could limit the Company’s operational flexibility, require a delay in making planned investments and/or require the Company to seek additional equity or debt financing. Any additional equity financing, if available, may be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other restrictions on the Company. While the Company believes that it will continue to have sufficient cash available to operate its businesses and to meet its financial obligations and debt covenants, there can be no assurances that its operations will generate sufficient cash, or that credit facilities will be available in an amount sufficient to enable the Company to meet these financial obligations. ​ Management’s Use of Estimates   The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reported period. Significant estimates, among others, include revenue recognition, future cash flows, inventory reserves, warranty reserves, impairment of long-lived assets, allowance for doubtful accounts and health insurance reserves. Although these estimates are based upon management’s best knowledge of current events and actions that the Company may undertake in the future, actual results could differ from these estimates, particularly in light of the COVID- 19 pandemic.     NOTE 2 — REVENUES   Revenues are recognized when the promised goods or services are transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.   The following table presents the Company’s revenues disaggregated by revenue source for the three and nine months ended September 30, 2021 and 2020 :       Three Months Ended September 30,     Nine Months Ended September 30,       2021     2020     2021     2020   Heavy Fabrications   $ 28,675     $ 43,440     $ 87,282     $ 125,424   Gearing     7,562       7,125       20,315       20,273   Industrial Solutions     4,213       4,081       12,357       12,516   Eliminations     ( 61 )     ( 32 )     ( 346 )     ( 39 ) Consolidated   $ 40,389     $ 54,614     $ 119,608     $ 158,174     6 Table of Contents   Revenue within the Company’s Gearing and Industrial Solutions segments, as well as industrial fabrication product line revenues within the Heavy Fabrications segment, are generally recognized at a point in time, typically when the promised goods or services are physically transferred to its customers in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The Company measures revenue based on the consideration specified in the purchase order and revenue is recognized when the performance obligations are satisfied. If applicable, the transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation.   For tower sales within the Company’s Heavy Fabrications segment, products are sold under terms included in bill and hold sales arrangements that result in different timing for revenue recognition. The Company recognizes revenue under these arrangements only when there is a substantive reason for the agreement, the ordered goods are identified separately as belonging to the customer and not available to fill other orders, the goods are currently ready for physical transfer to the customer, and the Company does not have the ability to use the product or to direct it to another customer. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance.   During the nine  months ended September  30,   2021, the Company recognized a portion of revenue within the Gearing and Heavy Fabrications segments over time, as the products had no alternative use to the Company and the Company had an enforceable right to payment, including profit, upon termination of the contracts. Since the projects are labor intensive, the Company uses labor hours as the input measure of progress for the applicable contracts. Within the Heavy Fabrications segment, the Company recognized revenue over time of $ 1,791  and $ 4,220  for the three  and nine  months ended September  30, 2021, respectively. Within the Gearing segment, the Company recognized revenue over time of $ 499  and $ 2,444  for the three and nine  months ended September  30, 2021, respectively. Contract assets are recorded when performance obligations are satisfied but the Company is not yet entitled to payment. Contract assets represent the Company’s rights to consideration for work completed but not billed at the end of the period. During the three and nine  months ended September  30, 2020, the Company recognized revenue over time of $ 1,475 from one customer within the Gearing segment.    The Company generally expenses sales commissions when incurred. These costs are recorded within selling, general and administrative expenses. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are classified as reductions of revenue in the Company’s statement of operations.   The Company does not disclose the value of the unsatisfied performance obligations for contracts with an original expected length of one year or less.     NOTE 3 — EARNINGS PER SHARE     The following table presents a reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020 , as follows:        Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Basic earnings per share calculation:                                 Net (loss) income   $ ( 2,105 )   $ ( 1,003 )   $ 6,937     $ 480   Weighted average number of common shares outstanding     19,417,675       16,866,134       18,460,444       16,741,481   Basic net (loss) income per share   $ ( 0.11 )   $ ( 0.06 )   $ 0.38     $ 0.03   Diluted earnings per share calculation:                                 Net (loss) income   $ ( 2,105 )   $ ( 1,003 )   $ 6,937     $ 480   Weighted average number of common shares outstanding     19,417,675       16,866,134       18,460,444       16,741,481   Common stock equivalents:                                 Non-vested stock awards     —       —       757,976       536,920   Weighted average number of common shares outstanding     19,417,675       16,866,134       19,218,420       17,278,401   Diluted net (loss) income per share   $ ( 0.11 )   $ ( 0.06 )   $ 0.36     $ 0.03       ​ 7 Table of Contents     NOTE 4 — INVENTORIES     The components of inventories as of September 30, 2021 and December 31, 2020 are summarized as follows:       September 30,     December 31,       2021     2020   Raw materials   $ 15,101     $ 14,586   Work-in-process     8,814       12,634   Finished goods     3,525       2,704         27,440       29,924   Less: Reserve for excess and obsolete inventory     ( 2,564 )     ( 3,200 ) Net inventories   $ 24,876     $ 26,724     ​   NOTE 5 — INTANGIBLE ASSETS   Intangible assets represent the fair value assigned to definite-lived assets such as trade names and customer relationships as part of the Company’s acquisition of Brad Foote completed in 2007 as well as the noncompetition agreements, trade names and customer relationships that were part of the Company’s acquisition of Red Wolf Company, LLC completed in 2017. Intangible assets are amortized on a straight-line basis over their estimated useful lives, with a remaining life range from 1   to 6   years.   As of September 30, 2021 and December 31, 2020 , the cost basis, accumulated amortization and net book value of intangible assets were as follows:       September 30, 2021     December 31, 2020                                       Remaining                                     Remaining                                       Weighted                                     Weighted                       Accumulated     Net     Average                     Accumulated     Net     Average       Cost     Accumulated     Impairment     Book     Amortization             Accumulated     Impairment     Book     Amortization       Basis     Amortization     Charges     Value     Period     Cost     Amortization     Charges     Value     Period   Intangible assets:                                                                                 Noncompete agreements   $ 170     $ ( 132 )   $ —     $ 38       1.3     $ 170     $ ( 111 )   $ —     $ 59       2.1   Customer relationships     15,979       ( 7,208 )     ( 7,592 )     1,179       4.2       15,979       ( 6,979 )     ( 7,592 )     1,408       4.9   Trade names     9,099       ( 6,680 )     —       2,419       6.0       9,099       ( 6,380 )     —       2,719       6.8   Intangible assets   $ 25,248     $ ( 14,020 )   $ ( 7,592 )   $ 3,636       4.0     $ 25,248     $ ( 13,470 )   $ ( 7,592 )   $ 4,186       4.6   ​ As of September 30, 2021 , estimated future amortization expense was as follows:   2021   $ 183   2022     725   2023     664   2024     661   2025     661   2026 and thereafter     742   Total   $ 3,636   ​ ​    NOTE 6 — ACCRUED LIABILITIES   Accrued liabilities as of September 30, 2021 and December 31, 2020 consisted of the following:        September 30,     December 31,       2021     2020   Accrued payroll and benefits   $ 2,646     $ 5,320   Fair value of interest rate swap     58       148   Accrued property taxes     546       —   Income taxes payable     57       78   Accrued professional fees     110       176   Accrued warranty liability     128       33   Self-insured workers compensation reserve     162       74   Accrued other     333       478   Total accrued liabilities   $ 4,040     $ 6,307     8 Table of Contents     NOTE 7 — DEBT AND CREDIT AGREEMENTS   The Company’s outstanding debt balances as of September 30, 2021 and December 31, 2020 consisted of the following:       September 30,     December 31,       2021     2020   Line of credit   $ 5,284     $ 1,245   PPP Loans     —       9,151   Other notes payable     161       163   Long-term debt     228       228   Less: Current portion     ( 5,445 )     ( 1,406 ) Long-term debt, net of current maturities   $ 228     $ 9,381     Credit Facility   On October 26, 2016, the Company established a three -year secured revolving line of credit with CIBC Bank USA (“CIBC”). This line of credit has been amended from time to time. On February 25, 2019, the line of credit was expanded and extended for three years when the Company and its subsidiaries entered into an Amended and Restated Loan and Security Agreement (the “Amended and Restated Loan Agreement”), with CIBC as administrative agent and sole lead arranger and the other financial institutions party thereto, providing the Company and its subsidiaries with a $ 35,000 secured credit facility (as amended to date, the “Credit Facility”). The obligations under the Credit Facility are secured by, subject to certain exclusions, (i) a first priority security interest in all accounts receivable, inventory, equipment, cash and investment property, and (ii) a mortgage on the Abilene, Texas tower and Pittsburgh, Pennsylvania gearing facilities.   