Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 18, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | BROADWIND ENERGY, INC. | ||
Entity Central Index Key | 1,120,370 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 45,108,000 | ||
Entity Common Stock, Shares Outstanding | 15,012,789 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 6,436 | $ 12,057 |
Short-term investments | 6,179 | 8,024 |
Restricted cash | 83 | 83 |
Accounts receivable, net | 9,784 | 17,043 |
Inventories, net | 24,219 | 31,144 |
Prepaid expenses and other current assets | 1,530 | 1,587 |
Current assets held for sale | 4,403 | 7,805 |
Total current assets | 52,634 | 77,743 |
LONG-TERM ASSETS: | ||
Property and equipment, net | 51,906 | 58,529 |
Intangible assets, net | 5,016 | 5,459 |
Other assets | 351 | 413 |
Long-term assets held for sale | 4,473 | |
Long-term assets held for sale | 12,278 | |
TOTAL ASSETS | 109,907 | 146,617 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 2,799 | 118 |
Current portions of capital lease obligations | 447 | 767 |
Accounts payable | 13,822 | 17,547 |
Accrued liabilities | 8,134 | 9,260 |
Customer deposits | 9,940 | 22,397 |
Current liabilities held for sale | 1,613 | 1,579 |
Total current liabilities | 36,755 | 51,668 |
LONG-TERM LIABILITIES: | ||
Long-term debt, net of current maturities | 2,600 | 2,646 |
Long-term capital lease obligations, net of current portions | 426 | |
Other | 3,060 | 3,467 |
Long-term liabilities held for sale | 30 | |
Total long-term liabilities | $ 5,660 | $ 6,569 |
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; 15,012,789 and 14,844,307 shares issued as of December 31, 2015, and 2014, respectively | $ 15 | $ 15 |
Treasury stock, at cost, 273,937 shares at December 31, 2015 and 2014, respectively | (1,842) | (1,842) |
Additional paid-in capital | 378,104 | 377,185 |
Accumulated deficit | (308,785) | (286,978) |
Total stockholders' equity | 67,492 | 88,380 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 109,907 | $ 146,617 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 15,012,789 | 14,844,307 |
Treasury stock, shares | 273,937 | 273,937 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenues | $ 199,156 | $ 225,829 |
Cost of sales | 191,289 | 204,852 |
Restructuring | 1,281 | |
Gross profit | 7,867 | 19,696 |
OPERATING EXPENSES: | ||
Selling, general and administrative | 18,271 | 18,931 |
Intangible amortization | 444 | 444 |
Regulatory settlement | 1,566 | |
Restructuring charges | 1,060 | 233 |
Total operating expenses | 19,775 | 21,174 |
Operating loss | (11,908) | (1,478) |
OTHER (EXPENSE) INCOME, net: | ||
Interest expense, net | (799) | (656) |
Other, net | 425 | 73 |
Gain on sale of assets and restructuring | 36 | |
Total other expense, net | (374) | (547) |
Net loss before benefit for income taxes | (12,282) | (2,025) |
Benefit for income taxes | (36) | (232) |
LOSS FROM CONTINUING OPERATIONS | (12,246) | (1,793) |
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX | (9,561) | (4,375) |
NET LOSS | $ (21,807) | $ (6,168) |
NET LOSS PER COMMON SHARE - BASIC AND DILUTED: | ||
Loss from continuing operations (in dollars per share) | $ (0.83) | $ (0.12) |
Loss from discontinued operations (in dollars per share) | (0.65) | (0.30) |
Net loss (in dollars per share) | $ (1.48) | $ (0.42) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and diluted (in shares) | 14,677 | 14,715 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2013 | $ 15 | $ 376,125 | $ (280,810) | $ 95,330 | |
Balance (in shares) at Dec. 31, 2013 | 14,627,990 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Stock issued for restricted stock (in shares) | 196,208 | ||||
Stock issued under stock option plans | 9 | 9 | |||
Stock issued under stock option plans (in shares) | 2,863 | ||||
Stock issued under defined contribution 401(k) retirement savings plan | 163 | 163 | |||
Stock issued under defined contribution 401(k) retirement savings plan (in shares) | 17,246 | ||||
Stock repurchases under repurchase program | $ (1,842) | (1,842) | |||
Stock repurchases under repurchase program(shares) | (273,937) | ||||
Share-based compensation | 888 | 888 | |||
Net loss | (6,168) | (6,168) | |||
Balance at Dec. 31, 2014 | $ 15 | $ (1,842) | 377,185 | (286,978) | $ 88,380 |
Balance (in shares) at Dec. 31, 2014 | 14,844,307 | (273,937) | 14,844,307 | ||
Increase (Decrease) in Stockholders' Equity | |||||
Stock issued for restricted stock (in shares) | 168,482 | ||||
Share-based compensation | 919 | $ 919 | |||
Net loss | (21,807) | (21,807) | |||
Balance at Dec. 31, 2015 | $ 15 | $ (1,842) | $ 378,104 | $ (308,785) | $ 67,492 |
Balance (in shares) at Dec. 31, 2015 | 15,012,789 | (273,937) | 15,012,789 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) income | $ (21,807) | $ (6,168) |
Loss from discontinued operations | (9,561) | (4,375) |
(Loss) income from continuing operations | (12,246) | (1,793) |
Adjustments to reconcile net cash used in operating activities: | ||
Depreciation and amortization expense | 9,179 | 10,944 |
Impairment charges | 183 | 84 |
Stock-based compensation | 919 | 888 |
Allowance for doubtful accounts | 35 | 65 |
Common stock issued under defined contribution 401(k) plan | 163 | |
Gain on disposal of assets | (98) | (157) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,223 | 498 |
Inventories | 6,925 | 1,599 |
Prepaid expenses and other current assets | (25) | 2,091 |
Accounts payable | (3,625) | (8,872) |
Accrued liabilities | (1,126) | 1,330 |
Customer deposits | (12,457) | (253) |
Other non-current assets and liabilities | (399) | (472) |
Net cash (used in) provided by operating activities of continued operations | (5,512) | 6,115 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of available for sale securities | (8,062) | (15,088) |
Sales of available for sale securities | 5,082 | 1,101 |
Maturities of available for sale securities | 4,825 | 7,106 |
Purchases of property and equipment | (2,789) | (6,297) |
Proceeds from disposals of property and equipment | 1,156 | 1,009 |
Net cash provided by (used in) by investing activities of continued operations | 212 | (12,169) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of stock | 9 | |
Proceeds used in repurchasing of common stock | (1,842) | |
Payments on lines of credit and notes payable | (118,212) | (15,850) |
Proceeds from lines of credit and notes payable | 118,212 | 15,850 |
Proceeds from long-term debt | 5,000 | |
Payments of long-term debt | (2,201) | |
Principal payments on capital leases | (747) | (934) |
Net cash provided by (used in) financing activities of continued operations | 2,052 | (2,767) |
DISCONTINUED OPERATIONS: | ||
Operating cash flows | (5,327) | (3,613) |
Investing cash flows | 2,864 | (151) |
Financing cash flows | (3) | (201) |
Net cash used in discontinued operations | (2,466) | (3,965) |
Add: Cash balance of discontinued operations, beginning of period | 93 | 185 |
Less: Cash balance of discontinued operations, end of period | 93 | |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (5,621) | (12,694) |
CASH AND CASH EQUIVALENTS, beginning of the period | 12,057 | 24,751 |
CASH AND CASH EQUIVALENTS, end of the period | 6,436 | 12,057 |
Supplemental cash flow information: | ||
Interest paid | 652 | 601 |
Income taxes paid | 48 | 62 |
Non-cash investing and financing activities: | ||
Issuance of restricted stock grants | $ 919 | 888 |
Common stock issued under defined contribution 401(k) plan | $ 163 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Broadwind Energy, Inc. (the “Company”) provides technologically advanced high ‑value products to energy, mining and infrastructure sector customers, primarily in the United States of America (the “U.S.”). The Company’s most significant presence is within the U.S. wind energy industry, although the Company has diversified into other industrial markets. Within the U.S. wind energy industry, the Company provides products primarily to turbine manufacturers. Outside of the wind energy market, the Company provides precision gearing and specialty weldments to a broad range of industrial customers for oil and gas (“O&G”), mining, steel and other industrial applications. The Company has two reportable operating segments: Towers and Weldments, and Gearing. Towers and Weldments The Company manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for multiple megawatt (“MW”) wind turbines. 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 500 towers, sufficient to support turbines generating more than 1,000 MW of power. This product segment also encompasses the manufacture of specialty fabrications and specialty weldments for mining and other industrial customers. Gearing The Company engineers, builds and remanufactures precision gears and gearing systems for O&G, wind energy, mining, steel and other industrial applications. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment in Neville Island, Pennsylvania. Liquidity The Company meets its short term liquidity needs through cash generated from operations, through its available cash balances and through the Company’s secured revolving line of credit (the “Credit Facility”) with AloStar Bank of Commerce (“AloStar”) . The Company uses the Credit Facility from time to time to fund temporary increases in working capital, and believes the Credit Facility, together with the operating cash generated by the business, will be sufficient to meet all cash obligations for the next twelve months. On August 23, 2012, the Company established a $20,000 Credit Facility with AloStar pursuant to a Loan and Security Agreement (as amended, the “Loan Agreement”). On June 29, 2015, the Credit Facility was amended to extend the maturity date, modify the applicable interest rate minimum quarterly interest charges and convert $5,000 of the original Credit Facility amount into a term loan (the “Term Loan”). The Credit Facility and the Term Loan each mature on August 31, 2016. Under the terms of the Credit Facility, AloStar will advance funds when requested up to the level of the Company’s borrowing base, which consists of approximately 85% of eligible receivables and approximately 50% of eligible inventory. Under the Credit Facility, borrowings are continuous and all cash receipts are automatically applied to the outstanding borrowed balance. As of December 31, 2015, cash and cash equivalents and short-term investments totaled $12,615 , a decrease of $7,466 from December 31, 2014, and $0 was outstanding under the Credit Facility. The Company had the ability to borrow up to $9,500 under the Credit Facility as of December 31, 2015. The Loan Agreement contains customary representations and warranties. It also contains a requirement that the Company, on a consolidated basis, maintain a minimum monthly fixed charge coverage ratio (the “Fixed Charge Coverage Ratio Covenant”) and minimum monthly earnings before interest, taxes, depreciation, amortization, restructuring and share-based payments (“Adjusted EBITDA Covenant”), along with other customary restrictive covenants, certain of which are subject to materiality thresholds, baskets and customary exceptions and qualifications. As of September 30, 2015, the Company was not in compliance with the Adjusted EBITDA Covenant. Consequently, an Eighth Amendment to Loan and Security Agreement and Waiver was executed on October 16, 2015, which waived the Company’s compliance with all covenants as of September 30, 2015, amended the Adjusted EBITDA Covenant going forward and provided that the Fixed Charge Coverage Ratio Covenant would be recalculated for future periods commencing with the quarter ending March 31, 2016. As of December 31, 2015, the Company was not in compliance with the Adjusted EBITDA Covenant. On February 23, 2016, the Company and AloStar executed a Ninth Amendment to Loan and Security Agreement and Waiver (the “Ninth Amendment”), which waived the Company’s compliance with the Adjusted EBITDA Covenant as of December 31, 2015, amended the Adjusted EBITDA Covenant going forward, provided that the Fixed Charge Coverage Ratio Covenant would be recalculated for future periods commencing with the quarter ending June 30, 2016, reduced the amount of the Credit Facility to $10,000 and extended the maturity date of the Credit Facility to February 28, 2017. The Ninth Amendment also contains a liquidity requirement of $3,500 and establishes a reserve against the borrowing base in an amount equal to the outstanding balance of the Term Loan at any given time. The Company is considering renewal of the Credit Facility and other financing alternatives in anticipation of the scheduled expiration of the Credit Facility and the Term Loan on August 31, 2016. As of December 31, 2015, there was no outstanding indebtedness under the Credit Facility, the Company had the ability to borrow up to $9,515 thereunder and the per annum interest rate thereunder was 4.25% . Also as of December 31, 2015, there was $2,799 in outstanding indebtedness under the Term Loan. The reduction in cash and cash equivalents as of December 31, 2015, when compared to levels at December 31, 2014, was due to the Company fulfilling customers’ orders for which the Company had previously received deposits, reducing customer deposits by $12,457 since December 31, 2014. Upon fulfilling the orders, the Company was able to recognize the cash from the deposits as revenue. The spike in inventory levels experienced early in 2015 has reversed; net inventory of $24,219 as of December 31, 2015 is $6,925 lower than at December 31, 2014. Total debt and capital lease obligations at December 31, 2015 totaled $5,846 , and the Company is obligated to make principal payments under the outstanding debt totaling $3,246 over the next twelve months. Since its inception, the Company has continuously incurred annual operating losses. The Company anticipates that current cash resources, amounts available under the Credit Facility, and cash to be generated from operations 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 several of the Company’s large customers, as well as 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. If the Company’s operational performance deteriorates significantly, it may be unable to comply with existing financial covenants, and could lose access to the Credit Facility. This could limit the Company’s operational flexibility or require a delay in making planned investments. 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. Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation These consolidated financial statements include the accounts of the Company and entities in which it has a controlling financial interest. All significant intercompany transactions and balances have been eliminated in consolidation. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”). When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a VIE, and if the Company is deemed to be the primary beneficiary, in accordance with the accounting standard for the consolidation of VIE’s. The accounting standard for the consolidation of VIE’s requires the Company to qualitatively assess if the Company was the primary beneficiary of the VIE based on whether the Company had (i) the power to direct those matters that most significantly impacted the activities of the VIE and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant. Refer to Note 19, “New Markets Tax Credit Transaction” of these consolidated financial statements for a description of two VIE’s included in the Company’s consolidated financial statements. Management’s Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“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 tax rates, inventory reserves, warranty reserves, impairment of long-lived assets, and allowance for doubtful accounts. 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. Out-of -Period Adjustment Include d in the results of operations for the year ended December 31, 2015, are out-of-period adjustments, which represent corrections of prior-period errors relating to the inventory balance in the Company’s Towers & Weldments segment. During the fourth quarter of 2015, the Company determined that the cost of certain component parts had not been properly assigned to previously sold towers resulting in an overstatement of inventory and an understatement of previously reported cost of goods sold. The out-of-period impact of the error recorded was approximately $231 related to periods prior to 2015. The correction of these errors was not material to the year ended December 31, 2015 or any of the prior interim or annual periods. Cash and Cash Equivalents and Short ‑Term Investments Cash and cash equivalents typically comprise cash balances and readily marketable investments with original maturities of three months or less, such as money market funds, short ‑term government bonds, Treasury bills, marketable securities and commercial paper. Marketable investments with original maturities between three and twelve months are recorded as short ‑term investments. The Company’s treasury policy is to invest excess cash in money market funds or other investments, which are generally of a short ‑term duration based upon operating requirements. Income earned on these investments is recorded to interest income in the Company’s consolidated statements of operations. As of December 31, 2015 and December 31, 2014, cash and cash equivalents totaled $6,436 and $12,057 , respectively, and short ‑term investments totaled $6,179 and $8,024 , respectively. For the years ended December 31, 2015 and 2014, interest income was $10 and $21 , respectively. Restricted Cash Restricted cash balances relate primarily to provisions contained in certain vendor agreements. The Company anticipates that all restricted cash balances will be used for current purposes. As of December 31, 2015 and 2014, the Company had restricted cash in the amount of $83 . Revenue Recognition The Company recognizes revenue when the earnings process is complete and when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable, collectability is reasonably assured and delivery has occurred per the terms of the contract. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are presumed to be classified as reductions of revenue in the Company’s statement of operations. In some instances, typically within the Company’s Towers and Weldments 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 the buyer requests the arrangement, a fixed schedule for delivery exists, the ordered goods are segregated from inventory and not available to fill other orders and the goods are complete and ready for shipment. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance. Cost of Sales Cost of sales represents all direct and indirect costs associated with the production of products for sale to customers. These costs include operation, repair and maintenance of equipment, materials, direct and indirect labor and benefit costs, rent and utilities, maintenance, insurance, equipment rentals, freight in and depreciation. Selling, General and Administrative Expenses Selling, general and administrative expenses include all corporate and administrative functions such as sales and marketing, legal, human resource management, finance, investor and public relations, information technology and senior management. These functions serve to support the Company’s current and future operations and provide an infrastructure to support future growth. Major expense items in this category include management and staff wages and benefits, share ‑based compensation and professional services. Accounts Receivable The Company generally grants uncollateralized credit to customers on an individual basis based upon the customer’s financial condition and credit history. Credit is typically on net 30 day terms and customer deposits are frequently required at various stages of the production process to minimize credit risk. Historically, the Company’s accounts receivable (“A/R”) are highly concentrated with a select number of customers. During the year ended December 31, 2015, the Company’s five largest customers accounted for 92% of its consolidated revenues and 71% of outstanding A/R balances, compared to the year ended December 31, 2014 when the Company’s five largest customers accounted for 91% of its consolidated revenues and 91% of its outstanding A/R balances. Allowance for Doubtful Accounts Based upon past experience and judgment, the Company establishes an allowance for doubtful accounts with respect to A/R. 