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) March 31, December 31, 2025 2024 ASSETS CURRENT ASSETS: Cash $ 1,204 $ 7,721 Accounts receivable, net 11,166 13,454 AMP credit receivable 2,566 2,533 Contract assets 926 836 Inventories 49,516 39,950 Prepaid expenses and other current assets 2,768 2,374 Total current assets 68,146 66,868 LONG-TERM ASSETS: Property and equipment, net 45,023 45,572 Operating lease right-of-use assets 14,355 13,841 Intangible assets, net 1,237 1,403 Other assets 557 606 TOTAL ASSETS $ 129,318 $ 128,290 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Line of credit and current maturities of long-term debt $ 4,816 $ 1,454 Current portion of finance lease obligations 2,257 2,266 Current portion of operating lease obligations 2,306 2,115 Accounts payable 22,967 16,080 Accrued liabilities 3,890 3,605 Customer deposits 8,876 18,037 Total current liabilities 45,112 43,557 LONG-TERM LIABILITIES: Long-term debt, net of current maturities 7,375 7,742 Long-term finance lease obligations, net of current portion 3,423 3,777 Long-term operating lease obligations, net of current portion 14,094 13,799 Other 5 15 Total long-term liabilities 24,897 25,333 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; 45,000,000 shares authorized; 22,902,433 and 22,593,589 shares issued as of March 31, 2025, and December 31, 2024, respectively 23 23 Treasury stock, at cost, 273,937 shares as of March 31, 2025 and December 31, 2024 ( 1,842 ) ( 1,842 ) Additional paid-in capital 401,843 401,564 Accumulated deficit ( 340,715 ) ( 340,345 ) Total stockholders’ equity 59,309 59,400 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 129,318 $ 128,290 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 March 31, 2025 2024 Revenues $ 36,838 $ 37,616 Cost of sales 32,512 30,979 Gross profit 4,326 6,637 OPERATING EXPENSES: Selling, general and administrative 3,977 4,394 Intangible amortization 165 165 Total operating expenses 4,142 4,559 Operating income 184 2,078 OTHER (EXPENSE) INCOME, net: Interest expense, net ( 516 ) ( 532 ) Other, net ( 2 ) 3 Total other expense, net ( 518 ) ( 529 ) Net (loss) income before provision for income taxes ( 334 ) 1,549 Provision for income taxes 36 39 NET (LOSS) INCOME ( 370 ) 1,510 NET (LOSS) INCOME PER COMMON SHARE—BASIC: Net (loss) income $ ( 0.02 ) $ 0.07 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC 22,361 21,595 NET (LOSS) INCOME PER COMMON SHARE—DILUTED: Net (loss) income $ ( 0.02 ) $ 0.07 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED 22,361 21,807 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, 2023 21,840,301 $ 22 ( 273,937 ) $ ( 1,842 ) $ 399,336 $ ( 341,497 ) $ 56,019 Stock issued under defined contribution 401(k) retirement savings plan 107,305 — — — 287 — 287 Share-based compensation — — — — 225 — 225 Net income — — — — — 1,510 1,510 BALANCE, March 31, 2024 21,947,606 $ 22 ( 273,937 ) $ ( 1,842 ) $ 399,848 $ ( 339,987 ) $ 58,041 BALANCE, December 31, 2024 22,593,589 $ 23 ( 273,937 ) $ ( 1,842 ) $ 401,564 $ ( 340,345 ) $ 59,400 Stock issued for restricted stock 268,152 — — — — — — Stock issued under defined contribution 401(k) retirement savings plan 165,189 — — — 286 — 286 Share-based compensation — — — — 189 — 189 Shares withheld for taxes in connection with issuance of restricted stock ( 124,497 ) — — — ( 196 ) — ( 196 ) Net loss — — — — — ( 370 ) ( 370 ) BALANCE, March 31, 2025 22,902,433 $ 23 ( 273,937 ) $ ( 1,842 ) $ 401,843 $ ( 340,715 ) $ 59,309 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) Three Months Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ ( 370 ) $ 1,510 Adjustments to reconcile net cash (used in) provided by operating activities: Depreciation and amortization expense 1,702 1,596 Deferred income taxes ( 11 ) ( 8 ) Stock-based compensation 189 225 Allowance for credit losses ( 16 ) ( 2 ) Common stock issued under defined contribution 401(k) plan 286 287 Changes in operating assets and liabilities: Accounts receivable 2,304 4,632 AMP credit receivable ( 33 ) 5,319 Contract assets ( 90 ) 800 Inventories ( 9,566 ) 19 Prepaid expenses and other current assets ( 394 ) 635 Accounts payable 6,815 ( 4,005 ) Accrued liabilities 285 ( 71 ) Customer deposits ( 9,161 ) ( 5,097 ) Other non-current assets and liabilities 23 17 Net cash (used in) provided by operating activities ( 8,037 ) 5,857 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment ( 916 ) ( 1,744 ) Net cash used in investing activities ( 916 ) ( 1,744 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from (payments on) line of credit, net 3,356 ( 4,657 ) Proceeds from long-term debt — 1,244 Payments on long-term debt ( 361 ) ( 325 ) Payments on finance leases ( 363 ) ( 401 ) Shares withheld for taxes in connection with issuance of restricted stock ( 196 ) — Net cash provided by (used in) financing activities 2,436 ( 4,139 ) NET DECREASE IN CASH ( 6,517 ) ( 26 ) CASH beginning of the period 7,721 1,099 CASH end of the period $ 1,204 $ 1,073 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 months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the twelve months ending December 31, 2024, 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, 2024 . The December 31, 2024 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, 2024 . There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2025 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10 -K for the year ended December 31, 2024 . 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, gearbox manufacturing and repair, heat treatment, precision machining, assembly, engineering and packaging solutions. The Company’s most significant presence is within the U.S. wind energy industry, which accounted for 52 % and 39 % of the Company’s revenue during the first three months of 2025 and 2024, respectively. Liquidity The Company typically meets its short term liquidity needs through cash generated from operations, its available cash balances, the 2022 Credit Facility (as defined below), equipment financing, access to the public and private debt and/or equity markets, and has the option to raise capital from the sale of the Company’s securities under the Company’s registration statement on Form S- 3 (as discussed below), and proceeds from any sales of Advanced Manufacturing Production tax credits (“AMP credits”) (discussed in Note 5 “AMP Credits” of these condensed consolidated financial statements). See Note 8, “Debt and Credit Agreements,” of these condensed consolidated financial statements for a description of the 2022 Credit Facility and the Company’s other debt. Debt and finance lease obligations at March 31, 2025 totaled $ 17,871 , which includes current outstanding debt and finance leases totaling $ 7,073 . The Company’s outstanding debt includes $ 7,307 outstanding from the senior secured term loan under the 2022 Credit Facility. During the three months ended March 31, 2025, the Company borrowed on the revolving line of credit and repaid such borrowings during the period. The Company had $ 3,357 drawn on the revolving line of credit as of March 31, 2025. The Company’s revolving line of credit balance, if any, is included in the “Line of credit and current maturities of long-term debt” line item in the Company’s condensed consolidated balance sheet. On September 22, 2023, 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 12, 2023 ( the “Form S- 3” ), replacing a prior shelf registration statement which expired on October 12, 2023. The Form S- 3 will expire on October 12, 2026. This shelf registration statement, which includes a base prospectus, allows the Company 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 September 12, 2022, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC and HC Wainwright & Co., LLC (collectively, the “Agents”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time through the Agents shares of the Company’s common stock, par value $ 0.001 per share with an aggregate sales price of up to $ 12,000 . The Company will pay a commission to the Agents of 2.75 % of the gross proceeds of the sale of the shares sold under the Sales Agreement and reimburse the Agents for the expenses incident to the performance of their obligations under the Sales Agreement. No shares of the Company’s common stock were issued under the Sales Agreement during the year ended December 31, 2024 or during the three months ended March 31, 2025. As of March 31, 2025, shares of the Company’s common stock having a value of approximately $ 11,667 remained available for issuance under the Sales Agreement. Any additional shares offered and sold under the Sales Agreement are to be issued pursuant to the Form S- 3 and a 424 (b) prospectus supplement. 