BROADWIND, INC. 10-K

ITEM 1. BUSINESS As used in this Annual Report, the terms “we,” “us,” “our,” “Broadwind” and the “Company” refer to Broadwind, Inc., a Delaware corporation headquartered in Cicero, Illinois, and its wholly-owned subsidiaries (the “Subsidiaries”). Dollars are presented in thousands unless otherwise stated. Business Overview Broadwind is a precision manufacturer of structures, equipment and components for power generation, critical infrastructure, and other specialized applications. We provide 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.”). Our capabilities include but are not limited to the following: heavy fabrications, welding, metal rolling, coatings, gear cutting and shaping, gearbox manufacturing and repair, heat treatment, precision machining, assembly, engineering and packaging solutions. We were incorporated in 1996 in Nevada as Blackfoot Enterprises, Inc., and through a series of subsequent transactions, became Broadwind Energy, Inc., a Delaware corporation, in 2008. Through acquisitions in 2007 and 2008, we focused on expanding upon our core platform as a wind tower manufacturer, established our Gearing segment, and developed and broadened our industrial fabrications capabilities. In early 2017, we acquired Red Wolf Company, LLC, a kitter and assembler of industrial components primarily supporting the global gas turbine market. In 2020, we rebranded to Broadwind, Inc., a reflection of our diversification progress to date and our continued strategy to expand our product and customer diversification outside of wind energy. Effective with our 2020 rebranding, we renamed certain segments. Our Towers and Heavy Fabrications segment was renamed to Heavy Fabrications and our Process Systems segment was renamed to Industrial Solutions. Our Gearing segment name remained the same. Heavy Fabrications We provide large, complex and precision fabrications to customers; historically in a broad range of industrial markets. Our most significant presence is within the U.S. wind energy industry where we provide steel towers and repowering adapters primarily to wind turbine manufacturers. We streamlined our operations within this segment during the year ended December 31, 2025, selling our industrial fabrication operations in Manitowoc, Wisconsin in September 2025 and consolidating our remaining segment operations to our production facility in Abilene, Texas. The Abilene facility has an annual wind tower production capacity of up to approximately 220 towers (660 tower sections), sufficient to support turbines generating more than 800 MW of power (assuming a 3 MW tower). In this segment we also manufacture a proprietary mobile, modular pressure reducing system (“PRS”) for the compressed natural gas virtual pipeline market. Gearing We provide gearing, gearboxes and precision machined components to a broad set of customers in diverse markets including; power generation, onshore and offshore oil and gas (“O&G”) fracking and drilling, material handling, wind energy, surface and underground mining, steel, infrastructure, marine, defense, and other industrial markets. We provide gearbox repair services and have manufactured loose gearing, gearboxes and systems, and provided heat treat services for aftermarket and Original Equipment Manufacturers (“OEM”) applications for a century. While a significant portion of our business is manufactured to our customer’s specifications, we employ design and metallurgical engineers to meet our customer’s stringent quality requirements, to improve product performance and reliability and to develop custom products that are integrated into our customer’s product offerings. Industrial Solutions We provide supply chain solutions, light fabrication, inventory management, kitting and assembly services, primarily serving the combined cycle natural gas turbine market. We support 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. We leverage a global supply chain to provide instrumentation & controls, valve assemblies, sensor devices, fuel system components, electrical junction boxes & wiring, and electromechanical devices. We also provide packaging solutions and fabricate panels and sub-assemblies to reduce our customers’ costs, improve manufacturing velocity and reliability. The following table summarizes the key markets served and product offerings of our three segments as of December 31, 2025: Segment Heavy Fabrications Gearing Industrial Solutions Key Markets Served -Wind Power Generation -Power Generation -Combined Cycle Natural -Oil and Gas -Onshore & Offshore Gas Power Generation -Onsite Power Generation Oil and Gas Fracking/Drilling -Solar Power Generation -Material Handling -Wind Power Generation -Wind Power Generation -Surface and Underground Mining -Steel Production -Infrastructure -Marine -Defense -Pulp and Paper -Waste Processing Products -Wind Towers/Adapters -Loose Gearing -Supply Chain Solutions -Pressure Reducing Systems -Custom Gearboxes -Inventory Management -Gearbox Repair -Kitting and Assembly -Heat Treat Services -Solar Inverter Racks -Precision Machining -Solar Powered Shelters/Charging Stations 4 Business and Operating Strategy We intend to capitalize on the markets for wind energy, gas turbines, O&G, mining, and other industrial verticals in North America by leveraging our core competencies in welding, manufacturing, assembling and kitting. Our strategic objectives include the following: ● Diversify our customer and product line concentrations . In 2025, sales derived from our top five customers represented 80% of total sales and sales into the wind energy industry represented 51% of total sales. We have reduced the concentration of our sales as compared to 2020, when our top five customers comprised 84% of total sales