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 realizability of its A/R. These factors include individual customer circumstances, history with the Company and other relevant criteria. A/R balances that remain outstanding after the Company has exhausted reasonable collection efforts are written off through a charge to the valuation allowance and a credit to A/R. 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 realizability of its A/R, as noted above, or modifications to the Company’s credit standards, collection practices and other related policies may impact its allowance for doubtful accounts and its financial results. Bad debt expense for the years ended December 31, 2015 and 2014 was $87 and $73 , respectively. Inventories Inventories are stated at the lower of cost or market. Cost is determined either based on the first ‑in, first ‑out (“FIFO”) method, or on a standard cost basis that approximates the FIFO method. Market is determined based on net realizable value. Any excess of cost over market value is included in the Company’s inventory allowance. Market value of inventory, and management’s judgment of the need for reserves, encompasses consideration of other business factors including physical condition, inventory holding period, contract terms and usefulness. Inventories consist of raw materials, work ‑in ‑process and finished goods. Raw materials consist of components and parts for general production use. Work ‑in ‑process consists of labor and overhead, processing costs, purchased subcomponents and materials purchased for specific customer orders. Finished goods consist of components purchased from third parties as well as components manufactured by the Company that will be used to produce final customer products. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is recognized using the straight ‑line method over the estimated useful lives of the related assets for financial reporting purposes, and generally an accelerated method for income tax reporting purposes. Depreciation expense related to property and equipment for the years ended December 31, 2015 and 2014 was $8,736 and $10,500 , respectively. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed as incurred. The Company has in the past capitalized interest costs incurred on indebtedness used to construct property and equipment. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. There was no interest cost capitalized during the years ended December 31, 2015 or 201 4. Property or equipment sold or disposed of is removed from the respective property accounts, with any corresponding gains and losses recorded to other income or expense in the Company’s consolidated statement of operations. Property and equipment and other long ‑lived assets are reviewed for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If such events or changes in circumstances occur, the Company will recognize an impairment loss if the undiscounted future cash flows expected to be generated by the assets is less than the carrying value of the related asset or asset group. The impairment loss would adjust the asset to its fair value. In evaluating the recoverability of long ‑lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the Company’s fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment and other long ‑lived assets. Asset recoverability is first measured by comparing the assets’ carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. To the extent the projections used in the Company’s analysis are not achieved, there may be a negative effect on the valuation of these assets. Intangible Assets The Company reviews intangible assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If such events or changes in circumstances occur an impairment loss is recognized if the undiscounted future cash flows expected to be generated by the assets are less than the carrying value of the related asset or asset group. The impairment loss would adjust the asset to its fair value. In evaluating the recoverability of definite ‑lived intangible assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to intangible assets. Asset recoverability is first measured by comparing the assets’ carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. To the extent the projections used in the Company’s analysis are not achieved, there may be a negative effect on the valuation of these assets. Warranty Liability The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. Warranty liability is recorded in accrued liabilities within the consolidated balance sheet. The Company estimates the warranty accrual based on various factors, including historical warranty costs, current trends, product mix and sales. The changes in the carrying amount of the Company’s total product warranty liability for the years ended December 31, 2015 and 2014 were as follows: As of December 31, 2015 2014 Balance, beginning of period $ $ Addition to (reduction of) warranty reserve Warranty claims Balance, end of period $ $ As of December 31, 2015, the decrease in the warranty liabilities was due primarily to settlement of a $371 obligation to a specific customer completed during 2015. Income Taxes The Company accounts for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted. In connection with the preparation of its consolidated financial statements, the Company is required to estimate its income tax liability for each of the tax jurisdictions in which the Company operates. This process involves estimating the Company’s actual current income tax expense and assessing temporary differences resulting from differing treatment of certain income or expense items for income tax reporting and financial reporting purposes. The Company also recognizes as deferred income tax assets the expected future income tax benefits of net operating loss (“NOL”) carryforwards. In evaluating the realizability of deferred income tax assets associated with NOL carryforwards, the Company considers, among other things, expected future taxable income, the expected timing of the reversals of existing temporary reporting differences and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Changes in, among other things, income tax legislation, statutory income tax rates or future taxable income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause its income tax provision to vary significantly among financial reporting periods. The Company also accounts for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company follows the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition related to the uncertainty in these income tax positions. Share ‑Based Compensation The Company grants incentive stock options and restricted stock units to certain officers, directors, and employees. The Company accounts for share ‑based compensation related to these awards based on the estimated fair value of the equity award and recognizes expense ratably over the vesting term of the award. See Note 16 “Share ‑Based Compensation” of these consolidated financial statements for further discussion of the Company’s share ‑based compensation plans, the nature of share ‑based awards issued and the Company’s accounting for share ‑based compensation. Net Loss Per Share The Company presents both basic and diluted net loss per share. Basic net loss per share is based solely upon the weighted average number of common shares outstanding and excludes any dilutive effects of options, warrants and convertible securities. Diluted net loss per share is based upon the weighted average number of common shares and common ‑share equivalents outstanding during the year excluding those common ‑share equivalents where the impact to basic net loss per share would be anti ‑dilutive. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 2. EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted earnings per share for the years ended December 31, 2015 and 2014 as follows: For the Years Ended December 31, 2015 2014 Basic earnings per share calculation: Net loss $ $ Weighted average number of common shares outstanding Basic net loss per share $ $ Diluted earnings per share calculation: Net loss $ $ Weighted average number of common shares outstanding Common stock equivalents: Stock options and non-vested stock awards — — Weighted average number of common shares outstanding Diluted net loss per share $ $ (1) Stock options and restricted stock units (“RSU’s”) granted and outstanding of 522,007 and 673,756 as of December 31, 2015 and 2014, respectively, are excluded from the computation of diluted earnings due to the anti ‑dilutive effect as a result of the Company’s net loss for these respective years. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2015 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | 3. DISCONTINUED OPERATIONS The Company’s Services segment has had substantial continued operating losses for several years, due to operating issues and an increasingly competitive environment due in part to increased in-sourcing of service functions by customers. In July, 2015 the Company’s Board of Directors (the “Board”) directed management to evaluate potential strategic alternatives with respect to the Services segment. In September, 2015 the Board authorized management to sell substantially all of the assets of the Services segment to one or more third-party purchasers, and thereafter to liquidate or otherwise dispose of any such assets remaining unsold. The Company began negotiations to sell substantially all the assets of the Services segment in the third quarter of 2015. The exit of this business is a strategic shift that has had a major effect on the Company; therefore, the Company reclassified the related assets and liabilities of the Services segment as held for sale. In connection with the divestiture, which was substantially completed in December 2015, the Company sold $5,406 of net assets, resulting in a $2,096 loss. In addition, the Company recorded an asset impairment charge of approximately $1,500 to reduce the carrying value of the remaining net assets held for sale to their estimated fair value based on anticipated sales in the open market within the next 12 months. The impairment charge and loss on sale is included in “Loss before benefit for income taxes” in “Results of Discontinued Operations.” Results of Discontinued Operations Results of operations associated with Services segment, which are reflected as discontinued operations in the Company’s condensed consolidated statements of income for the twelve months ended December 31, 2015 and 2014, were as follows: Year Ended December 31, 2015 2014 Revenues $ $ Cost of sales Selling, general and administrative Interest expense, net Other income and expense items Impairment of held for sale assets and liabilities and loss on sale of assets — Loss from discontinued operations before benefit for income taxes $ $ Assets and Liabilities Held for Sales Assets and liabilities classified as held for sale in the Company’s consolidated balance sheets as of December 31, 2015 and 2014 include the following: December 31, December 31, 2015 2014 Assets: Accounts receivable, net $ $ Inventories, net Prepaid expenses and other current assets Property and equipment, net — Other assets — Assets Held For Sale Related To Discontinued Operations Impairment of discontinued assets held for sale — Total Assets Held For Sale Related To Discontinued Operations $ $ Liabilities: Current maturities of long-term debt $ — $ Accounts payable Accrued liabilities Customer deposits and other current obligations Long-term debt, net of current maturities — Other long-term liabilities Total Liabilities Held For Sale Related To Discontinued Operations $ $ |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 12 Months Ended |
Dec. 31, 2015 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | 4. 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 consolidated financial statements, except as discussed below. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014 09, Revenue from Contracts with Customers, which amends the guidance in former Accounting Standard s Codification Topic 605, Revenue Recognition, and provides a single, comprehensive revenue recognition model for all contracts with customers. This standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The entity will recognize revenue to reflect the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This update permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirement in the year of adoption, through a cumulative adjustment. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) Deferral of the Effective Date, which amends the previously issued ASU to provide for a one year deferral from the original effective date. This update is effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted for annual reporting periods beginning on or after December 15, 2016, including interim periods within that annual period . The Company will adopt the provisions of ASU 2014-09 for the fiscal year beginning January 1, 2018, and is currently evaluating the impact on its condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), to simplify the presentation of deferred income taxes. Under the new standard, both deferred tax liabilities and assets are required to be classified as noncurrent in a classified balance sheet. This standard will become effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016, with early adoption allowed. During the fourth quarter of 2015, the Company elected to prospectively adopt this standard. The prior reporting period was not retrospectively adjusted. Note 15, “Income Taxes” of these condensed consolidated financial statements contains additional information regarding the adoption of this standard. |
CASH AND CASH EQUIVALENTS AND S
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2015 | |
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 5. CASH AND CASH EQUIVALENTS AND SHORT ‑TERM INVESTMENTS The components of cash and cash equivalents and short ‑term investments as of December 31, 2015 and December 31, 2014 are summarized as follows: As of December 31, 2015 2014 Cash and cash equivalents: Cash $ $ Money market funds Corporate & Municipal bonds Total cash and cash equivalents Short-term investments (available-for-sale): Corporate & Municipal bonds Total cash and cash equivalents and short-term investments $ $ |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 6. ALLOWANCE FOR DOUBTFUL ACCOUNTS The activity in the A/R allowance from operations for the years ended December 31, 2015 and 2014 consists of the following: For the Years Ended December 31, 2015 2014 Balance at beginning of period $ $ Bad debt expense Write-offs — Other adjustments Balance at end of period $ $ |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2015 | |
INVENTORIES | |
INVENTORIES | 7. INVENTORIES The components of inventories from operations as of December 31, 2015 and 2014 are summarized as follows: As of December 31, 2015 2014 Raw materials $ $ Work-in-process Finished goods Less: Reserve for excess and obsolete inventory Net inventories $ $ |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 8. PROPERTY AND EQUIPMENT The cost basis and estimated lives of property and equipment from continuing operations as of December 31, 2015 and 2014 are as follows: As of December 31, 2015 2014 Life Land $ $ Buildings 39 years Machinery and equipment 2 - 10 years Office furniture and equipment 3 - 7 years Leasehold improvements Asset life or life of lease Construction in progress Less accumulated depreciation and amortization $ $ During the fourth quarter of 2015 , the Company continued to experience triggering events associated with the Gearing segment’s current period operating losses combined with their history of continued operating losses. As a result, the Company evaluated the recoverability of certain of its long ‑lived assets associated with the Gearing segment. Based upon the Company’s December 31, 2015 impairment assessment, the undiscounted cash flows based upon the Company’s most recent projections were less than the carrying amount of relevant asset groups within the Gearing segment, and a possible impairment to these assets was indicated under step one of ASC 360. However, based on third-party appraisal s and other estimates of the fair value of the assets, the Company determined that the fair value of these assets is in excess of their carrying amount under step two of ASC 360. The Company assumed that the assets would be exchanged in an orderly transaction between market participants and would represent the highest and best use of these assets. Based on the step two analysis, the Company determined that no impairment to these assets was indicated as of December 31, 2015. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 9. INTANGIBLE ASSETS As of December 31, 2015 and 2014, the cost basis, accumulated amortization and net book value of intangible assets were as follows: December 31, 2015 December 31, 2014 Weighted Weighted Net Average Net Average Cost Accumulated Book Amortization Cost Accumulated Book Amortization Basis Amortization Value Period Basis Amortization Value Period Intangible assets: Customer relationships $ $ $ $ $ $ Trade names Intangible assets $ $ $ $ $ $ During the fourth quarter of 2015, the Company continued to experience a triggering event associated with the Gearing segment’s current period operating loss combined with its history of continued operating losses. As a result, the Company evaluated the recoverability of certain of its intangible assets associated with the Gearing segment. Based upon the Company’s December 31, 2015 impairment assessment, the undiscounted cash flows based upon the Company’s most recent projections were less than the carrying amount of the relevant asset groups within the Gearing segment, and a possible impairment to these assets was indicated under step one of ASC 360. In step two of ASC 360 testing , the Company compared the long-lived assets’ estimated fair values with the corresponding carrying amount of the assets. Under step two, the Company assumed that the assets would be exchanged in an orderly transaction between market participants and would represent the highest and best use of these assets. Based on the step two analysis, the Company determined that no impairment t o these assets was indicated as of December 31, 2015. Intangible assets are amortized on a straight ‑line basis over their estimated useful lives, which range from 15 to 20 years. Amortization expense was $444 for the years ended December 31, 2015 and 2014. As of December 31, 2015, estimated future amortization expense is as follows: 2016 $ 2017 2018 2019 2020 2021 and thereafter Total $ |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2015 | |
ACCRUED LIABILITIES | |
ACCRUED LIABILITIES | 10. ACCRUED LIABILITIES Accrued liabilities as of December 31, 2015 and 2014 consisted of the following: December 31, 2015 2014 Accrued payroll and benefits $ $ Accrued property taxes Income taxes payable Accrued professional fees Accrued warranty liability Accrued regulatory settlement Accrued environmental reserve Accrued self-insurance reserve Accrued other Total accrued liabilities $ $ |