5 Table of Contents The Company also utilizes supply chain financing arrangements as a component of its funding for working capital, which accelerates receivable collections and helps to better manage cash flow. Under these agreements, the Company has agreed to sell certain of its accounts receivable balances to banking institutions who have agreed to advance amounts equal to the net accounts receivable balances due, less a discount as set forth in the respective agreements. The balances under these agreements are accounted for as sales of accounts receivable, as they are sold without recourse. Cash proceeds from these agreements are reflected as operating activities included in the change in accounts receivable in the Company's consolidated statements of cash flows. Fees incurred in connection with the agreements are recorded as interest expense by the Company. During the three months ended March 31, 2025 and March 31, 2024, the Company sold account receivables totaling $ 8,840 and $ 6,805 , respectively, related to supply chain financing arrangements, of which customers’ financial institutions applied discount fees totaling $ 198 and $ 164 , respectively. The Company anticipates that current cash resources, amounts available under the 2022 Credit Facility, sales of shares under the Sales Agreement, cash to be generated from operations and equipment financing, access to the public and private debt and/or equity markets, any potential proceeds from the sale of further Company securities under the Form S- 3, and proceeds from sales of AMP credits 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, the Company’s ability to finalize the terms of the remaining obligations under a supply agreement with a leading global wind turbine manufacturer, as well as receipt of customer deposits and revenues generated from new customer orders, are materially inconsistent with management’s expectations, the Company may in the future encounter cash flow and liquidity issues, which could have a material adverse impact on the Company. If the Company’s operational performance deteriorates, the Company may be unable to comply with existing financial covenants, and could lose access to the 2022 Credit Facility. This could limit the Company’s 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 the Company’s 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 the Company and could be on less favorable terms than the 2022 Credit Facility. While management believes that the Company will continue to have sufficient cash available to operate its businesses and to meet the Company’s financial obligations and debt covenants, there can be no assurances that the Company’s operations will generate sufficient cash, or that credit facilities or equity or equity-linked financings will be available in an amount sufficient to enable the Company to meet these financial obligations. Reclassifications Certain prior year amounts have been reclassified to conform to current year presentation in the condensed consolidated financial statements and the notes to the condensed consolidated financial statements. 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 inventory reserves, warranty reserves, impairment of long-lived assets, allowance for credit losses, health insurance reserves, and valuation allowances on deferred taxes. 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. 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 months ended March 31, 2025 and 2024 : Three Months Ended March 31, 2025 2024 Heavy Fabrications $ 25,248 $ 22,016 Gearing 5,966 8,337 Industrial Solutions 5,647 7,994 Eliminations ( 23 ) ( 731 ) Consolidated $ 36,838 $ 37,616 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 substantially all wind sales within the Company’s Heavy Fabrications segment as well as certain sales within our Gearing 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 three months ended March 31, 2025 and 2024, the Company recognized $ 216 and $ 0 , respectively, of revenue within the Gearing segment under terms included in bill and hold sales arrangements. During the three months ended March 31, 2025 and 2024, the Company recognized a portion of revenue within the Heavy Fabrications segment 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. Because 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 for contracts that meet over time criteria of $ 997 and $ 280 for the three months ended March 31, 2025 and March 31, 2024, 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. 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 — NET INCOME PER SHARE The following table presents a reconciliation of basic and diluted income per share for the three months ended March 31, 2025 and 2024 , as follows: Three Months Ended March 31, 2025 2024 Basic (loss) income per share calculation: Net (loss) income $ ( 370 ) $ 1,510 Weighted average number of common shares outstanding 22,361,152 21,594,664 Basic net (loss) income per share $ ( 0.02 ) $ 0.07 Diluted (loss) income per share calculation: Net (loss) income $ ( 370 ) $ 1,510 Weighted average number of common shares outstanding 22,361,152 21,594,664 Common stock equivalents: Non-vested stock awards (1) — 212,118 Weighted average number of common shares outstanding 22,361,152 21,806,782 Diluted net (loss) income per share $ ( 0.02 ) $ 0.07 ( 1 ) Restricted stock units granted and