On October  29, 2020, the Company executed the First Amendment to the Amended and Restated Loan Agreement, implementing a payoff of a syndicated lender and a pricing grid based on the Company’s trailing twelve month EBITDA under which applicable margins range from 2.25 % to 2.75 % for London Interbank Offering Rate (“LIBOR”) rate loans and 0.00 % and 0.75 % for base rate loans, and extending the term of the Credit Facility to  July  31, 2023.   On February 23, 2021, the Company executed the Second Amendment to the Amended and Restated Loan Agreement, which waived testing of the fixed charge coverage covenant for the quarters ended March 31, 2021 and June 20, 2021, added a new liquidity covenant applicable to the quarter ended March 31, 2021 and new minimum EBITDA covenants applicable to the quarters ended March 31, 2021 and June 30, 2021. As of September 30, 2021, the Company transitioned back to a fixed charge coverage covenant.   On November 8, 2021, the Company executed the Third Amendment to the Amended and Restated Loan Agreement (the “Third Amendment”) which waived the fixed charge coverage ratio default for the quarter ended September 30, 2021, suspended testing of the fixed charge coverage ratio covenant through September 30, 2022, added a minimum EBITDA covenant applicable to the three -month period ending December 31, 2021, the six -month period ending March 31, 2022, the nine -month period ending June 30, 2022 and the twelve -month period ending September 30, 2022  and added a reserve of $ 5,000,000 to the Revolving Loan Availability through December 31, 2022. For a more detailed description of the Third Amendment, refer to Item 5 of Part II of this Form 10 -Q.   The Credit Facility is an asset-based revolving credit facility, pursuant to which the CIBC advances funds against a borrowing base consisting of approximately (a) 85 % of the face value of eligible receivables of the Company and the subsidiaries, plus (b) the lesser of (i) 50 % of the lower of cost or market value of eligible inventory of the Company, (ii) 85 % of the orderly liquidation value of eligible inventory and (iii) $ 12.5 million, plus (c) the lesser of (i) the sum of (A) 75 % of the appraised net orderly liquidation value of the Company’s eligible machinery and equipment plus (B) 50 % of the fair market value of the Company’s mortgaged property and (ii) $ 12 million. Subject to certain borrowing base conditions, the aggregate Credit Facility limit under the Amended and Restated Loan Agreement is $ 35 million with a sublimit for letters of credit of $ 10 million. Borrowings under the Credit Facility bear interest at a per annum rate equal to, at the option of the Company, the one, two or three -month LIBOR rate or the base rate, plus a margin. The Company must also pay an unused facility fee equal to 0.50 % per annum on the unused portion of the Credit Facility along with other standard fees. With the exception of the balance impacted by the interest rate swap (as described below), the Company is allowed to prepay in whole or in part advances under the Credit Facility without penalty or premium other than customary “breakage” costs with respect to LIBOR loans.   The Credit Facility contains customary representations and warranties applicable to the Company and its subsidiaries. It also contains a requirement that the Company, on a consolidated basis, maintain a minimum quarterly fixed charge coverage ratio, along with other customary restrictive covenants, certain of which are subject to materiality thresholds, baskets and customary exceptions and qualifications.    In conjunction with the Amended and Restated Loan Agreement, during June 2019, the Company entered into a floating to fixed interest rate swap with CIBC. The swap agreement has a notional amount of $ 6,000 and a schedule matching that of the underlying loan that synthetically fixes the interest rate on LIBOR borrowings for the entire term of the Credit Facility at 2.13 %, before considering the Company’s risk premium. The interest rate swap is accounted for using mark-to-market accounting. Accordingly, changes in the fair value of the swap each reporting period are adjusted through earnings, which may subject the Company’s results of operations to non-cash volatility. The interest rate swap liability is included in the “Accrued liabilities” line item of the Company’s condensed consolidated financial statements as of September 30, 2021 and December 31, 2020 .   As of September 30, 2021 , there was $ 5,284   of outstanding indebtedness under the Credit Facility, with the ability to borrow an additional $ 18,743 .   9 Table of Contents   Other     In 2016, the Company entered into a $ 570 loan agreement with the Development Corporation of Abilene which is included in the “Long-term debt, less current maturities” line item of our condensed consolidated financial statements as of September 30, 2021 and December 31, 2020 . The loan is forgivable upon the Company meeting and maintaining specific employment thresholds. During each of the years 2020, 2019, and 2018, $ 114 of the loan was forgiven. As of September 30, 2021 , the loan balance was $ 228 . In addition, the Company has outstanding notes payable for capital expenditures in the amount of $ 161   and $ 163 as of September 30, 2021 and December 31, 2020 , respectively, with $ 161  included in the “Line of credit and other notes payable” line item of the Company’s condensed consolidated financial statements as of September 30, 2021 and December 31, 2020 . The notes payable have monthly payments that range from $ 1 to $ 16  and an interest rate of approximately 4 %. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates that range from March  2022  to September  2024. ​ On April 15, 2020, the Company received funds under notes and related documents with CIBC, under the Paycheck Protection Program (the “PPP”) which was established under the CARES Act enacted on March 27, 2020 in response to the COVID- 19 pandemic and is administered by the SBA. The Company received total proceeds of $ 9,530 from the PPP Loans and made repayments of $ 379 on May 13, 2020. Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020 enacted on June 5, 2020 ( the “Flexibility Act”), the PPP Loans, and accrued interest and fees are eligible to be forgiven following a period of twenty-four weeks after PPP Loan proceeds are received (the “covered period”) if they are used for qualifying expenses as described in the CARES Act including payroll costs and certain employee benefits (which must equal or exceed 60% of the amount requested to be forgiven), rent, mortgage interest, and utilities. The amount of loan forgiveness is reduced if the borrower terminates employees or significantly reduces salaries during such period, subject to certain exceptions. The Company used at least 60% of the amount of the PPP Loans proceeds to pay for payroll costs and the balance on other eligible qualifying expenses consistent with the terms of the PPP and submitted its forgiveness applications to CIBC during the first quarter of 2021. During the quarter ended June  30,   2021, all loans were forgiven by the SBA and a gain of $ 9,151 was recorded in “Other income (expense), net” in the Company's condensed consolidated statements of operations.    NOTE 8 — LEASES   The Company leases certain facilities and equipment. On January 1, 2019, the Company adopted Accounting Standard Update (“ASU”)  2016 - 02, Leases (“Topic 842” ) and ASU  2018 - 11 using the cumulative effect method and has elected to apply each available practical expedient. The adoption of Topic 842 resulted in the Company recognizing operating lease liabilities totaling $ 19,508 with a corresponding right-of-use (“ROU”) asset of $ 17,613 based on the present value of the minimum rental payments of such leases. The variance between the ROU asset balance and the lease liability is a deferred rent liability that existed prior to the adoption of Topic 842 and was offset against the ROU asset balance during the adoption. The discount rates used for leases accounted for under ASC 842 are based on an interest rate yield curve developed for the leases in the Company’s lease portfolio.   The Company has elected to apply the short-term lease exception to all leases of one year or less. During the nine months ended September 30, 2021  and 2020, the Company had additional operating leases that resulted in right-of-use assets obtained in exchange for lease obligations of $ 907 and $ 4,380 , respectively. Additionally, during the  nine months ended September 30, 2021  and 2020, the Company had additional finance leases that resulted in property, plant, and equipment obtained in exchange for lease obligations of $ 2,444   and $ 2,253 , respectively.    