DEBT AND CREDIT AGREEMENTS
DEBT AND CREDIT AGREEMENTS | 12 Months Ended |
Dec. 31, 2015 | |
DEBT AND CREDIT AGREEMENTS | |
DEBT AND CREDIT AGREEMENTS | 11. DEBT AND CREDIT AGREEMENTS The Company’s outstanding debt balances as of December 31, 2015 and 2014 consisted of the following: December 31, 2015 2014 Term loans and notes payable $ $ Less: Current portion Long-term debt, net of current maturities $ $ As of December 31, 2015, future annual principal payments on the Company’s outstanding debt obligations were as follows: 2016 $ 2017 — 2018 2019 — 2020 — 2021 and thereafter — Total $ Credit Facilities AloStar Credit Facility On August 23, 2012, the Company established the Credit Facility with AloStar in the original amount of $20,000 . On June 29, 2015, the Credit Facility was amended to extend the maturity date one additional year, modify the applicable interest rate and minimum quarterly interest charges and convert $5,000 of the original Credit Facility amount into the Term Loan. The Credit Facility and the Term Loan each mature on August 31, 2016. Under the Credit Facility, AloStar will advance funds when requested against a borrowing base consisting of approximately 85% of the face value of eligible receivables of the Company and approximately 50% of the book value of eligible inventory of the Company. Borrowings under the Credit Facility bear interest at a per annum rate equal to the one-month London Interbank Offered Rate (“LIBOR”) plus a margin of 3.25% . The Company must also pay an unused facility fee to AloStar equal to 0.50% per annum on the unused portion of the Credit Facility along with other standard fees. AloStar funded the full amount of the Term Loan on June 30, 2015. Borrowings under the Term Loan bear interest at a per annum rate equal to 3.50% plus the applicable daily weighted average LIBOR. The Term Loan payments are being amortized at approximately $60 per month with a balloon payment of approximately $2,323 due in August 2016. In connection with the Credit Facility, the Company entered into the Loan Agreement. The Loan Agreement contains customary representations and warranties. It also contains a requirement that the Company, on a consolidated basis, comply with the Fixed Charge Coverage Ratio Covenant and the Adjusted EBITDA Covenant, along with other customary restrictive covenants, certain of which are subject to materiality thresholds, baskets and customary exceptions and qualifications. As of September 30, 2015, the Company was not in compliance with the Adjusted EBITDA Covenant. Consequently, an Eighth Amendment to Loan and Security Agreement and Waiver was executed on October 16, 2015, which waived the Company’s compliance with all covenants as of September 30, 2015, amended the Adjusted EBITDA Covenant going forward and provided that the Fixed Charge Coverage Ratio Covenant would be recalculated for future periods commencing with the quarter ending March 31, 2016. As of December 31, 2015, the Company was not in compliance with the Adjusted EBITDA Covenant. On February 23, 2016, the Company and AloStar executed the Ninth Amendment, which waived the Company’s compliance with the Adjusted EBITDA Covenant as of December 31, 2015, amended the Adjusted EBITDA Covenant going forward, provided that the Fixed Charge Coverage Ratio Covenant would be recalculated for future periods commencing with the quarter ending June 30, 2016, reduced the amount of the Credit Facility to $10,000 and extended the maturity date of the Credit Facility to February 28, 2017. The Ninth Amendment also contains a liquidity requirement of $3,500 and establishes a reserve against the borrowing base in an amount equal to the outstanding balance of the Term Loan at any given time. The obligations under the Loan Agreement are secured by, subject to certain exclusions, (i) a first priority security interest in all of the A/R, inventory, chattel paper, payment intangibles, cash and cash equivalents and other working capital assets and stock or other equity interests in the Company’s subsidiaries, and (ii) a first priority security interest in all of the equipment of the Company’s wholly-owned subsidiary Brad Foote Gear Works, Inc. (“Brad Foote”). The Company is considering renewal of the Credit Facility and other financing alternatives in anticipation of the scheduled expiration of the Credit Facility and the Term Loan on August 31, 2016. As of December 31, 2015, there was no outstanding indebtedness under the Credit Facility. The Company had the ability to borrow up to $9,515 under the Credit Facility as of December 31, 2015. Other Included in Long Term Debt, Net of Current Maturities is $2,600 associated with the New Markets Tax Credit transaction described further in Note 19, “New Markets Tax Credit Transaction” of these condensed consolidated financial statements. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2015 | |
LEASES | |
LEASES | 12. LEASES The Company leases various property and equipment under operating lease arrangements. Lease terms generally range from 3 to 15 years with renewal options for extended terms. Certain leases contain rent escalation clauses that require additional rental payments in the later years of the term. Rent expense for these types of leases is recognized on a straight ‑line basis over the minimum lease term. Any lease concessions received by the Company are deferred and recognized as an adjustment to rent expense ratably over the minimum lease term. The Company is required to make additional payments under certain property leases for taxes, insurance and other operating expenses incurred during the operating lease period. Rental expense for the years ended December 31, 2015 and 2014 was $2,875 and $3,333 , respectively. In addition, the Company has entered into capital lease arrangements to finance property and equipment and assumed capital lease obligations in connection with certain acquisitions. The cost basis and accumulated depreciation of assets recorded under capital leases, which are included in property and equipment, are as follows as of December 31, 2015 and 2014: December 31, 2015 2014 Cost $ $ Accumulated depreciation Net book value $ $ Depreciation expense recorded in connection with assets recorded under capital leases was $263 a nd $362 for the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015, future minimum lease payments under capital leases and operating leases were as follows: Capital Operating Leases Leases Total 2016 $ $ $ 2017 — 2018 — 2019 — 2020 — 2021 and thereafter — Total $ $ Less—portion representing interest at a weighted average annual rate of 5.0% Principal Less—current portion Capital lease obligations, noncurrent portion $ — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is subject to legal proceedings or claims arising from its normal course of operations. The Company accrues for costs related to loss contingencies when such costs are probable and reasonably estimable. Except as otherwise noted, as of December 31, 2015, the Company is not aware of any material pending legal proceedings or threatened litigation that would have a material adverse effect on the Company’s financial condition or results of operations, although no assurance can be given with respect to the ultimate outcome of pending actions. Refer to Note 22, “Legal Proceedings” of these consolidated financial statements for further discussion of legal proceedings. 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. Also, certain environmental laws can 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. In connection with the Company’s restructuring initiatives, during the third quarter of 2012, the Company identified a liability associated with the planned sale of one of Brad Foote’s facilities located in Cicero, Illinois (the “Cicero Avenue Facility”). The liability is associated with environmental remediation costs that were identified while preparing the site for sale. During 2013, the Company applied for and was accepted into the Illinois Environmental Protection Agency (“IEPA”) voluntary site remediation program. In the first quarter of 2014, the Company completed a comprehensive review of remedial options for the Cicero Avenue Facility and selected a preferred remediation technology. As part of the voluntary site remediation program, the Company submitted a plan to the IEPA for approval to conduct a pilot study to test the effectiveness of the selected remediation technology. On July 23, 2014, the Company received comments from the IEPA regarding the proposed site remediation plan. The Company provided additional information to the IEPA in response to those comments, and determined that no change to the remediation plan or the financial reserve was needed at that time. In the third quarter of 2015, t he Company obtained additional information regarding potential remediation options and modified the remediation plan, which caused an increase in the estimated cost of remediation and resulted in the Company increasing its reserve associated with this matter by $874 . The Company is currently reviewing these options and will continue to reevaluate its remediation activities and the reserve balance associated with this matter as additional information is obtained . As of December 31, 2015, the accrual balance associated with this matter totaled $1,300 . 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. Warranty Liability The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. 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 dependent on actual losses sustained by the customer. When the damages are determined to be probable and estimable, the damages are recorded as a reduction to revenue. During 2015, the Company incurred $1,489 of liquidated damages. There was $379 reserve for liquidated damages as of December 31, 2015. Workers’ Compensation Reserves At the beginning of the third quarter of 2013, the Company began to self ‑insure for its workers’ compensation liabilities, including reserves for self ‑retained losses. Historical loss experience combined with actuarial evaluation methods and the application of risk transfer programs are used to determine required workers’ compensation reserves. The Company takes into account claims incurred but not reported when determining its workers’ compensation reserves. Although the ultimate outcome of these matters may exceed the amounts recorded and additional losses may be incurred, the Company does not believe that any additional potential exposure for such liabilities will have a material adverse effect on the Company’s consolidated financial position or results of operations. As of December 31, 2015, the Company had $1,464 accrued for self ‑insured workers’ compensation liabilities. Other As of December 31, 2015, approximately 14% of the Company’s employees were covered by two collective bargaining agreements with local unions at the Company’s Cicero, Illinois and Neville Island, Pennsylvania locations. The current collective bargaining agreement with the Cicero union is expected to remain in effect through February 2018. The current collective bargaining agreement with the Neville Island union is expected to remain in effect through October 2017. See Note 19, “New Markets Tax Credit Transaction” of these consolidated financial statements for a discussion of a strategic financing transaction (the “NMTC Transaction”) which originally related to the Company’s drivetrain service center in in Abilene, Texas (the “Abilene Gearbox Facility”), and was amended in August 2015 to also include the activities of the Company’s heavy industries business conducted in the same building in Abilene, Texas (the “Abilene Heavy Industries Facility”). The Abilene Gearbox Facility focused on servicing the growing installed base of megawatt (“MW”) wind turbines as they come off warranty and, to a limited extent, industrial gearboxes requiring precision repair and testing. The Abilene Heavy Industries Facility focuses on heavy weldment fabrication for industries including those related to compressed natural gas distribution. Pursuant to the NMTC Transaction, the gross loan and investment in the Abilene Heavy Industries Facility and the Abilene Gearbox Facility of $10,000 is expected to generate $3,900 in tax credits over a period of seven years, which the NMTC Transaction makes available to Capital One, National Association (“Capital One”). The Abilene Heavy Industries Facility and the Abilene Gearbox Facility must operate and be in compliance with the terms and conditions of the NMTC Transaction during the seven year compliance period, or the Company may be liable for the recapture of $3,900 in tax credits to which Capital One is otherwise entitled. The Company does not anticipate any credit recaptures will be required in connection with the NMTC Transaction. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 14. FAIR VALUE MEASUREMENTS The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, 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. For the Company’s municipal bonds and money market funds, although quoted prices are available and used to value said assets, they are traded less frequently. 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 Company used market negotiations to value its Gearing assets. The Company used real estate appraisals to value its Clintonville, Wisconsin facility (the “Clintonville Facility”). The following table represents the Company’s assets measured at fair values as of December 31, 2015 and 2014: December 31, 2015 Level 1 Level 2 Level 3 Total Assets measured on a recurring basis: Corporate & municipal bonds and money market funds $ — $ $ — $ Assets measured on a nonrecurring basis: Gearing equipment — — Clintonville, WI facility — — Gearing Cicero Ave. facility — — Services assets — — Total assets at fair value $ — $ $ $ December 31, 2014 Level 1 Level 2 Level 3 Total Assets measured on a recurring basis: Municipal bonds and money market funds $ — $ $ — $ Assets measured on a nonrecurring basis: Clintonville, WI facility — — Gearing Cicero Ave. facility — — Services assets — — Total assets at fair value $ — $ $ $ Fair value of financial instruments The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, restricted 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. Assets measured at fair value on a nonrecurring basis The fair value measurement approach for long ‑lived assets utilizes a number of significant unobservable inputs or Level 3 assumptions. These assumptions include, among others, projections of the Company’s future operating results, the implied fair value of these assets using an income approach by preparing an undiscounted cash flow analysis, a market ‑based approach based on the Company’s market capitalization and market value third-party appraisal, and other subjective assumptions. To the extent assumptions used in the Company’s evaluations are not achieved, there may be a negative effect on the valuation of these assets. Due to the Company’s operating losses in 2015 combined with its history of continued operating losses, the Company continues to evaluate the recoverability of certain of its identifiable intangible assets and certain property and equipment assets. Based upon the Company’s December 31, 2015 assessment, the recoverable amount of undiscounted cash flows based upon the Company’s most recent projections were less than the carrying amount of the relevant asset groups within the Gearing segment and failed this step one of the impairment test. In step two, the Company compared the long-lived assets’ estimated fair values with the corresponding carrying amount of the assets. Under step two, the Company assumed that the assets would be exchanged in an orderly transaction between market participants and would represent the highest and best use of these assets. Based on the step two analysis, the Company determined that no impairment to these assets was indicated. During the first half of 2013, the Company took a $288 charge to adjust the carrying value of the Clintonville Facility assets to fair value, and reclassified the resulting carrying value from property and equipment to Assets Held for Sale. This treatment was due to the decision to list the Clintonville Facility for sale as a result of management’s determination that the Clintonville Facility was no longer required in the Company’s operations. The Company also took a $345 charge to adjust the carrying value of certain Gearing equipment to fair value, and reclassified the resulting carrying value to Assets Held for Sale as a result of a decision to sell this equipment. Additionally, during the fourth quarter of 2013, the Company recorded a $1,732 charge to adjust the carrying value of the Cicero Avenue Facility’s land and building down to fair value. This treatment was in response to the Cicero Avenue Facility being taken substantially offline in conjunction with the Company’s plant consolidation initiative. As the Cicero Avenue Facility is not immediately available for sale, it has not been classified as Assets Held for Sale. The three aforementioned impairment charges were recorded as Restructuring expenses within the Statement of Operations. The Clintonville Facility remains as Assets Held For Sale as of December 31, 2015 and due to depressed commercial real estate values, the Company recorded an additional impairment of $186 in 2015 to value the property at its fair value based on negotiations that resulted in an executed sale contract subsequent to the year-end. Following the Board’s approval of a plan to divest the Company’s Services segment, the Company has been able to evaluate the value of the segment’s assets on the open market; therefore, the Company has utilized this measurement to determine the fair value of the Services segment assets. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