outstanding of 689,732 as of March 31, 2025, are excluded from the computation of diluted earnings due to the anti-dilutive effect as a result of the Company’s net loss for the three months ended March 31, 2025. NOTE 4 — INVENTORIES The components of inventories as of March 31, 2025 and December 31, 2024 are summarized as follows: March 31, December 31, 2025 2024 Raw materials $ 31,033 $ 19,651 Work-in-process 12,159 9,945 Finished goods 8,740 12,517 51,932 42,113 Less: Reserve ( 2,416 ) ( 2,163 ) Net inventories $ 49,516 $ 39,950 7 Table of Contents ​ NOTE 5 — AMP CREDITS During the three months ended March 31, 2025 and March 31, 2024, the Company recognized gross AMP credits totaling $ 2,772 and $ 1,872 , respectively, within the Heavy Fabrications segment. These AMP credits were introduced as part of the Inflation Reduction Act (“IRA”), which was enacted on August 16, 2022. The IRA includes advanced manufacturing tax credits for manufacturers of eligible components, including wind components. Manufacturers of wind components qualify for the AMP credits based on the total rated capacity, expressed on a per watt basis, of the completed wind turbine for which such component is designed. The credit applies to each component produced and sold in the U.S. beginning in 2023 through 2032. Wind towers within the Company’s Heavy Fabrications segment are eligible for credits of $ 0.03 per watt for each wind tower produced. In calculating the eligible credit, the Company relied on the megawatt rating provided by the customers. Manufacturers who qualify for the AMP credits can apply to the Internal Revenue Service for cash refunds of the AMP credits, sell the AMP credits to third parties for cash, or apply the AMP credits against taxable income. The Company recognized the AMP credits as a reduction to cost of sales in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2025 and March 31, 2024. The assets related to the AMP credits are recognized as current assets in the “AMP credit receivable” line item in the Company’s condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024. During the three months ended March 31, 2024, the Company recognized gross AMP credits totaling $ 1,872 and recognized a 6.5 % discount on the credits totaling $ 122 , which was recognized in cost of sales. The Company also incurred other miscellaneous administrative costs related to the credits in the amount of $ 33 , which have been recorded as cost of sales. Additionally, costs totaling $ 42 are included in the “Prepaid expenses and other current assets” line item of the Company’s condensed consolidated financial statements at March 31, 2024. During the three months ended March 31, 2025, the Company recognized gross AMP credits totaling $ 2,772 and recognized a 6.5 % discount on the credits totaling $ 180 , which was recognized in cost of sales. The Company also incurred other miscellaneous administrative costs related to the credits in the amount of $ 28 , which have been recorded as cost of sales. Additionally, costs totaling $ 12 are included in the “Prepaid expenses and other current assets” line item of the Company’s condensed consolidated financial statements at March 31, 2025. NOTE 6 — 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 3 years. As of March 31, 2025 and December 31, 2024 , the cost basis, accumulated amortization and net book value of intangible assets were as follows: March 31, 2025 December 31, 2024 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: Customer relationships 15,979 ( 8,169 ) ( 7,592 ) 218 0.8 15,979 ( 8,103 ) ( 7,592 ) 284 1.1 Trade names 9,099 ( 8,080 ) — 1,019 2.5 9,099 ( 7,980 ) — 1,119 2.8 Intangible assets $ 25,078 $ ( 16,249 ) $ ( 7,592 ) $ 1,237 2.2 $ 25,078 $ ( 16,083 ) $ ( 7,592 ) $ 1,403 2.5 ​ As of March 31, 2025 , estimated future amortization expense was as follows: 2025 $ 496 2026 422 2027 319 Total $ 1,237 ​ ​ NOTE 7 — ACCRUED LIABILITIES Accrued liabilities as of March 31, 2025 and December 31, 2024 consisted of the following: March 31, December 31, 2025 2024 Accrued payroll and benefits $ 2,928 $ 2,968 Accrued property taxes 179 — Income taxes payable 183 137 Accrued professional fees 136 81 Accrued warranty liability 166 167 Self-insured workers compensation reserve 41 10 Accrued sales tax 14 6 Accrued other 243 236 Total accrued liabilities $ 3,890 $ 3,605 8 Table of Contents NOTE 8 — DEBT AND CREDIT AGREEMENTS The Company’s outstanding debt balances as of March 31, 2025 and December 31, 2024 consisted of the following: March 31, December 31, 2025 2024 Line of credit $ 3,357 $ — Other notes payable 1,527 1,618 Long-term debt 7,307 7,578 Total debt 12,191 9,196 Less: current maturities ( 4,816 ) ( 