and sales in the wind energy industry represented 70% of total sales. To reduce the concentration of our sales, we have focused our product development activities and our sales force on expanding and diversifying our customer base and product lines. We are leveraging existing customer relationships within each of our segments to cross sell our broad portfolio of capabilities. We utilize a stage gate model for new product development, which provides a framework for evaluating opportunities and commercialization. Our diversification efforts are impacted in part by the end-market demand outlook. ● Improve capacity utilization and broaden our manufacturing capabilities . Subject to labor availability, we have manufacturing capacity available that could support a significant increase in our annual revenues for gearing and industrial solutions. We are working to improve our capacity utilization and financial results by leveraging our existing manufacturing capacity and adjusting capacity where we can, in response to changing market conditions. ● Pursue opportunistic acquisitions as well as organic investments. In addition to existing business and operating strategies, we are endeavoring to identify, and opportunistically execute on, accretive acquisitions and organic investments that will allow us to achieve further growth. Our investment criteria for opportunistic acquisitions as well as organic investments include, among other things, our ability to: improve manufacturing competencies, support our existing capacity utilization strategy, enhance our diversification strategy. Additionally, we have developed new variations of our PRS unit which supplies compressed natural gas to regions without established infrastructure as part of the virtual pipeline. We believe that execution of our investment strategy provides significant opportunity to generate stockholder value, through profitable growth and leveraging a significant unrealized economic asset, over $298 million of net operating losses (“NOLs”) as of December 31, 2025 which can be used to cover future prospective tax liabilities. ● Streamline front-end processes to operational efficiency . We believe that the proper coordination and integration of the supply chain, consistent use of systems to manage our production activities and “Continuous Improvement” initiatives are key factors that enable high operating efficiencies, increased reliability, better delivery and lower costs. We utilize robust Advanced Product Quality Processes (APQP) to support the introduction of new products. We have developed better supply chain expertise, worked with lean enterprise resources, upgraded and improved systems utilization and invested capital to enhance our operational efficiency and flexibility. We have implemented scheduling software and have expanded our engineering organization to support the growing complexity of our expanded customer base and product lines. We have staffed our operations with Continuous Improvement experts in order to optimize our production processes to increase output, leverage our scale and lower our costs while maintaining product quality. SALES AND MARKETING We market our heavy fabrications, gearing, and industrial solutions through a direct sales force, supplemented with independent sales agents in certain markets. Our sales and marketing strategy is to develop and maintain long-term relationships with our existing customers, and seek opportunities to expand these relationships across our business units. Our business development team uses market data, including marketing databases, information gathered at industry and trade shows, internet research and website marketing to identify and target new customers. 5 CUSTOMERS We manufacture products for a variety of customers in the wind energy, O&G, gas turbine, mining, and other industrial markets. Within the wind energy industry, our customer base consists primarily of wind turbine manufacturers who supply end users and wind farm operators with wind turbines, and wind gearbox re-manufacturers who use our replacement gears in their replacement gearboxes. The wind turbine market is very concentrated. According to Wood Mackenzie Power & Renewables 2025 industry data, the top two wind turbine manufacturers comprised approximately 88% of the U.S. market. As a result, although we have historically produced towers for a broad range of wind turbine manufacturers, in any given year a limited number of customers have accounted for the majority of our revenues. Within the O&G and mining industries, our customer base consists of manufacturers of hydraulic fracturing and mud pumps, drilling and production equipment, mining equipment, and off highway vehicles. Within the gas turbine industry, our customers supply end-users with natural gas turbines and after-market replacement and efficiency upgrade packages. Within our other industrial markets served, our customer base includes steel producers, and manufacturers of material handling, pulp and paper and other power generation equipment. Sales to GE Vernova represented greater than 10% of our consolidated revenues for the years ended December 31, 2025 and 2024. The loss of this customer could have a material adverse effect on our business, results of operation or financial condition. As a result, we have an ongoing initiative to diversify our customer base. COMPETITION Each of our businesses faces competition from both domestic and international companies. In recent years, the industrial gearing industry has experienced consolidation of producers and acquisitions by strategic buyers in response to strong international competition, although recent tariff and supply chain uncertainties have caused buyers to shift more of their purchases to domestic