INCOME TAXES | 15. INCOME TAXES The provision for income taxes for the years ended December 31, 2015 and 2014 consists of the following: For the Years Ended December 31, 2015 2014 Current provision Federal $ — $ — Foreign — — State Total current (benefit) provision Deferred credit Federal State Total deferred credit Increase in deferred tax valuation allowance Total provision (benefit) for income taxes $ $ The (decrease) increase in the deferred tax valuation allowance was $9,568 and $(1,022) for the years ended December 31, 2015 and 2014, respectively. The changes in the deferred tax valuation allowances in 2015 and 2014 were primarily the result of (decreases) increases to the deferred tax assets pertaining to federal and state NOLs. The tax effects of the temporary differences and NOLs that give rise to significant portions of deferred tax assets and liabilities are as follows: As of December 31, 2015 2014 Current deferred income tax assets: Accrual and reserves $ — $ Total current deferred tax assets — Valuation allowance — Current deferred tax assets, net of valuation allowance — — Noncurrent deferred income tax assets: Net operating loss carryforwards Intangible assets Accrual and reserves — Other Total noncurrent deferred tax assets Valuation allowance Noncurrent deferred tax assets, net of valuation allowance Noncurrent deferred income tax liabilities: Fixed assets Intangible assets — — Total noncurrent deferred tax liabilities Net deferred income tax liability $ — $ — In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), to simplify the presentation of deferred income taxes. Under the new standard, both deferred tax liabilities and assets are required to be classified as noncurrent in a classified balance sheet. This standard will become effective for fiscal years, and the interim periods within those years, beginning after December 15, 2016, with early adoption allowed. As of December 31, 2014, the Company had deferred taxes that were classified as current and noncurrent assets and noncurrent liabilities. During the fourth quarter of 2015, the Company elected to prospectively adopt this standard, thus reclassifying $5,919 of current deferred tax assets to noncurrent within the deferred tax assets and liabilities table. The prior reporting period was not retrospectively adjusted. Based on the Company’s valuation allowance position, the adoption of this guidance had no impact on the Company’s consolidated balance sheet. The adoption of this guidance had no impact on the Company’s consolidated statement s of operations. Valuation allowances of $109,336 and $99,768 have been provided for deferred income tax assets for which realization is uncertain as of December 31, 2015 and 2014, respectively. A reconciliation of the beginning and ending amounts of the valuation is as follows: Valuation allowance as of December 31, 2014 $ Gross increase for current year activity Valuation allowance as of December 31, 2015 $ As of December 31, 2015, the Company had federal NOL carryforwards of approximately $202,107 expiring in various years through 2035. The majority of the NOL carryforwards will expire in various years from 2028 through 2035. As of December 31, 2015, the Company had unapportioned state NOLs in the aggregate of approximately $202,107 , expiring in various years from 2021 through 2035, based upon various NOL carryforward periods as designated by the different taxing jurisdictions. The reconciliation between the statutory U.S. federal income tax rate and the Company’s effective income tax rate is as follows: For the Year Ended December 31, 2015 2014 Statutory U.S. federal income tax rate % % State and local income taxes, net of federal income tax benefit Permanent differences Change in valuation allowance Change in uncertain tax positions Other — Effective income tax rate % % The Company accounts for the uncertainty in income taxes by prescribing a minimum recognition threshold for a tax position taken, or expected to be taken, in a tax return that is required to be met before being recognized in the financial statements. The changes in the Company’s uncertain income tax positions for the years ended December 31, 2015 and 2014 consisted of the following: For the Year Ended December 31, 2015 2014 Beginning balance $ $ Tax positions related to current year: Additions — — Reductions — — — — Tax positions related to prior years: Additions — — Reductions — — Settlements — Lapses in statutes of limitations Additions from current year acquisitions — — Ending balance $ $ The amount of unrecognized tax benefits at December 31, 2015 that would affect the effective tax rate if the tax benefits were recognized was $92 . It is the Company’s policy to include interest and penalties in tax expense. During the years ended December 31, 2015 and 2014, the Company recognized and accrued approximately $18 and $16 , respectively, of interest and penalties. The Company files income tax returns in the U.S. federal and state jurisdictions. As of December 31, 2015, open tax years in the federal and some state jurisdictions date back to 1996 due to the taxing authorities’ ability to adjust NOL carryforwards. The Company’s 2008 and 2009 federal tax returns were examined in 2011 and no material adjustments were identified related to any of the Company’s tax positions. Although these periods have been audited, they continue to remain open until all NOLs generated in those tax years have either been utilized or expire. 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 this section 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, the Company has determined that aggregate changes in stock ownership have triggered an annual limitation on NOL and built ‑in losses available for utilization. To the extent the Company’s use of NOL carryforwards and associated built ‑in losses is significantly limited in the future due to additional changes in stock ownership, the Company’s income could be subject to U.S. corporate income tax earlier than it would if the Company were able to use NOL carryforwards and built ‑in losses without such annual 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 (the “Rights Plan”) designed to preserve the Company’s substantial tax assets associated with NOL carryforwards under IRC Section 382. The Rights Plan is intended to act as a deterrent to any person or group, together with its affiliates and associates, being or 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. Pursuant to 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 ‑thousandth of a share of the Company’s Series A Junior Participating Preferred Stock at an exercise price of $14.00 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 Rights unless they acquire additional shares. The Company announced on February 5, 2016, that its Board had approved an amendment extending the Rights Plan for three years. The amendment is subject to approval by the Company’s stockholders at the Company’s 2016 Annual Meeting of Stockholders. As of December 31, 2015, the Company had $140 of unrecognized tax benefits, all of which would have a favorable impact on income tax expense. It is reasonably possible that unrecognized tax benefits will decrease by up to approximately $77 as a result of the expiration of the applicable statutes of limitations within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. The Company had accrued interest and penalties of $84 as of December 31, 2015. As of December 31, 2014, the Company had unrecognized tax benefits of $199 , of which $118 represented accrued interest and penalties. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 16. SHARE ‑BASED COMPENSATION Overview of Share ‑Based Compensation Plan 2007 Equity Incentive Plan The Company has granted incentive stock options and other equity awards pursuant to the Amended and Restated Broadwind Energy, Inc. 2007 Equity Incentive Plan (the “2007 EIP”), which was approved by the Board in October 2007 and by the Company’s stockholders in June 2008. The 2007 EIP has been amended periodically since its original approval. The 2007 EIP reserved 691,051 shares of the Company’s common stock for grants to officers, directors, employees, consultants and advisors upon whose efforts the success of the Company and its affiliates depends to a large degree. As of December 31, 2015, the Company had reserved 57,783 shares for issuance upon the exercise of stock options outstanding and no shares for issuance upon the vesting of RSU awards outstanding. As of December 31, 2015, 253,387 shares of common stock reserved for stock options and RSU awards under the 2007 EIP have been issued in the form of common stock. 2012 Equity Incentive Plan The Company has granted incentive stock options and other equity awards pursuant to the Broadwind Energy, Inc. 2012 Equity Incentive Plan (the “2012 EIP”), which was approved by the Board in March 2012 and by the Company’s stockholders in May 2012. The 2012 EIP reserved 1,200,000 shares of the Company’s common stock for grants to officers, directors, employees, consultants and advisors upon whose efforts the success of the Company and its affiliates will depend to a large degree. As of December 31, 2015, the Company had reserved 86,414 shares for issuance upon the exercise of stock options outstanding and 212,005 shares for issuance upon the vesting of RSU awards outstanding. As of December 31, 2015, 468,857 shares of common stock reserved for stock options and RSU awards under the 2012 EIP have been issued in the form of common stock. 2015 Equity Incentive Plan The Company has granted equity awards pursuant to the Broadwind Energy, Inc. 2015 Equity Incentive Plan (the “2015 EIP;” together with the 2007 EIP and the 2012 EIP, the “Equity Incentive Plans”), which was approved by the Board in February 2015 and by the Company’s stockholders in April 2015. The purposes of the 2015 EIP are (i) to align the interests of the Company’s stockholders and recipients of awards under the 2015 EIP by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining officers, other employees, non-employee directors and independent contractors; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. Under the 2015 EIP, the Company may grant (i) non-qualified stock options; (ii) “incentive stock options” (within the meaning of IRC Section 422); (iii) stock appreciation rights; (iv) restricted stock and RSUs; and (v) performance awards. The 2015 EIP reserves 1,100,000 shares of the Company’s common stock for grants to officers, directors, employees, consultants and advisors upon whose efforts the success of the Company and its affiliates will depend to a large degree. As of December 31, 2015, the Company had reserved 165,805 shares for issuance upon the vesting of RSU awards outstanding. As of December 31, 2015, no shares of common stock reserved for RSU awards under the 2015 EIP had been issued in the form of common stock. Stock Options. The exercise price of stock options granted under the Equity Incentive Plans is equal to the closing price of the Company’s common stock on the date of grant. Stock options generally become exercisable on the anniversary of the grant date, with vesting terms that may range from one to five years from the date of grant. Additionally, stock options expire ten years after the date of grant. The fair value of stock options granted is expensed ratably over their vesting term. Restricted Stock Units (RSUs). The granting of RSUs is provided for under the Equity Incentive Plans. RSUs generally vest on the anniversary of the grant date, with vesting terms that may range from one to five years from the date of grant. The fair value of each RSU granted is equal to the closing price of the Company’s common stock on the date of grant and is generally expensed ratably over the vesting term of the RSU award. Stock option activity during the years ended December 31, 2015 and 2014 under the Equity Incentive Plans was as follows: Weighted Average Aggregate Intrinsic Weighted Average Remaining Value Options Exercise Price Contractual Term (in thousands) Outstanding as of December 31, 2014 $ Granted — — Exercised — — Forfeited Cancelled — — Outstanding as of December 31, 2015 $ $ — Exercisable as of December 31, 2015 $ $ — The following table summarizes information with respect to all outstanding and exercisable stock options under the Equity Incentive Plans as of December 31, 2015: Options Outstanding Options Exercisable Weighted Average Number of options Weighted Average Remaining Number Weighted Average Exercise Price or Range outstanding Exercise Price Contractual Term Exercisable Exercise Price $3.40 - $13.50 $ years $ $14.20 - $54.40 years $80.00 - $128.50 years $ years $ The following table summarizes information with respect to outstanding RSU’s as of December 31, 2015 and 2014: Weighted Average Grant-Date Fair Value Number of Shares Per Share Outstanding as of December 31, 2014 $ Granted $ Vested $ Forfeited $ Outstanding as of December 31, 2015 $ The fair value of each stock option award is estimated on the date of grant using the Black ‑Scholes option pricing model. The determination of the fair value of each stock option is affected by the Company’s stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the expected life of the awards and actual and projected stock option exercise behavior. There were no stock options granted during the twelve months ended December 31, 2015. During the years ended December 31, 2015 and 2014 , the Company utilized a forfeiture rate of 25% for estimating the forfeitures of stock compensation granted. The following table summarizes share ‑based compensation expense, net of taxes withheld, included in the Company’s consolidated statements of operations for the years ended December 31, 2015 and 2014 as follows: For the Years Ended December 31, 2015 2014 Share-based compensation expense: Cost of sales $ $ Selling, general and administrative Income tax benefit (1) — — Net effect of share-based compensation expense on net loss $ $ Reduction in earnings per share: Basic and diluted earnings per share $ $ (1) Income tax benefit is not illustrated because the Company is currently operating at a loss and an actual income tax benefit was not realized for the years ended December 31, 2015 and 2014. The result of the loss situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the valuation allowance. (2) Diluted earnings per share for the years ended December 31, 2015 and 2014 does not include common stock equivalents due to their anti ‑dilutive nature as a result of the Company’s net losses for these respective periods. Accordingly, basic earnings per share and diluted earnings per share are identical for all periods presented. As of December 31, 2015, the Company estimates that pre ‑tax compensation expense for all unvested share ‑based awards, including both stock options and RSUs, in the amount of approximately $1,170 will be recognized through the year 2018. The Company expects to satisfy the exercise of stock options and future distribution of shares of restricted stock by issuing new shares of common stock. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2015 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 17. 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. In September 2015, the Board approved a plan to divest or otherwise exit the Company’s Services segment; consequently, this segment is now reported as a discontinued operation and the Company has revised its segment presentation to include two reportable operating segments: Towers and Weldments, and Gearing. All current and prior period financial results have been revised to reflect these changes. The Company’s segments and their product offerings are summarized below: Towers and Weldments The Company manufactures towers for wind turbines, specifically the large and heavier wind towers that are designed for multiple MW wind turbines. 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 facilities have a combined annual tower production capacity of up to approximately 500 towers, sufficient to support turbines generating more than 1,000 MW of power. This product segment also encompasses the manufacture of specialty weldments for mining and other industrial customers. Gearing The Company engineers, builds and remanufactures precision gears and gearing systems for oil and gas, wind, mining, steel and other industrial applications. The Company uses an integrated manufacturing process, which includes machining and finishing processes in Cicero, Illinois, and heat treatment in Neville Island, Pennsylvania. Corporate and Other “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, “Description of Business and Summary of Significant Accounting Policies” of these consolidated financial statements. Summary financial information by reportable segment is as follows: Towers and Weldments Gearing Corporate Eliminations Consolidated 2015 Revenues from external customers $ $ $ — $ — $ Intersegment revenues (1) — — Net revenues — Operating profit (loss) Depreciation and amortization — Capital expenditures — Assets held for sale — Total assets Towers and Weldments Gearing Corporate Eliminations Consolidated 2014 Revenues from external customers $ $ $ — $ — $ Intersegment revenues (1) — — Net revenues — Operating profit (loss) Depreciation and amortization — Capital expenditures — Assets held for sale — — Total assets (1) Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled $972 and $888 for the years ended December 31, 2015 and 2014, respectively. The Company generates revenues entirely from transactions completed in the U.S. and its long ‑lived assets are all located in the U.S. All intercompany revenue is eliminated in consolidation. During 2015 and 2014 , two customers each accounted for more than 10% of total net revenues. These two customers accounted for revenues of $124,759 and $45,214 for fiscal year 2015 and $124,263 and $53,955 for fiscal year 2014 were reported within the Towers and Weldments segment. During the years ended December 31, 2015 and 201 4, five customers accounted for 92% and 91% , respectively , of total net revenues. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 18. EMPLOYEE BENEFIT PLANS Retirement Savings and Profit Sharing Plans Retirement Savings and Profit Sharing Plans The Company offers a 401(k) retirement savings plan to all eligible employees who may elect to contribute a portion of their salary on a pre ‑tax basis, subject to applicable statutory limitations. Participating non ‑union employees are eligible to receive safe harbor matching contributions equal to 100% of the first 3% of the participant’s elective deferral contributions and 50% of the next 2% of the participant’s elective deferral contributions. In accordance with the collective bargaining agreements in place at its two union locations, the Company’s Illinois ‑based union employees are eligible to receive a discretionary match in an amount up to 50% of each participant’s first 4% of elective deferral contributions, and the Company’s Pennsylvania ‑based union employees are eligible to receive a discretionary match in an amount up to 100% of each participant’s first 3% and 50% of the next 2% of elective deferral contributions. The Company has the discretion, subject to applicable statutory requirements, to fund any matching contribution with a contribution to the plan of the Company’s common stock. Beginning with the first quarter of 2012, the Company funded the matching contributions in the form of the Company’s common stock. Starting in the first quarter of 2014, the Company resumed funding the matching contributions in cash. Under the plan, elective deferrals and basic Company matching will be 100% vested at all times. For the years ended December 31, 2015 and 2014, the Company recorded expense under these plans of approximately $876 and $701 , respectively. Deferred Compensation Plan The Company maintains a deferred compensation plan for certain key employees and nonemployee directors, whereby certain wages earned, compensation for services rendered, and discretionary company ‑matching contributions may be deferred and deemed to be invested in the Company’s common stock. Changes in the fair value of the plan liability are recorded as charges or credits to compensation expense. Compensation expense associated with the deferred compensation plan recorded during the years ended December 31, 2015 and 2014 was ($19) and ($23) , respectively. The fair value of the plan liability to the Company is included in accrued liabilities in the Company’s consolidated balance sheets. As of December 31, 2015 and 2014, the fair value of plan liability to the Company was $12 and $31 , respectively. In addition to the employee benefit plans described above, the Company participates in certain customary employee benefits plans, including those which provide health and life insurance benefits to employees. |
NEW MARKETS TAX CREDIT TRANSACT
NEW MARKETS TAX CREDIT TRANSACTION | 12 Months Ended |
Dec. 31, 2015 | |
NEW MARKETS TAX CREDIT TRANSACTION | |