1,454 ) Long-term debt, net of current maturities $ 7,375 $ 7,742 Credit Facility On August 4, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) with Wells Fargo Bank, National Association, as lender (“Wells Fargo”), which replaced its prior credit facility and provided the Company and its subsidiaries with a $ 35,000 senior secured revolving credit facility (which may be further increased by up to an additional $ 10,000 upon the request of the Company and at the sole discretion of Wells Fargo) and a $ 7,578 senior secured term loan (collectively, the “2022 Credit Facility”). The proceeds of the 2022 Credit Facility are available for general corporate purposes, including strategic growth opportunities. Net deferred financing costs related to the 2022 Credit Facility which primarily relate to the revolving credit loan, were $ 243 at March 31, 2025, which is net of accumulated amortization of $ 277 . Net deferred financing costs at December 31, 2024 were $ 269 , which is net of accumulated amortization of $ 251 . These costs are included in the “Other assets” line item of the Company's condensed consolidated financial statements at March 31, 2025 and December 31, 2024. On February 8, 2023, the Company executed Amendment No. 1 to Credit Agreement and Limited Waiver which waived the Company’s fourth quarter minimum EBITDA (as defined in the 2022 Credit Agreement) requirement for the period ended December 31, 2023, amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Agreement) requirements for the twelve -month period ending January 31, 2024 through and including June 30, 2024 and each twelve -month period thereafter, and amended the minimum EBITDA requirements applicable to the twelve -month periods ending March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023. On December 19, 2024, the Company executed Amendment No. 2 to Credit Agreement, which ( 1 ) increased the outstanding principal amount of the term loan to $ 7,578 and restarted the 84 -month amortization period, and ( 2 ) amended the Fixed Charge Coverage Ratio (as defined in the 2022 Credit Agreement) from 1.1:1.0 to 1.0:1.0 for each twelve -month period ending January 31, 2024 through and including December 31, 2025. Proceeds from the increased amount of the term loan were used to repay the Company’s indebtedness under its existing revolving line of credit with Wells Fargo and related fees and expenses, thereby allowing for increased availability under the existing revolving line of credit. The 2022 Credit Agreement, as amended, contains customary covenants limiting the Company’s and its subsidiaries’ ability to, among other things, incur liens, make investments, incur indebtedness, merge or consolidate with others or dispose of assets, change the nature of its business, and enter into transactions with affiliates. The initial term of the revolving credit facility matures August 4, 2027. The term loan also matures on August 4, 2027, with monthly payments based on an 84 -month amortization. As of March 31, 2025 , there was $ 10,664 of outstanding indebtedness under the 2022 Credit Facility, with the ability to borrow an additional $ 21,392 . As of March 31, 2025, the Company was in compliance with all financial covenants under the 2022 Credit Facility. As of March 31, 2025, the effective interest rate of the senior secured revolving credit facility was 6.36 % and the senior secured term loan was 6.86 %. As of December 31, 2024, the effective interest rate of the senior secured revolving credit facility was 6.71 % and the effective rate of the senior secured term loan was 6.96 %. Other In addition, the Company has outstanding notes payable for capital expenditures in the amount of $ 1,527 and $ 1,618 as of March 31, 2025 and December 31, 2024 , respectively, with $ 377 and $ 371 included in the “Line of credit and current maturities of long-term debt” line item of the Company’s condensed consolidated financial statements as of March 31, 2025 and December 31, 2024 , respectively. The notes payable have monthly payments that range from $ 1 to $ 20 and an interest rate of approximately 7 %. The equipment purchased is utilized as collateral for the notes payable. The outstanding notes payable have maturity dates that range from September 2028 to June 2029. NOTE 9 — LEASES The Company leases certain facilities and equipment. The leases are accounted for under Accounting Standard Update 2016 - 02, Leases (“Topic 842” ), and the Company elected to apply each available practical expedient. The discount rates used for the leases 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 three months ended March 31, 2025 and 2024, the Company had additional operating leases that resulted in right-of-use assets obtained in exchange for lease obligations in the amount of $ 1,034 and $ 0 , respectively. During the three months ended March 31, 2025 and 2024, the Company had additional finance leases associated with property, plant, and equipment of $ 0 and $ 813 , 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. 