Some of the Company’s facility leases include options to renew. The exercise of the renewal options is typically at the Company’s discretion. The Company regularly evaluates the renewal options and includes them in the lease term when the Company is reasonably certain to exercise them.   10 Table of Contents   Quantitative information regarding the Company’s leases is as follows:       Three Months Ended September 30,     Nine Months Ended September 30,       2021     2020     2021     2020   Components of lease cost                                 Finance lease cost components:                                 Amortization of finance lease assets   $ 268     $ 150     $ 709     $ 435   Interest on finance lease liabilities     92       64       265       139   Total finance lease costs     360       214       974       574   Operating lease cost components:                                 Operating lease cost     741       764       2,260       2,340   Short-term lease cost     166       196       540       483   Variable lease cost (1)     220       198       647       586   Sublease income     ( 47 )     ( 45 )     ( 140 )     ( 136 ) Total operating lease costs     1,080       1,113       3,307       3,273                                     Total lease cost   $ 1,440     $ 1,327     $ 4,281     $ 3,847                                     Supplemental cash flow information related to our operating leases is as follows for the nine months ended September 30, 2021 and 2020:                                 Cash paid for amounts included in the measurement of lease liabilities:                                 Operating cash outflow from operating leases                   $ 2,722     $ 2,638                                     Weighted-average remaining lease term-finance leases at end of period (in years)                     2.0       1.7   Weighted-average remaining lease term-operating leases at end of period (in years)                     9.1       10.2   Weighted-average discount rate-finance leases at end of period                     6.4 %     8.9 % Weighted-average discount rate-operating leases at end of period                     8.6 %     8.9 %     ( 1 ) Variable lease costs consist primarily of taxes, insurance, utilities, and common area or other maintenance costs for the Company’s leased facilities and equipment. ​ As of September 30, 2021 , future minimum lease payments under finance leases and operating leases were as follows: ​     Finance     Operating               Leases     Leases     Total   2021   $ 658     $ 861     $ 1,519   2022     2,143       3,474       5,617   2023     1,487       3,388       4,875   2024     561       2,933       3,494   2025     240       3,015       3,255   2026 and thereafter     55       17,101       17,156   Total lease payments     5,144       30,772       35,916   Less—portion representing interest     ( 496 )     ( 10,177 )     ( 10,673 ) Present value of lease obligations     4,648       20,595       25,243   Less—current portion of lease obligations     ( 1,886 )     ( 1,732 )     ( 3,618 ) Long-term portion of lease obligations   $ 2,762     $ 18,863     $ 21,625   ​    NOTE 9 — FAIR VALUE MEASUREMENTS     Fair Value of Financial Instruments     The carrying amounts of the Company’s financial instruments, which include cash, accounts receivable, accounts payable and customer deposits, approximate their respective fair values due to the relatively short-term nature of these instruments. Based upon interest rates currently available to the Company for debt with similar terms, the carrying value of the Company’s long-term debt is approximately equal to its fair value.    11 Table of Contents   The Company entered into an interest rate swap in June 2019 to mitigate the exposure to the variability of LIBOR for its floating rate debt described in Note 7, “Debt and Credit Agreements,” of these condensed consolidated financial statements. The fair value of the interest rate swap is reported in “Accrued liabilities” and the change in fair value is reported in “Interest expense, net” of these condensed consolidated financial statements. The fair value of the interest rate swap is estimated as the net present value of projected cash flows based on forward interest rates at the balance sheet date.   The Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. Financial instruments are assessed quarterly to determine the appropriate classification within the fair value hierarchy. Transfers between fair value classifications are made based upon the nature and type of the observable inputs. The fair value hierarchy is defined as follows:   Level 1 — Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.   Level 2 — Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.    Level 3 — Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date.   The following tables represent the fair values of the Company’s financial liabilities as of September 30, 2021 and December 31, 2020 :       September 30, 2021       Level 1     Level 2     Level 3     Total   Liabilities measured on a recurring basis:                                 Interest rate swap   $ —     $ 58     $ —     $ 58   Total liabilities at fair value   $ —     $ 58     $ —     $ 58         December 31, 2020       Level 1     Level 2     Level 3     Total   Liabilities measured on a recurring basis:                                 Interest rate swap   $ —     $ 148     $ —     $ 148   Total liabilities at fair value   $ —     $ 148     $ —     $ 148       NOTE 10 — INCOME TAXES     Effective tax rates differ from federal statutory income tax rates primarily due to changes in the Company’s valuation allowance, permanent differences and provisions for state and local income taxes. As of September 30, 2021 , the Company has a full valuation allowance recorded against deferred tax assets. During the nine months ended September 30, 2021 , the Company recorded a provision for income taxes of $ 101 , compared to a provision for income taxes of $ 103  during the nine months ended September 30, 2020 .    The Company files income tax returns in U.S. federal and state jurisdictions. As of September 30, 2021 , open tax years in federal and some state jurisdictions date back to 1996 due to the taxing authorities’ ability to adjust operating loss carryforwards. As of December 31, 2020 , the Company had federal and unapportioned state net operating loss (“NOL”) carryforwards of $ 260,598  of which $ 227,781 will generally begin to expire in 2026. The majority of the NOL carryforwards will expire in various years from 2028 through 2037. NOLs generated after January 1, 2018 will not expire.   Since the Company has no unrecognized tax benefits, they will not have an impact on the condensed consolidated financial statements as a result of the expiration of the applicable statues of limitations within the next twelve months. In addition, Section  382 of the Internal Revenue Code of 1986, as amended (the “IRC”), generally imposes an annual limitation on the amount of NOL carryforwards and associated built-in losses that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. The Company’s ability to utilize NOL carryforwards and built-in losses may be limited, under IRC Section 382 or otherwise, by the Company’s issuance of common stock or by other changes in stock ownership. Upon completion of the Company’s analysis of IRC Section  382 in 2010, the Company determined that aggregate changes in stock ownership have triggered an annual limitation on NOL carryforwards and built-in losses available for utilization, thereby currently limiting annual NOL usage to $ 14,284 per year. Further limitations may occur, depending on additional future changes in stock ownership. To the extent the Company’s use of NOL carryforwards and associated built-in losses is significantly limited in the future, the Company’s income could be subject to U.S. corporate income tax earlier than it would be if the Company were able to use NOL carryforwards and built-in losses without such limitation, which could result in lower profits and the loss of benefits from these attributes.    12 Table of Contents   In February 2013, the Company adopted a Stockholder Rights Plan, which was amended and extended in February 2016 and again in February 2019 ( as amended, the “Rights Plan”). The Rights Plan is designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under IRC Section 382. The amendment to the Rights Plan was most recently approved by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders and has a term of three years.   The Rights Plan is intended to act as a deterrent to any person or group, together with its affiliates and associates, becoming the beneficial owner of 4.9 % or more of the Company’s common stock and thereby triggering a further limitation of the Company’s available NOL carryforwards. In connection with the adoption of the Rights Plan, the Board declared a non-taxable dividend of one preferred share purchase right (a “Right”) for each outstanding share of the Company’s common stock to the Company’s stockholders of record as of the close of business on February  22, 2013. Each Right entitles its holder to purchase from the Company one one -thousandth of a share of the Company’s Series A Junior Participating Preferred Stock at an exercise price of $ 4.25 per Right, subject to adjustment. As a result of the Rights Plan, any person or group that acquires beneficial ownership of 4.9 % or more of the Company’s common stock without the approval of the Board would be subject to significant dilution in the ownership interest of that person or group. Stockholders who owned 4.9 % or more of the outstanding shares of the Company’s common stock as of February  12, 2013 will not trigger the preferred share purchase rights unless they acquire additional shares after that date.    As of September 30, 2021 , the Company had no unrecognized tax benefits. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. The Company had no accrued interest and penalties as of September 30, 2021 .     NOTE 11 — SHARE-BASED COMPENSATION   ​ There was no  stock option activity during the nine months ended September 30, 2021  and no  stock options were outstanding as of September 30, 2021 .    The following table summarizes the Company’s restricted stock unit and performance award activity during the nine months ended September 30, 2021 :                Weighted Average       Number of     Grant-Date Fair Value       Shares     Per Share   Unvested as of December 31, 2020     1,332,884     $ 1.86   Granted     393,592     $ 4.82   Vested     ( 691,994 )   $ 1.93   Forfeited     ( 108,144 )   $ 2.95   Unvested as of September 30, 2021     926,338     $ 2.74     Under certain situations, shares are withheld from issuance to cover taxes for the vesting of restricted stock units and performance awards. For the nine  months ended September  30, 2021, 233,153  of such shares were withheld to cover $ 1,503  of tax obligations.    