NEW MARKETS TAX CREDIT TRANSACTION | 19. NEW MARKETS TAX CREDIT TRANSACTION On July 20, 2011, the Company executed the NMTC Transaction involving the following third parties: AMCREF Fund VII, LLC (“AMCREF”), a registered community development entity; COCRF Investor VIII, LLC (“COCRF”); and Capital One. The NMTC Transaction allows the Company to receive below market interest rate funds through the federal New Markets Tax Credit (“NMTC”) program . The Company received $2,280 in proceeds via the NMTC Transaction. The NMTC Transaction qualifies under the NMTC program and included a gross loan from AMCREF to the Company's wholly-owned subsidiary Broadwind Services, LLC in the principal amount of $10,000 , with a term of fifteen years and interest payable at the rate of 1.4% per annum, largely offset by a gross loan in the principal amount of $7,720 from the Company to COCRF, with a term of fifteen years and interest payable at the rate of 2.5% per annum. The NMTC Transaction was amended on August 24, 2015; the amendment did not change the financial terms of the NMTC Transaction, but did add the activities and assets of the Abilene Heavy Industries Facility to the NMTC Transaction and allows for the sale of the Abilene Gearbox Facility assets provided that the proceeds of such sale are re-invested in the Abilene Heavy Industries Facility. The NMTC regulations permit taxpayers to claim credits against their federal income taxes for up to 39% of qualified investments in the equity of community development entities. The NMTC Transaction could generate $3,900 in tax credits, which the Company has made available under the structure by passing them through to Capital One. The proceeds have been applied to the Company’s investment in the Abilene Gearbox Facility assets and operating costs and to the newly added assets of the Abilene Heavy Industries Facility, as permitted under the amended terms of the NMTC Transaction . The Abilene Heavy Industries Facility and the Abilene Gearbox Facility must operate and be in compliance with various regulations and restrictions through September 2018, the end of the seven year period provided for in the IRC, to comply with the terms of the NMTC Transaction, or the Company may be liable under its indemnification agreement with Capital One for the recapture of tax credits. In the event the Company does not comply with these regulations and restrictions, the NMTC program tax credits may be subject to 100% recapture for a period of seven years as provided in the IRC. The Company does not anticipate that any tax credit recapture events will occur or that it will be required to make any payments to Capital One under the indemnification agreement. The Capital One contribution, including a loan origination payment of $320 , has been included as other assets in the Company’s condensed consolidated balance sheet as of December 31, 2015. The NMTC Transaction includes a put/call provision whereby the Company may be obligated or entitled to repurchase Capital One’s interest in the third quarter of 2018. Capital One may exercise an option to put its investment and receive $130 from the Company. If Capital One does not exercise its put option, the Company can exercise a call option at the then fair market value of the call. The Company expects that Capital One will exercise the put option at the end of the tax credit recapture period. The Capital One contribution other than the amount allocated to the put obligation will be recognized as income only after the put/call is exercised and when Capital One has no ongoing interest. However, there is no legal obligation for Capital One to exercise the put, and the Company has attributed only an insignificant value to the put option included in this transaction structure. The Company has determined that two pass ‑through financing entities created under this transaction structure are VIEs. The ongoing activities of the VIEs—collecting and remitting interest and fees and complying with NMTC program requirements—were considered in the initial design of the NMTC Transaction and are not expected to significantly affect economic performance throughout the life of the VIEs. In making this determination, management also considered the contractual arrangements that obligate the Company to deliver tax benefits and provide various other guarantees under the transaction structure, Capital One’s lack of a material interest in the underlying economics of the project, and the fact that the Company is obligated to absorb losses of the VIEs. The Company has concluded that it is required to consolidate the VIEs because the Company has both (i) the power to direct those matters that most significantly impact the activities of each VIE, and (ii) the obligation to absorb losses or the right to receive benefits of each VIE. The $262 of issue costs paid to third parties in connection with the NMTC Transaction are recorded as prepaid expenses, and are being amortized over the expected seven year term of the NMTC arrangement. Capital One’s net contribution of $2,600 is included in Long Term Debt, Net of Current Maturities in the consolidated balance sheet. Incremental costs to maintain the transaction structure during the compliance period will be recognized as they are incurred. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2015 | |
RESTRUCTURING | |
RESTRUCTURING | 20. RESTRUCTURING The Company’s total net restructuring charges are detailed below: 2011 2012 2013 2014 2015 Total Actual Actual Actual Actual Actual Incurred Restructuring charges: Capital expenditures $ $ $ $ $ — $ Gain on sale of Brandon, SD Facility — — — — Accelerated depreciation — — — Severance — — — Impairment charges — — — Moving and other exit-related costs Total $ $ $ $ $ $ During the third quarter of 2011, the Company conducted a review of its business strategies and product plans based on the business and industry outlook, and concluded that its manufacturing footprint and fixed cost base were excessive for its medium-term needs. Accordingly, a plan was developed to reduce the Company’s facility footprint by approximately 40% through the sale and/or closure of facilities comprising a total of approximately 600,000 square feet. To date, the Company has reduced its leased presence at six facilities and achieved a reduction of approximately 400,000 square feet. Two remaining properties, the Clintonville Facility and the Cicero Avenue Facility, have been vacated and are being marketed for sale. The Company believes its remaining locations will be sufficient to support its current business activities, while allowing for growth for the next several years. The Company recorded a liability associated with environmental remediation costs that were originally identified while preparing the Cicero Avenue Facility for sale. See the “Environmental Compliance and Remediation Liabilities” section of Note 13, “Commitments and Contingencies” of these consolidated financial statements. The Company further adjusted the liability by recording an additional $352 liability associated with the planned sale of the Cicero Avenue Facility. The Company adjusted the liability in the fourth quarter of 2013 by recording an additional $258 charge in the fourth quarter of 2013 and an additional $874 in the current quarter ending September 30, 2015. The liability is associated with environmental remediation costs that were originally identified while preparing the site for sale. The expenses associated with this liability have been recorded as restructuring charges; as of December 31, 2015, the accrual balance remaining was $1,300 . As of December 31, 2014, the Company had completed the expenditures relating to its restructuring plan, with the exception of the new information on the environmental remediation of the Cicero Avenue Facility that resulted in additional expense of $874 recorded during the third quarter of 2015 and new information on the fair value on the Clintonville Facility that resulted in additional impairment expense of $186 recorded during the fourth quarter of 2015 based on negotiations that resulted in the execution of a sale contract subsequent to the year-end . The Company incurred total costs of approximately $14, 2 00 , net of a $3,585 gain on the sale of an idle tower plant in Brandon, South Dakota. The Company’s restructuring charges generally include costs to close or exit facilities, costs to move equipment, the related costs of building infrastructure for moved equipment and employee related costs. Of the total restructuring costs incurred, a total of approximately $4,800 consists of non ‑cash charges. |
QUARTERLY FINANCIAL SUMMARY (UN
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | 21. QUARTERLY FINANCIAL SUMMARY (UNAUDITED) The following table provides a summary of selected financial results of operations by quarter for the years ended December 31, 2015 and 2014 as follows: 2015 First Second Third Fourth Revenues $ $ $ $ Gross profit (loss) Operating profit (loss) (Loss) income from continuing operations, net of tax Net (loss) income (Loss) income from continuing operations per share: Basic and Diluted Net (loss) income per share: Basic and Diluted $ $ $ $ 2014 First Second Third Fourth Revenues $ $ $ $ Gross profit (loss) Operating profit (loss) Loss from continuing operations, net of tax Net loss Loss from continuing operations per share: Basic Diluted Net loss per share: Basic Diluted $ $ $ $ |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Dec. 31, 2015 | |
LEGAL PROCEEDINGS | |
LEGAL PROCEEDINGS | 22. 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. |
DESCRIPTION OF BUSINESS AND S29
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation These consolidated financial statements include the accounts of the Company and entities in which it has a controlling financial interest. All significant intercompany transactions and balances have been eliminated in consolidation. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”). When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a VIE, and if the Company is deemed to be the primary beneficiary, in accordance with the accounting standard for the consolidation of VIE’s. The accounting standard for the consolidation of VIE’s requires the Company to qualitatively assess if the Company was the primary beneficiary of the VIE based on whether the Company had (i) the power to direct those matters that most significantly impacted the activities of the VIE and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant. Refer to Note 19, “New Markets Tax Credit Transaction” of these consolidated financial statements for a description of two VIE’s included in the Company’s consolidated financial statements. |
Management's Use of Estimates | Management’s Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (“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 tax rates, inventory reserves, warranty reserves, impairment of long-lived assets, and allowance for doubtful accounts. 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. |
Out-of-Period Adjustment | Out-of -Period Adjustment Include d in the results of operations for the year ended December 31, 2015, are out-of-period adjustments, which represent corrections of prior-period errors relating to the inventory balance in the Company’s Towers & Weldments segment. During the fourth quarter of 2015, the Company determined that the cost of certain component parts had not been properly assigned to previously sold towers resulting in an overstatement of inventory and an understatement of previously reported cost of goods sold. The out-of-period impact of the error recorded was approximately $231 related to periods prior to 2015. The correction of these errors was not material to the year ended December 31, 2015 or any of the prior interim or annual periods. |
Cash and Cash Equivalents and Short-Term Investments | Cash and Cash Equivalents and Short ‑Term Investments Cash and cash equivalents typically comprise cash balances and readily marketable investments with original maturities of three months or less, such as money market funds, short ‑term government bonds, Treasury bills, marketable securities and commercial paper. Marketable investments with original maturities between three and twelve months are recorded as short ‑term investments. The Company’s treasury policy is to invest excess cash in money market funds or other investments, which are generally of a short ‑term duration based upon operating requirements. Income earned on these investments is recorded to interest income in the Company’s consolidated statements of operations. As of December 31, 2015 and December 31, 2014, cash and cash equivalents totaled $6,436 and $12,057 , respectively, and short ‑term investments totaled $6,179 and $8,024 , respectively. For the years ended December 31, 2015 and 2014, interest income was $10 and $21 , respectively. |
Restricted Cash | Restricted Cash Restricted cash balances relate primarily to provisions contained in certain vendor agreements. The Company anticipates that all restricted cash balances will be used for current purposes. As of December 31, 2015 and 2014, the Company had restricted cash in the amount of $83 . |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when the earnings process is complete and when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable, collectability is reasonably assured and delivery has occurred per the terms of the contract. Customer deposits, deferred revenue and other receipts are deferred and recognized when the revenue is realized and earned. Cash payments to customers are presumed to be classified as reductions of revenue in the Company’s statement of operations. In some instances, typically within the Company’s Towers and Weldments 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 the buyer requests the arrangement, a fixed schedule for delivery exists, the ordered goods are segregated from inventory and not available to fill other orders and the goods are complete and ready for shipment. Assuming these required revenue recognition criteria are met, revenue is recognized upon completion of product manufacture and customer acceptance. |
Cost of Sales | Cost of Sales Cost of sales represents all direct and indirect costs associated with the production of products for sale to customers. These costs include operation, repair and maintenance of equipment, materials, direct and indirect labor and benefit costs, rent and utilities, maintenance, insurance, equipment rentals, freight in and depreciation. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling, general and administrative expenses include all corporate and administrative functions such as sales and marketing, legal, human resource management, finance, investor and public relations, information technology and senior management. These functions serve to support the Company’s current and future operations and provide an infrastructure to support future growth. Major expense items in this category include management and staff wages and benefits, share ‑based compensation and professional services. |
Accounts Receivable | Accounts Receivable The Company generally grants uncollateralized credit to customers on an individual basis based upon the customer’s financial condition and credit history. Credit is typically on net 30 day terms and customer deposits are frequently required at various stages of the production process to minimize credit risk. Historically, the Company’s accounts receivable (“A/R”) are highly concentrated with a select number of customers. During the year ended December 31, 2015, the Company’s five largest customers accounted for 92% of its consolidated revenues and 71% of outstanding A/R balances, compared to the year ended December 31, 2014 when the Company’s five largest customers accounted for 91% of its consolidated revenues and 91% of its outstanding A/R balances. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Based upon past experience and judgment, the Company establishes an allowance for doubtful accounts with respect to A/R. 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 realizability of its A/R. These factors include individual customer circumstances, history with the Company and other relevant criteria. A/R balances that remain outstanding after the Company has exhausted reasonable collection efforts are written off through a charge to the valuation allowance and a credit to A/R. 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 realizability of its A/R, as noted above, or modifications to the Company’s credit standards, collection practices and other related policies may impact its allowance for doubtful accounts and its financial results. Bad debt expense for the years ended December 31, 2015 and 2014 was $87 and $73 , respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined either based on the first ‑in, first ‑out (“FIFO”) method, or on a standard cost basis that approximates the FIFO method. Market is determined based on net realizable value. Any excess of cost over market value is included in the Company’s inventory allowance. Market value of inventory, and management’s judgment of the need for reserves, encompasses consideration of other business factors including physical condition, inventory holding period, contract terms and usefulness. Inventories consist of raw materials, work ‑in ‑process and finished goods. Raw materials consist of components and parts for general production use. Work ‑in ‑process consists of labor and overhead, processing costs, purchased subcomponents and materials purchased for specific customer orders. Finished goods consist of components purchased from third parties as well as components manufactured by the Company that will be used to produce final customer products. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is recognized using the straight ‑line method over the estimated useful lives of the related assets for financial reporting purposes, and generally an accelerated method for income tax reporting purposes. Depreciation expense related to property and equipment for the years ended December 31, 2015 and 2014 was $8,736 and $10,500 , respectively. Expenditures for additions and improvements are capitalized, while replacements, maintenance and repairs that do not improve or extend the useful lives of the respective assets are expensed as incurred. The Company has in the past capitalized interest costs incurred on indebtedness used to construct property and equipment. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. There was no interest cost capitalized during the years ended December 31, 2015 or 201 4. Property or equipment sold or disposed of is removed from the respective property accounts, with any corresponding gains and losses recorded to other income or expense in the Company’s consolidated statement of operations. Property and equipment and other long ‑lived assets are reviewed for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If such events or changes in circumstances occur, the Company will recognize an impairment loss if the undiscounted future cash flows expected to be generated by the assets is less than the carrying value of the related asset or asset group. The impairment loss would adjust the asset to its fair value. In evaluating the recoverability of long ‑lived assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If the Company’s fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to property and equipment and other long ‑lived assets. Asset recoverability is first measured by comparing the assets’ carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. To the extent the projections used in the Company’s analysis are not achieved, there may be a negative effect on the valuation of these assets. |
Intangible Assets | Intangible Assets The Company reviews intangible assets for impairment whenever events or circumstances indicate that carrying amounts may not be recoverable. If such events or changes in circumstances occur an impairment loss is recognized if the undiscounted future cash flows expected to be generated by the assets are less than the carrying value of the related asset or asset group. The impairment loss would adjust the asset to its fair value. In evaluating the recoverability of definite ‑lived intangible assets, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of such assets. If fair value estimates or related assumptions change in the future, the Company may be required to record impairment charges related to intangible assets. Asset recoverability is first measured by comparing the assets’ carrying amounts to their expected future undiscounted net cash flows to determine if the assets are impaired. If such assets are considered to be impaired, the impairment recognized is measured based on the amount by which the carrying amount of the assets exceeds the fair value. To the extent the projections used in the Company’s analysis are not achieved, there may be a negative effect on the valuation of these assets. |