gear manufacturers. Within the wind tower product line of our Heavy Fabrications segment, the largest North American based competitor is Arcosa Inc. Other competitors include C.S. Wind, a South Korean company, Marmen Industries, a Canadian company, and GRI Renewable Industries, a Spanish company, each of which have production facilities in the U.S. We also face competition from imported towers, although in recent years a number of trade cases have periodically significantly reduced competition from imports. Imports from China and Vietnam have declined following a determination by the U.S. International Trade Commission (“USITC”) in 2013 that wind towers from those countries were being sold in the U.S. at less than fair value. As a result of the determination, the U.S. Department of Commerce (“USDOC”) issued antidumping and countervailing duty orders on imports of wind towers from China and an antidumping duty order on imports of towers from Vietnam. In May 2018, the U.S. Court of Appeals affirmed the decision from the U.S. Court of International Trade but excluded CS Wind Vietnam from the antidumping order. In April 2019, the USDOC extended the term of these duties for an additional five-year period. In October 2024, the USDOC again extended the term of these duties for an additional five-year period. Following a renewed surge of tower imports from countries not impacted by existing duties, in July 2020, the USDOC issued antidumping and countervailing duty orders on imports of wind towers from Canada, Indonesia, and Vietnam—including CS Wind Vietnam—and an antidumping order on imports of towers from Korea. The Indonesia countervailing duty order was later revoked after an appeal to the U.S. Court of International Trade (“CIT”). An appeal of the Canada antidumping determination is currently pending at the U.S. Court of Appeals for the Federal Circuit. The USITC and USDOC are currently conducting a required “five-year review” of the trade orders on Canada, Indonesia, Korea, and Vietnam to determine whether the orders should be extended for another five-year period. In September 2020, a new trade case was brought before the USDOC and USITC, to assess whether wind towers imported from India, Malaysia, and Spain were being sold in the U.S. at less than fair value. The USDOC and USITC issued affirmative final determinations in all three antidumping (India, Malaysia, and Spain) and two countervailing duty cases (India and Malaysia). The USDOC imposed orders for two cases in August 2021 and the remainder in December 2021. 6 In our Gearing segment, which is focused on O&G, natural gas power generation, wind energy, mining and steel markets, we compete with domestic and international manufacturers who produce gears greater than one meter in diameter. Our key competitors include Overton Chicago Gear, Cincinnati Gearing Systems, Milwaukee Gear and Horsburgh & Scott. In addition, we compete with the internal gear manufacturing capacity of relevant equipment manufacturers and face competition from foreign competitors. In our Industrial Solutions segment, which is primarily focused on the gas turbine market, we compete with electrical supply distributors. Our key competitors include Gexpro and other small independent companies. REGULATION Production Tax Credit/Investment Tax Credit Historically, the most impactful development incentive for our wind industry products has been the production tax credit (“PTC”) for new wind energy projects, which provides federal income tax credits based on electricity produced from qualifying wind turbines. Political and legislative support for the PTC has been intermittent since its introduction in 1992, which has caused significant volatility in the demand for new wind energy projects. In December 2020, the Consolidated Appropriations Act of 2021 (“COVID IV”), a $2.3 trillion spending bill that combined a $1.4 trillion omnibus spending bill for federal fiscal year 2021 with $900 billion in stimulus relief for the COVID-19 pandemic was signed into law. As part of COVID IV, the PTC was extended for an additional year, allowing for a 60% credit for projects that start construction by the end of 2021. In order to benefit from the PTC, qualifying projects must either be completed within four years from their start of construction, or the developer must demonstrate that its projects are in continuous construction between start of construction and completion. As a result of COVID IV, the PTC has subsidized wind projects commenced as late as 2021 and completed by 2025, or later if continuous construction can be demonstrated. Included in COVID IV was the addition of a new 30% investment tax credit (“ITC”) created for offshore wind projects that start construction by the end of 2025. The provision also retroactively applied to certain projects that started production in 2016. On August 16, 2022, the Inflation Reduction Act (“IRA”) was enacted to reduce inflation and promote clean energy in the United States. The IRA modified and extended the PTC until the later of 2032 or when greenhouse gas emissions would have been reduced by 75% compared to 2022. It provided for tax credits up to a maximum of 30%, adjusted for inflation annually, for electricity generated from qualified renewable energy sources where taxpayers meet prevailing wage standards and employ a sufficient proportion of qualified apprentices from registered apprenticeship programs. It also provided a bonus credit for qualifying clean energy production in energy communities. The One Big Beautiful Bill Act (the “OBBBA”), enacted on July 4, 2025, limited the applicability of these existing programs. Under the OBBBA, wind projects that begin construction after July 4, 2026, must be placed in service by December 31, 