The following table summarizes share-based compensation expense included in the Company’s condensed consolidated statements of operations for the nine months ended September 30, 2021 and 2020 , as follows:        Nine Months Ended September 30,       2021     2020   Share-based compensation expense:                 Cost of sales   $ 103     $ 74   Selling, general and administrative     754       689   Net effect of share-based compensation expense on net income   $ 857     $ 763   Reduction in earnings per share:                 Basic earnings per share   $ 0.05     $ 0.05   Diluted earnings per share   $ 0.04     $ 0.04     13 Table of Contents     NOTE 12 — LEGAL PROCEEDINGS   The Company is party to a variety of legal proceedings that arise in the normal course of its business. While the results of these legal proceedings cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on the Company’s results of operations, financial condition or cash flows. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s results of operations, financial condition or cash flows. It is possible that if one or more of such matters were decided against the Company, the effects could be material to the Company’s results of operations in the period in which the Company would be required to record or adjust the related liability and could also be material to the Company’s financial condition and cash flows in the periods the Company would be required to pay such liability.     NOTE 13 — RECENT ACCOUNTING PRONOUNCEMENTS     The Company reviews new accounting standards as issued. Although some of the accounting standards issued or effective in the current fiscal year may be applicable to it, the Company believes that none of the new standards have a significant impact on its condensed consolidated financial statements.     NOTE 14— SEGMENT REPORTING     The Company is organized into reporting segments based on the nature of the products offered and business activities from which it earns revenues and incurs expenses for which discrete financial information is available and regularly reviewed by the Company’s chief operating decision maker.   The Company’s segments and their product and service offerings are summarized below:    Heavy Fabrications   The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. The Company’s most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve capacity utilization, reduce customer concentration, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and tower adapters primarily to wind turbine manufacturers. Production facilities, located in Manitowoc, Wisconsin and Abilene, Texas, are situated in close proximity to the primary U.S. domestic wind energy and equipment manufacturing hubs. The two facilities have a combined annual tower production capacity of up to approximately 550 towers ( 1,650 tower sections), sufficient to support turbines generating more than 1,100  megawatts of power. The Company has expanded production capabilities and leveraged manufacturing competencies, including welding, lifting capacity and stringent quality practices, into aftermarket and original equipment manufacturer (“OEM”) components utilized in surface and underground mining, construction, material handling, oil and gas (“O&G”) and other infrastructure markets.   Gearing    The Company provides gearing and gearboxes to a broad set of customers in diverse markets including; onshore and offshore O&G fracking and drilling, surface and underground mining, wind energy, steel, material handling and other infrastructure markets. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for nearly a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment in Neville Island, Pennsylvania.   Industrial Solutions    The Company provides supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market, as well as other clean technology markets.   14 Table of Contents   Corporate   “Corporate” includes the assets and selling, general and administrative expenses of the Company’s corporate office. “Eliminations” comprises adjustments to reconcile segment results to consolidated results.    The accounting policies of the reportable segments are the same as those referenced in Note 1, “Basis of Presentation” of these condensed consolidated financial statements. Summary financial information by reportable segment for the three and nine months ended September 30, 2021 and 2020 is as follows:       Heavy Fabrications     Gearing     Industrial Solutions     Corporate     Eliminations     Consolidated   For the Three Months Ended September 30, 2021                                                 Revenues from external customers   $ 28,675     $ 7,562     $ 4,152     $ —     $ —     $ 40,389   Intersegment revenues     —       —       61       —       ( 61 )     —   Net revenues     28,675       7,562       4,213       —       ( 61 )     40,389   Operating (loss) profit     ( 445 )     ( 219 )     ( 108 )     ( 1,248 )     23       ( 1,997 ) Depreciation and amortization     967       463       105       59       —       1,594   Capital expenditures     294       306       —       4       —       604         Heavy Fabrications     Gearing     Industrial Solutions     Corporate     Eliminations     Consolidated   For the Three Months Ended September 30, 2020                                                 Revenues from external customers   $ 43,434     $ 7,100     $ 4,080     $ —     $ —     $ 54,614   Intersegment revenues     6       25       1       —       ( 32 )     —   Net revenues     43,440       7,125       4,081       —       ( 32 )     54,614   Operating profit (loss)     2,020       ( 1,023 )     87       ( 1,559 )     —       ( 475 ) Depreciation and amortization     928       488       109       42       —       1,567   Capital expenditures     601       42       7       18       —       668         Heavy Fabrications     Gearing     Industrial Solutions     Corporate     Eliminations     Consolidated   For the Nine Months Ended September 30, 2021                                                 Revenues from external customers   $ 87,277     $ 20,315     $ 12,016     $ —     $ —     $ 119,608   Intersegment revenues     5       —       341       —       ( 346 )     —   Net revenues     87,282       20,315       12,357       —       ( 346 )     119,608   Operating loss     ( 1,873 )     ( 2,090 )     ( 169 )     ( 4,487 )     —       ( 8,619 ) Depreciation and amortization     2,904       1,383       315       156       —       4,758   Capital expenditures     942       343       26       58       —       1,369         Heavy Fabrications     Gearing     Industrial Solutions     Corporate     Eliminations     Consolidated   For the Nine Months Ended September 30, 2020                                                 Revenues from external customers   $ 125,418     $ 20,241     $ 12,515     $ —     $ —     $ 158,174   Intersegment revenues     6       32       1       —       ( 39 )     —   Net revenues     125,424       20,273       12,516       —       ( 39 )     158,174   Operating profit (loss)     8,760       ( 1,935 )     496       ( 5,081 )     —       2,240   Depreciation and amortization     2,831       1,503       319       108       —       4,761   Capital expenditures     1,199       211       134       53       —       1,597     15 Table of Contents       Total Assets as of       September 30,     December 31,   Segments:   2021     2020   Heavy Fabrications   $ 32,989     $ 40,438   Gearing     45,104       43,319   Industrial Solutions     9,623       10,244   Corporate     228,029       220,428   Eliminations     ( 201,267 )     ( 194,747 )     $ 114,478     $ 119,682       NOTE 15 — COMMITMENTS AND CONTINGENCIES     Environmental Compliance and Remediation Liabilities     The Company’s operations and products are subject to a variety of environmental laws and regulations in the jurisdictions in which the Company operates and sells products governing, among other things, air emissions, wastewater discharges, the use, handling and disposal of hazardous materials, soil and groundwater contamination, employee health and safety, and product content, performance and packaging. Certain environmental laws may impose the entire cost or a portion of the cost of investigating and cleaning up a contaminated site, regardless of fault, upon any one or more of a number of parties, including the current or previous owners or operators of the site. These environmental laws also impose liability on any person who arranges for the disposal or treatment of hazardous substances at a contaminated site. Third parties may also make claims against owners or operators of sites and users of disposal sites for personal injuries and property damage associated with releases of hazardous substances from those sites.    Allowance for Doubtful Accounts     Based upon past experience and judgment, the Company establishes an allowance for doubtful accounts with respect to accounts receivable. The Company’s standard allowance estimation methodology considers a number of factors that, based on its collections experience, the Company believes will have an impact on its credit risk and the collectability of its accounts receivable. These factors include individual customer circumstances, history with the Company, the length of the time period during which the account receivable has been past due and other relevant criteria.    The Company monitors its collections and write-off experience to assess whether or not adjustments to its allowance estimates are necessary. Changes in trends in any of the factors that the Company believes may impact the collectability of its accounts receivable, as noted above, or modifications to its credit standards, collection practices and other related policies may impact the Company’s allowance for doubtful accounts and its financial results. The activity in the accounts receivable allowance liability for the nine months ended September 30, 2021 and 2020 consisted of the following:        For the Nine Months Ended September 30,       2021     2020   Balance at beginning of period   $ 473     $ 127   Bad debt expense     —       130   Write-offs     ( 432 )     ( 47 ) Other adjustments     ( 2 )     ( 36 ) Balance at end of period   $ 39     $ 174     Collateral     In select instances, the Company has pledged specific inventory and machinery and equipment assets to serve as collateral on related payable or financing obligations.    