Warranty Liability | Warranty Liability The Company provides warranty terms that generally range from one to five years for various products and services relating to workmanship and materials supplied by the Company. In certain contracts, the Company has recourse provisions for items that would enable the Company to pursue recovery from third parties for amounts paid to customers under warranty provisions. Warranty liability is recorded in accrued liabilities within the consolidated balance sheet. The Company estimates the warranty accrual based on various factors, including historical warranty costs, current trends, product mix and sales. The changes in the carrying amount of the Company’s total product warranty liability for the years ended December 31, 2015 and 2014 were as follows: As of December 31, 2015 2014 Balance, beginning of period $ $ Addition to (reduction of) warranty reserve Warranty claims Balance, end of period $ $ As of December 31, 2015, the decrease in the warranty liabilities was due primarily to settlement of a $371 obligation to a specific customer completed during 2015. |
Income Taxes | Income Taxes The Company accounts for income taxes based upon an asset and liability approach. Deferred tax assets and liabilities represent the future tax consequences of the differences between the financial statement carrying amounts of assets and liabilities versus the tax basis of assets and liabilities. Under this method, deferred tax assets are recognized for deductible temporary differences, and operating loss and tax credit carryforwards. Deferred tax liabilities are recognized for taxable temporary differences. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The impact of tax rate changes on deferred tax assets and liabilities is recognized in the year that the change is enacted. In connection with the preparation of its consolidated financial statements, the Company is required to estimate its income tax liability for each of the tax jurisdictions in which the Company operates. This process involves estimating the Company’s actual current income tax expense and assessing temporary differences resulting from differing treatment of certain income or expense items for income tax reporting and financial reporting purposes. The Company also recognizes as deferred income tax assets the expected future income tax benefits of net operating loss (“NOL”) carryforwards. In evaluating the realizability of deferred income tax assets associated with NOL carryforwards, the Company considers, among other things, expected future taxable income, the expected timing of the reversals of existing temporary reporting differences and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Changes in, among other things, income tax legislation, statutory income tax rates or future taxable income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause its income tax provision to vary significantly among financial reporting periods. The Company also accounts for the uncertainty in income taxes related to the recognition and measurement of a tax position taken or expected to be taken in an income tax return. The Company follows the applicable pronouncement guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition related to the uncertainty in these income tax positions. |
Share-Based Compensation | Share ‑Based Compensation The Company grants incentive stock options and restricted stock units to certain officers, directors, and employees. The Company accounts for share ‑based compensation related to these awards based on the estimated fair value of the equity award and recognizes expense ratably over the vesting term of the award. See Note 16 “Share ‑Based Compensation” of these consolidated financial statements for further discussion of the Company’s share ‑based compensation plans, the nature of share ‑based awards issued and the Company’s accounting for share ‑based compensation. |
Net Loss Per Share | Net Loss Per Share The Company presents both basic and diluted net loss per share. Basic net loss per share is based solely upon the weighted average number of common shares outstanding and excludes any dilutive effects of options, warrants and convertible securities. Diluted net loss per share is based upon the weighted average number of common shares and common ‑share equivalents outstanding during the year excluding those common ‑share equivalents where the impact to basic net loss per share would be anti ‑dilutive. |
DESCRIPTION OF BUSINESS AND S30
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of changes in the carrying amount of the total product warranty liability | As of December 31, 2015 2014 Balance, beginning of period $ $ Addition to (reduction of) warranty reserve Warranty claims Balance, end of period $ $ |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
EARNINGS PER SHARE | |
Reconciliation of basic and diluted earnings per share | For the Years Ended December 31, 2015 2014 Basic earnings per share calculation: Net loss $ $ Weighted average number of common shares outstanding Basic net loss per share $ $ Diluted earnings per share calculation: Net loss $ $ Weighted average number of common shares outstanding Common stock equivalents: Stock options and non-vested stock awards — — Weighted average number of common shares outstanding Diluted net loss per share $ $ Stock options and restricted stock units (“RSU’s”) granted and outstanding of 522,007 and 673,756 as of December 31, 2015 and 2014, respectively, are excluded from the computation of diluted earnings due to the anti ‑dilutive effect as a result of the Company’s net loss for these respective years. |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DISCONTINUED OPERATIONS | |
Schedule of assets and liabilities held for sale | Results of Discontinued Operations Results of operations associated with Services segment, which are reflected as discontinued operations in the Company’s condensed consolidated statements of income for the twelve months ended December 31, 2015 and 2014, were as follows: Year Ended December 31, 2015 2014 Revenues $ $ Cost of sales Selling, general and administrative Interest expense, net Other income and expense items Impairment of held for sale assets and liabilities and loss on sale of assets — Loss from discontinued operations before benefit for income taxes $ $ Assets and Liabilities Held for Sales Assets and liabilities classified as held for sale in the Company’s consolidated balance sheets as of December 31, 2015 and 2014 include the following: December 31, December 31, 2015 2014 Assets: Accounts receivable, net $ $ Inventories, net Prepaid expenses and other current assets Property and equipment, net — Other assets — Assets Held For Sale Related To Discontinued Operations Impairment of discontinued assets held for sale — Total Assets Held For Sale Related To Discontinued Operations $ $ Liabilities: Current maturities of long-term debt $ — $ Accounts payable Accrued liabilities Customer deposits and other current obligations Long-term debt, net of current maturities — Other long-term liabilities Total Liabilities Held For Sale Related To Discontinued Operations $ $ |
CASH AND CASH EQUIVALENTS AND33
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | |
Summary of components of cash and cash equivalents and short-term investments | As of December 31, 2015 2014 Cash and cash equivalents: Cash $ $ Money market funds Corporate & Municipal bonds Total cash and cash equivalents Short-term investments (available-for-sale): Corporate & Municipal bonds Total cash and cash equivalents and short-term investments $ $ |
ALLOWANCE FOR DOUBTFUL ACCOUN34
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | |
Schedule of activity in the A/R allowance from continuing operations | For the Years Ended December 31, 2015 2014 Balance at beginning of period $ $ Bad debt expense Write-offs — Other adjustments Balance at end of period $ $ |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INVENTORIES | |
Schedule of the components of inventories from operations | As of December 31, 2015 2014 Raw materials $ $ Work-in-process Finished goods Less: Reserve for excess and obsolete inventory Net inventories $ $ |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
PROPERTY AND EQUIPMENT | |
Schedule of cost basis and estimated lives of property and equipment from continuing operations | As of December 31, 2015 2014 Life Land $ $ Buildings 39 years Machinery and equipment 2 - 10 years Office furniture and equipment 3 - 7 years Leasehold improvements Asset life or life of lease Construction in progress Less accumulated depreciation and amortization $ $ |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INTANGIBLE ASSETS | |
Schedule of the cost basis, accumulated amortization and net book value of intangible assets | December 31, 2015 December 31, 2014 Weighted Weighted Net Average Net Average Cost Accumulated Book Amortization Cost Accumulated Book Amortization Basis Amortization Value Period Basis Amortization Value Period Intangible assets: Customer relationships $ $ $ $ $ $ Trade names Intangible assets $ $ $ $ $ $ |
Schedule of estimated future amortization expense | 2016 $ 2017 2018 2019 2020 2021 and thereafter Total $ |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ACCRUED LIABILITIES | |
Schedule of accrued liabilities | December 31, 2015 2014 Accrued payroll and benefits $ $ Accrued property taxes Income taxes payable Accrued professional fees Accrued warranty liability Accrued regulatory settlement Accrued environmental reserve Accrued self-insurance reserve Accrued other Total accrued liabilities $ $ |
DEBT AND CREDIT AGREEMENTS (Tab
DEBT AND CREDIT AGREEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DEBT AND CREDIT AGREEMENTS | |
Schedule of outstanding debt balances | December 31, 2015 2014 Term loans and notes payable $ $ Less: Current portion Long-term debt, net of current maturities $ $ |
Schedule of Future annual principal payments | 2016 $ 2017 — 2018 2019 — 2020 — 2021 and thereafter — Total $ |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
LEASES | |
Schedule of cost basis and accumulated depreciation of assets recorded under capital leases, which are included in property and equipment | December 31, 2015 2014 Cost $ $ Accumulated depreciation Net book value $ $ |
Schedule of future minimum annual lease payments under capital leases and operating leases | Capital Operating Leases Leases Total 2016 $ $ $ 2017 — 2018 — 2019 — 2020 — 2021 and thereafter — Total $ $ Less—portion representing interest at a weighted average annual rate of 5.0% Principal Less—current portion Capital lease obligations, noncurrent portion $ — |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE MEASUREMENTS | |
Schedule of the fair values of the Company's financial assets | December 31, 2015 Level 1 Level 2 Level 3 Total Assets measured on a recurring basis: Corporate & municipal bonds and money market funds $ — $ $ — $ Assets measured on a nonrecurring basis: Gearing equipment — — Clintonville, WI facility — — Gearing Cicero Ave. facility — — Services assets — — Total assets at fair value $ — $ $ $ December 31, 2014 Level 1 Level 2 Level 3 Total Assets measured on a recurring basis: Municipal bonds and money market funds $ — $ $ — $ Assets measured on a nonrecurring basis: Clintonville, WI facility — — Gearing Cicero Ave. facility — — Services assets — — Total assets at fair value $ — $ $ $ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
INCOME TAXES | |
Schedule of components of provision for income taxes | For the Years Ended December 31, 2015 2014 Current provision Federal $ — $ — Foreign — — State Total current (benefit) provision Deferred credit Federal State Total deferred credit Increase in deferred tax valuation allowance Total provision (benefit) for income taxes $ $ |
Schedule of tax effects of the temporary differences and NOL's that give rise to significant portions of deferred tax assets and liabilities | As of December 31, 2015 2014 Current deferred income tax assets: Accrual and reserves $ — $ Total current deferred tax assets — Valuation allowance — Current deferred tax assets, net of valuation allowance — — Noncurrent deferred income tax assets: Net operating loss carryforwards Intangible assets Accrual and reserves — Other Total noncurrent deferred tax assets Valuation allowance Noncurrent deferred tax assets, net of valuation allowance Noncurrent deferred income tax liabilities: Fixed assets Intangible assets — — Total noncurrent deferred tax liabilities Net deferred income tax liability $ — $ — |
Schedule of reconciliation of the beginning and ending amounts of the valuation | Valuation allowance as of December 31, 2014 $ Gross increase for current year activity Valuation allowance as of December 31, 2015 $ |
Schedule of reconciliation between the statutory U.S. federal income tax rate and the Company's effective income tax rate | For the Year Ended December 31, 2015 2014 Statutory U.S. federal income tax rate % % State and local income taxes, net of federal income tax benefit Permanent differences Change in valuation allowance Change in uncertain tax positions Other — Effective income tax rate % % |
Schedule of changes in the Company's uncertain income tax positions | For the Year Ended December 31, 2015 2014 Beginning balance $ $ Tax positions related to current year: Additions — — Reductions — — — — Tax positions related to prior years: Additions — — Reductions — — Settlements — Lapses in statutes of limitations Additions from current year acquisitions — — Ending balance $ $ |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SHARE-BASED COMPENSATION | |
Schedule of stock option activity | Weighted Average Aggregate Intrinsic Weighted Average Remaining Value Options Exercise Price Contractual Term (in thousands) Outstanding as of December 31, 2014 $ Granted — — Exercised — — Forfeited Cancelled — — Outstanding as of December 31, 2015 $ $ — Exercisable as of December 31, 2015 $ $ — |
Summary of information with respect to all outstanding and exercisable stock options | Options Outstanding Options Exercisable Weighted Average Number of options Weighted Average Remaining Number Weighted Average Exercise Price or Range outstanding Exercise Price Contractual Term Exercisable Exercise Price $3.40 - $13.50 $ years $ $14.20 - $54.40 years $80.00 - $128.50 years $ years $ |
Schedule of RSU activity | Weighted Average Grant-Date Fair Value Number of Shares Per Share Outstanding as of December 31, 2014 $ Granted $ Vested $ Forfeited $ Outstanding as of December 31, 2015 $ |
Schedule of share-based compensation expense, net of taxes withheld | For the Years Ended December 31, 2015 2014 Share-based compensation expense: Cost of sales $ $ Selling, general and administrative Income tax benefit (1) — — Net effect of share-based compensation expense on net loss $ $ Reduction in earnings per share: Basic and diluted earnings per share $ $ (1) Income tax benefit is not illustrated because the Company is currently operating at a loss and an actual income tax benefit was not realized for the years ended December 31, 2015 and 2014. The result of the loss situation creates a timing difference, resulting in a deferred tax asset, which is fully reserved for in the valuation allowance. (2) Diluted earnings per share for the years ended December 31, 2015 and 2014 does not include common stock equivalents due to their anti ‑dilutive nature as a result of the Company’s net losses for these respective periods. Accordingly, basic earnings per share and diluted earnings per share are identical for all periods presented. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
SEGMENT REPORTING | |
Schedule of financial information by reportable segment | Towers and Weldments Gearing Corporate Eliminations Consolidated 2015 Revenues from external customers $ $ $ — $ — $ Intersegment revenues (1) — — Net revenues — Operating profit (loss) Depreciation and amortization — Capital expenditures — Assets held for sale — Total assets Towers and Weldments Gearing Corporate Eliminations Consolidated 2014 Revenues from external customers $ $ $ — $ — $ Intersegment revenues (1) — — Net revenues — Operating profit (loss) Depreciation and amortization — Capital expenditures — Assets held for sale — — Total assets (1) Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled $972 and $888 for the years ended December 31, 2015 and 2014, respectively. |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
RESTRUCTURING | |
Schedule of total net restructuring charges | 2011 2012 2013 2014 2015 Total Actual Actual Actual Actual Actual Incurred Restructuring charges: Capital expenditures $ $ $ $ $ — $ Gain on sale of Brandon, SD Facility — — — — Accelerated depreciation — — — Severance — — — Impairment charges — — — Moving and other exit-related costs Total $ $ $ $ $ $ |
QUARTERLY FINANCIAL SUMMARY (46
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | |
Summary of selected financial results of operations | 2015 First Second Third Fourth Revenues $ $ $ $ Gross profit (loss) Operating profit (loss) (Loss) income from continuing operations, net of tax Net (loss) income (Loss) income from continuing operations per share: Basic and Diluted Net (loss) income per share: Basic and Diluted $ $ $ $ 2014 First Second Third Fourth Revenues $ $ $ $ Gross profit (loss) Operating profit (loss) Loss from continuing operations, net of tax Net loss Loss from continuing operations per share: Basic Diluted Net loss per share: Basic Diluted $ $ $ $ |
DESCRIPTION OF BUSINESS AND S47
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Aspects of the Description of Business - (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015USD ($)itemMW | Dec. 31, 2014USD ($) | Feb. 23, 2016USD ($) | Jun. 29, 2015USD ($) | Dec. 31, 2013USD ($) | Aug. 23, 2012USD ($) | |
Description of Business | ||||||
Number of reportable segments | item | 2 | |||||
Liquidity | ||||||
Cash and cash equivalents and short-term investments | $ 12,615 | $ 20,081 | ||||
Increase (decrease) in Cash and cash equivalents and Short-term investments | 7,466 | |||||
Long-term Debt, Current Maturities | 2,799 | 118 | ||||
Increase (Decrease) in Customer Deposits | (12,457) | (253) | ||||
Inventories, net | 24,219 | 31,144 | ||||
Increase (Decrease) in inventories | (6,925) | (1,599) | ||||
Total debt and capital lease obligations | 5,846 | |||||
Debt, Long-term and Short-term, Combined Amount | 5,399 | |||||
Long-term Debt and Capital Lease Obligations, Repayments of Principal in Next Twelve Months | 3,246 | |||||
Cash and Cash Equivalents and Short-Term Investments | ||||||
Cash and cash equivalents | 6,436 | 12,057 | $ 24,751 | |||
Short-term investments | 6,179 | 8,024 | ||||
Interest income | 10 | 21 | ||||
Restricted Cash | ||||||
Restricted cash | 83 | 83 | ||||
Subsequent event | ||||||
Liquidity | ||||||
Maximum borrowing capacity | $ 10,000 | |||||
Liquidity Requirement | $ 3,500 | |||||
Improperly Assigned Cost of Certain Component Parts | ||||||
Out-of-Period Adjustment | ||||||
Out-of-period impact | $ 231 | |||||
Credit facility | ||||||
Liquidity | ||||||
Maximum borrowing capacity | $ 20,000 | |||||
Maximum borrowing capacity of the face value of eligible A/R (as a percent) | 85.00% | |||||
Maximum percentage of book value of inventories that may be financed | 50.00% | |||||
Long-term Line of Credit | 0 | |||||
Current borrowing capacity | 9,515 | |||||