2027, to qualify for the PTC or the ITC. Any wind project that begins construction after July 4, 2026, and is not placed in service by December 31, 2027, will not qualify for the PTC or the ITC. The PTC and ITC have driven demand for new wind projects by providing financial incentives to developers, and the limitations on available incentives imposed by the OBBBA have negatively impacted demand for future wind projects. The IRA also included Advanced Manufacturing Production tax credits (“AMP credits”) for manufacturers of eligible components, including wind and solar components. Manufacturers qualify for the AMP credits based on the electricity output for each component produced and sold in the US starting in 2023 through 2032. The OBBBA eliminated the credit for components produced and sold after 2027. The credit amount varies based on the eligible component, which includes solar components, wind energy components, inverters, qualifying battery components, and critical minerals. Tower manufacturers are eligible for credits of $0.03 per watt for applicable components produced. Manufacturers can elect a direct pay option where they can receive a payment equal to the full value of the tax credits from the Internal Revenue Service anytime during the ten-year period. That election lasts for five years, after which the AMP credits can be used against tax obligations or transferred to third parties in exchange for cash. Investment in Infrastructure In November 2021, the federal Infrastructure Investment and Jobs Act (“IIJA”) was signed into law. The IIJA authorized $548 billion in new infrastructure spending over the next five years following enactment and $650 billion in previously allocated funds. The IIJA allocated $62 billion to the Department of Energy (“DOE”) for various projects focused on clean energy resources and expanding renewable energy. As of the date of this report, the DOE still reported a limited amount of clean energy project funding remained available under the IIJA, however the timing of the award of remaining projects funded by the IIJA is uncertain thus the remaining impact on our business is uncertain. Occupational Safety and Health Administration Our operations are subject to regulation of health and safety matters by the U.S. Occupational Safety and Health Administration. We believe that we take appropriate precautions to protect our employees and third parties from workplace injuries and harmful exposure to materials handled and managed at our facilities. However, claims asserted in the future against the Company for work-related injury or illnesses could increase our costs. 7 Environmental Our operations are subject to numerous federal, state and local environmental laws and regulations. Although it is our objective to maintain compliance with these laws and regulations, it may not be possible to quantify with certainty the potential impact of actions involving environmental matters, particularly remediation and other compliance efforts that we may undertake in the future. BACKLOG We sell our towers under either supply agreements or individual purchase orders (“POs”), depending on the size and duration of the purchase commitment. Under the supply agreements, we typically receive a purchase commitment for towers to be delivered in future fiscal quarters, then receive POs on a periodic basis depending upon the customer’s forecast of production volume requirements within the contract terms. For our Gearing and Industrial Solutions segments, sales are generally based on individual POs. As of December 31, 2025, the dollar amount of our backlog based on unfulfilled POs and supply agreements was approximately $96 million. This represents a 24% decrease from the backlog at December 31, 2024. Backlog as of December 31, 2025 and 2024 is net of revenue recognized over time as described in Note 2, “Revenues” of our consolidated financial statements. SEASONALITY The majority of our business is not affected by seasonality. EMPLOYEES We had 341 U.S.-based employees at December 31, 2025, of which 304 were in manufacturing related functions and 37 were in administrative functions. As of December 31, 2025, approximately 20% of our employees were covered by collective bargaining agreements with local unions in our Cicero, Illinois and Neville Island, Pennsylvania locations. We anticipate that the collective bargaining agreements with our union members will be renewed through contract renegotiation near the contract expiration dates, although there can be no assurance that any such agreements will be concluded. The collective bargaining agreement with the Neville Island union was renegotiated in November 2022 and is expected to remain in effect through October 2026. On March 6, 2026, we agreed to a new four-year collective bargaining agreement with the union representing the workforce at our Cicero, Illinois facility replacing a previous agreement. The new four-year collective bargaining agreement is expected to remain in effect through February 2030. We believe that our relationship with our employees is generally positive. The table below summarizes our employees as of December 31, 2025: Number of Employees As of Segment December 31, 2025 Heavy Fabrications 163 Gearing 104 Industrial Solutions 64 Corporate 10 Total 341 RAW MATERIALS The primary raw material used in the construction of heavy fabrication and gearing products is steel in the form of plate, bar stock, forgings and castings. The market for tower steel and internal packages has become increasingly globalized. Although we are generally responsible for procurement of the raw materials, our global tower customers often negotiate the prices and terms for purchases, and, through a “directed buy”, we purchase under these agreements. We have legal title to the raw materials and pass the raw material cost through to our end customer plus a conversion margin. 