Liquidated Damages     In certain customer contracts, the Company has agreed to pay liquidated damages in the event of qualifying delivery or production delays. These damages are typically limited to a specific percentage of the value of the product in question and/or are dependent on actual losses sustained by the customer. The Company does not believe that this potential exposure will have a material adverse effect on the Company’s consolidated financial position or results of operations. There was no reserve for liquidated damages as of  September 30, 2021 or December 31, 2020.    16 Table of Contents     Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations     The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes thereto in Item 1, “Financial Statements,” of this Quarterly Report and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2020. The discussion below contains forward-looking statements that are based upon our current expectations and are subject to uncertainty and changes in circumstances including, but not limited to, those identified in “Cautionary Note Regarding Forward-Looking Statements” at the end of Item 2. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties including those arising as a result of, or amplified by, the COVID-19 pandemic. As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” and the “Company” refer to Broadwind, Inc., a Delaware corporation headquartered in Cicero, Illinois, and its subsidiaries, as appropriate.    (Dollars are presented in thousands except share, per share and per employee data or unless otherwise stated)     KEY METRICS USED BY MANAGEMENT TO MEASURE PERFORMANCE   In addition to measures of financial performance presented in our consolidated financial statements in accordance with GAAP, we use certain other financial measures to analyze our performance. These non-GAAP financial measures primarily consist of adjusted EBITDA (as defined below) and free cash flow which help us evaluate growth trends, establish budgets, assess operational efficiencies, oversee our overall liquidity, and evaluate our overall financial performance.   Key Financial Measures       Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Net revenues   $ 40,389     $ 54,614     $ 119,608     $ 158,174   Net (loss) income   $ (2,105 )   $ (1,003 )   $ 6,937     $ 480   Adjusted EBITDA (1)   $ 401     $ 1,297     $ 14,418     $ 7,766   Capital expenditures   $ 604     $ 668     $ 1,369     $ 1,597   Free cash flow (2)   $ (3,251 )   $ 7,256     $ (1,913 )   $ (1,737 ) Operating working capital (3)   $ 19,554     $ 13,486     $ 19,554     $ 13,486   Total debt (4)   $ 5,673     $ 17,673     $ 5,673     $ 17,673   Total orders   $ 42,597     $ 39,555     $ 103,252     $ 112,922   Backlog at end of period (5)   $ 76,531     $ 97,146     $ 76,531     $ 97,146   Book-to-bill (6)     1.1       0.7       0.9       0.7     (1) We provide non-GAAP adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, share based compensation and other stock payments, restructuring costs, impairment charges, and other non-cash gains and losses) as supplemental information regarding our business performance. Our management uses adjusted EBITDA when they internally evaluate the performance of our business, review financial trends and make operating and strategic decisions. We believe that this non-GAAP financial measure is useful to investors because it provides a better understanding of our past financial performance and future results, and it allows investors to evaluate our performance using the same methodology and information as used by our management. Our definition of adjusted EBITDA may be different from similar non-GAAP financial measures used by other companies and/or analysts.   (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. We believe free cash flow is a useful measure for investors because it portrays our ability to generate cash from our business for purposes such as repaying maturing debt and funding future investments.   (3) We define operating working capital as accounts receivable and inventory net of accounts payable and customer deposits.   (4) Total debt at September 30, 2020 includes PPP Loans totaling $9,151.   (5) Our backlog at September 30, 2021 and September 30, 2020 is net of revenue recognized over time.    (6) We define the book-to-bill as the ratio of new orders we received, net of cancellations, to revenue during a period.   The following table reconciles our non-GAAP key financial measures to the most directly comparable GAAP measure:       Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Net (loss) income   $ (2,105 )   $ (1,003 )   $ 6,937     $ 480   Interest expense     269       507       816       1,654   Income tax provision     24       20       101       103   Depreciation and amortization     1,594       1,567       4,758       4,761   Share-based compensation and other stock payments     619       206       1,806       768   Adjusted EBITDA     401       1,297       14,418       7,766   Changes in operating working capital     (2,555 )     6,627       (14,492 )     (7,906 ) Employee retention credit receivable     (503 )     —       (503 )     —   Capital expenditures     (604 )     (668 )     (1,369 )     (1,597 ) Proceeds from disposal of property and equipment     10       —       33       —   Free Cash Flow   $ (3,251 )   $ 7,256     $ (1,913 )   $ (1,737 )     17 Table of Contents   OUR BUSINESS     Third Quarter Overview     We booked $42,597 in new orders in the third quarter of 2021, up from $39,555 in the third quarter of 2020. Gearing segment orders increased 258% compared to the third quarter of 2020 primarily due to increased demand from oil and gas (“O&G”) and mining customers. Within our Heavy Fabrications segment, wind tower orders decreased 38% versus the prior year quarter as customers continue to delay orders due to uncertainty regarding the timing and likelihood of potential wind energy incentives provided by the federal government and elevated steel prices. Consistent with the Company's diversification strategy, this reduction was partially offset by an increase in industrial fabrications product line orders of 262% primarily due to higher order intake within all markets served as customers resumed capital spending and inventory purchases. Orders within our Industrial Solutions segment decreased by 9% as compared to the prior year, primarily due to the timing of orders associated with aftermarket projects.   We recognized revenue of $40,389 in the third quarter of 2021, down 26% compared to the third quarter of 2020, primarily due to a 37% decrease in tower sections sold as a result of project delays and lower industry wide activity levels. Industrial fabrications product line revenue within the Heavy Fabrications segment increased 14% primarily due to recognizing our first revenue associated with our Modular Pressure Reducing Systems (“PRS”) units. Gearing revenue increased by $437 from the third quarter of 2020, driven by higher order intake in recent quarters from O&G and steel customers, partially offset by decreased revenue from other industrial customers. Industrial Solutions revenue increased $132 from the third quarter of 2020, representing a 3% increase compared to the prior year quarter, primarily due to the timing of new gas turbine projects.   We recorded a net loss of $2,105 or $0.11 per share in the third quarter of 2021, compared to a net loss of $1,003 or $0.06 per share in the third quarter of 2020 primarily due to a 37% decrease in tower sections sold due to project delays and underutilization of plant capacity in the quarter. This was partially offset by higher sales and improved manufacturing efficiencies in the Gearing segment.    On March 27, 2020, the CARES Act was signed into law providing numerous tax provisions and other stimulus measures, including the Employee Retention Credit (“ERC”), which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. The ERC is available for wages paid through December 31, 2021 and is equal to 70% of qualified wages (which includes employer qualified health plan expenses) paid to employees. During each quarter of 2021, a maximum of $10,000 in qualified wages for each employee is eligible for the ERC. Therefore, the maximum tax credit that can be claimed by an eligible employer in 2021 is $7,000 per employee per calendar quarter. We qualified for the ERC in the first quarter of the year because we experienced a reduction in gross receipts of more than 20% for the first quarter of 2021 compared to the first quarter of 2019, the relevant criteria for the ERC. Since we qualified for the ERC in the first quarter of 2021, we automatically qualified for the ERC in the second quarter of 2021. In the first and second quarters of 2021, we received ERC benefits of $3,372 and $3,593, respectively, which were recorded in “Other income (expense), net” in our condensed consolidated statement of operations. During the third quarter of 2021 due to relatively higher revenues in 2021 as compared to the third quarter of 2019, we did not qualify for the ERC benefit. The receivable for the remaining uncollected ERC benefit is $503   as of September 30, 2021 and is included in the “Employee retention credit receivable” line item in our condensed consolidated balance sheet at September 30, 2021.    COVID-19 Pandemic   In March 2020, the World Health Organization recognized a novel strain of coronavirus (COVID-19) as a pandemic. In response to this pandemic, the United States and various foreign, state and local governments have, among other actions, imposed travel and business restrictions and required or advised communities in which we do business to adopt stay-at-home orders and social distancing guidelines, causing some businesses to adjust, reduce or suspend operating activities. The pandemic and the various governments’ response have caused significant and widespread uncertainty, volatility and disruptions in the U.S. and global economies, including in the regions in which we operate.    