Outstanding indebtedness under the Credit Facility | $ 0 | |||||
Interest rate (as a percent) | 4.25% | |||||
Term Loan | ||||||
Liquidity | ||||||
Principal amount | $ 5,000 | |||||
Long-term Debt, Current Maturities | $ 2,799 | |||||
Tower and Weldments | ||||||
Description of Business | ||||||
Number of facilities | item | 2 | |||||
New Markets Tax Credit Transaction | ||||||
Principles of Consolidation and Basis of Presentation | ||||||
Number of VIE's | item | 2 | |||||
Minimum | Tower and Weldments | ||||||
Description of Business | ||||||
Power generating capacity of turbines that towers produced annually can support (in megawatts) | MW | 1,000 | |||||
Maximum | Tower and Weldments | ||||||
Description of Business | ||||||
Annual tower production capacity (in towers) | item | 500 |
DESCRIPTION OF BUSINESS AND S48
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - A/R, Allowances of A/R and PPE - (Details) $ in Thousands | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($) | |
Accounts Receivable | |||
Number of days for evaluating significant balances for credit risk | 30 days | ||
Number of largest customers | item | 5 | ||
Allowance for Doubtful Accounts | |||
Bad debt expense | $ 87 | $ 73 | |
Property and Equipment | |||
Depreciation & amortization expense | $ 8,736 | $ 10,500 | |
Interest cost capitalized | $ 0 | ||
Consolidated revenues | Customer concentration | |||
Accounts Receivable | |||
Concentration risk (as a percent) | 92.00% | 91.00% | |
Outstanding A/R balances | Customer concentration | |||
Accounts Receivable | |||
Concentration risk (as a percent) | 71.00% | 91.00% |
DESCRIPTION OF BUSINESS AND S49
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summary of Warranty Liability - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Warranty Liability | ||
Obligation to specific customer causing warranty liabilities decrease | $ 371 | |
Changes in the carrying amount of the total product warranty liability | ||
Balance at beginning of period | 1,054 | $ 396 |
Addition to (reduction of) warranty reserve | (72) | 745 |
Warranty claims | (381) | (87) |
Balance at end of period | $ 601 | $ 1,054 |
Minimum | ||
Warranty Liability | ||
Term of warranty | 1 year | |
Maximum | ||
Warranty Liability | ||
Term of warranty | 5 years |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Basic earnings per share calculation: | ||||||||||
Net (loss) income | $ (10,794) | $ (7,613) | $ 1,615 | $ (5,015) | $ (5,172) | $ (1,814) | $ 1,860 | $ (1,042) | $ (21,807) | $ (6,168) |
Weighted average number of common shares outstanding | 14,677,000 | 14,715,000 | ||||||||
Basic net loss per share | $ (0.35) | $ (0.12) | $ 0.13 | $ (0.07) | $ (1.48) | $ (0.42) | ||||
Diluted earnings per share calculation: | ||||||||||
Net loss | $ (21,807) | $ (6,168) | ||||||||
Weighted average number of common shares outstanding | 14,677,000 | 14,715,000 | ||||||||
Weighted average number of common shares outstanding | 14,677,000 | 14,715,000 | ||||||||
Diluted net income (loss) per share | $ (0.35) | $ (0.12) | $ 0.12 | $ (0.07) | $ (1.48) | $ (0.42) | ||||
Stock options and restricted stock units granted and outstanding excluded from the computation of diluted earnings per share, due to the anti-dilutive effect (in shares) | 522,007 | 673,756 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
DISCONTINUED OPERATIONS | ||||
Net assets, sold | $ 5,406 | $ 5,406 | $ 5,406 | |
Results of operations, which are reflected as discontinued operations | ||||
Impairment of held for sale assets and liabilities and loss on sale of assets | (186) | |||
Loss from discontinued operations before benefit for income taxes | (9,561) | $ (4,375) | ||
Loss before provision (benefit) for income taxes | 2,096 | |||
Assets: | ||||
Impairment of discontinued assets held for sale | (186) | |||
Discontinued Operations, Held-for-sale | ||||
Results of operations, which are reflected as discontinued operations | ||||
Impairment of held for sale assets and liabilities and loss on sale of assets | (1,500) | |||
Assets: | ||||
Accounts receivable, net | 2,119 | 2,119 | 2,119 | 2,969 |
Inventories, net | 2,118 | 2,118 | 2,118 | 3,777 |
Prepaid expenses and other current assets | 606 | 606 | 606 | 321 |
Property and equipment, net | 4,423 | |||
Other assets | 50 | |||
Assets Held For Sale Related To Discontinued Operations | 4,843 | 4,843 | 4,843 | 11,540 |
Impairment of discontinued assets held for sale | (1,500) | |||
Total assets | 3,343 | 3,343 | 3,343 | 11,540 |
Liabilities: | ||||
Current maturities of long-term debt | 140 | |||
Accounts payable | 367 | 367 | 367 | 914 |
Accrued liabilities | 433 | 433 | 433 | 293 |
Customer deposits and other current obligations | 49 | 49 | 49 | 232 |
Long-term debt, net of current maturities | 5 | |||
Other long-term liabilities | 17 | 17 | 17 | 25 |
Total Liabilities Held For Sale Related To Discontinued Operations | $ 866 | $ 866 | 866 | 1,609 |
Service Segment | ||||
Results of operations, which are reflected as discontinued operations | ||||
Revenues | 10,486 | 15,560 | ||
Cost of sales | (14,395) | (17,765) | ||
Selling, general and administrative | (2,153) | (2,252) | ||
Interest expense, net | (36) | (71) | ||
Other income and expense items | 133 | 153 | ||
Impairment of held for sale assets and liabilities and loss on sale of assets | (3,596) | |||
Loss from discontinued operations before benefit for income taxes | (9,561) | $ (4,375) | ||
Assets: | ||||
Impairment of discontinued assets held for sale | $ (3,596) |
CASH AND CASH EQUIVALENTS AND52
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Cash and cash equivalents and short-term investments | |||
Total cash and cash equivalents | $ 6,436 | $ 12,057 | $ 24,751 |
Short-term investments (available-for-sale) | 6,179 | 8,024 | |
Total cash and cash equivalents and short-term investments | 12,615 | 20,081 | |
Cash | |||
Cash and cash equivalents and short-term investments | |||
Total cash and cash equivalents | 4,614 | 8,651 | |
Money market funds | |||
Cash and cash equivalents and short-term investments | |||
Total cash and cash equivalents | 199 | 877 | |
Corporate & Municipal bonds | |||
Cash and cash equivalents and short-term investments | |||
Total cash and cash equivalents | 1,623 | 2,529 | |
Short-term investments (available-for-sale) | $ 6,179 | $ 8,024 |
ALLOWANCE FOR DOUBTFUL ACCOUN53
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Activity in the accounts receivable allowance from continuing operations | ||
Balance at beginning of period | $ 81 | $ 16 |
Bad debt expense | 87 | 73 |
Write-offs | (11) | |
Other adjustments | (73) | (8) |
Balance at end of period | $ 84 | $ 81 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
INVENTORIES | ||
Raw materials | $ 14,868 | $ 21,385 |
Work-in-process | 8,540 | 8,554 |
Finished goods | 2,661 | 2,971 |
Gross inventories | 26,069 | 32,910 |
Less: Inventory Reserve | (1,850) | (1,766) |
Net inventories | $ 24,219 | $ 31,144 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 131,010 | $ 133,605 |
Less-accumulated depreciation and amortization | (79,104) | (75,076) |
Property and equipment, net | 51,906 | 58,529 |
Impairment charge recorded to reduce the carrying value of assets to fair value | 183 | 84 |
Gearing | ||
PROPERTY AND EQUIPMENT | ||
Impairment charge recorded to reduce the carrying value of assets to fair value | 0 | |
Land | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | 1,982 | 1,982 |
Buildings | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 20,874 | 20,873 |
Life | 39 years | |
Machinery and equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 95,546 | 98,218 |
Machinery and equipment | Minimum | ||
PROPERTY AND EQUIPMENT | ||
Life | 2 years | |
Machinery and equipment | Maximum | ||
PROPERTY AND EQUIPMENT | ||
Life | 10 years | |
Office furniture and equipment | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 3,446 | 3,126 |
Office furniture and equipment | Minimum | ||
PROPERTY AND EQUIPMENT | ||
Life | 3 years | |
Office furniture and equipment | Maximum | ||
PROPERTY AND EQUIPMENT | ||
Life | 7 years | |
Leasehold improvements | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 8,169 | 8,003 |
Construction in progress | ||
PROPERTY AND EQUIPMENT | ||
Property and equipment, gross | $ 993 | $ 1,403 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
INTANGIBLE ASSETS | ||
Cost Basis | $ 11,978 | $ 11,978 |
Accumulated Amortization | (6,962) | (6,519) |
Net Book Value | $ 5,016 | $ 5,459 |
Weighted Average Amortization Period | 15 years 9 months 18 days | 15 years 9 months 18 days |
Amortization expense | $ 444 | $ 444 |
Estimated future amortization expense | ||
2,016 | 444 | |
2,017 | 444 | |
2,018 | 444 | |
2,019 | 444 | |
2,020 | 444 | |
2021 and thereafter | 2,796 | |
Net Book Value | 5,016 | 5,459 |
Gearing | ||
INTANGIBLE ASSETS | ||
Impairment of assets | $ 0 | |
Minimum | ||
INTANGIBLE ASSETS | ||
Weighted Average Amortization Period | 15 years | |
Maximum | ||
INTANGIBLE ASSETS | ||
Weighted Average Amortization Period | 20 years | |
Customer relationships | ||
INTANGIBLE ASSETS | ||
Cost Basis | $ 3,979 | 3,979 |
Accumulated Amortization | (3,682) | (3,639) |
Net Book Value | $ 297 | $ 340 |
Weighted Average Amortization Period | 7 years 2 months 12 days | 7 years 2 months 12 days |
Estimated future amortization expense | ||
Net Book Value | $ 297 | $ 340 |
Trade names | ||
INTANGIBLE ASSETS | ||
Cost Basis | 7,999 | 7,999 |
Accumulated Amortization | (3,280) | (2,880) |
Net Book Value | $ 4,719 | $ 5,119 |
Weighted Average Amortization Period | 20 years | 20 years |
Estimated future amortization expense | ||
Net Book Value | $ 4,719 | $ 5,119 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
ACCRUED LIABILITIES | |||
Accrued payroll and benefits | $ 3,675 | $ 3,213 | |
Accrued property taxes | 128 | 86 | |
Income taxes payable | 155 | 199 | |
Accrued professional fees | 74 | 126 | |
Accrued warranty liability | 601 | 1,054 | $ 396 |
Accrued regulatory settlement | 500 | 2,066 | |
Accrued environmental reserve | 1,300 | 513 | |
Accrued self-insurance reserve | 1,464 | 1,411 | |
Accrued other | 237 | 592 | |
Total accrued liabilities | $ 8,134 | $ 9,260 |
DEBT AND CREDIT AGREEMENTS (Det
DEBT AND CREDIT AGREEMENTS (Details) - USD ($) $ in Thousands | Aug. 23, 2012 | Dec. 31, 2015 | Feb. 23, 2016 | Jun. 29, 2015 | Dec. 31, 2014 |
Credit Facilities | |||||
Long-term debt, gross | $ 5,399 | ||||
Less-Current portion | (2,799) | $ (118) | |||
Long-term debt, net of current maturities | 2,600 | 2,646 | |||
Future annual principal payments | |||||
2,016 | 2,799 | ||||
2,018 | 2,600 | ||||
Term loans and notes payable | 5,399 | ||||
Subsequent event | |||||
Future annual principal payments | |||||
Maximum borrowing capacity | $ 10,000 | ||||
Liquidity Requirement | $ 3,500 | ||||
New Markets Tax Credit Transaction | |||||
Credit Facilities | |||||
Long-term debt, net of current maturities | 2,600 | ||||
Credit facility | |||||
Future annual principal payments | |||||
Maximum borrowing capacity | $ 20,000 | ||||
Maximum borrowing capacity of the face value of eligible A/R (as a percent) | 85.00% | ||||
Maximum percentage of book value of inventories that may be financed | 50.00% | ||||
Variable rate basis | one month LIBOR | ||||
Annual unused line fee (as a percent) | 0.50% | ||||
Interest rate margin (as a percent) | 3.25% | ||||
Outstanding indebtedness under the Credit Facility | 0 | ||||
Current borrowing capacity | $ 9,515 | ||||
Term Loan | |||||
Future annual principal payments | |||||
Debt Instrument, Face Amount | $ 5,000 | ||||
Interest rate margin (as a percent) | 3.50% | ||||
Term loan amortization | $ 60 | ||||
Term loan balloon payment | 2,323 | ||||
Term loans and notes payable | |||||
Credit Facilities | |||||
Long-term debt, gross | 5,399 | 2,764 | |||
Future annual principal payments | |||||
Term loans and notes payable | $ 5,399 | $ 2,764 |
LEASES - Lease Term and Rental
LEASES - Lease Term and Rental Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
LEASES | ||
Rental expense | $ 2,875 | $ 3,333 |
Minimum | ||
LEASES | ||
Operating lease term | 3 years | |
Maximum | ||
LEASES | ||
Operating lease term | 15 years |
LEASES - Capital and Operating
LEASES - Capital and Operating Leases - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cost basis and accumulated depreciation of assets recorded under capital leases | ||
Depreciation expense recorded under capital leases | $ 8,736 | $ 10,500 |
Capital Leases | ||
2,016 | 455 | |
Total future minimum lease payments | 455 | |
Less-portion representing interest at a weighted average annual rate of 5.0% | (8) | |
Principal | 447 | |
Less-current portion | $ (447) | (767) |
Capital lease obligations, noncurrent portion | 426 | |
Weighted average annual interest rate (as a percent) | 5.00% | |
Operating Leases | ||
2,016 | $ 2,833 | |
2,017 | 2,804 | |
2,018 | 2,753 | |
2,019 | 2,785 | |
2,020 | 2,202 | |
2021 and thereafter | 12,966 | |
Total future minimum lease payments | 26,343 | |
Total | ||
2,016 | 3,288 | |
2,017 | 2,804 | |
2,018 | 2,753 | |
2,019 | 2,785 | |
2,020 | 2,202 | |
2021 and thereafter | 12,966 | |
Future minimum lease payments | 26,798 | |
Capital leases | ||
Cost basis and accumulated depreciation of assets recorded under capital leases | ||
Cost | 1,784 | 2,892 |
Accumulated depreciation | (503) | (1,081) |
Net book value | 1,281 | 1,811 |
Depreciation expense recorded under capital leases | $ 263 | $ 362 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Warranties, Environmental and Liquidation Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2013 | Dec. 31, 2015 | Sep. 30, 2012 | |
Environmental Compliance and Remediation Liabilities | ||||
Increase in estimated cost of remediation | $ 874 | |||
Accrual for Environmental Loss Contingencies | 1,300 | $ 352 | ||
Accrual for Environmental Loss Contingencies, Provision for New Losses | $ 874 | $ 258 | ||
Liquidated Damages | ||||
Liquidated damages | 1,489 | |||
Reserve for liquidated damages | $ 379 | |||
Minimum | ||||
Warranty Liability | ||||
Term of warranty | 1 year | |||
Maximum | ||||
Warranty Liability | ||||
Term of warranty | 5 years |
COMMITMENTS AND CONTINGENCIES62
COMMITMENTS AND CONTINGENCIES - Collective Bargaining Agreements (Details) - Total Company Employees - Coverage under collective bargaining agreements | 12 Months Ended |
Dec. 31, 2015agreement | |
Collective bargaining agreements | |
Percentage of company's employees covered | 14.00% |
Number of agreements | 2 |
COMMITMENTS AND CONTINGENCIES63
COMMITMENTS AND CONTINGENCIES - Tax Credit Program and Worker's Compensation Reserves (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jul. 20, 2011 | |
Workers' Compensation Reserves | |||
Amount accrued for self-insured workers' compensation claims | $ 1,464 | $ 1,411 | |
New Markets Tax Credit Transaction | |||
New Markets Tax Credit program | |||
Future tax credit that can be generated | $ 3,900 | ||
Tax credit period | 7 years | ||
Period which facility must operate and be in compliance | 7 years | ||
Amount of tax credits for which the Company may be liable | $ 3,900 | ||
New Markets Tax Credit Transaction | Broadwind Services, LLC | |||
New Markets Tax Credit program | |||
Gross loan from AMCREF to Broadwind Services | $ 10,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | |
FAIR VALUE MEASUREMENTS | ||||
Municipal bonds and money market funds | $ 12,615 | $ 20,081 | ||
Impairment charge recorded to reduce the carrying value of assets to fair value | 183 | 84 | ||
Gearing | ||||
FAIR VALUE MEASUREMENTS | ||||
Impairment to identifiable intangible assets | 0 | |||
Impairment charge recorded to reduce the carrying value of assets to fair value | 0 | |||
Recurring | Municipal bonds and money market funds | ||||
FAIR VALUE MEASUREMENTS | ||||
Municipal bonds and money market funds | 8,001 | 11,429 | ||
Recurring | Level 2 | Municipal bonds and money market funds | ||||
FAIR VALUE MEASUREMENTS | ||||
Municipal bonds and money market funds | 8,001 | 11,429 | ||
Nonrecurring | ||||
FAIR VALUE MEASUREMENTS | ||||
Total assets at fair value | 12,964 | 24,267 | ||
Nonrecurring | Gearing | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | 506 | |||
Nonrecurring | Services | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | 3,343 | 11,540 | ||
Nonrecurring | Certain Gearing segment machinery and equipment | ||||
FAIR VALUE MEASUREMENTS | ||||
Impairment charge recorded to reduce the carrying value of assets to fair value | $ 345 | |||
Nonrecurring | Clintonville Facility | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | 554 | 738 | ||
Impairment charge recorded to reduce the carrying value of assets to fair value | $ 288 | |||
Additional asset impairment charges | 186 | |||
Nonrecurring | Cicero Avenue | ||||
FAIR VALUE MEASUREMENTS | ||||
Impairment charge recorded to reduce the carrying value of assets to fair value | $ 1,732 | |||
Nonrecurring | Cicero Avenue | Gearing | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | 560 | 560 | ||
Nonrecurring | Level 2 | ||||
FAIR VALUE MEASUREMENTS | ||||
Total assets at fair value | 8,001 | 11,429 | ||
Nonrecurring | Level 3 | ||||
FAIR VALUE MEASUREMENTS | ||||
Total assets at fair value | 4,963 | 12,838 | ||
Nonrecurring | Level 3 | Gearing | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | 506 | |||
Nonrecurring | Level 3 | Services | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | 3,343 | 11,540 | ||
Nonrecurring | Level 3 | Clintonville Facility | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | 554 | 738 | ||
Nonrecurring | Level 3 | Cicero Avenue | Gearing | ||||
FAIR VALUE MEASUREMENTS | ||||
Property plant and equipment at fair value | $ 560 | $ 560 |
INCOME TAXES- Components of Pro
INCOME TAXES- Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Current provision | ||
State | $ (36) | $ (232) |
Total current (benefit) provision | (36) | (232) |
Deferred credit | ||
Federal | (7,165) | (278) |
State | (2,403) | 1,300 |
Total deferred credit | (9,568) | 1,022 |
Increase in deferred tax valuation allowance | 9,568 | (1,022) |
Total provision (benefit) for income taxes | $ (36) | $ (232) |
INCOME TAXES - Operating Loss C
INCOME TAXES - Operating Loss Carryforwards, Summary of Deferred Taxes and Temporary Tax Differences (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Current deferred income tax assets: | ||
Accrual and reserves | $ 5,607 | |
Total current deferred tax assets | 5,607 | |
Valuation allowance | (5,607) | |
Noncurrent deferred income tax assets: | ||
Net operating loss carryforwards | $ 81,221 | 68,685 |
Intangible assets | 22,886 | 26,315 |
Accrual and reserves | 5,919 | |
Other | 75 | 87 |
Total noncurrent deferred tax assets | 110,101 | 95,087 |
Valuation allowance | (109,336) | (94,161) |
Noncurrent deferred tax assets, net of valuation allowance | 765 | 926 |
Noncurrent deferred income tax liabilities: | ||
Fixed assets | (765) | (926) |
Total noncurrent deferred tax liabilities | (765) | $ (926) |
Reconciliation of the beginning and ending amounts of the valuation | ||
Valuation allowance at the beginning of the period | (99,768) | |
Gross increase for current year activity | (9,568) | |
Valuation allowance at the end of the period | (109,336) | |
Federal | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | 202,107 | |
State | ||
Operating loss carryforwards | ||
Net operating loss carryforwards | $ 202,107 |
INCOME TAXES - Tax Statutory Ra
INCOME TAXES - Tax Statutory Rate Reconciliation and Changes in Uncertain Income Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of the tax (benefit) provision computed at the statutory rate to the effective tax rate | ||
Statutory U.S. federal income tax rate (as a percent) | 34.00% | 34.00% |
State and local income taxes, net of federal income tax benefit (as a percent) | 4.60% | 1.50% |
Permanent differences (as a percent) | (0.40%) | (9.80%) |