9 Table of Contents Quantitative information regarding the Company’s leases is as follows: Three Months Ended March 31, 2025 2024 Components of lease cost Finance lease cost components: Amortization of finance lease assets $ 327 $ 358 Interest on finance lease liabilities 113 107 Total finance lease costs 440 465 Operating lease cost components: Operating lease cost 741 642 Short-term lease cost 188 46 Variable lease cost (1) 277 369 Sublease income ( 121 ) ( 104 ) Total operating lease costs 1,085 953 Total lease cost $ 1,525 $ 1,418 Supplemental cash flow information related to our operating leases is as follows for the three months ended March 31, 2025 and 2024: Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 907 810 Weighted-average remaining lease term-finance leases at end of period (in years) 2.9 2.9 Weighted-average remaining lease term-operating leases at end of period (in years) 5.9 6.9 Weighted-average discount rate-finance leases at end of period 5.9 % 8.0 % Weighted-average discount rate-operating leases at end of period 8.5 % 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 March 31, 2025 , future minimum lease payments under finance leases and operating leases were as follows: ​ Finance Operating Leases Leases Total 2025 $ 2,130 $ 2,709 $ 4,839 2026 1,508 3,676 5,184 2027 1,212 3,388 4,600 2028 952 3,402 4,354 2029 526 3,440 3,966 2030 and thereafter — 4,618 4,618 Total lease payments 6,328 21,233 27,561 Less—portion representing interest ( 648 ) ( 4,833 ) ( 5,481 ) Present value of lease obligations 5,680 16,400 22,080 Less—current portion of lease obligations ( 2,257 ) ( 2,306 ) ( 4,563 ) Long-term portion of lease obligations $ 3,423 $ 14,094 $ 17,517 ​ NOTE 10 — 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. 10 Table of Contents 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. NOTE 11 — 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 March 31, 2025 , the Company has a full valuation allowance recorded against deferred tax assets. During the three months ended March 31, 2025 , the Company recorded a provision for income taxes of $ 36 , compared to a provision for income taxes of $ 39 during the three months ended March 31, 2024 . On August 16, 2022, Congress enacted the IRA which includes advanced manufacturing tax credits for manufacturers of eligible components, including wind components produced and sold in the U.S. beginning in 2023 through 2032. These credits will have no impact on income tax expense. The Company files income tax returns in U.S. federal and state jurisdictions. As of March 31, 2025 , 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, 2024 , the Company had federal and unapportioned state net operating loss (“NOL”) carryforwards of $ 295,198 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 Section 382 of the IRC 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 Section 382 of the IRC in 2010, the Company determined that aggregate changes in stock ownership 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. In February 2013, the Company adopted a Stockholder Rights Plan, which was approved by the Company’s stockholders and extended in 2016, 2019, 2022, and 2025 for additional three -year periods (as amended, the “Rights Plan”), designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under Section 382 of the IRC. 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 $ 7.70 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 March 31, 2025 , 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 March 31, 2025 . 11 Table of Contents NOTE 12 — SHARE-BASED COMPENSATION ​ There was no stock option activity during the three months ended March 31, 2025 and March 31, 2024 and no stock options were outstanding as of March 31, 2025 or March 31, 2024. The following table summarizes the Company’s restricted stock unit and performance award activity during the three months ended March 31, 2025 : Weighted Average Number of Grant-Date Fair Value Shares Per Share Unvested as of December 31, 2024 823,808 $ 2.96 Granted 134,076 $ 2.72 Vested ( 268,152 ) $ 1.77 Unvested as of March 31, 2025 689,732 $ 2.96 Under certain situations, shares are withheld from issuance to cover taxes for the vesting of restricted stock units and performance awards. For the three months ended March 31, 2025 and 2024, 124,497 and 0 shares, respectively, were