Our facilities continued to operate as essential businesses in light of the customers and markets served. However, through September 30, 2021, we have experienced an adverse impact to our business, operations and financial results as a result of this pandemic due in part to a decline in order activity levels, manufacturing inefficiencies associated with supply chain disruptions and employee staffing constraints due to the spread of the COVID-19 pandemic. In response to the pandemic, we continue to right-size our workforce and delay certain capital expenditures. In future periods, we may experience weaker customer demand, requests for extended payment terms, customer bankruptcies, additional supply chain disruption, employee staffing constraints and difficulties, government restrictions or other factors that could negatively impact the Company and its business, operations and financial results. As we cannot predict the duration or scope of the pandemic, including in light of the emerging variants, or its impact on economic and financial markets, any negative impact to our results cannot be reasonably estimated, but it could be material.   We continue to monitor closely the Company’s financial health and liquidity and the impact of the pandemic on the Company, including emerging variants. We have been able to serve the needs of our customers while taking steps to protect the health and safety of our employees, customers, partners, and communities. Among these steps, we have followed the guidance provided by the U.S. Centers for Disease Control and Prevention to protect the continued safety and welfare of our employees.   18 Table of Contents   RESULTS OF OPERATIONS     Three months ended September 30, 2021, Compared to Three months ended September 30, 2020     The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the three months ended September 30, 2021, compared to the three months ended September 30, 2020.       Three Months Ended September 30,     2021 vs. 2020               % of Total             % of Total                       2021     Revenue     2020     Revenue     $ Change     % Change   Revenues   $ 40,389       100.0 %   $ 54,614       100.0 %   $ (14,225 )     (26.0 )% Cost of sales     38,315       94.9 %     50,876       93.2 %     (12,561 )     (24.7 )% Gross profit     2,074       5.1 %     3,738       6.8 %     (1,664 )     (44.5 )% Operating expenses                                                 Selling, general and administrative expenses     3,888       9.6 %     4,030       7.4 %     (142 )     (3.5 )% Intangible amortization     183       0.5 %     183       0.3 %     —       0.0 % Total operating expenses     4,071       10.1 %     4,213       7.7 %     (142 )     (3.4 )% Operating loss     (1,997 )     (4.9 )%     (475 )     (0.9 )%     (1,522 )     (320.4 )% Other (expense) income, net                                                 Interest expense, net     (269 )     (0.7 )%     (507 )     (0.9 )%     238       46.9 % Other, net     185       0.5 %     (1 )     (0.0 )%     186       18600.0 % Total other (expense) income, net     (84 )     (0.2 )%     (508 )     (0.9 )%     424       83.5 % Net loss before provision for income taxes     (2,081 )     (5.2 )%     (983 )     (1.8 )%     (1,098 )     (111.7 )% Provision for income taxes     24       0.1 %     20       0.0 %     4       20.0 % Net loss   $ (2,105 )     (5.2 )%   $ (1,003 )     (1.8 )%   $ (1,102 )     (109.9 )%   Consolidated     Revenues decreased by $14,225 versus the prior year quarter, which was primarily driven by a 37% decrease in tower sections sold in our Heavy Fabrications segment, reflecting both project delays and an industry-wide reduction in activity. Partly offsetting this was a 14% increase in industrial fabrications product line revenue, primarily due to recognizing our first revenue associated with our PRS units. Gearing segment revenue was up $437 from the third quarter of 2020, primarily driven by higher order intake in recent quarters from O&G and steel customers, partially offset by decreased revenue from other industrial customers. Industrial Solutions segment revenue increased $132 representing a 3% increase compared to the prior year quarter, primarily due to the timing of new gas turbine customer projects.   Gross profit decreased by $1,664 from the prior year quarter primarily due to reduced operating leverage associated with lower wind tower production. This decrease was partially offset by higher sales and improved manufacturing efficiencies within the Gearing segment.    As a result, gross margin decreased to 5.1% during the three months ended September 30, 2021, from 6.8% during the three months ended September 30, 2020.   Due to lower revenue levels, higher commission expenses, and an increase in employee costs, operating expenses as a percentage of sales increased to 10.1% in the current-year quarter from 7.7% in the prior year quarter.   Net loss was $2,105 during the three months ended September 30, 2021, compared to $1,003 during the three months ended September 30, 2020. This erosion was primarily due to the factors described above, partially offset by a 47% reduction in interest expense.    Heavy Fabrications Segment         Three Months Ended       September 30,       2021     2020   Orders   $ 26,539     $ 31,391   Tower sections sold     197       312   Revenues     28,675       43,440   Operating (loss) income     (445 )     2,020   Operating margin     (1.6 )%     4.7 %   Heavy Fabrications segment wind tower orders decreased 38% as compared to the third quarter of 2020 as customers delayed orders due to uncertainty regarding the timing and likelihood of potential U.S. federal wind energy incentives and elevated steel prices. Industrial fabrication product line orders increased 262% quarter-over-quarter as customers resumed capital spending and inventory purchases in all end markets. Segment revenues decreased $14,765 from the prior year quarter primarily due to a 37% decrease in tower sections sold due to the aforementioned project delays. This was partially offset by increased industrial fabrication revenues as we recognized our first revenue associated with our PRS units in the current year quarter.   19 Table of Contents   Heavy Fabrications segment operating income decreased by $2,465   compared to the prior year. The quarter-over-quarter degradation in operating performance reflects the adverse volume impacts described previously, manufacturing inefficiencies caused by supply chain disruptions, and the underutilization of plant capacity in the quarter. Operating margin was (1.6)% during the three months ended September 30, 2021, a decrease from 4.7% during the three months ended September 30, 2020.   Gearing Segment       Three Months Ended       September 30,       2021     2020   Orders   $ 11,546     $ 3,225   Revenues     7,562       7,125   Operating loss     (219 )     (1,023 ) Operating margin     (2.9 )%     (14.4 )%   Gearing segment orders increased 258% from the prior year period primarily due to increased demand from O&G and mining customers. Gearing revenue was up 6% relative to the comparable prior year period, a reflection of higher order intake in the current year, primarily from O&G and steel customers, partially offset by a decrease in revenue from other industrial customers.   Gearing segment operating loss decreased $804   from the prior year period. This was primarily attributable to higher sales and improved manufacturing efficiencies. Operating margin was (2.9)% during the three months ended September 30, 2021, an improvement from (14.4)% during the three months ended September 30, 2020, driven primarily by the items identified above.   Industrial Solutions Segment         Three Months Ended       September 30,       2021     2020   Orders   $ 4,512     $ 4,939   Revenues     4,213       4,081   Operating (loss) income     (108 )     87   Operating margin     (2.6 )%     2.1 %   20 Table of Contents   Industrial Solutions segment orders decreased by 9% from the prior year period primarily due to the timing of orders associated with aftermarket projects. Segment revenue increased by 3% from the prior year period primarily due to the timing of new gas turbine projects. The decrease in operating income versus the prior-year quarter was primarily a result of a lower margin sales mix sold.    Corporate and Other     Corporate and Other expenses during the three months ended September 30, 2021 decreased from the prior year period primarily due to lower incentive compensation and decreased professional service expenses.      Nine Months Ended September 30, 2021, Compared to Nine Months Ended September 30, 2020   The condensed consolidated statement of operations table below should be read in connection with a review of the following discussion of our results of operations for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020.       Nine Months Ended September 30,     2021 vs. 2020               % of Total             % of Total                       2021     Revenue     2020     Revenue     $ Change     % Change   Revenues   $ 119,608       100.0 %   $ 158,174       100.0 %   $ (38,566 )     (24.4 )% Cost of sales     115,054       96.2 %     142,847       90.3 %     (27,793 )     (19.5 )% Gross profit     4,554       3.8 %     15,327       9.7 %     (10,773 )     (70.3 )% Operating expenses                                                 Selling, general and administrative expenses     12,623       10.6 %     12,537       7.9 %     86       0.7 % Intangible amortization     550       0.5 %     550       0.3 %     —       — % Total operating expenses     13,173       11.0 %     13,087       8.3 %     86       0.7 % Operating (loss) income     (8,619 )     (7.2 )%     2,240       1.4 %     (10,859 )     (484.8 )% Other income (expense), net                                                 Paycheck Protection Program loan forgiveness     9,151       7.7 %     —       — %     9,151       100.0 % Interest expense, net     (816 )     (0.7 )%     (1,654 )     (1.0 )%     838       50.7 % Other, net     7,322       6.1 %     (3 )     (0.0 )%     7,325       244166.7 % Total other income (expense), net     15,657       13.1 %     (1,657 )     (1.0 )%     17,314       1044.9 % Net income before provision for income taxes     7,038       5.9 %     583       0.4 %     6,455       1107.2 % Provision for income taxes     101       0.1 %     103       0.1 %     (2 )     (1.9 )% Net income   $ 6,937       5.8 %   $ 480       0.3 %   $ 6,457       1345.2 %   Consolidated     Revenues decreased by $38,566 from the nine months ended September 30, 2020, primarily due to a 29% decrease in   tower sections sold due to customer driven project delays and a lower average selling price due to the mix of tower designs sold.    