Change in valuation allowance (as a percent) | (38.20%) | (24.50%) |
Change in uncertain tax positions (as a percent) | 0.20% | 2.70% |
Other (as a percent) | (0.30%) | |
Effective income tax rate (as a percent) | 0.20% | 3.60% |
Changes in the uncertain income tax positions | ||
Beginning balance | $ 81 | $ 286 |
Tax positions related to prior years: | ||
Settlements | (192) | |
Lapses in statutes of limitations | (25) | (13) |
Total | (25) | (205) |
Ending balance | 56 | 81 |
Amount of unrecognized tax benefits that would affect the effective tax rate if the tax benefits were recognized | 92 | |
Penalties and Interest Accrued | $ 18 | $ 16 |
INCOME TAXES - Tax Summary of S
INCOME TAXES - Tax Summary of Stockholder Rights Plan (the ?Rights Plan?) (Details) $ / shares in Units, $ in Thousands | Feb. 13, 2013item$ / sharesshares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Rights Plan | ||||
Unrecognized tax benefits | $ 56 | $ 81 | $ 286 | |
Unrecognized tax benefits, including accrued interest and penalties | 199 | |||
Decrease in unrecognized tax benefits as a result of the expiration of the applicable statutes of limitations within the next twelve months | 77 | |||
Accrued interest or penalties related to uncertain tax positions recognized | 84 | $ 118 | ||
Favorable Tax Impact Member | ||||
Rights Plan | ||||
Unrecognized tax benefits, including accrued interest and penalties | $ 140 | |||
Series A Junior Participating Preferred Stock | ||||
Rights Plan | ||||
Preservation period of tax assets | 3 years | |||
Number of rights for each outstanding share of common stock | item | 1 | |||
Number of preferred share purchase rights for each outstanding share of the company's common stock | shares | 0.001 | |||
Exercise price (in dollars per right) | $ / shares | $ 14 | |||
Series A Junior Participating Preferred Stock | Minimum | ||||
Rights Plan | ||||
Threshold percentage of beneficial ownership for significant dilution of ownership interest | 4.90% | |||
Current beneficial ownership percentage that will not trigger the preferred share purchase rights unless they acquire additional shares | 4.90% | |||
Series A Junior Participating Preferred Stock | Maximum | ||||
Rights Plan | ||||
Beneficial ownership percentage of any person or group, together with its affiliates and associates | 4.90% |
SHARE-BASED COMPENSATION - Summ
SHARE-BASED COMPENSATION - Summary of Stock Options (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
2007 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares of common stock reserved for grants | 691,051 |
Common stock issued under share-based compensation plan | 253,387 |
2012 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares of common stock reserved for grants | 1,200,000 |
Common stock issued under share-based compensation plan | 468,857 |
2015 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares of common stock reserved for grants | 1,100,000 |
Common stock issued under share-based compensation plan | 0 |
Stock Options | |
SHARE-BASED COMPENSATION | |
Expiration term | 10 years |
Summary of the stock option activity | |
Outstanding at the beginning of the period (in shares) | 158,718 |
Granted (in shares) | 0 |
Forfeited (in shares) | (14,521) |
Outstanding at the end of the period (in shares) | 144,197 |
Exercisable (in shares) | 133,483 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 16.64 |
Forfeited (in dollars per share) | $ / shares | 3.39 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 17.98 |
Exercisable (in dollars per share) | $ / shares | $ 19.15 |
Weighted Average Remaining Contractual Term | |
Outstanding at the end of the period | 2 years 11 months 12 days |
Exercisable | 2 years 8 months 5 days |
Stock Options | 2007 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 57,783 |
Stock Options | 2012 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 86,414 |
Stock Options | Minimum | |
SHARE-BASED COMPENSATION | |
Vesting term | 1 year |
Stock Options | Maximum | |
SHARE-BASED COMPENSATION | |
Vesting term | 5 years |
Restricted stock unit (RSU) | 2012 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 212,005 |
Restricted stock unit (RSU) | 2015 EIP | |
SHARE-BASED COMPENSATION | |
Number of shares reserved | 165,805 |
Restricted stock unit (RSU) | Minimum | |
SHARE-BASED COMPENSATION | |
Vesting term | 1 year |
Restricted stock unit (RSU) | Maximum | |
SHARE-BASED COMPENSATION | |
Vesting term | 5 years |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Options Exercise Price Range, Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 144,197 |
Weighted Average Exercise Price (in dollars per share) | $ 17.98 |
Weighted Average Remaining Contractual Term | 2 years 11 months 12 days |
Options Exercisable | |
Number Exercisable (in shares) | shares | 133,483 |
Weighted Average Exercise Price (in dollars per share) | $ 19.15 |
$3.40 - $13.50 | |
Outstanding and exercisable stock options under the EIP | |
Exercise price, low end of range (in dollars per share) | 3.40 |
Exercise price, high end of range (in dollars per share) | $ 13.50 |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 101,324 |
Weighted Average Exercise Price (in dollars per share) | $ 4.88 |
Weighted Average Remaining Contractual Term | 3 years 6 months 7 days |
Options Exercisable | |
Number Exercisable (in shares) | shares | 90,610 |
Weighted Average Exercise Price (in dollars per share) | $ 5.06 |
$14.20 - $54.40 | |
Outstanding and exercisable stock options under the EIP | |
Exercise price, low end of range (in dollars per share) | 14.20 |
Exercise price, high end of range (in dollars per share) | $ 54.40 |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 29,073 |
Weighted Average Exercise Price (in dollars per share) | $ 24.26 |
Weighted Average Remaining Contractual Term | 1 year 2 months 16 days |
Options Exercisable | |
Number Exercisable (in shares) | shares | 29,073 |
Weighted Average Exercise Price (in dollars per share) | $ 24.26 |
$80.00 - $128.50 | |
Outstanding and exercisable stock options under the EIP | |
Exercise price, low end of range (in dollars per share) | 80 |
Exercise price, high end of range (in dollars per share) | $ 128.50 |
Options Outstanding | |
Number of options outstanding (in shares) | shares | 13,800 |
Weighted Average Exercise Price (in dollars per share) | $ 100.92 |
Weighted Average Remaining Contractual Term | 2 years 5 months 27 days |
Options Exercisable | |
Number Exercisable (in shares) | shares | 13,800 |
Weighted Average Exercise Price (in dollars per share) | $ 100.92 |
SHARE-BASED COMPENSATION - Su71
SHARE-BASED COMPENSATION - Summary of Restricted Stock Units (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Options | ||
Weighted Average Grant-Date Fair Value Per Share | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | |
Forfeiture rate (as percent) | 25.00% | 25.00% |
Restricted stock unit (RSU) | ||
Summary of the restricted stock unit activity | ||
Outstanding at the beginning of the period (in shares) | 515,038 | |
Granted (in shares) | 332,946 | |
Vested (in shares) | (238,986) | |
Forfeited (in shares) | (231,188) | |
Outstanding at the end of the period (in shares) | 377,810 | 515,038 |
Weighted Average Grant-Date Fair Value Per Share | ||
Outstanding at the beginning of the period (in dollars per share) | $ 5.78 | |
Granted (in dollars per share) | 4.44 | |
Vested (in dollars per share) | 5.54 | |
Forfeited (in dollars per share) | 5.57 | |
Outstanding at the end of the period (in dollars per share) | $ 4.87 | $ 5.78 |
SHARE-BASED COMPENSATION - Su72
SHARE-BASED COMPENSATION - Summary of Share-Based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Summary of share-based compensation expense | |||
Benefit for income taxes | $ (36) | $ (232) | |
Net effect of share-based compensation expense on net loss | $ 919 | $ 888 | |
Reduction in earnings per share: | |||
Basic and diluted earnings per share (in dollars per share) | [1] | $ 0.06 | $ 0.06 |
Pre-tax compensation expense for all unvested share-based awards | $ 1,170 | ||
Cost of sales | |||
Summary of share-based compensation expense | |||
Share-based compensation expense | 131 | $ 159 | |
Selling, general and administrative | |||
Summary of share-based compensation expense | |||
Share-based compensation expense | $ 788 | $ 729 | |
[1] | Diluted earnings per share for the years ended December 31, 2015 and 2014 does not include common stock equivalents due to their antidilutive nature as a result of the Company’s net losses for these respective periods. Accordingly, basic earnings per share and diluted earnings per share are identical for all periods presented. |
SEGMENT REPORTING - Segment Rep
SEGMENT REPORTING - Segment Reporting Information by Segment (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($)item | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)itemMW | Dec. 31, 2014USD ($) | ||
SEGMENT REPORTING | |||||||||||
Revenues from external customers | $ 199,156 | $ 225,829 | |||||||||
Revenues from external customers | $ 37,573 | $ 49,791 | $ 62,563 | $ 49,229 | $ 49,192 | $ 55,295 | $ 64,933 | $ 56,409 | 199,156 | 225,829 | |
Operating profit (loss) | (11,025) | $ (2,135) | $ 3,616 | $ (2,364) | (4,137) | $ (1,086) | $ 3,411 | $ 334 | (11,908) | (1,478) | |
Depreciation and amortization | 9,179 | 10,944 | |||||||||
Capital expenditures | 2,789 | 6,297 | |||||||||
Assets held for sale | 4,403 | 7,805 | 4,403 | 7,805 | |||||||
Assets, Noncurrent | 12,278 | 12,278 | |||||||||
Total Assets | $ 109,907 | 146,617 | $ 109,907 | 146,617 | |||||||
Tower and Weldments | |||||||||||
SEGMENT REPORTING | |||||||||||
Number of facilities | item | 2 | 2 | |||||||||
Revenues from external customers | $ 170,540 | 184,464 | |||||||||
Intersegment revenues | [1] | 379 | 440 | ||||||||
Revenues from external customers | 170,919 | 184,904 | |||||||||
Operating profit (loss) | 4,702 | 18,065 | |||||||||
Depreciation and amortization | 3,954 | 3,993 | |||||||||
Capital expenditures | 2,096 | 4,118 | |||||||||
Assets held for sale | $ 554 | 554 | |||||||||
Assets, Noncurrent | 738 | 738 | |||||||||
Total Assets | 38,622 | 51,429 | $ 38,622 | 51,429 | |||||||
Tower and Weldments | Minimum | |||||||||||
SEGMENT REPORTING | |||||||||||
Power generating capacity of turbines that towers produced annually can support (in megawatts) | MW | 1,000 | ||||||||||
Tower and Weldments | Maximum | |||||||||||
SEGMENT REPORTING | |||||||||||
Annual tower production capacity (in towers) | item | 500 | ||||||||||
Gearing | |||||||||||
SEGMENT REPORTING | |||||||||||
Revenues from external customers | $ 28,616 | 41,365 | |||||||||
Intersegment revenues | [1] | 972 | 888 | ||||||||
Revenues from external customers | 29,588 | 42,253 | |||||||||
Operating profit (loss) | (8,235) | (9,423) | |||||||||
Depreciation and amortization | 5,031 | 6,816 | |||||||||
Capital expenditures | 583 | 1,814 | |||||||||
Assets held for sale | 506 | 506 | |||||||||
Total Assets | 39,735 | 50,238 | 39,735 | 50,238 | |||||||
Corporate | |||||||||||
SEGMENT REPORTING | |||||||||||
Operating profit (loss) | (8,378) | (10,153) | |||||||||
Depreciation and amortization | 194 | 135 | |||||||||
Capital expenditures | 110 | 365 | |||||||||
Assets held for sale | 3,343 | 3,343 | |||||||||
Assets, Noncurrent | 11,540 | 11,540 | |||||||||
Total Assets | 256,238 | 273,699 | 256,238 | 273,699 | |||||||
Eliminations | |||||||||||
SEGMENT REPORTING | |||||||||||
Intersegment revenues | [1] | (1,351) | (1,328) | ||||||||
Revenues from external customers | (1,351) | (1,328) | |||||||||
Operating profit (loss) | 3 | 33 | |||||||||
Total Assets | $ (224,688) | $ (228,749) | $ (224,688) | $ (228,749) | |||||||
[1] | Intersegment revenues primarily consist of sales from Gearing to Services. Sales from Gearing to Services totaled $972 and $888 for the years ended December 31, 2015 and 2014, respectively. |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of Major Customers (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($)item | |
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 37,573 | $ 49,791 | $ 62,563 | $ 49,229 | $ 49,192 | $ 55,295 | $ 64,933 | $ 56,409 | $ 199,156 | $ 225,829 |
Two customers | ||||||||||
SEGMENT REPORTING | ||||||||||
Number of major customers | item | 2 | |||||||||
Concentration risk (as a percent) | 10.00% | |||||||||
Customer One | Towers and Weldments Segment | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 124,759 | 124,263 | ||||||||
Customer Two | Towers and Weldments Segment | ||||||||||
SEGMENT REPORTING | ||||||||||
Revenues from external customers | $ 45,214 | $ 53,955 | ||||||||
Five customers | ||||||||||
SEGMENT REPORTING | ||||||||||
Number of major customers | item | 5 | 5 | ||||||||
Concentration risk (as a percent) | 92.00% | 91.00% |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | |
Retirement Savings and Profit Sharing Plans | ||
Contribution expense | $ 876 | $ 701 |
Deferred Compensation Plan | ||
Compensation expense | (19) | (23) |
Fair value of plan liability | $ 12 | $ 31 |
Collective bargaining arrangement | ||
Retirement Savings and Profit Sharing Plans | ||
Number of union locations where discretionary match continued | item | 2 | |
Collective bargaining arrangement | Illinois | ||
Retirement Savings and Profit Sharing Plans | ||
Matching contribution of first 4% of eligible employees' contributions (as a percent) | 50.00% | |
Percentage of eligible employees' contributions matched by the company | 4.00% | |
Collective bargaining arrangement | Pennsylvania | ||
Retirement Savings and Profit Sharing Plans | ||
Matching contribution of first 3% of eligible employees' contributions (as a percent) | 100.00% | |
Employer match of employee contributions as first eligible compensation (as a percent) | 3.00% | |
Matching contribution of first 2% of eligible employees' contributions (as a percent) | 50.00% | |
Employer match of employee contributions as next eligible compensation (as a percent) | 2.00% | |
Defined contribution 401(k) safe harbor plan | ||
Retirement Savings and Profit Sharing Plans | ||
Matching contribution of first 3% of eligible employees' contributions (as a percent) | 100.00% | |
Employer match of employee contributions as first eligible compensation (as a percent) | 3.00% | |
Matching contribution of first 2% of eligible employees' contributions (as a percent) | 50.00% | |
Employer match of employee contributions as next eligible compensation (as a percent) | 2.00% | |
Elective deferrals and basic matching contribution vested (as a percent) | 100.00% |
NEW MARKETS TAX CREDIT TRANSA76
NEW MARKETS TAX CREDIT TRANSACTION (Details) $ in Thousands | Jul. 20, 2011USD ($) | Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) |
New Markets Tax Credit Transaction | |||
Net amount outstanding | $ 2,600 | $ 2,646 | |
New Markets Tax Credit Transaction | |||
New Markets Tax Credit Transaction | |||
Proceeds from transaction | $ 2,280 | ||
Receivable term | 15 years | ||
Potential tax credit that can be generated under the NMTC transaction | $ 3,900 | ||
Gross loan in the principal amount from the Company to COCRF Investor VIII, LLC | $ 7,720 | ||
Interest rate (as a percent) | 2.50% | ||
Maximum percentage of a qualified investment available as credit against federal income taxes | 39.00% | ||
Period which facility must operate and be in compliance | 7 years | ||
Percentage of recapture to which the tax credits are subject | 100.00% | ||
Loan origination payment | $ 320 | ||
Company's obligation if Capital One exercises its option to put its investment | $ 130 | ||
Number of pass-through financing entities created under the structure that are deemed variable interest entities | item | 2 | ||
Issue costs paid to third parties recorded as prepaid expenses | 262 | ||
Amortization period for prepaid expenses for the NMTC arrangement | 7 years | ||
Net amount outstanding | $ 2,600 | ||
Broadwind Services, LLC | New Markets Tax Credit Transaction | |||
New Markets Tax Credit Transaction | |||
Principal amount | $ 10,000 | ||
Debt term | 15 years | ||
Interest rate (as a percent) | 1.40% |
RESTRUCTURING (Details)
RESTRUCTURING (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 60 Months Ended | |||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($)ft²item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2012USD ($) | |
RESTRUCTURING | ||||||||||
Restructuring Charges, Total | $ 874 | $ 1,060 | $ 233 | |||||||
Exit costs | $ 1,060 | 2,153 | $ 5,331 | $ 4,769 | $ 874 | $ 14,187 | ||||
Impairment of held for sale assets and liabilities and loss on sale of assets | $ 186 | |||||||||
Percentage of facility footprint planned to be reduced through the sale and/or closure | 40.00% | |||||||||
Area of facilities planned to be reduced through the sale and/or closure (in square feet) | ft² | 600,000 | |||||||||
Number of facilities for which agreement has been reached to close or reduce leased presence | item | 6 | |||||||||
Area of facilities for which agreement has been reached to close or reduce leased presence | ft² | 400,000 | |||||||||
Number of remaining properties vacated and marketed for sale | item | 2 | |||||||||
Impairment charges | $ 183 | 84 | ||||||||
Liability associated with environmental remediation costs | $ 1,300 | 1,300 | 1,300 | $ 352 | ||||||
Addition in liability associated with environmental remediation costs | 874 | $ 258 | ||||||||
Restructuring charges | $ 874 | 1,060 | 233 | |||||||
Capital Expenditures | ||||||||||
RESTRUCTURING | ||||||||||
Exit costs | 674 | 2,352 | 2,596 | 5 | 5,627 | |||||
Gain On Sale Of Brandon Facility | ||||||||||
RESTRUCTURING | ||||||||||
Exit costs | 3,585 | 3,585 | ||||||||
Accelerated Depreciation | ||||||||||
RESTRUCTURING | ||||||||||
Exit costs | 898 | 819 | 1,717 | |||||||
Severance | ||||||||||
RESTRUCTURING | ||||||||||
Exit costs | 435 | 430 | 865 | |||||||
Impairment Charges | ||||||||||
RESTRUCTURING | ||||||||||
Exit costs | 186 | 2,365 | 2,551 | |||||||
Moving And Other Exit Related Costs | ||||||||||
RESTRUCTURING | ||||||||||
Exit costs | 874 | $ 1,479 | $ 2,866 | $ 1,354 | $ 439 | 7,012 | ||||
Brandon Facility | ||||||||||
RESTRUCTURING | ||||||||||
Gain on sale of Brandon, SD Facility | $ 3,585 | |||||||||
Gearing | ||||||||||
RESTRUCTURING | ||||||||||
Impairment charges | $ 0 |
QUARTERLY FINANCIAL SUMMARY (78
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
QUARTERLY FINANCIAL SUMMARY (UNAUDITED) | ||||||||||
Revenues | $ 37,573 | $ 49,791 | $ 62,563 | $ 49,229 | $ 49,192 | $ 55,295 | $ 64,933 | $ 56,409 | $ 199,156 | $ 225,829 |
Gross profit (loss) | (6,208) | 2,831 | 8,499 | 2,745 | 494 | 4,013 | 9,306 | 5,883 | 7,867 | 19,696 |
Operating profit (loss) | (11,025) | (2,135) | 3,616 | (2,364) | (4,137) | (1,086) | 3,411 | 334 | (11,908) | (1,478) |
(Loss) income from continuing operations | (10,727) | (2,383) | 3,387 | (2,523) | (4,053) | (1,099) | 3,186 | 173 | (12,246) | (1,793) |
Net (loss) income | $ (10,794) | $ (7,613) | $ 1,615 | $ (5,015) | $ (5,172) | $ (1,814) | $ 1,860 | $ (1,042) | $ (21,807) | $ (6,168) |
(Loss) income from continuing operations per share: | ||||||||||
Basic and Diluted (in dollars per share) | $ (0.73) | $ (0.16) | $ 0.23 | $ (0.17) | $ (0.83) | $ (0.12) | ||||
Loss from continuing operations per share: Basic | $ (0.28) | $ (0.07) | $ 0.22 | $ 0.01 | ||||||
Loss from continuing operations per share: Diluted | (0.28) | (0.07) | 0.21 | 0.01 | ||||||
Net (loss) income per share: | ||||||||||
Basic net loss per share | (0.35) | (0.12) | 0.13 | (0.07) | (1.48) | (0.42) | ||||
Diluted net income (loss) per share | $ (0.35) | $ (0.12) | $ 0.12 | $ (0.07) | (1.48) | (0.42) | ||||
Basic and Diluted (in dollars per share) | $ (0.73) | $ (0.52) | $ 0.11 | $ (0.34) | $ (1.48) | $ (0.42) |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
LEGAL PROCEEDINGS | |
Settlement amount | $ 1,566 |