withheld to cover tax obligations. The following table summarizes share-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 , as follows: Three Months Ended March 31, 2025 2024 Share-based compensation expense: Cost of sales $ 13 $ 29 Selling, general and administrative 176 196 Net effect of share-based compensation expense on net income $ 189 $ 225 Reduction in earnings per share: Basic earnings per share $ 0.01 $ 0.01 Diluted earnings per share $ 0.01 $ 0.01 NOTE 13 — LEGAL PROCEEDINGS AND OTHER MATTERS Legal Proceedings The Company is party to a variety of legal proceedings that arise in the normal course of its business. On an ongoing basis, the Company is often the subject of, or party to, various legal claims by other parties against the Company, by the Company against other parties, or involving the Company, which arise in the normal course of its business. While the results of these legal proceedings or claims cannot be predicted with certainty, management believes that the final outcome of these proceedings or claims 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 materially adverse to the Company, including to its results of operations in the period in which the Company would be required to record or adjust the related liability and to the Company’s financial condition and cash flows in the periods the Company would be required to pay such liability. 12 Table of Contents NOTE 14 — 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. In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023 - 07, “Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures”, which requires additional disclosure of significant segment expenses on an annual and interim basis. This guidance will be applied retrospectively and will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. The Company adopted this guidance for the year ended December 31, 2024. Refer to Note 15 “Segment Reporting” of these condensed consolidated financial statements for the additional disclosures applied on a retrospective basis. In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 2023 - 09, “Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures,” which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial statements. In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update No. 2024 - 03,“Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ): Disaggregation of Incomes Statement Expenses,” which serves to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses in commonly presented expense captions. This guidance will be effective for annual periods beginning after December 15, 2026. The Company is currently evaluating the impact that the updated guidance will have on its consolidated financial statements. NOTE 15— SEGMENT REPORTING The Company is organized into reporting segments based on the nature of the products offered and business activities from which it earns revenues and incurs expenses for which discrete financial information is available and regularly reviewed by the Company’s chief operating decision maker (“CODM”). The Company’s CODM has been identified as the Chief Executive Officer and President, who reviews operating income by segment in relation to total operating income to make decisions about allocating resources and assessing performance. The Company’s segments and their product and service offerings are summarized below: Heavy Fabrications The Company provides large, complex and precision fabrications to customers in a broad range of industrial markets. The Company’s most significant presence is within the U.S. wind energy industry, although it has diversified into other industrial markets in order to improve capacity utilization, reduce customer concentrations, and reduce exposure to uncertainty related to governmental policies currently impacting the U.S. wind energy industry. Within the U.S. wind energy industry, the Company provides steel towers and repowering 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 1.7 GW of power. The Company has expanded its 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. The Company has designed and manufactures a mobile, modular pressure reducing system for the compressed natural gas virtual pipeline market. The Company manufactures components for buckets, shovels, car bodies, drill masts and other products that support mining and construction markets. In other industrial markets, the Company provides crane components, pressure vessels, frames and other structures. Gearing The Company provides gearing, gearboxes and precision machined components to a broad set of customers in diverse markets including surface and underground mining, wind energy, steel, material