Gross profit decreased by $10,773 from the first nine months of 2020 primarily due to lower sales volumes and due to manufacturing inefficiencies caused by supply chain disruptions, and a temporary shut-down of our Abilene, Texas plant due to a weather event in the first quarter of 2021.   As a result, gross margin decreased to 3.8% during the nine months ended September 30, 2021, from 9.7% during the nine months ended September 30, 2020.   Due to lower revenue levels, higher legal expenses and an increase in professional service fees, operating expenses as a percentage of sales increased to 11.0% in the current year from 8.3% in the prior year period.   Net income was $6,937   during the nine months ended September 30, 2021, compared to $480 during the nine months ended September 30, 2020. The increase was primarily attributable to income of $9,151 recognized from the PPP Loan forgiveness and income of $6,965   recognized from the ERC benefit. Both of these items were recognized in “Other income (expense), net” in our condensed consolidated statements of operations. This was partially offset by adverse volume impacts in our Heavy Fabrications segment.    Heavy Fabrications Segment         Nine Months Ended       September 30,       2021     2020   Orders   $ 62,096     $ 78,306   Tower sections sold     668       944   Revenues     87,282       125,424   Operating (loss) income     (1,873 )     8,760   Operating margin     (2.1 )%     7.0 %   Heavy Fabrications segment wind tower orders decreased 34% compared to the prior year period as customers delayed orders due to uncertainty regarding the timing and likelihood of potential federal wind energy incentives and elevated U.S. steel prices.  Industrial fabrication product line orders, within the Heavy Fabrication segment, increased 48% year-over-year. Segment revenues decreased by $38,142   from the prior year period primarily due to a 29% decrease in tower sections sold and a lower average selling price due to the mix of tower designs sold.    21 Table of Contents   Heavy Fabrications segment operating income decreased by $10,633   compared to the prior year. The year-over-year   degradation in operating performance reflects the adverse volume impacts described previously, the underutilization of plant capacity, manufacturing inefficiencies caused by supply chain disruptions and a temporary shut-down of our Abilene, Texas plant due to a weather event in the first quarter of 2021. Operating margin was (2.1)% during the nine months ended September 30, 2021, a decrease from 7.0% during the nine months ended September 30, 2020.   Gearing Segment       Nine Months Ended       September 30,       2021     2020   Orders   $ 29,325     $ 19,376   Revenues     20,315       20,273   Operating loss     (2,090 )     (1,935 ) Operating margin     (10.3 )%     (9.5 )%   Gearing segment orders increased 51% from the nine months ended September 30, 2020 primarily due to increased demand from O&G customers, partially offset by the timing of aftermarket wind gearing orders, which can fluctuate based on customer order patterns and market conditions. Gearing revenue was flat as lower order intake in the second half of the prior year from industrial and mining customers was offset by increased revenue from O&G and aftermarket wind customers.   Gearing segment operating loss increased $155 from the prior year period. This was primarily attributable to increased manufacturing inefficiencies. Operating margin was (10.3)% during the nine months ended September 30, 2021, down from (9.5)% during the nine months ended September 30, 2020, driven primarily by the items identified above.   Industrial Solutions Segment         Nine Months Ended       September 30,       2021     2020   Orders   $ 11,831     $ 15,240   Revenues     12,357       12,516   Operating (loss) income     (169 )     496   Operating margin     (1.4 )%     4.0 %   Industrial Solutions segment orders decreased by 22% from the prior year period primarily due to the timing of orders associated with new gas turbine and aftermarket projects. Segment revenue decreased by 1% from the prior year period primarily due to the timing of aftermarket installations. The decrease in operating income versus the prior year was primarily a result of a lower margin sales mix sold during the first nine months of 2021. Operating margin was (1.4)% during the nine months ended September 30, 2021, a decrease from 4.0% during the nine months ended September 30, 2020.   Corporate and Other     Corporate and Other expenses during the nine months ended September 30, 2021 decreased from the prior year period primarily due to lower incentive compensation and decreased professional service expenses.        LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES     As of September 30, 2021, cash totaled $2,335, a decrease of $1,037   from December 31, 2020. Cash balances remain limited as operating receipts and disbursements flow through our Credit Facility (as defined in Note 7, “Debt and Credit Agreements,” in the notes to our condensed consolidated financial statements), which is in a drawn position. Debt and finance lease obligations at September 30, 2021 totaled $10,321. As of September 30, 2021, we had the ability to borrow up to an additional $18,743 un der the Credit Facility.   On March 9, 2021, we entered into a $10,000 Equity Distribution Agreement (the “Equity Distribution Agreement”) with Craig-Hallum Capital Group, LLC (the “Manager”). Pursuant to the terms of the Equity Distribution Agreement, we issued 1,897,697 shares of the Company's common stock thereunder during the first two quarters of 2021. The net proceeds (before upfront costs) to the Company from the sales of such shares were approximately $9,725 after deducting commissions paid of approximately $275   and before deducting other expense of $396.    On November 8, 2021, we executed the Third Amendment to the Amended and Restated Loan Agreement (the “Third Amendment”) which waived the fixed charge coverage ratio default for the quarter ended September 30, 2021, suspended testing of the fixed charge coverage ratio covenant through September 30, 2022, added a minimum EBITDA covenant applicable to the three-month period ending December 31, 2021, the six-month period ending March 31, 2022, the nine-month period ending June 30, 2022 and the twelve-month period ending September 30, 2022 and added a reserve of $5,000,000 to the Revolving Loan Availability through December 31, 2022.   We anticipate that current cash resources, amounts available under the Credit Facility, cash to be generated from operations and any potential proceeds from the sale of further securities under the Form S-3 will be adequate to meet our liquidity needs for at least the next twelve months.   22 Table of Contents   If assumptions regarding our production, sales and subsequent collections from certain of our large customers, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, particularly in light of the COVID-19 pandemic, and emerging variants, and its effects on domestic and global economies, we may encounter cash flow and liquidity issues. ​ If our operational performance deteriorates, we may be unable to comply with existing financial covenants, and could lose access to the Credit Facility. This could limit our operational flexibility, require a delay in making planned investments and/or require us to seek additional equity or debt financing. Any attempt to raise equity through the public markets could have a negative effect on our stock price, making an equity raise more difficult or more dilutive. Any additional equity financing or equity linked financing, if available, will be dilutive to stockholders, and additional debt financing, if available, would likely require new financial covenants or impose other operating and financial restrictions on us. While we believe that we will continue to have sufficient cash available to operate our businesses and to meet our financial obligations and debt covenants, there can be no assurances that our operations will generate sufficient cash or that existing or new credit facilities or equity or equity linked financings will be available in an amount sufficient to enable us to meet these financial obligations.   Sources and Uses of Cash     The following table summarizes our cash flows from operating, investing, and financing activities for the nine months ended September 30, 2021 and 2020:       Nine Months Ended       September 30,       2021     2020   Total cash (used in) provided by:                 Operating activities   $ (10,823 )   $ (2,475 ) Investing activities     (1,336 )     (1,597 ) Financing activities     11,122       4,197   Net (decrease) increase in cash   $ (1,037 )   $ 125     Operating Cash Flows     During the nine months ended September 30, 2021, net cash used in operating activities totale d $10,823   com pared to net cash used in operating activities of $2,475 during the prior year period. The increase in net cash used was primarily due to our operating performance (excluding the PPP loan forgiveness), the timing of accruals and an increase in operating working capital in the current year period.   Investing Cash Flows     During the nine months ended September 30, 2021, net cash used in investing activities tot aled $1,336, comp ared to net cash used in investing activities of $1,597 during the prior year period. The decrease in net cash used in investing activities as compared to the prior-year period was primarily due to a decrease in net purchases of property and equipment.   