8 Outside of these directed buys, we operate a multiple supplier sourcing strategy and source our raw materials through various suppliers located throughout the U.S. and abroad. We do not have long term supply agreements with our raw material suppliers, and closely match terms with those of our customers to limit our exposure to commodity price fluctuations. We have made modifications to our supply chain management practices to deal more effectively with potential disruptions arising from these purchasing practices. QUALITY CONTROL We have a long-standing focus on processes for ensuring the manufacture of high-quality products. To achieve high standards of production and operational quality, we implement strict and extensive quality control and inspections throughout our production processes. We maintain internal quality controls over all core manufacturing processes and carry out quality assurance inspections at the completion of each major manufacturing step to ensure the quality of our products. The manufacturing process at our Gearing segment, for example, involves transforming forged steel into precision gears through cutting, heat treating, testing and finishing. We inspect and test raw materials before they enter the assembly process, retest the raw materials after rough machining, test the functioning of gear teeth and cores after thermal treatment and accuracy test final outputs for compliance with product specifications. We believe our investment in industry leading heat treatment, high precision machining, specialized grinding technologies and cutting-edge welding has contributed to our high product reliability and the consistent performance of our products under varying operating conditions. All of our core operating facilities are ISO 9001:2015 certified. Our Gearing segment is also AS9100D certified as of August 2024 and has the ability to produce aerospace components. Additionally, our Gearing and Heavy Fabrications segments completed International Traffic in Arms Regulations registrations in 2024 to protect the intellectual property of our defense customers. We will continue our efforts to achieve the highest quality standards. INFORMATION SYSTEMS We utilize standardized information technology systems across all areas of quoting and estimating, enterprise resource planning, materials resource planning, capacity planning and accounting, project execution and financial controls. We provide information technology oversight and support from our corporate headquarters in Cicero, IL. The operational information systems we employ throughout the Company are industry-specific applications that in some cases have been internally developed or modified by the vendor and improved to fit our operations. Our enterprise resource planning software is integrated with our operational information systems wherever possible to deliver relevant and real-time operational data. We believe our information systems provide our people with the tools to execute their individual job function and achieve our strategic initiatives. WORKING CAPITAL We sell to a broad range of industrial customers. In general, we produce to order rather than to stock. For wind towers, our largest product line, the industry has historically used customized contracts with varying terms and conditions between suppliers and customers, depending on the specific objectives of each party. Our practices mirror this historical industry practice of negotiating agreements on a case- by-case basis. As a result, working capital needs, including levels of accounts receivable (“A/R”), accounts payable (“A/P”), and inventory, can vary significantly from quarter to quarter based on the contractual terms associated with each quarter’s sales, such as whether and when we are required to purchase and supply steel to meet our contractual obligations. Customer deposits can vary significantly from quarter to quarter based on customer mix, contractual terms associated with each quarter’s sales and the timing impacts associated with customers placing orders for future production. In recent years, our larger customers have increasingly used supplier financing programs, whereby a third-party lender advances customer payments to us net of an interest charge. The combination of customer deposits and supplier financing programs arrangements may significantly reduce our working capital requirements. In analyzing our liquidity, an important short-term metric is our use of operating working capital (“OWC”) in relation to revenue. OWC is comprised of A/R and inventories, net of A/P and customer deposits. Our OWC at December 31, 2025 was $37,795, or 25% of trailing three months of sales annualized, compared to December 31, 2024, when OWC was $19,287, or 14% of trailing three months of sales annualized. The increase in OWC was driven primarily by lower customer deposit balances. 9 CORPORATE INFORMATION Our principal executive office is located at 3240 South Central Avenue, Cicero, IL 60804. Our phone number is (708) 780-4800 and our website address is www.bwen.com. OTHER INFORMATION On our website at www.bwen.com , we make available under the “Investors” menu selection, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such reports or amendments are electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”). Also, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC. From time to time, we also provide additional information about the Company and its activities on the “Investors” section of our website, which we encourage investors to review. The information contained or incorporated on our website is not a part of this document.