handling, infrastructure, onshore and offshore oil and gas fracking and drilling, marine, defense, and other industrial markets. The Company has manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and OEM applications for a century. The Company uses an integrated manufacturing process, which includes machining and finishing processes in addition to gearbox repair in Cicero, Illinois, and heat treatment and gearbox repair in Neville Island, Pennsylvania. Industrial Solutions The Company provides supply chain solutions, light fabrication, inventory management and kitting and assembly services, primarily serving the combined cycle natural gas turbine market. The Company has recently expanded into the U.S. wind power generation market, by providing tower internals kitting solutions for on-site installations, as OEMs domesticate their supply chain due to lead time and reliability issues. The Company leverages a global supply chain to provide instrumentation and controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes and wiring, and electromechanical devices. The Company also provides packaging solutions and fabricates panels and sub-assemblies to reduce customers’ costs and improve manufacturing velocity and reliability. 13 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 months ended March 31, 2025 and 2024 is as follows: Heavy Fabrications Gearing Industrial Solutions Corporate Eliminations Consolidated For the Three Months Ended March 31, 2025 Revenues from external customers $ 25,248 $ 5,966 $ 5,624 $ — $ — $ 36,838 Intersegment revenues — — 23 — ( 23 ) — Net revenues 25,248 5,966 5,647 — ( 23 ) 36,838 Direct materials 14,622 1,440 3,329 — * 19,391 Direct labor 3,762 1,261 * — — 5,023 Indirect labor 2,811 1,129 547 — — 4,487 Variable overhead * 875 473 — — 1,348 AMP credits ( 2,564 ) — — — — ( 2,564 ) Salaries and benefits * * * 398 — 398 Share-based compensation * * * 146 — 146 Depreciation and amortization 1,021 549 114 18 — 1,702 All other expenses (1) 3,355 1,604 854 933 ( 23 ) 6,723 Operating income (loss) 2,241 ( 892 ) 330 ( 1,495 ) — 184 Capital expenditures 861 26 — 29 — 916 Heavy Fabrications Gearing Industrial Solutions Corporate Eliminations Consolidated For the Three Months Ended March 31, 2024 Revenues from external customers $ 22,016 $ 8,337 $ 7,263 $ — $ — $ 37,616 Intersegment revenues — — 731 — ( 731 ) — Net revenues 22,016 8,337 7,994 — ( 731 ) 37,616 Direct materials 12,547 1,829 4,386 — * 18,762 Direct labor 2,885 1,382 * — — 4,267 Indirect labor 2,689 1,307 382 — — 4,378 Variable overhead * 1,003 457 — — 1,460 AMP credits ( 1,717 ) — — — — ( 1,717 ) Salaries and benefits * * * 579 — 579 Share-based compensation * * * 172 — 172 Depreciation and amortization 911 540 100 45 — 1,596 All other expenses (1) 2,655 2,251 902 964 ( 731 ) 6,041 Operating income (loss) 2,046 25 1,767 ( 1,760 ) — 2,078 Capital expenditures 461 1,068 215 — — 1,744 * Line item not deemed a significant expense for this segment (per analysis of Accounting Standards Update No. 2023 - 07 ). ( 1 ) All other expenses for each reportable segment primarily consist of: Heavy Fabrications -variable overhead, salaries and benefits, and rent and utilities Gearing - salaries and benefits and rent Industrial Solutions -direct labor, salaries and benefits, and rent and utilities Corporate -professional expenses Total Assets as of March 31, December 31, Segments: 2025 2024 Heavy Fabrications $ 51,993 $ 43,035 Gearing 38,920 41,406 Industrial Solutions 15,247 14,864 Corporate 50,667 48,488 Eliminations ( 27,509 ) ( 19,503 ) $ 129,318 $ 128,290 NOTE 16 — 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 Credit Losses  Beginning January 1, 2023, the Company assessed and recorded an allowance for credit losses using the current expected credit loss model. The adjustment for credit losses to management’s current estimate is recorded in net income as credit loss expense. All credit losses were on trade receivables and/or contract assets arising from the Company's contracts with customers.  14 Table of Contents 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, or modifications to its credit standards, collection practices and other related policies may impact the Company’s allowance for credit losses and its financial results. The activity in the accounts receivable allowance liability for the three months ended March 31, 2025 and 2024 consisted of the following: For the Three Months Ended March 31, 2025 2024 Balance at beginning of period $ 94 $ 99 Write-offs ( 16 ) — Other adjustments — ( 2 ) Balance at end of period $ 78 $ 97 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 at March 31, 2025 and December 31, 2024. 15 Table of Contents