Financing Cash Flows     During the nine months ended September 30, 2021, net cash provided by financing activities tot aled $11,122, co mpared to net cash provided by financing activities of $4,197 during the prior year period. The increase was primarily due to proceeds from the sale of securities under the Equity Distribution Agreement and increased net borrowings under our Credit Facility in the current year, partially offset by the absence of the PPP Loan (defined below) proceeds received in 2020.    Other   In 2016, we entered into a $570 loan agreement with the Development Corporation of Abilene which is included in the “Long-term debt, less current maturities” line item of our condensed consolidated financial statements as of September 30, 2021 and December 31, 2020. The loan is forgivable upon the Company meeting and maintaining specific employment thresholds. During each of the years 2020, 2019 and 2018, $114 of the loan was forgiven. As of September 30, 2021, the loan balance was $228. In addition, we have outstanding notes payable for capital expenditures in the amount of $161   and $163 as of September 30, 2021 and December 31, 2020, respectively, with $161 included in the “Line of Credit and other notes payable” line item of our condensed consolidated financial statements as of September 30, 2021 and December 31, 2020. The notes payable have monthly payments that range from $1 to $16 and an interest rate of approximately 4%. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates that range from March 2022 to September 2024.   23 Table of Contents   On April 15, 2020, we received funds under notes and related documents executed under the Paycheck Protection Program (“PPP Loans”) with CIBC Bank, USA under the PPP which was established under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020 in response to the COVID-19 pandemic and is administered by the U.S. Small Business Administration (the “SBA”). We received total proceeds of $9,530 from the PPP Loans and made repayments of $379 on May 13, 2020. Under the terms of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020 enacted on June 5, 2020 (the “Flexibility Act”), the PPP Loans, and accrued interest and fees are eligible to be forgiven following a period of twenty-four weeks after PPP Loan proceeds are received (the “covered period”) if they are used for qualifying expenses as described in the CARES Act including payroll costs and benefits (which must equal or exceed 60% of the amount requested to be forgiven), rent, mortgage interest, and utilities, which are subject to certain reductions based on the number of full time equivalent employees and the level of compensation for employees during such covered period. The amount of loan forgiveness will be reduced if the borrower terminates employees or significantly reduces salaries during such period, subject to certain exceptions. We used at least 60% of the amount of the PPP Loans proceeds to pay for payroll costs and the balance on other eligible qualifying expenses consistent with the terms of the PPP and submitted our forgiveness applications to CIBC Bank, USA during the first quarter of 2021. During the second quarter of 2021, all loans were forgiven by the SBA and a gain of $9,151 was recorded in Other income (expense), net in our condensed consolidated statements of operations.    The CARES Act also provided for the ERC, which is a refundable tax credit against certain employment taxes. The Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the American Rescue Plan Act of 2021 extended and expanded the availability of the ERC. The ERC is available for wages paid through December 31, 2021 and is equal to 70% of qualified wages (which includes employer qualified health plan expenses) paid to employees. During each quarter in 2021, a maximum of $10,000 in qualified wages for each employee is eligible for the ERC. Therefore, the maximum tax credit that can be claimed by an eligible employer in 2021 is $7,000 per employee per calendar quarter. We qualified for the ERC in the first quarter of the year because we experienced a reduction in gross receipts of more than 20% for the first quarter of 2021 compared to the first quarter of 2019, the relevant criteria for the ERC. Since we qualified for the ERC in the first quarter of 2021, we automatically qualified for the ERC in the second quarter of 2021. In the first and second quarters of 2021, we received ERC benefits of $3,372 and $3,593, respectively, which were recorded in “Other income (expense), net” in our condensed consolidated statement of operations. During the third quarter of 2021 due to relatively higher revenues, we did not qualify for the ERC benefit. The remaining receivable for the uncollected ERC benefit is $503 as of September 30, 2021 and is included in the “Employee retention credit receivable” line item in our condensed consolidated balance sheet at September 30, 2021.    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS     The preceding discussion and analysis should be read in conjunction with our condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2020. Portions of this Quarterly Report on Form 10-Q, including the discussion and analysis in this Part I, Item 2, contain “forward looking statements”, as defined in Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), that reflect our current expectations regarding our future growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. We have tried to identify forward looking statements by using words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “plan” and similar expressions, but these words are not the exclusive means of identifying forward looking statements. Forward looking statements include any statement that does not directly relate to a current or historical fact. Our forward-looking statements may include or relate to our beliefs, expectations, plans and/or assumptions with respect to the following, many of which are, and will be, amplified by the COVID-19 pandemic, including as a result of emerging variants: (i) the impact of global health concerns, including the impact of the current COVID-19 pandemic on the economies and financial markets and the demand for our products; (ii) state, local and federal regulatory frameworks affecting the industries in which we compete, including the wind energy industry, and the related extension, continuation or renewal of federal tax incentives and grants and state renewable portfolio standards as well as new or continuing tariffs on steel or other products imported into the United States; (iii) our customer relationships and our substantial dependency on a few significant customers and our efforts to diversify our customer base and sector focus and leverage relationships across business units; (iv) the economic and operational stability of our significant customers and suppliers, including their respective supply chains, and the ability to source alternative suppliers as necessary, in light of the COVID-19 pandemic; (v) our ability to continue to grow our business organically and through acquisitions, and the impairment thereto by the impact of the COVID-19 pandemic; (vi) the production, sales, collections, customer deposits and revenues generated by new customer orders and our ability to realize the resulting cash flows; (vii) information technology failures, network disruptions, cybersecurity attacks or breaches in data security, including with respect to any remote work arrangements implemented in response to the COVID-19 pandemic; (viii) the sufficiency of our liquidity and alternate sources of funding, if necessary; (ix) our ability to realize revenue from customer orders and backlog; (x) our ability to operate our business efficiently, comply with our debt obligations, manage capital expenditures and costs effectively, and generate cash flow; (xi) the economy, including its stability in light of the COVID-19 pandemic, and the potential impact it may have on our business, including our customers; (xii) the state of the wind energy market and other energy and industrial markets generally and the impact of competition and economic volatility in those markets; (xiii) the effects of market disruptions and regular market volatility, including fluctuations in the price of oil, gas and other commodities; (xiv) competition from new or existing industry participants including, in particular, increased competition from foreign tower manufacturers; (xv) the effects of the change of administrations in the U.S. federal government; (xvi) our ability to successfully integrate and operate acquired companies and to identify, negotiate and execute future acquisitions; (xvii) the potential loss of tax benefits if we experience an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended; (xviii) our ability to utilize various relief options enabled by the CARES Act; (xix) the limited trading market for our securities and the volatility of market price for our securities; and (xx) the impact of future sales of our common stock or securities convertible into our common stock on our stock price. These statements are based on information currently available to us and are subject to various risks, uncertainties and other factors that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements including, but not limited to, those set forth under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020. We are under no duty to update any of these statements. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or other factors that could cause our current beliefs, expectations, plans and/or assumptions to change. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results.   24 Table of Contents   Item 3. Quantitative and Qualitative Disclosures About Market Risk     We are a smaller reporting company as defined by Item 10(f)(1) of Regulation S-K under the Securities Act and as such are not required to provide information under this Item pursuant to Item 305I of Regulation S-K.